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IN THE HIGH COURT OF BOMBAY
(P. M. Mukhi J.)
IQBALNATH PREMNATH ANAND - Appellant.
V.
RAMESHWARNATH PREMNATH ANAND and another - Respondents.
Advocates Appeared
For appellant - Mahindra Gill and M. K. Joshi.
For respondents - V. O. Meghani.
PARTNERSHIP - DISSOLUTION - NOTICE - PARTNERSHIP AT WILL - RETIREMENT - DETERMINATION - CONSTRUCTION OF DEED OF PARTNERSHIP - COURT RECEIVER - APPOINTMENT.
Fact of the Case:
The plaintiff and the two defendants were blood relations (the plaintiff and the first defendant being brothers and the second defendant being their mother) who agreed to continue the family business of Messrs Ramsarandas and sons, operating inter alia as Passage and Passport Agents. Disputes and differences arose between the partners and the plaintiff gave a notice to the two defendants as the other partners of the firm seeking dissolution of the firm. The defendants sent a reply through their solicitors suggesting that instead of indulging in a prolonged and costly litigation it was better that the disputes should be amicably settled. The plaintiff welcomed the suggestion. Nothing appears to have come out from this avowal of both parties to seek an amicable settlement. Then followed a letter which has considerable significance. In that letter which is dated the 9th July, 1973 and is addressed by the defendants' Solicitors M/s. Gagrat and Co. to the Plaintiff's Advocate, Mr. Mahendra. Gill, in the second paragraph it is stated:- "Our clients are prepared to waive the two months' notice period and' treat the firm as dissolved earlier even on a date that may be agreed. In any event, our clients are agreeable to the dissolution of the firm."
Finding of the Court:
The partnership in suit is a partnership at will and that it has been dissolved by the notice of dissolution dated June 19, 1973 given by the plaintiff's advocate. Secondly, in view of the attitude taken up by the defendants, it is clear that the defendants have effectively kept the plaintiff out and are arrogating to themselves the ownership of the partnership business.
Issues: 1. Whether the partnership is a partnership at will or not? 2. Whether the notice of dissolution dated June 19, 1973 given by the plaintiff's advocate is a valid notice? 3. Whether the defendants are agreeable to the dissolution of the firm? 4. Whether a receiver should be appointed?
Ratio Decidendi: 1. A partnership is a partnership at will if there is no provision in the contract between the partners for the duration of their partnership, or for the determination of their partnership. 2. A notice of dissolution of a partnership at will can be given by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. 3. The agreement of the defendants to waive the two months' notice period and to treat the firm as dissolved earlier even on a date that may be agreed, shows that the defendants were agreeable to the dissolution of the firm. 4. A receiver should be appointed in a partnership at will where a notice for dissolution is given and a suit filed.
Final Decision: The appeal is allowed and the order dated 20th February 1975, passed by the learned Judge of the City Civil Court is set aside. The notice of motion is made absolute in terms of prayers (a) and (b) with the modification that the Court receiver will not take charge of the building "Anand Niketan" at Fort street as such but only of the portion on the ground floor covering the entire breadth and to the depth of 14 feet.
2. By a deed of partnership dated the 4th December, 1967, the plaintiff and the two defendants who are blood relations (the plaintiff and the first defendant being brothers and the second defendant being their mother) agreed to continue the family business of Messrs Ramsarandas and sons, operating inter alia as Passage and Passport Agents. It would appear that the business was originally started years back in 1914, by an ancestor of the parties, as a proprietory business, and was thereafter converted into a partnership. There were several re-constitutions in between until the present firm was constituted by the above-mentioned deed of partnership dated 4th December, 1967. It is this partnership, with which this appeal is concerned.
3. It is now appropriate to set out some of the relevant provisions and clauses of this partnership deed because a considerable amount of argument has been advanced on the interpretation of this deed and in particular clauses 14 and 15 thereof.
4. Now it is provided in clause 1, that the partnership business shall be deemed to have commenced on and from the 25th day of October, 1967. The parties expressly agreed by clauses 6 and 13 that to begin with the profit and losses of the calendar year 1967 will be adjusted and all the transactions made and entered in the name of the new firm after the 24th day of October 1967, were accepted and confirmed by all the partners. These provisions were obviously inserted with a view to ensure the continuity of the business. Clause 14 after stating that the partnership was at will provides for the retirement of a partner and clause 15 provides that the death or legal disability of a partner shall not have the statutory effect of dissolving partnership. Clauses 14 and 15 may be reproduced in extenso and read as follows :-
"14: That the partnership being at will any partner shall be at liberty to retire or be separate from the firm, but in that case such partner shall have to give two clear months' previous notice in writing to the other partners of his intention to do so, and at the expiration of the period of such notice and on settling the accounts and his liabilities, he shall be allowed to retire from the firm.
15: That in case of death of any of the partners or of any legal dissability of a partner, the partnership business shall not be dissolved, but shall continue subject to the provisions of this Deed. Anyhow, within six months, new deed shall be executed by the continuing partners, with the mutual consent of the surviving partners and legal heirs of the deceased or legally disabled partner."
It would appear that the partnership firm operated not only in Bombay but a1 several places in the Punjab and particularly at Jullundur and it is the contention of the defendants that the air travel business at Jullundur office constituted the main and most important part of the partnership business.
5. Sometime in May 1973, disputes and differences arose between the partners that is to say the plaintiff on the one side and the two defendants on the other and it requires to be noticed that defendant No.2 who is the mother is clearly on the side of the younger son Rameshwarnath defendant No. l. As the result of the disputes and differences defendant No.1, apparently with the approval of his mother, defendant No.2, filed a criminal complaint against his elder brother i.e. the plaintiff, at Jullundur, and obtained a warrant for his arrest. It would appear that the charge was that the plaintiff had taken away a large sum of money from one of the Bank accounts of the firm with the United Commercial Bank, at Jullundur. Those moneys were said to represent trust moneys in the sense
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