HIGH COURT OF JUDICATURE AT BOMBAY
ROSHAN DALVI, J.
Fatima Correa nee Fatima Yakub Ali
Versus
Mrs. Hasina Mohamed Shafik Laljee & Others
Arbitration Petition No.503 of 2013
Decided on: 19-09-2013
Partnership - Dissolution - Limitation Act - [PARTNERSHIP] - [Section 9] - [Section 37 of the Partnership Act, 1932, Article 106 of the Limitation Act, 1908, Section 42 of the Partnership Act, 1932, Article 120 of the Limitation Act, 1908] - The court discussed the dissolution of the partnership, the rights of legal representatives, and the application of the Limitation Act in determining the claims for accounts and share in the assets of the firm.
Fact of the Case:
The Petitioner, as the legal representative of a deceased partner, claimed a share in the partnership firm and its assets. The Respondents, heirs of the other partner, contested the claim, arguing that it was barred by limitation.
Finding of the Court:
The court analyzed the partnership agreements, previous judgments, and legal provisions related to dissolution, accounts, and share in partnership assets. It considered the applicability of the Limitation Act and observed that the Petitioner's claim may be considered in arbitration but did not warrant an injunction against the Respondents.
Issues: The key issues involved the dissolution of the partnership, the rights of legal representatives, and the applicability of the Limitation Act to the Petitioner's claim for a share in the partnership assets.
Ratio Decidendi: The court relied on legal precedents and provisions of the Partnership Act and the Limitation Act to determine that the Petitioner's claim for accounts and share in the assets of the firm may be barred by limitation. It emphasized the need for the Petitioner to prove a breach of trust by the Respondents in using the assets of the deceased partner in their business.
Final Decision: The Petition was dismissed, and the court suggested that the Petitioner's claim could be considered in arbitration, but it did not warrant an injunction against the Respondents.
1. This Petition is filed U/s.9 for interim reliefs pending the arbitration. The Petitioner claims to be sole heir and legal representative of a deceased partner. The Respondents are stated to be the legal heirs of the other partner.
2. One Mahomedali Esmail commenced the partnership firm and purchased the immoveable property belonging to the firm. He is the predecessor-in-title of both the parties. He entered into a partnership with one Yakub Ali, the father of the Petitioner. After his death Yakub Ali made his nephew, the father of the Respondents, his partner under the partnership deed executed on 1st June, 1965. The Petitioner claims that upon the death of the Yakub Ali the firm stood dissolved but the partner of Yakub Ali, the said nephew continued the business, kept charge of the assets and continued collecting rents. The Petitioner claims that hence he held the assets in trust for the heirs of Yakub Ali. The Petitioner claims to be a only heir of the Yakub Ali. After the death of the said nephew, his heirs, the Respondents herein, continued representing the firm and claimed that the said nephew was the sole proprietor and continued the firm as such. They executed certain declaration-cum-indemnity in their name.
3. The Petitioner claims that the premises were owned by Yakub Ali and purchased out of the capital contributed by him and consequently the Petitioner as his heir is entitled to a share in the said property.
4. The Petitioner resided in Kuwait after her marriage. She has returned to India and claimed a share in the said partnership.
5. The partnership agreement between Yakub Ali and the said nephew dated 1 s t June, 1965 specifies in clause 14 thereof that in the event of death of any partner the firm shall not stand dissolved. Consequently, the said nephew continued the firm as sole proprietor. The incidents of such continuation would only have to be seen as between the heirs of the two partners in arbitration. Similarly, under the earlier agreement between Mahomedali Esmail and Yakub Ali dated 17th January, 1961 also under clause 11 thereof upon the death of the partner the business was to continue without any right of admission to the heirs of the partner. Consequently the initial partnership between Mahomedali Esmail and Yakub Ali and later partnership between Yakub Ali and his nephew would continue.
6. The conveyance in favour of Mahomedali Esmail dated 28th February, 1978 which constitutes the property of the firm would prima facie continue as such in the firm. Upon the death of the Yakub Ali, the predecessor-in-title of the Petitioner, in 1982, and the consequent dissolution of the firm, the Petitioner could claim her share in the accounts of the firm as also the property thereof. That has not been done until the arbitration has been invoked by the Petitioner's advocate notice dated 15th February, 2013.
7. The fact that the partnership was not dissolved as claimed by the Petitioner in paragraph 2(h) would be the determinative factor in the arbitration invoked by the Petitioner as the heir of the deceased partner.
8. It is contended on behalf of the Petitioner that only when the Respondents sought to make certain declarations to get the property of the firm transferred to their names, as the only heirs of the sole proprietor who was the last partner of the firm, that the Petitioner sought her rights.
9. The Respondents have claimed that the claim is barred by limitation as it has not been made since 1982. That aspect would have to be considered in arbitration. Yet as observed by this Court in the case of Perma Container (uk) Line Ltd. Vs. Perma Container Line (India) Pvt. Ltd. 2010 (2) BCR 419 and drawing from the Supreme Court dictate in the case of National Insurance Co. Ltd. Vs. Boghara Polyfab Pvt.Ltd., 2009 4 BCR 891 this Court is enjoined to consider, prima facie, the question of the bar of limitation.
10. The Petitioner is the legal representative of the deceased partner of the firm. The cla
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