2000 Supreme(AP) 950
Andhra Pradesh High Court
Judges : BILAL NAZKI, V.ESWARAIAH
Gorla Satyanarayana, rep.by G.P.A.Hlder - Appellant
Versus
Gangula Venkateswara Rao - Respondent
L.P.A.No.189/2000
Decided On : 12-19-00
Advocates Appeared :
Mr.P.Raja Gopala Rao, Mr.C.C.S.Sastry
Headnote:INDIAN PARTNER SHIP ACT, Secs.69(1)and (2) 3 (a) - RICE MILLING INDUSTRY (REGULATION) ACT, 1958, Secs.6,8,13 & 18 and rules made thereunder - Plaintiff filing suit for dissolution and rendition of accounts of firm basing on partnership agreement - Trial court dismissed suit holding that agreement is not valid and binding on defendant - Single judge decreed suit - In the LPA, defendant contends that Rice Milling Industry Act prohibits transfer of licence or entering into partnership and that agreement is void abinitio - Partnership was created for running business of rice milling - Agreement does not in any case transfer the licence and same continues to remain in the name of defendant - No bar or prohibition under provisions of RMI Act or conditions of licence to enter into partnership with any other person - Prohibition is only for transfer of licence and not for carrying on business under partnership agreement - In the presents case, though firm not registered, suit for dissolution of firm and rendition of accounts is maintainable u/S.69(3)(a) - Appeal dismissed.
( 1 ) THE appellant in this case was the defendant in the suit and the respondent was plaintiff. In order to avoid any confusion the parties are referred to as plaintiff and the defendant. The plaintiff filed a suit for dissolution and rendition of accounts of a firm. The firm was sought to be dissolved with effect from 27-1-1983. The case of the plaintiff was that he along with the defendant established a Rice and Flour mill at Muthyalapalli village and a partnership was created by virtue of written agreement on 8-10-1982. A piece of land measuring 15 cents was purchased by the defendant in his name under a registered sale deed. The defendant also secured 25 horse power electric motor and 25 H. P. Oil engine and the mill was established by the name of Sri Laxmi Gnaneswara Rice and flour mill. The plaintiff had to contribute rs. 69,300/- being 30% of the total investment and defendant had to contribute rs. 1,76,0007- being 70% share. The plaintiff contributed an amount of Rs. 55,000. 00 the balance of Rs. 14,300. 00 was due to be paid by the plaintiff. Profits and losses had to be shared in the ratio of their investment. Partnership was at will. The defendant obtained approval and permission from the panchayat and also licence from the Joint collector, West Godavari for running the mill in his name. As per the terms of the agreement the defendant has to manage the mill. The plaintiff belongs to a different village. Therefore he executed a Power of attorney in favour of one T. Rangarao so that he could look after his interests in the business. The defendant failed to render accounts properly and started taking away the profits. Therefore the Power of Attorney holder of the plaintiff issued a registered notice to the defendant dissolving the firm with effect from the date of notice and called upon the defendant to render accounts. The defendant failed and a suit was filed, the defendant resisted the suit on various grounds. The principal ground was that the agreement dated 8-10-82 was not true and was a forged document. The defendant also claimed that the Rice mill was sole proprietary concern. He stated that plaintiff was closely related to him and the plaintiff had been asked by the defendant to manage the mill in the month of September, 1982. The defendant further stated that he took some land on lease from one Tirumani mutyalu for storing the husk in October, 1982. When the defendant was sick the plaintiff was managing the mill. The plaintiff informed the defendant that said mutyalu was insisting for a written document with respect to lease and on this representation he obtained signatures of the defendant on blank papers. The defendant also denied that the plaintiff had contributed Rs. 55,0007- towards the mill. Following issues were framed by the trial court. (1) Whether the agreement alias "khararnama" dated 8-10-1982 is true and valid and binding? (2) Whether the suit for dissolution and rendition of accounts of the suit mill is not maintainable? (3) To what relief is the plaintiff entitled to ?the trial Court decreed the suit in favour of the plaintiff for Rs. 15,000. 00 with an interest of 6% over it. The suit for dissolution of the firm and rendition of accounts was dismissed. The trial Court held that agreement dated 8-10-1982 was true but was not valid and binding on the defendant. The trial Court found that the plaintiff had committed breach of the terms of the agreement in not having contributed major portion of the investment. The trial court found that the plaintiff had only invested Rs. 15,000. 00. Appeal was filed by the plaintiff, cross-objections were filed by the defendant and the appeal was heard by the learned Single Judge of this Court. The learned Single Judge decreed the suit. While considering the appeal and cross-objections the learned Single Judge framed three questions for determination; (1) Whether there has been an agreement of partnership between the parties? (2) Whether the suit