2016 Supreme(AP) 620

In the High Court of Judicature at Hyderabad
C.V. NAGARJUNA REDDY & G. SHYAM PRASAD, JJ.
Ketineni Chandrasekhar Rao & Others - Appellant
Versus
Boppana Seshagiri Rao & Others - Respondents
C.M.A. Nos.193, 194, 202 & 308 of 2016
Decided On : 25-11-2016

Headnote:

Indian Partnership Act, 1932 - Section 14, 72 and 45 - Indian Evidence Act, 1872 - Section 115, 43, 47 - English Act - Section 36 Sub-section (1) - Additional Chief Judge City Civil Court - Plaintiff filed against the appellants and others for multiple reliefs, viz; (a) to pass a preliminary decree for partition of the suit schedule property admeasuring Ameerpet Hyderabad by metes and bounds divide the immovable property of the said partnership firm and allot 1/5th share to the plaintiff to grant dissolution of the partnership firm by name Brothers & Co. in respect of the property shown in to render true and correct account of the partnership business to the plaintiff and based on the same to pass a money decree for the share of the plaintiff - Registered partnership firm by name M/s. Satyam Brothers & Co. as per the partnership deed That his son by name is also one of the partners in the above firm and that since he is sailing with the plaintiff he is not impleaded as a party to the suit - That though the said partnership firm was originally constituted sometime in the Month vide partnership deed - Plaintiff had been the partner from the inception, that he had been continuing as such even on the date of filing of the suit and that the business of the partnership firm is running of a cinema hall - That the business of the partnership firm is being managed by defendant that though the cinema hall is situated in a very prime area, the profits of the partnership business are not being distributed correctly, that the books of account of the partnership business are also not being maintained correctly and that the plaintiff has been requesting defendants 1 to 14 to account for the income and profits of the partnership firm but the said defendants have been withholding the same - Plaintiff has recently come to know that defendant Nos.1 to 4 entered into a development agreement with defendant No.15 M/s. Asian Builders and Developers in respect of the property of the partnership firm, without the consent and knowledge of the plaintiff and defendant No.1 is not sharing information about the business activity of the partnership firm – Held, Court held that notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement - This view was followed by the learned single Judge - We are of the prima facie opinion that the development agreement though entered after the firm was purportedly dissolved still binds the plaintiff and all other partners irrespective of whether they were parties to the resolution dt.09.07.2011 or not. For all these reasons, we hold that the plaintiff failed to establish prima facie case for grant of injunction - Plaintiff proceeded on the premise that he is entitled to 1/5th share in the suit schedule property and allotment of 1/5th share ignoring the fact that he has only 5% share in the partnership firm - After the asset is thrown into partnership stock his pre-existing right over the property cannot be recognized - Since the development agreement binds the plaintiff, he cannot prevent defendant from proceeding in accordance with the same - As rightly submitted by the learned Senior Counsel appearing for the appellants plaintiff has not raised the plea that the development agreement is vitiated by fraud or that if the same is implemented it affects his interests either financial or otherwise - Plaintiff has neither claimed the relief of invalidating the development agreement - Plaintiff has failed to establish that execution of development agreement would cause irreparable loss or injury to his interests and consequently he failed to establish existence of elements of balance of convenience in his favour for grant of injunction. The plaintiff has not disputed the fact that in pursuance of the development agreement, defendant No.15 has paid Rs.50 lakhs to the firm and Rs.52 lakhs towards building and development fee - We are therefore of the opinion that the loss that may be suffered by the defendants would outweigh the advantage that may be conferred on the plaintiff - Impugned order dt.01.02.2016 in I.A. No.1114 of 2015 in O.S. No.747 of 2015, is set aside and the C.M.As are allowed.