Gujarat High Court
J. M. SHETH
Madhavji Khatau Katira - Appellant
Versus
Trikamdas Narandas Tanna - Respondent
Second Appeal No. 715 of 1964
Decided On : 06/28/1968
Indian Partnership Act - Section 33 - Decree- Regular Civil Appeal - Preliminary decree that came to be passed in favour respondent and against appellants by trial Court has been confirmed by District Court - Against that appellate decree present second appeal is filed by appellants-defendants – Held, court will have to consider in present case as to whether there would be two inconsistent decrees - Abated in so far as deceased appellant was concerned and his legal representatives had not been brought on the record decree trial Court dismissing suit for ejecting defendants had become final - Necessary corollary this was that it was not thereafter open to appellate Court to allow surviving appellants and pass an inconsistent decree by decreeing their claim of based on the same title – Appeal dismissed
1. The plaintiff be declared to have continued as a partner in the firm of Vijay Sewing Machine Co., as constituted under the agreement, dated 23rd July, 1960 and 15th December, 1960;
2. It may be declared that the said firm of Vijay Sewing Machine Co. stood dissolved on 27th February, 1962 on or such date as the Court thinks fit taking the evidence on record;
3. The affairs of the said firm of Vijay Sewing Machine Co. be wound up finally after taking all accounts under the direction of this Court and the profits or loss whatever become due at the foot of final account be apportioned between the suit partners according to their respective shares;
4. The defendants (appellants) be restrained from preventing the plaintiff from exercising his right as a partner of the said firm;
5. The defendants (appellants) be restrained from carrying on any business in the name of the said firm; and
6. That he (plaintiff) be awarded the costs of the suit.
2. The material allegations made in the plaint in brief were as under :-
3. The respondent, appellants, and one Dhirajlal Dhanjibhai Thakkar, as partners had agreed on 29th June, 1960 to constitute the firm in question and to do business in the name of Vijay Sewing Machine Co. at Navsari on the terms referred to in the partnership-deed, dated 23rd July, 1960. The partner Dhirajlal retired from it with effect from 7th December, 1960. On his retirement, a supplementary partnership-deed, dated 15th December, 1960 was executed and the partnership business was continued between the appellants and the respondent on the same terms and conditions as contained in the original partnership-deed, dated 23rd July, 1960, save and except the change in the shares of the parties. It was alleged by the plaintiff-respondent that with a view to deprive him of his legitimate right in the assets of the suit firm, purporting to rely upon clause 25 of the said agreement, dated 29th June, 1960, by their attorney letter dated 15th July, 1961, without assigning any reason intimated to the respondent that he had been expelled from the suit firm. He has been wrongfully expelled. It is a mala fide act of the appellants and it is in contravention of the statutory provisions of the Indian Partnership Act. After the suit notice Ex. 28, the respondent was not allowed to take part in the affairs of the suit firm by the appellants. The respondent tried to settle the dispute through arbitration but the appellants did not agree to it. On the contrary, he was served with a notice to pay Rs. 48,561.65 nPs. with interest without settling final accounts. In short, the allegations of the respondent were that the expulsion was wrong and eventually he continued to be a partner of the said firm. He prayed for the aforesaid reliefs in the suit.
4. The appellants, by their Joint written statement, Ex. 57, contended inter alia that the firm had incurred loss due to the mismanagement of the respondent. They have expelled the plaintiff-respondent in the bona fide exercise of the power of expulsion vested in them in view of the provisions of the partnership agreement referred to, in the plaint That the suit was misconceived and not maintainable. The suit should be dismissed.
5. The learned trial Judge found that the expulsion was wrong. It was not bona fide. Notice of expulsion was ultra vires, illegal and unenforceable. Clause 25 of the partnership agreement is consistent with Section 33(1) of the Act provided it is exercised in good faith by majority of partners. That the respondent was not expelled by the appellants in good-faith. The firm is dissolved from 27th February, 1962 as contended by the plaintiff-respondent. In view of his findings, the learned trial Judge made the following decretal order:
"1. It is hereby declared that
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