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1964 Supreme(AP) 212

Andhra Pradesh High Court
Judges : ANANTA NARAYANA AYYAR
DAGGUMATI RADHAKRISANAIAH - Appellant
Versus
Yedlapalli Govindu - Respondent
Decided On : 10-22-64

A stranger to a partnership firm cannot ask for its dissolution.

Headnote:

PARTNERSHIP - DISSOLUTION - STRANGER TO PARTNERSHIP - NO RIGHT TO ASK FOR DISSOLUTION - ACCOUNTING - NECESSARY FOR ASCERTAINING AMOUNT DUE FROM DISSOLVED FIRM.

Fact of the Case:

Plaintiffs filed a suit for dissolution of a partnership firm (plaintiff-firm) and for a decree for the amount alleged to be due from another firm (fourth defendant-firm). The fourth defendant-firm had already been dissolved in a previous suit filed by one of its partners. The plaintiffs were not partners in the fourth defendant-firm.

Finding of the Court:

The court held that the plaintiffs, being strangers to the fourth defendant-firm, could not ask for its dissolution. However, the court held that the plaintiffs could ask for a decree for the amount alleged to be due from the fourth defendant-firm, as the amount had to be ascertained by taking accounts.

Issues: 1. Whether the plaintiffs, being strangers to the fourth defendant-firm, could ask for its dissolution. 2. Whether the plaintiffs could ask for a decree for the amount alleged to be due from the fourth defendant-firm.

Ratio Decidendi: 1. Under Section 44 of the Partnership Act, only a partner can file a suit for dissolution of a partnership firm. 2. Order 30, Rule 9 of the Civil Procedure Code provides that a suit between a firm and one or more of its partners, or between firms having one or more partners in common, shall be governed by the rule. However, no execution shall be issued in such suits except by leave of the court, and on an application for leave to issue such execution, all such accounts and inquiries may be directed to be taken and made and directions given as may be just.

Final Decision: The court allowed the civil revision petition in part and modified the finding of the lower court on issue No. 4. The court held that the plaintiffs could not ask for dissolution of the fourth defendant-firm, but they could ask for a decree for the amount alleged to be due from the fourth defendant-firm.

ANATHANARAYANA AYYAR, J.

( 1 ) THIS is a petition by D. Radhakrishnaiah to revise the Order of the learned District Munsif, Nellore, in O, S. No. 51 of 1957 giving a finding on preliminary issue No. 4. The relevant facts are as follows : two plaintiffs filed O. S No. 51 of 1957 on the file of the learned District munsif, Nellore, impleadiwg seven defendats. Of these, the second defendant it D. Radhakrishnaiah in hii capacity as partner of a firm (Ay/ha Venkata seshiah Oil Company) which included plaintiffs land 2 and also defendants 1 and 2. In the plaint, as originally framed, it was contended that one Aytha venkataseshaiah (third defendant) was also a patner of this partnership. This partnership it hereafter referred to for convenience in this order as plantiff- firm. The first defendant is Aytha Venkataseshaiah. The fourth defendant is another firm called D. Radhakrishnaiah and Aytha Venkatasesbaiah New account. For convenience, I shall refer to it hereafter as the fourth-defendant firm. In the plaint, as originally framed, it was contended that its partners consisted of Aytha Venkataseshaiah (fifth defendant who wai the same person as the first defendant ), D. Radhakrishnaiah (who is personally identical with the second defendant) and Aytba Venkatarathnam (seventh defendant who is personally identical with the third defendant ). In the plaint, the plaintiffs asked reliefs as follows :" (A) for a preliminary decree declaring that suit firm be dissolved as from date of plaint ; (b) declaring plantifi s share in the suit partnership ; (c) directing first defendant to render a proper account in respect of plaintiffs share in the firm and produce into Court all the partnership account books, vouchers and documents in his custody; (d) far directing a general account, after dissolving the fourth defendant firm in respect of the liability of the fourth defendant and defendants 5. 6 and 7 as its partners, in respect of cash dealing; between suit firm and the 4th defendant-firm. "it was contended in the plaint as follows :"the partnership (plaintiff-firm) was at will. . . . . . . . . . . There are cash dealings and running account between suit firm aytha Venkataseshaiah oi Company, (plaintiff-firm) and D. Radhakrishnaiah and a. V, Seshaiah New Account (fourth defendant firm ). . . . . . . . . The balance of about Rs 24,000 is due and payable by the 4th defendant firm to the suit firm. "a written statement was filed by D. Radbakrishnaiah which purported to be written statement of defendandts 2, 4 and 6. In it, he stated as follows:"this defendant has no objection for the dissolution of the suit firm, ascertainment of the profits. "the first defendant filed written statement. The third defendant filed another written statement adopting that of the defendant. Seven issues were framed as follows:"1. Whether the defendants 1 and 3 are members of a joint hindu family and the first defendant is the partner of the firm known as Aytha Venkataseshayya Oil Company as the manager of the joint family? 2. Whether the third defendant is liable in the capacity of a partner? 3. Whether the third defendant is a necessary party to the suit? 4. Whether the plaintiff (i) can ask for dissolution of the other firm shown as tie foui tb defendant, and (ii) can ask for a decree for the amount alleged to be due from it? (The numbering is done by me for convenience in discussion ) 5. Whether the, assets of the partnership known as Aytha venkar tasesbayya Oil Company are used for carrying on the business under the name arid style of Aytha Venkataseshayya, Yedlapalli Govind Oil company ? 6 Whether defendants 4 to 7 are necessary parties to the suit ? 7. To what relief is the plaintiff entitled?"the order of the lower Courtt shows that the third defendant was given up subsequently. Advocate on both sides represent that issues 1 to 3 are also- given up in consequence. The learned District Munsif precceded to dispose of issue No. 4 as a preliminary issue and gave

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