The main legal point established is that in cases of partnership dissolution, the appointment of a receiver can be justified if the partnership has been dissolved, the business is running at a loss, and there is a failure to wind up the partnership affairs.

S. Sankarasubban, J.

This Civil Revision Petition is filed against the order in C.M.A. No. 33/96 of the Subordinate Judge's Court, Kozhikode. Petitioner is the defendant in O.S. No. 976/91 on the file of She Munsiffs Court, Kozhikode. Respondent is the plaintiff in that suit. The suit was filed for rendition of accounts. According to the plaintiff, the plaint schedule premises belonged to the plaintiff and defendant. In it they jointly set up a building and a lodging house under the name and style 'Swarga lodge'. The lodge was being conducted as. a partnership business. Defendant was the Managing Partner of the Firm. Till 1988, the plaintiff earnestly believed that the defendant was looking after the business honestly. But subsequently, according to the plaintiff, the defendant had been making profits of the business defrauding the plaintiff. Hence, the plaintiff was not interested in the continuation of the partnership and she terminated the same with effect from 15.6.1991 by a registered notice. The suit was filed for rendition of accounts by the defendant of the firm by name 'Swarga lodge' and for payment of plaintiffs share in the dissolved partnership.

2. Defendant filed written statement contending that the firm was not dissolved properly and that the plaintiff has consented to the accounts prepared by the defendant. The suit was disposed of by the trial court by judgment dated 6th July, 1996. It found that the partnership linn was terminated with effect from 15.6.1991. Regarding the contention of the defendant that the plaintiff has been participating in the conduct of the affairs of the firm and scrutinizing the accounts, the court found that the defendant could not produce even a single document signed by the plaintiff to show that either plaintiff or any of her relative ever checked the accounts. Hence, the Court found that the defendant was under an obligation to refer accounts to the plaintiff. Hence, a preliminary decree was passed finding that the defendant was to render accounts.

3. An advocate was appointed as Commissioner to audit the accounts, etc. Subsequent to the decree, plaintiff filed I. A. No. 3292/96 under 0.40 R.1 of the Code of Civil Procedure for the appointment of a receiver in respect of the management and business of the firm. Plaintiffs respondent herein prayed that a receiver be appointed to preserve the property, collect outstandings pay debtors, if any and to sell the assets for the purpose of division.

4. Defendant filed a counter affidavit. He contended that he had been preserving the property of the partnership for a long time. The petition was filed without any bonafide. He further contended that he had filed an appeal as A.S. No. 161/96 before the District Court, Calicut. It was further contended that a receiver cannot be appointed as a matter of course. Since there is no proof of any mismanagement, there was no reason to appoint a receiver. Another objection raised was that earlier the plaintiff had filed LA. No. 2119/95 for the same relief and it was dismissed. Hence, this petition is filed to abuse the process of court.

5. The trial court, after hearing the parties, dismissed the above application. It took the view that there is no change in circumstance after the dismissal of I. A. No. 2119/95 and hence, the present application was barred by res judicata. It further held that there was no evidence to show that the respondent-petitioner herein was misappropriating the firm for his own use detrimental to the interest of the respondent herein. The court cannot appoint a receiver as a matter of course and it found fault with the plaintiff for not applying for the appointment of a receiver immediately after the termination of the partnership. Plaintiff preferred an appeal against the above order as C.M.A, No. 33/96 before the Sub Court, Kozhikode. It held that the dismissal of the earlier application for appointment of a receiver cannot be said to be res judicata. According to it,