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1973 Supreme(Mad) 454

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. M. Ismail and S. Natarajan, JJ.
S. P. Periaswami Konar and another .. .....Appellant(s)
Versus
S. Mikole Udayar and another .. .....Respondent(s)
Appeal No. 509 of 1967.
Decided On : 05 September 1973

Important Points

Suit for rendition of accounts.

Subject

Partnership - Dissolution and Accounting

Headnote

Partnership-Suit filed for rendition of accounts due to dissolution of partnership-Held, proper relief is general accounting.

       

Advocates:
V. K. T. Chari and Srinivasan, for Appellant.
R. Kesava Iyengar, for Respondent.

Ismail, J. — Defendants 1 and 2 in O.S. No. 8 of i960 on the file of the Court of the Subordinate Judge, Sivaganga, are the appellants herein. Admittedly, the first respondent herein entered into a contract with the Highways Department for the construction of Kodaikanal Moonar Road. After having taken this contract, he entered into a partnership with the appellant and the second respondent for the purpose of carrying out the contract taken by him from the Highways Department. The terms of the partnership were reduced to writing under Exhibit A-1 dated 18th May, 1955. Even though the partnership agreement was reduced to writing on 18th May, 1955, the said document itself provided that the partnership must be deemed to have come into existence on 25th January, 1955. According to the agreement between the parties, each one of the partners was to contribute a sum of Rs. 10,000 towards the capital of the partnership business and they had to divide the profits or losses equally as between them. Clause 7 of the partnership deed provided that under the control and direction of the first respondent herein, the appellant and the second respondent should carry on the construction work and keep proper accounts for the receipts and expenditure, keeping vouchers, bills, invoices etc. to support the expenditure and render a true and proper account of the receipts and expenditure relating to the partnership. The document expressly contemplated the partnership to cover a single venture and to come to an end on the venture itself coming to a close. In addition to this, the partnership deed further provided that it was open to any of the partners to give notice of dissolution of the partnership in the event of there being no proper understanding between the partners or the partnership venture itself ending in a loss. On the allegation that the appellants herein and the second respondent did not diligently, honestly and properly carry out the contract work and the first respondent himself had to take up the contract work and even then the contract work was not completed within the time fixed the Government themselves took over the work in March, 1958. Thereby the partnership became dissolved in March, 1958 and the suit was instituted by the first respondent herein for rendition of accounts against the appellants and the second respondent herein. The prayers in the suit were;

"(a) for directing the defendants to render true and proper accounts supported by vouchers, bills, invoices etc., of their management of the joint contract and venture regarding the Kodaikanal Moonar Road from January 1955 to 1958, when the partnership became dissolved to the satisfaction of the plaintiff ;

(b) to receive from the plaintiff statement of charges and falsifications for amounts misappropriated and loss caused on account of fraud, misfesance and malfeasance and non-feasance and neglect of the defendants in their management ;

(c) to direct the defendants to pay the amounts that may be found due to the plaintiff on the taking of such accounts with subsequent interest ;

(d) ..............................

(e)............................

Among the various defence put forward by the appellants herein, they contended that there was a dissolution of the partnership and settlement of accounts by agreement between the parties in August, 1956 and consequently the suit instituted on 30th March, 1960 was barred by limitation. They also put forward the contention that the partnership itself was an illegal one, being opposed to public policy since the Madras De-taled Standard Specification, which applied to the contract taken by the first respondent from the Highways Department, provided that the contractors should not, without the written consent of the Executive Engineer assign the contract nor sublet any portion of the same, and in this particular case notwithstanding this prohibition the first respondent had entered into a partnership with the appellant and the second respondent























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