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2018 Supreme(Del) 2776
IN THE HIGH COURT OF DELHI AT NEW DELHI
VALMIKI J.MEHTA, J.
RAKESH KANAUJIA - Appellant
Versus
M/S SUPERWHITE DRYCLEANERS & ANR - Respondents
RFA No. 665 of 2018
Decided on : 17-08-2018
Advocate Appeared:
For the Appellant :Mr. Biswas, Advocate
The main legal point established in the judgment is the application of the Limitation Act, 1963 to the suit for rendition of accounts of a dissolved partnership firm and the validity of the amended partnership deed.
Headnote:
Partnership Firm - Dissolution of Partnership - Amendment of Partnership Deed - Limitation Act, 1963 - [PARTNERSHIP FIRM] - [DISSOLUTION OF PARTNERSHIP] - [Section 96 of CPC, Partnership Act, Limitation Act] - The court discussed the amendment of the partnership deed, dissolution of the partnership, and the applicability of the Limitation Act. The court found that the suit for rendition of accounts was time-barred as it was filed beyond the three-year limitation period from the date of dissolution of the partnership firm. The court also held that the amended partnership deed was validly executed and the father had the mental capacity to do so.
Fact of the Case:
The plaintiff filed a suit seeking rendition of accounts of a partnership firm and claimed entitlement to a 50% share in the partnership firm. The trial court dismissed the suit as being barred by limitation and held that the partnership firm stood dissolved on the death of the father, thereby making the suit time-barred. The trial court also found that the amended partnership deed reducing the father's share to 10% was validly executed and that the father had the mental capacity to do so.
Finding of the Court:
The court found that the suit for rendition of accounts was time-barred as it was filed beyond the three-year limitation period from the date of dissolution of the partnership firm. The court also held that the amended partnership deed was validly executed and the father had the mental capacity to do so.
Issues: The issues included whether the partnership deed was legally and validly amended, whether the plaintiff was entitled to a 50% share in the business, and whether the suit was within the limitation period.
Ratio Decidendi: The court held that the suit for rendition of accounts was time-barred as it was filed beyond the three-year limitation period from the date of dissolution of the partnership firm. The court also found that the amended partnership deed reducing the father's share to 10% was validly executed and that the father had the mental capacity to do so.
Final Decision: The appeal was dismissed by the court.
VALMIKI J. MEHTA, J.
C.M. Appl. No. 32831/2018 (for exemption)
1. Exemption allowed, subject to all just exceptions.
C.M. stands disposed of.
C.M. Appl. No. 32830/2018 (for delay)
2. For the reasons stated in the application the delay of 41 days in re-filing the appeal is condoned, subject to just exceptions.
C.M. stands disposed of.
RFA No.665/2018
3. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit impugning the Judgment of the Trial Court dated 31.1.2018 by which the trial court has dismissed the suit for rendition of accounts of the respondent no. 1/defendant no. 1/partnership firm. Appellant/plaintiff had also sought the reliefs of declaration and permanent injunction with respect to appellant/plaintiff being entitled to 50% share in the partnership firm and the respondent no.2/defendant no. 2 be restrained from disposing of the assets of the partnership firm. The partnership firm of which rendition of accounts was sought was a partnership firm of the father of the appellant/plaintiff namely late Sh. Phool Chand with the other/second son of the father late Sh. Phool Chand, namely Sh. Rajender Kanaujia/respondent no. 2/defendant no. 2 i.e. the brother of the appellant/plaintiff.
4. The admitted facts of the case are that the father late Sh. Phool Chand was a partner in the partnership firm in terms of the Partnership Deed dated 22.4.1975 with the respondent no. 2/ defendant no. 2. The Partnership Deed dated 22.4.1975 was effective from 1.4.1975. Business which was carried on by the partnership firm/respondent no. 1/defendant no. 1 was of drycleaners. The share in the profit and loss of this Partnership Deed was in the ratio of 60% of the father Sh. Phool Chand and 40% of respondent no. 2/ defendant no.2 Sh. Rajender Kanaujia. Another Partnership Deed dated 16.4.1992 was entered into between the parties whereby the profit sharing ratio was maintained in terms of the pervious partnership deed. The case of the appellant/plaintiff was that Sh. Phool Chand during his life time had executed his last and final Will dated 19.9.1996 which was duly registered before the concerned Sub-Registrar. As per his Will dated 19.9.1996, out of the 60% share of late Sh. Phool Chand in the partnership business, 50% share in the partnership firm was to devolve upon the appellant/plaintiff, and the balance 10% out of the 60% share of the father Sh. Phool Chand was to devolve upon respondent no. 2/defendant no. 2. Sh. Phool Chand expired on 1.1.2004 and his estate comprised of his share in the partnership firm and also a residential property B-4/7, Safdarjung Enclave, New Delhi, on a plot of land of 200 sq. yards. The property at Safdarjung Enclave was divided between the appellant/plaintiff, the respondent no. 2/ defendant no. 2 and the third brother Sh. Ratan Lal Kanaujia in terms of the Will, but disputes arose between the two brothers who are parties to this suit as regards partnership business inasmuch as the respondent no. 2/ defendant no. 2 pleaded that the earlier Partnership Deeds dated 22.4.1975 and 16.4.1992(Ex.DW1/1) as per which the father Sh. Phool Chand had a 60% share in the partnership firm, was amended by the subsequent Partnership Deed dated 1.4.2003 (Ex.DW1/2) whereby the share of the father in the partnership firm was brought down by him/the father to 10%. Therefore it was pleaded that at best only 10% share of the partnership firm was available to the legal heirs of late Sh. Phool Chand, whether Sh. Phool Chand died intestate or he died leaving behind his Will dated 19.9.1996 (Ex.P2). Respondent no. 2/Defendant no. 2 accordingly pleaded that appellant/plaintiff could not seek 50% share in the partnership firm.
5. After pleadings were complete, the trial court framed the following issues:-
"(i) Whether the share ratio in the profits and losses of the partnership firm, defendant no. 1 was legally and validly amended between defendant no. 2 and late Shri P
