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1917 Supreme(Cal) 263

CALCUTTA HIGH COURT
Sanderson, C.J, Asutosh Monkeriee, J.
Kali Das Chaudhuri & Ors. - Appellant
Versus
Srimati Danpadi Sundari Dassee - Respondent
Decided On : 02-02-1917

Headnote:

Limitation - Partnership - Indian Limitation Act, 1908, Sections 3, 19, and Schedule 1, Articles 106 and 120 - Indian Contract Act, 1872, Sections 239, 253 - - The court examined the applicability of the Limitation Act to a suit for an account and share of profits of a dissolved partnership. It held that Article 106 of the Schedule 1 applied, requiring the suit to be instituted within three years from the date of dissolution. The court also considered the effect of an acknowledgment of liability under Section 19, finding that it only saved the portion of the claim admitted in the acknowledgment. The court concluded that the suit was barred by limitation except for the period admitted in the acknowledgment.

Fact of the Case:

The plaintiff, a former partner in a firm, sued for an account and share of profits after retiring from the partnership. The defendants argued that the suit was barred by limitation, as more than three years had passed since the plaintiff's retirement. The plaintiff claimed that the suit was saved by an acknowledgment of liability made by the defendants.

Finding of the Court:

The court found that Article 106 of the Limitation Act applied, requiring the suit to be instituted within three years from the date of dissolution. The court also found that the acknowledgment of liability only saved the portion of the claim admitted in the acknowledgment. Therefore, the suit was barred by limitation except for the period admitted in the acknowledgment.

Issues: The main issues were whether the suit was barred by limitation under Article 106 of the Limitation Act and whether an acknowledgment of liability under Section 19 saved the suit from the bar of limitation.

Ratio Decidendi: The court held that a suit for an account and share of profits of a dissolved partnership must be instituted within three years from the date of dissolution, as per Article 106 of the Limitation Act. The court also held that an acknowledgment of liability under Section 19 only saves the portion of the claim admitted in the acknowledgment. Therefore, the suit was barred by limitation except for the period admitted in the acknowledgment.

Final Decision: The appeal was allowed, and the decree was modified to reflect the court's findings on the applicability of the Limitation Act and the effect of the acknowledgment of liability.

JUDGMENT

Sanderson, C.J.

1 .This is an appeal from a judgment of my learned brother Mr. Justice Greaves, and the sole question which has been argued before us is whether the claim in the suit was barred by the Statute of Limitation.

2. I will deal in detail with the nature of the suit directly.

3. The suit was brought on the 8th of February 1913, and it was alleged to be in respect of a certain partnership of which the plaintiff Hari Prosad Saha was a member up to the 27th of June 1910. Before the case came on for trial, it was discovered that a necessary party, Mokshoda Sundari Ghowdhurani, had not been added and she was added on the 12th of February 1914, so that as regards the added party the claim was barred or was alleged to be barred, and consequently as she was a necessary party, the claim was alleged to be barred against the other parties. Therefore, when the case came on for trial the learned Counsel appearing for the defendant, Mr. S.R. Das, according to the minutes said, the suit is barred as they had added Mokshoda Sundari as a party defendant after the lapse of three years.' Mr. Mitter said, I know nothing about it--my friend should have raised the point by a supplemental written statement. But there is an admission of liability by the letter dated the 12th of August 1913.

4. Then the learned standing Counsel said further on, 'I shall put in a formal petition showing admission of liability, but if I require any other amendment I shall then ask for an adjournment. But I do not think I shall require.'

5. Then there were two paragraphs added by way of amendment whereby 'the plaintiff submitted that there had been a valid admission of liability in writing signed by the defendants or their duly authorized agents within the period of limitation, and such admission was contained in the letters of the 5th of July 1909, 2nd of October 1912, 6th of October 1912, 21st of January 1913 and in the written statement filed in this suit: and the plaintiff was advised and submitted that the proper period of limitation in the suit was six years from the time that the original plaintiff had retired from the partnership business. Those paragraphs were added on the day of the trial, the 31st of January 1916.

6. Then the learned Counsel for the defendant Mr. Das, said that he did not rely any longer upon that part of the defence which feet up the allegation that the plaintiff had only remained with the firm, to use a neutral expression, up to 1311 B.S. (corresponding with 1904 05) but that he simply relied upon the Statute of Limitation.

7. The learned Judge held that as regards the Statute of Limitation, Article 120 of the First Schedule to the Limitation Act applied and, therefore, the suit was not barred.

8. The case now comes before us, the learned Counsel for the appellant urging that the learned Judge was wrong and that Article 106 applies and consequently the suit is barred by the Limitation Act. It is necessary to refer perhaps once more to the words of the Statute. Section 3 says, "Subject to the provisions contained in Sections 4 to 25 (inclusive) every suit instituted, appeal preferred and application made after the period of limitation prescribed therefor by the First Schedule shall be dismissed, although limitation has not been set up as a defence." Then in the First Schedule one finds three columns, which of course are familiar to everybody, the first column of which sets out the description of the suit, the second, the period of limitation, and the third, the time from which the period begins to run. Therefore, it is necessary to see what is the description of the suit in the first instance; and for that purpose I turn to the plaint. But before I turn to the plaint perhaps I might refer to two letters to see, quite apart from the plaint, what was the real nature of the suit. On the 27th of June 1910 the plaintiff's solicitor wrote a letter saying, "We are informed by our client Babu Hari Prosad Saha...that he has been acting as go

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