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2025 Supreme(Ker) 1734

IN THE HIGH COURT OF KERALA AT ERNAKULAM 
C. PRATHEEP KUMAR, J.
Chathu Kottollathil S/o Kannan Therath - Appellant 
Versus
Parveettil Haris S/o Pakran - Respondent
R.F.A. No. 313 of 2017
Decided On : 16-07-2025


Advocates:
Advocate Appeared:
For the Appellants : A.T. Anilkumar, V. Shylaja
For the Respondents: P.B. Krishnan, P.M. Neelakandan, Sabu George, P.B. Subramanyan

IMPORTANT POINT
Exclusive property of an individual partner does not become partnership property without clear evidence of intention to treat it as such.

Headnote:

(A) Indian Partnership Act, 1932 - Section 14 - Dissolution of partnership - Plaintiff claimed exclusive ownership of property used for partnership business - Trial court found property remained individual property of plaintiff, not partnership asset - Court emphasized intention of parties and necessity of evidence for conversion of property status. (Paras 1 - 28 )

(B) Damages for use and occupation - Trial court awarded damages without a specific prayer in the plaint - Court held such award unjustified, as it deprived defendants of opportunity to contest. (Paras 29 - 30 )

Facts of the case:

The plaintiff sought dissolution of a partnership and claimed exclusive ownership of property used for the business, alleging mismanagement by the defendant. The trial court decreed the suit, granting ownership and damages.

Findings of Court:

The trial court's finding that the property was individual property of the plaintiff was upheld, while the award for damages was set aside due to lack of a specific claim.

Issues: The court addressed whether the property was partnership property and the validity of the damages awarded.

Ratio Decidendi: The court ruled that exclusive property does not become partnership property without clear agreement, affirming the plaintiff's ownership while setting aside unjustified damages.

Result: Appeal allowed in part.

Table of Content
1. court's analysis of property status and partnership law. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28)
2. court's ruling on unjustified damages. (Para 29)
3. final decision on appeal. (Para 30)

JUDGMENT :

1. The additional defendants 2 to 5 in O.S.80/2011 on the file of the Subordinate Judge, Vatakara are the appellants. (For the purpose of convenience the parties are hereafter referred to as per their rank before the trial court.)

2. The plaintiff filed the above suit originally for dissolution of partnership and rendition of account. Subsequently the prayer for declaration was also incorporated. During the pendency of the suit, the original defendant died and his legal representatives were impleaded as additional defendants 2 to 5. The plaintiff and the original defendant had entered into a partnership business in the name and style 'M/s.Unique Wood Industry' at Thanneerpanthal. It was a partnership at Will. The share capital of the firm was Rs.5,50,000 and out of which, the plaintiff contributed 25% and the original defendant contributed 75%. Ext.B1 is the partnership deed dated 8.9.2000 executed by them in that respect. Till 2004, the business was running smoothly. According to the plaintiff, thereafter the defendant himself managed the firm, forged his signature for filing applications before authorities and obtained new licence. He also alleged that in spite of repeated demands, the defendant failed to show the accounts of the firm to him. Therefore, he issued a lawyer notice dated 23.12.2010 calling upon the defendant to execute a dissolution deed and to settle the accounts within 15 days from the date of the notice. Since the above request was not complied, the plaintiff filed the suit originally for dissolution and for rendition of accounts.

3. In the written statement filed by the defendant, while denying the allegations in the plaint he contended that the land and the building wherein the partnership business has been carried on are the assets of the firm and that the plaintiff's share capital of Rs.1,38,750/- is the value of the land and building as estimated by them. The sum and substance of the contention raised by the defendant is that the land and building wherein the partnership business has been carried on, are to be treated as the assets of the firm and the same also is to be partitioned among the plaintiff and defendant. Thereafter the plaintiff amended the suit incorporating a prayer that the land and the building wherein the partnership business has been carried on exclusively belong to him. Therefore, he prayed for a declaration to that effect and also a mandatory injunction for getting possession of the said property.

4. The trial court framed seven issues. No oral evidence was adduced by both sides. The only documentary evidence produced are Exts.A1 to A6. After evaluating the above evidence the trial court decreed the suit ordering dissolution of the firm, rendition of its accounts and declaring that the plaint schedule property belongs to the plaintiff. The trial court passed a mandatory injunction directing the defendants to remove themselves from the scheduled property. The trial court further held that the plaintiff is entitled to get damages for use and occupation of the land and building w.e.f. 14.1.2011 till additional defendants 2 to 5 vacate the premises and it further held that the quantum thereof shall be ascertained and fixed at the time of passing final decree. Aggrieved by the above judgment and decree to the extent it granted declaration, mandatory injunction and damages for use and occupation of the land and building, the additional defendants preferred this appeal.

5. Now the points that arise for consideration are the following :

i) Whether the individual property of the plaintiff used for the business of the firm, can be treated as the property of the partnership?

ii) Whether the trial court was justified in awarding damages for use and occupation of the

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