Karnataka High Court
Babulal Vakataji Shah Since deceased by LRs. - Appellant
Versus
Chandabai - Respondent
Decided On : 07-01-88
R.S.A. : 488 of 1978
FRAUD - PARTNERSHIP - Section 17 of the Limitation Act - [Section 17] - The court discussed the application of Section 17 of the Limitation Act, which deals with the concealment of the knowledge of the right or title on which a suit or application is founded by fraud. The court held that the plaintiff's suit for accounts of the erstwhile firm was barred by time as the plaintiff had not sought to enforce her right to seek accounts of the former firm and the postponement pleaded based on false assurances given by the defendants would not save the limitation from running.
Fact of the Case:
The plaintiff, Chandabai, sought a decree enabling rendition of accounts of a partnership firm after discovering fraud by the defendants. The courts below held the suit to be in time based on Section 17 of the Limitation Act.
Finding of the Court:
The court found that the suit for accounts of the erstwhile firm was barred by time as the plaintiff had not sought to enforce her right to seek accounts of the former firm and the postponement pleaded based on false assurances given by the defendants would not save the limitation from running.
Issues: The main issue was whether the plaintiff's suit for accounts of the partnership firm was barred by time, and whether the application of Section 17 of the Limitation Act was justified.
Ratio Decidendi: The court held that the plaintiff's suit for accounts of the erstwhile firm was barred by time as the plaintiff had not sought to enforce her right to seek accounts of the former firm and the postponement pleaded based on false assurances given by the defendants would not save the limitation from running.
Final Decision: The appeal was allowed, and the decrees in favor of the plaintiff were set aside. The court dismissed the suit as barred by time.
( 1 ) THIS appeal is by the defendant in o. S. No. 11/1964 on the file of the Principal civil Judge, Belgaum and is directed against the said concurrent judgments and decrees of both the Court-below i. e. , O. S. No. 11/64 subsequently affirmed by the I Additional district Judge, Belgaum in R. A. No. 10/1973, granting the plaintiff in the suit who is respondent herein a decree enabling rendition of accounts of a firm M/s. Shah vaktaji Dalichand and Company, Gokak of which her husband Dalichand was a partner, during his lifetime. The correctness and the legality of the abovesaid decree is challenged herein, on the very short ground that the plaintiffs suit barred by time as on the date, it was instituted. Regrettably the respondent who was in the plaintiff in the Court-below a lady by name Chandabai unrepresented in this Court despite of service of notice on her. I have to mention at the outset that she was represented by an advocate of this Court Sri jestamal, who subsequently sought and obtained permission to retire from the case for want of instruction, after serving a registered notice on her disclosing his intention to retire from the case. Subsequently, the respondent has not chosen to engage anybody else in place of Mr. Jestamal and therefore I have not had the benefit of any argument on her behalf.
( 2 ) BUT, then, Mr. Mandagi, who appears for the appellants has been good enough to take me through the whole of the records and also assisted me by providing information regarding all the law then obtained on that point. With the result, I have not been handicapped by the omission of the other side in being represented in this Court by counsel.
( 3 ) AS earlier mentioned, the whole case turns on a short point being whether the plaintiffs suit was in time. On this point both the Courts below have held that suit to be in time relying on Section 17 of the limitation Act, holding that the cause of action enabling the plaintiff to institute the suit arose only after she discovered the factum of fraud having been practiced on her by the defendants, who had successfully prevented her from approaching the Court by inducing in her a belief that she was being continued as a partner in the firm in question in place of her deceased husband. The plaintiff having learnt, of late, that she was not made a partner of that firm and the representation made to her by the defendants in that behalf was thoroughly false, she had thereafter hastened to the Court with this suit.
( 4 ) A few facts necessary for the disposal of this appeal and which are not dispute are that the plaintiff husband one Dalichand and the two defendants were closely related in that Dalichand was uncle of the defendants, all three of them constituted members of a firm that was being run at Gokak, under the name and style of M/s. Shah Vaktaji dalichand and Company along with two other firms located in Sholapur and kholapur. It would appear, due to some misfortune, when the plaint and her husband dalihand were away on a Piligrimage, dalichand passed away on 5-11-1960. Thereafter, the plaintiff came back to Gokak four months later and then went away to her native place in Rajasthan for a year before again returning to Gokak during which period she received assurances from the defendants that she had been made a partner in place of her deceased husband and the firm of H/s/ Shah Vaktaji Dalicha and Company was being carried on with her as the new partner. However, the plaintiff says that when she made a demand for her share of the dividends of the firm, she then received a written communication on 2-11-1963 from the defendants stating that she had no connection whatsoever with the firm in question, the same having been formed after the death of her husband comprising of only the two defendants as partners and therefore she was not entitled to any share in the dividends of that firm, plaintiff asserts it was only then she became aware of the confidence trick play
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