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1979 Supreme(HP) 74

High Court Of Himachal Pradesh
V.D.MISRA,H.S.THAKUR
KRISHAN DAYAL - Appellant
Versus
AMAR NATH - Respondent
L. P. A. No. 31 of 1969
Decided On : 12/31/1979

Advocates Appeared:
For appellant :R. N. Malhotra and Mrs. P. Malhotra. For respondents: Inder Singh.

A suit for rendition of accounts cannot be dismissed after a preliminary decree has been passed, unless the decree is reversed on appeal. However, if the plaintiff withholds material account books, the court may dismiss the suit as the accounts cannot be gone into without the necessary documents.

Headnote:

PARTNERSHIP - DISSOLUTION - RENDITION OF ACCOUNTS - PRELIMINARY DECREE - DISMISSAL OF SUIT - ADMISSIBILITY OF EVIDENCE - STATEMENT OF WITNESS WHO DIED BEFORE CROSS-EXAMINATION - ADVERSE INFERENCE - NON-PRODUCTION OF DOCUMENTS.

Fact of the Case:

A partnership firm was dissolved, and a preliminary decree for dissolution and rendition of accounts was passed. The Local Commissioner appointed to go into the accounts submitted a report, which was set aside by the trial court. The trial court then dismissed the suit, holding that it was not possible to go into the accounts as both parties were withholding important and material account books. The plaintiff appealed to the District Judge, who agreed with the trial court that the Local Commissioner had committed serious errors and that the plaintiff had failed to produce material account books. However, the District Judge found that Rs. 16,000/- had been deposited by one of the defendants when resin belonging to the partnership was released in his favor, and held that the parties were entitled to the amount in accordance with their shares in the partnership.

Finding of the Court:

The High Court upheld the decision of the District Judge, holding that the trial court was justified in dismissing the suit as the plaintiff had withheld material account books, and that the adverse inference drawn against the plaintiff under section 114 of the Evidence Act was justified. The High Court also held that the statement of a witness who had died before cross-examination was admissible in evidence, but that the weight to be attached to it depended on the circumstances of each case.

Issues: 1. Whether the suit could be dismissed after a preliminary decree had been passed for rendition of accounts? 2. Whether the statement of a witness who died before cross-examination was admissible in evidence? 3. Whether adverse inference could be drawn against the plaintiff for non-production of documents?

Ratio Decidendi: 1. A suit cannot be dismissed after a preliminary decree has been passed for rendition of accounts unless the decree is reversed on appeal. However, if the plaintiff withholds material account books, the court may dismiss the suit as the accounts cannot be gone into without the necessary documents. 2. The statement of a witness who died before cross-examination is admissible in evidence, but the weight to be attached to it depends on the circumstances of each case. Factors to be considered include the nature of the testimony, its probative value, the status of the witness, his relationship or connection with the parties to the case, and any other factor touching the credibility of the witness. 3. Adverse inference may be drawn against a party who withholds material documents, as provided under section 114 of the Evidence Act.

Final Decision: The appeal was dismissed, and the parties were left to bear their own costs.

JUDGMENT

H. S. Thakur, J.—The appellant has filed this Letters Patent Appeal against the judgment and decree dated 8th July, 1969 passed by a learned single Judge of Delhi High Court (Himachal Bench),

2. The brief facts of the case are that during 1999 Bikrami, Krishan Dayal appellant-plaintiff, Chandu Ram defendant No. 1 and Munshi Ram defendant No. 2, entered into a partnership for extraction and sale of resin in the then Princely Mandi State. A deed of partnership was executed in that connection which is marked as Ex. PA. According to the terms of the partnership deed, the plaintiff was to invest the entire amount for the business of the partnership and was entitled to receive interest at the rate of Rs. 1/-per cent per annum on the amount invested. The assets of the partnership were first to be applied towards payment of the amount invested by the plaintiff and the interest thereon. Out of the balance, the profits were to be distributed amongst the partners. The share of the plaintiff was fixed at 6 annas in a rupee, while the shares of Chandu Ram and Munshi Ram defendants were 8 annas and 2 annas in a rupee, respectively. The partnership firm, thereafter, carried on the business for some years. During the year 2004 Bikrami the plaintiff filed a suit for dissolution of partnership and rendition of accounts against Chandu Ram and Munshi Ram defendants. A preliminary decree for dissolution of partnership and rendition of accounts was passed in that suit on March 28, 1^51. The preliminary decree was affirmed on appeal by the District Judge and the learned Judicial Commissioner, Himachal Pradesh. Shri R. C. Sawhney, Advocate, was appointed Local Commissioner to go into accounts in pursuance of the preliminary decree. The Local Commissioner submitted a report dated April 6, 1958 to the effect that the plaintiff was entitled to recover Rs. 24,374/1/3 from defendant No. 1 and Rs. 3,115/15/6 from defendant No. 2. A total sum of Rs 27,526/- was thus found to be due from the two defendants to the plaintiff. Objections were preferred by the plaintiff as well as by the defendants to the report of the Local Commissioner. The trial court after considering the evidence and the report of the Local Commissioner, set aside the same. Instead of appointing another commissioner for going into the accounts, the learned trial court made an attempt to go into the accounts. The conclusion, however, arrived at by the trial court was that it was not possible to go into the accounts of partnership as both the parties were withholding important and material account books. Consequently the trial court raising a presumption against the plaintiff under clause (g) of section 114 of the Evidence Act, on account of the non-production of account books which were in his possession, dismissed the suit. The plaintiff thereafter went up in appeal to the Court of the District Judge, and the learned District Judge found that the Local Commissioner who had gone into the accounts had committed serious errors. The learned District Judge agreed with the trial Court that there were sufficient grounds for setting aside the report of the Local Commissioner. The learned District Judge also agreed with the trial court that the plaintiff had failed to produce material account books which were in his possession. As such, the plaintiff was held not entitled to claim rendition of accounts. It was brought to the notice of the learned District Judge that Rs, 16,0C0/- had been deposited by Munshi Ram defendant in that court when resin belonging to the partnership was released in his favour. The said resin was thereafter sold by Munshi Ram defendant. In the view of the learned District Judge, the parties were held entitled to the amount of Rs. 16,000/- in accordance with their shares in the partnership. The plaintiff was, accordingly, held entitled to get Rs 6,000/- out of Rs. 16,000/-, while the legal representatives of Chandu Ram defendant were held entitled to receive Rs. 8,000/









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