1923 Supreme(SC) 29
Privy Council
Ameer Ali, Sir John Edge, Phillimore, Justice Sumner , JJ.
Jamnabai -Appellant
Versus
Fazalbhoy Heptoola, and other -Resopndent
P. C. A. No. 4 of 1922
Decided On : 12-06-1923
Manisty and Co., Nicholl, E. Dalgado, E. B. Raikes, Lowndes, J. M. Parikh, De Gruyther
A consent order can only be set aside upon proof of serious and substantial injustice. Additionally, appellate courts will not disturb a lower court's factual finding on whether properties are partnership assets or co-owned unless the finding is successfully displaced.
Headnote:(A) Civil Procedure - Consent Orders - Setting aside - Standard of proof - A consent order may be set aside only if it is demonstrated that serious and substantial injustice would result from letting the order stand. (Para 11)
(B) Partnership Law - Partnership Assets vs. Co-ownership - Findings of Fact - Where a lower court has determined based on available materials that properties are held in co-ownership rather than as partnership assets, such a finding of fact will not be disturbed by an appellate court unless the prima facie assumption of the correctness of the judgment is successfully displaced. (Paras 17-20)
Facts of the case:
The widow and executrix of a deceased partner in a firm brought an action for accounts to obtain a share of buildings and rents. One appeal sought to set aside a consent order for a specific sum, alleging a mistake of fact regarding the date up to which the sum was calculated. The other appeal contended that the properties in question, consisting of a dwelling-house and godowns, were assets of the partnership firm rather than properties held in co-ownership by the partners.
Findings of Court:
Regarding the consent order, the court found that no serious and substantial injustice occurred, as the order was likely beneficial to the appellant by avoiding costs and risks associated with a full account. Regarding the properties, the court upheld the finding that the properties were co-owned and not partnership assets.
Issues: Whether a consent order made under a mistake of fact should be set aside due to injustice, and whether certain properties were partnership assets or co-owned by the partners.
Ratio Decidendi: A consent order will not be set aside unless serious and substantial injustice is demonstrated. Furthermore, findings of fact by the lower court regarding the nature of property ownership are presumed correct unless the appellant provides sufficient evidence to displace that conclusion.
Result: Appeals dismissed.
Legal Category Hierarchy
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practice and procedure
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civil procedure
- consent orders
- appellate review
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civil procedure
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commercial law
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partnership law
- partnership assets
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partnership law
Lord Sumner :-
These are con solidated appeals by one Jamnabai the widow and executrix of Tricum Nathoo, who died so long ago as 1892. He had been a partner in a muccadamage firm, Khimji Jiwa and Co., with a gentleman called Khimji Jiwa, who had retired from the firm and had died before the time at which Tricum Nathoo died. The widow Jamnabai commenced these proceedings against certain persons who continued to carry on the same business as had been carried on by her late husband in partnership, although they changed the name of the firm. She brought an action for accounts, the prin cipal object of which, so far as the present appeals are concerned, was to obtain an account and a share of certain buildings and the rents produced by those buildings, which originally had been purchased by her late husband and his partner while they were still in partnership. The buildings consisted on the one hand of a house built on the estate of the Port Trust in Bombay, and on the other of sundry godowns which were used in some way, not very clear, down to the date of the proceedings, by the defendants.
There are two appeals, from two decrees, which have been consoli dated.
The first appeal relates to the alleged right of the plaintiff to have an account taken over a long series of years of the rents and profits of the godowns, she herself bringing into account the rents of the house, but this apparently is a secondary matter, for the house has fallen into decay and is almost worthless.
The second appeal is brought in order that the appellant, Jamnabai, may have the opportunity of esta blishing her late husband's interest in the partnership business beyond the date to which the partnership account had been stated and balan ced, and may have an account for that purpose. In order to succeed in that appeal, she has to establish her right to have an order set aside, which was in point of fact consented to by her advocate before the learned Judge who made the order. It may be convenient to dispose of the second appeal quite shortly.
The learned Judge records that when he had expressed the opinion that the form in which a previous order had been drawn up did not prevent the plaintiff from being entitled to have its terms rectified and to have the accounts, which she desired to obtain, taken on a footing wider than its terms stated, her counsel, having apparently considered the matter, intimated that he did not press to have an account actually taken, and that he would be content with an order in her favour for payment of a parti cular sum which, according to the note which the learned Judge took, was accepted by the learned coun sel, because he conceived it to be an amount agreed up to the date of the death of Tricum Nathoo, whereas it appears that it was really an amount agreed only up to the date of the last adjustment made in his lifetime, which was something like two years earlier. To that extent there is ground for saying, if the learned Judge's note was correct as a statement of the reasons which prompted the advo cate at the time, that the advocate gave this consent under a mistake of fact, the gravity of which may be substantial or may not,and when the plaintiff discovered, as she afterwards did, that this order had been made, under which she would get payment of this parti cular sum, but would not get the account which she desired, she took proceedings to get the consent order set aside and to prefer her claim to the account.
Their Lordships have had on both appeals the advantage of an argument from Mr. De Gruyther, on behalf of the appellant, equally illuminating and candid. With regard to this appeal he accepted as the law, which governs his position, that serious and substantial injustice to his client must be shown to result from letting the consent order stand which was made under the circumstances mentioned. There has been some controversy as to whether his client was consulted by her advocate at the time when the consent was given.
Upon th