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2019 Supreme(Kar) 2206
IN THE HIGH COURT OF KARNATAKA
Sreenivas Harish Kumar, J.
Dattatreya Kushappa Desai - Appellant
Versus
Panduranga Krishnaji Bugad And Others - Respondents
Regular First Appeal Nos. 1398 and 1397 of 2017
Decided On : 28-05-2019
Advocate Appeared:
For the Appellant :Sri. C.G. Gopalaswamy, Advocate
For the Respondent:Sri K.G.Sadashivaiah, Advocate
Headnote:
Civil Procedure Code - Order VI - Rule 17 - Immovable property - Suit for dissolution of a partnership firm - Lack jurisdiction - Whether second concern styled as Ice and Cold Storage is a part and parcel of suit partnership as contended by plaintiffs - Whether said concern belongs exclusively to defendant No.1 as contended by him - Whether partner seeking for dissolution of firm and its accounts has made out grounds for dissolution - Whether there was an agreement between partners not to adhere to mode prescribed by Section 48 as was sought to be contended learned senior Counsel court find that award has dealt with all aspects referred to in Section 48 - Whether immovable property of Ice and Cold Storage can be included for drawing up final decree - Respondents 1, 2 and 3 deceased persons being partners brought a suit in City Civil Court against another partner appellant in these two appeals for dissolution and taking of accounts of firm Bangalore Ice Factory - They sought for inclusion of another business concern Ice and Cold Storage in suit on allegation that appellant ran latter business concern by divulging funds of Bangalore Ice Factory - City Civil Court by its judgment decreed suit and ordered for drawing up of preliminary decree - Appellant preferred an appeal RFA to this court challenging preliminary decree - This appeal was allowed with observations that partnership firm stood dissolved deemingly with effect and that issue No.2 should be decided in final decree proceeding – Held, Learned counsel for appellant argued very much that court below is functus officio to entertain matter - In case on hand Court having to reach stage of functus officio has not arisen for as discussed above before drawing up final decree other stages are not completed - May be there is an order to close final decree proceedings but it was a sheer mistake which can always be corrected - Once preliminary decree is passed until it is given into effect by completing other steps culminating into final decree there is no stop - As declaration of rights or shares is only first stage in a suit for partition a preliminary decree does not have effect of disposing of suit - Suit continues to be pending until partition that is division by metes and bounds takes place by passing a final decree - An application requesting court to take necessary steps to draw up a final decree effecting a division in terms of preliminary decree is neither an application for execution nor an application seeking a fresh relief - It is only a reminder to court to do its duty to appoint a Commissioner get a report and draw a final decree in pending suit so that suit is taken to its logical conclusion - Though above ruling is in a suit for partition principle is very much applicable to a suit for dissolution of a partnership firm - As preliminary decree only brings suit for dissolution of a partnership firm to a certain stage it is only by making further progress in matter adopting such step as may be necessary for distribution of surplus at end among partners in proportion to their contribution to firm effective final decree can be drawn - If procedure envisaged in section 48 of Partnership Act is not followed and if there is no adjudication of manner in which firm must be subjected to dissolution there is no final decree at all - Probably for this reason court below ordered for drawing up final decree by passing impugned order - Order passed by trial Court in first instance did not bring proceedings to logical end - Therefore court do not find that trial Court has become functus officio and lacks jurisdiction - There are chances that appellant will be deprived of that land - To this submission replied that respondents confine their claim to an area within boundaries mentioned in sale deed – Therefore trial Court shall take note of this aspect while holding an enquiry in final decree proceedings - With these discussion court come to conclusion that impugned order for drawing up final decree does not suffer from any illegality but it requires to be modified to extent that final decree shall not be drawn unless an enquiry by following procedure envisaged in Section 48 of Indian Partnership Act is held – Surplus if any shall be distributed or divided at end among partners or their legal representatives in proportion to contribution of each partner - For division of immovable property procedure followed in a suit for partition may be adopted - It appears that execution petition has already been filed - Two appeals stand disposed of
JUDGMENT :
1. Common order dated 28.1.2017 in FDP 104/2001 and FDP 20/2003 is challenged in these two appeals. Stated briefly the background for these two appeals, it is as follows:-
2. The respondents 1, 2 and 3 deceased persons namely, Annashankar Taralakar, Manohar Apparao Korade and Bhojagadde Krishnaji Venkoba Rao, being the partners brought a suit O.S.1551/1980 in the City Civil Court, Bengaluru, against another partner, i.e, the appellant in these two appeals for dissolution and taking of accounts of the firm Bangalore Ice Factory. They sought for inclusion of another business concern Lakshmi Ice and Cold Storage in the suit on the allegation that the appellant ran the latter business concern by divulging the funds of Bangalore Ice Factory. The City Civil Court, by its judgment dated 31.7.1991, decreed the suit and ordered for drawing up of preliminary decree. The appellant preferred an appeal, RFA 460/1991 to this court challenging the preliminary decree. On 3.6.2002, this appeal was allowed with observations that the partnership firm stood dissolved deemingly with effect from 21.8.1976 and that issue No.2 should be decided in final decree proceeding. The issue No.2 is "Whether the second concern styled as Lakshmi Ice and Cold Storage is a part and parcel of suit partnership as contended by the plaintiffs?" or "Whether the said concern belongs exclusively to defendant No.1 as contended by him"?
3. Pursuant to the decision in the appeal, the appellant initiated FDP 104/2001 and the original plaintiffs in the suit filed FDP 20/2003. Consolidating these two proceedings for adjudication, the trial court decided issue No.2 holding that Lakshmi Ice and Cold Storage was a part of Bangalore Ice Factory and consequently all the partners had 1/7 share each in the capital account of the partnership firm. With these observations, both FDP petitions were disposed of with a direction to draw final decree. The share of 6th plaintiff was purchased by other plaintiffs. This judgment was challenged before this court in RFA 1574/2005 by the appellant herein, but by judgment dated 25.10.2013, this court dismissed the appeal. A Special Leave Petition (Civil) No. 3495/2014, preferred by the appellant before the Hon’ble Supreme Court was also dismissed.
4. In the final decree proceedings, the plaintiffs made an application under Order VI Rule 17 of Civil Procedure Code (the Code for short) seeking an amendment to the plaint in order to include the assets of another concern, Lakshmi Ice and Cold Storage. The court below did not grant the application, but made certain observations which will be referred to little later. The appellant in these two appeals being respondent in FDP 20/2003 made an application under Order 26 Rule 13 of the Code seeking appointment of a Commissioner to make a partition of the property as per the preliminary decree. This application being objected to by the respondents herein, was dismissed. It appears that the appellant as also one of the defendants in the suit were appointed as receivers. On 11.11.2015, the court below passed one more order holding that since the order for drawing up final decree had attained finality, necessity to appoint a Commissioner for effecting division would not arise, and the course open to the parties was to execute the decree after obtaining the final decree drawn up. On 24.9.2016, the trial court passed an order on a memo to the effect that the property belonging to Lakshmi Ice and Cold Storage Factory should be included at the time of drawing up final decree and that the appellant (respondent in FDP 20/2003) should furnish the details of assets of Lakshmi Ice and Cold Storage. On 28.1.2017 the trial court passed one more order upon an application filed by the appellant under section 151 of the Code. In this application, the appellant sought for deferment of orders; he gave the reasons that he had filed writ petitions challenging the order dated 16.8.2005 and 24.9.2016 and till conclusion o
