IMPORTANT POINT
Even if plea of limitation is not set up as a defence, Court has to dismiss suit if it is barred by limitation.

1. Leave granted.

2. The present appeal is preferred for assailing the judgment dated 27th March, 2014 passed by the Division Bench of High Court of Judicature of Andhra Pradesh at Hyderabad, whereby the learned Division Bench allowed LPA No. 47 of 2002 preferred by respondent No. 1-plaintiff.

3. The status and rank of the parties to the lis is as below:

4. Respondent No. 1-plaintiff, along with defendant Nos. 2, 3, 4 and deceased M. Balraj Reddy¹ [Died in 1984] had constituted a partnership firm-defendant No. 1 namely “M/s Shivraj Reddy and Brothers” (hereinafter being referred to as ‘firm’) on 15th August, 1978 with its primary business being the construction of buildings on a contract basis with respect to the works of the Government and Municipalities.

5. Respondent No. 1-plaintiff instituted O.S. No. 67 of 1997² [Initially filed as O.S. No. 3 of 1996 but later renumbered as (O.S. No. 67 of 1997)] seeking relief of dissolution of the firm and rendition of accounts. The learned II Additional Chief Judge, City Civil Court, Hyderabad (hereinafter being referred to as ‘trial Court’), allowed the original suit filed by respondent No. 1-plaintiff and passed a decree dated 26th October, 1998 declaring the firm-defendant No. 1 to be dissolved and directed defendant Nos. 2 to 4 to tender accounts of the firm from the year 1979 onwards till October, 1998 and further, granted liberty to respondent No. 1-plaintiff to file a separate application seeking appointment of an Advocate Commissioner for taking accounts of the firm and for other appropriate reliefs.

6. Being aggrieved, the firm-defendant No. 1 and defendant No. 2 preferred C.C.C. Appeal No. 35 of 1999 before the High Court of Judicature of Andhra Pradesh at Hyderabad. Learned Single Judge of the High Court vide judgment dated 19th October, 2001 allowed C.C.C. Appeal No. 35 of 1999 on the ground that O.S. No. 67 of 1997 was barred by limitation as one of the partners in subsisting partnership firm, Shri M. Balraj Reddy expired in 1984, therefore the firm stood dissolved immediately on the death of the partner. Since the original suit was filed in 1996, it was barred by limitation.

7. Aggrieved by the decision of learned Single Judge, respondent No. 1-plaintiff preferred LPA No. 47 of 2002 before the learned Division Bench of the High Court, which allowed the appeal and set aside the judgment dated 19th October, 2001 passed by the learned Single Judge in C.C.C. Appeal No. 35 of 1999, observing that the plea of limitation was never raised during the pleadings in the trial Court and learned Single Judge ought not to have dealt with that issue at all. Being aggrieved, appellants have preferred the present appeal by special leave.

Submissions of behalf of the appellants:

8. Learned counsel representing the appellants urged that the suit was filed by respondent No. 1-plaintiff for dissolution of the defendant No. 1-firm and for the rendition of accounts in the year 1996. He referred to the partnership deed dated 25th April, 1978, whereby the firm-defendant No. 1 was constituted and urged that the partnership was a partnership at will. He drew the attention of the Court to Section 42 of the Partnership Act, 1932 (hereinafter being referred to as ‘the Act’) which reads as below:

“42. Dissolution on the happening of certain contingencies

- Subject to contract between the partners a firm is dissolved:

(a) if constituted for a fixed term, by the expiry of the term.

(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof.

(c) by the death of a partner.

(d) by the adjudication of a partner as an insolvent.”

9. Learned counsel submitte