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2001 Supreme(AP) 1302

Andhra Pradesh High Court
Judges : C.Y.SOMAYAJULU
Shivraj Reddy, Brothers, Hyd. - Appellant
Versus
S.Raghu Raj Reddy - Respondent
Decided On : 10-19-01

Headnote:

Partnership Act - Section 25 - Income Tax Act,1983 - Evidence Act - Sections 91 and 92 - Partnership firm - Suit filed by plaintiff for partition - Existence for income tax - Cross-examination - Possesses joint property - Suits that his share capital - Appeals are being disposed of by a common Judgment because common questions of law - Respondent in both these appeals is plaintiff in both suits - He filed two suits for dissolution of two partnership firms and rendition of accounts - In case of plaintiff and others had formed themselves into a partnership firm in name and style and Brothers for carrying on business by undertaking construction work contract – Held, Cause of action for suit as per plaint in arose date - As per of Partnership Act a partner cannot be expelled from firm by majority of partners except in good faith and when such power is conferred as per contract between the partners and do not contain a provision for expulsion – Therefore question of Shiva Raj Reddy exercising the power to expel plaintiff from the partnership does not arise Firm is one at will - Therefore as held it stood dissolved on date on which summons accompanied by a copy of plaint was served on defendants - Record of trial Court shows that some defendants were served and by all defendants were served with summons in suit - Therefore it should be taken that firm stood dissolved -Appeal dismissed (Para 25)

C. Y. SOMAYAJULU, J.

( 1 ) THESE appeals are being disposed of by a common Judgment because common questions of law and fact arise for consideration, though some parties only are common in both the suits.

( 2 ) 1st respondent in both these appeals is the plaintiff in both the suits. He filed two suits for dissolution of two partnership firms and rendition of accounts. In C. C. C. A. No. 35 of 1999 the case of the plaintiff is that he, Shiva Raj Reddy (his eldest brother), Balraj Reddy and others had formed themselves into a partnership firm in the name and style of shiv Raj Reddy and Brothers for carrying on business by undertaking construction work contracts. In CC. C. A. No. 40 of 1999 his case is that he, Shiva Raj Reddy (his eldest brother) and others formed a firm shiva Raj Reddy and Brothers, B. Arjun Reddy and Co. , to carry on business in film production distribution, exhibition etc. , and constructed aradhana Theatre . His case in both the suits is that his share capital in the two firms was invested by his eldest brother Shiva Raj Reddy, the Karta of their joint family, from out of the share of his income from the joint family property and that those two firms have been submitting income tax returns and his share of profits were being given to him till 1991 and thereafter Shiva Raj Reddy stopped paying his share of profits and hence the suits.

( 3 ) SHIVA Raj Reddy, who is the 2nd Defendant in O. S. No. 67 of 1997 out of which C. C. C. A. No. 35 of 1999 arises and 1st defendant in O. S. No. 121 of 1997 out of which C. C. C. A. No. 40 of 1999 arises filed written statements on his behalf and on behalf of two firms which are shown as 1st defendant in O. S. No. 67 of 1997 and 9th defendant in O. S. No. 121 of 1997, that he undertook contract works with his own money in his name and that the joint family of himself and plaintiff had no property or income, and since the name shiva Raj Reddy and Brothers brought him good luck he is carrying on business in that name only showing the plaintiff and some of his relatives nominally as partners in his business.

( 4 ) DEFENDANTS 3 and 4 in O. S. No. 67 of 1997 and defendants 2 to 4 in O. S. No. 121 of 1997 adopted the written statement filed by Shiva Raj Reddy for himself and on behalf of the firms. Defendants 5 to 8 in O. S. No. 121 of 1997 chose to remain ex parte.

( 5 ) IN both the suits plaintiff besides examining himself as PW. 1 examined his auditor as PW. 2 and marked Exs. A1 to A20 in O. S. No. 67 of 1997 and Exs. Al to A13 in O. S. No. 121 of 1997. Only Shiva Raj Reddy was examined on behalf of the defendants in both the suits as DW. 1. No documentary evidence was adduced in O. S. No. 67 of 1997 by defendants but they got marked Ex. B1 in O. S. No. 121 of 1997.

( 6 ) BY the decrees under appeal, the trial Court, negativing the contention of Shiva Raj Reddy held in favour of the plaintiff in both the suits. Hence these appeals by Shiva Raj Reddy on behalf of himself and the firms, hereinafter called the appellants .

( 7 ) THE contention of Mr. Mahmood Ali, learned Counsel for the appellants, is that since the averments in the plaint and the evidence of plaintiff as PW. l in both the suits is that his share of capital contribution in the firms came from out of the income of the joint family, and since the contention of Shiva Raj Reddy is that the joint family had no property much less income fetching property, and since there is no presumption that a joint family possesses property, the burden of proof to establish that the joint family has property and was deriving income therefrom is on the plaintiff and since the plaintiff failed to adduce any such evidence, the contention that plaintiff invested some amounts in the two firms cannot be believed or accepted. It is his contention that since the evidence of Shiva Raj Reddy, as DW. l, shows that the firms were brought into existence for income tax purpose and to elevate the status of his brothers, plaintiff is not en























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