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1968 Supreme(Mad) 320
Madras High Court
VENKATARAMAN,RAMAMURTI
Minor Dorairaj - Appellant
Versus
K.K.R.Karuppiah Ambalam - Respondent
Decided On : 09/26/1968
A. Sundaram Iyer, for Appellant; T.B. Srinivasan, for Respondents.
Headnote:
The suit for taking accounts of a dissolved partnership and is directed against the first defendant Karuppiah Ambalam. The suit has been dismissed on two preliminary grounds-(1) that in part it involved the determination of title to immoveable properly situate in Malaya a foreign territory; and (2) limitation.
Fact of the Case:
The plaintiffs grandfather Solayappa and the first defendant Karuppiah Ambalam were sons of sisters. They carried on a partnership business in Malaya under the name and style of K. R. PR. Mantin. Originally the business was at Mantian and later it was in Siramban. This partnership is admitted. It is also common ground that Solayappan had 3/4 share and the 1st defendant 1/4 share. Solayappa died on 19-1-1946. Section 42 of the Partnership Act says "Subject to contract between the partners, a firm is dissolved by the death of a partner". As pointed out by their Lordships of the Supreme Court in Commissioner of Income-tax v. Govindaram Sugar Mills, 1965-3 SCR 488 : (AIR 1966 SC 24), a firm of two partners necessarily gets dissolved on the death of one of the partners and to such a partnership the phrase subject to contract between the partners" cannot apply, because a partnership necessarily involves a minimum of two partners. Even when the legal representatives of the deceased partner takes his place and carry on the business with the other partners, it will only be a new partnership. The plaint, however, states inaccurately that there was a contract between Solayappa and the 1st defendant that the partnership should continue without dissolution even in the event of the death of one of the partners, by the legal representatives taking his place. But in substance, the case in the plaint is that a new partnership came into existence on the death of Solayappa, between his sons Ayyachami and Periannan on the one hand, and the first defendant on the other.
Finding of the Court:
The suit is maintainable in the Subordinate Judge's Court of Devakottai. Ex. A-5 constitutes a valid contract on the basis of which the parties must proceed, namely, that there was a partnership between Ayyachami, Perianna and the first defendant even from 19-1-1946 upto 5-4-1949, and that the shares are as indicated in Ex. A-5. Since the first defendant has settled the matter with defendants 3, 4 and 5, the dispute will be outstanding only as between the plaintiff and the second defendant on the one hand, and the first defendant on the other. We find the suit is within time.
Issues: 1. Whether the suit is maintainable in the Subordinate Judge's Court of Devakottai? 2. Whether Ex. A-5 constitutes a valid contract on the basis of which the parties must proceed, namely, that there was a partnership between Ayyachami, Perianna and the first defendant even from 19-1-1946 upto 5-4-1949, and that the shares are as indicated in Ex. A-5? 3. Whether the suit is within time?
Ratio Decidendi: The suit here is essentially an action in personam against a defendant who is amenable to the jurisdiction of the Subordinate Judge's Court of Devakottai. It is an accepted principle that in such cases the court (where he resides) will have jurisdiction to try the action.
Final Decision: The judgment and decree of the learned Subordinate Judge are set aside and the suit is remitted for trial on the further points of dispute between the parties and in particular the following- 1. Whether the partnership continued from 5-4-1949 to 30-3-1950? 2. Which of the parties are liable to account; in particular whether the first defendant is liable to account and if so, from what date? 3. What are the shares of the plaintiffs and the second defendant? 4. To what relief will the parties be entitled? Besides the evidence already on record, the parties will be entitled to adduce further evidence. The suit must be disposed of expeditiously. The parties will bear their own costs in the appeal. The court-fee paid on the memorandum of appeal will be refunded to the appellant. Costs in the trial Court will abide the result of the suit. In the meanwhile the first defendant, who is said to have collected the costs from the plaintiff, may pay back the costs to the plaintiff.
JUDGMENT :- This appeal has been filed by the plaintiff in O. S. No. 16 of 1957 on the file of the Subordinate Judge's Court, Devakottai, against the judgment and decree dismissing his suit. The suit is for taking accounts of a dissolved partnership and is directed against the first defendant Karuppiah Ambalam. The suit has been dismissed on two preliminary grounds-(1) that in part it involved the determination of title to immoveable properly situate in Malaya a foreign territory; and (2) limitation.
2. The following genealogical tree will show the relationship of the parties-
The plaintiffs grandfather Solayappa and the first defendant Karuppiah Ambalam were sons of sisters. They carried on a partnership business in Malaya under the name and style of K. R. PR. Mantin. Originally the business was at Mantian and later it was in Siramban. This partnership is admitted. It is also common ground that Solayappan had 3/4 share and the 1st defendant 1/4 share. Solayappa died on 19-1-1946. Section 42 of the Partnership Act says "Subject to contract between the partners, a firm is dissolved by the death of a partner". As pointed out by their Lordships of the Supreme Court in Commissioner of Income-tax v. Govindaram Sugar Mills, 1965-3 SCR 488 : (AIR 1966 SC 24), a firm of two partners necessarily gets dissolved on the death of one of the partners and to such a partnership the phrase subject to contract between the partners" cannot apply, because a partnership necessarily involves a minimum of two partners. Even when the legal representatives of the deceased partner takes his place and carry on the business with the other partners, it will only be a new partnership. The plaint, however, states inaccurately that there was a contract between Solayappa and the 1st defendant that the partnership should continue without dissolution even in the event of the death of one of the partners, by the legal representatives taking his place. But in substance, the case in the plaint is that a new partnership came into existence on the death of Solayappa, between his sons Ayyachami and Periannan on the one hand, and the first defendant on the other. Paragraph 13 of the plaint alleges-
"He (first defendant) has caused the partnership between KR. PR. to be continued at Seramban without break and without bringing about dissolution and treating Ayyachami and Periannan as partners of the continuing business in the place of their deceased grandfather. (In the plaint Solayapan is throughout referred to as the grandfather). He caused the continuity of the firm to be recognised and registered according to the requirements of the law of Malaya by introducing their names and carried on the firm under his exclusive directions and management".
This is also made clear in the other paragraphs, like paragraphs 7 and 14.
3. The plaint further states that Ayyachami and Periannan were given to drinking and other bad habits and, therefore, Ponnalagi the wife of Periannan, acting as the next friend of her minor sons, Solamalai and Ramaswami, instituted a suit, O. S. No. 33 of 1948, on the file of the Subordinate Judge's Court, Devakottai, on 3-11-1947, for partition. In that suit Ayyachami was the 1st defendant, Periannan alias Muthukannu was the 2nd defendant and Karuppiah Ambalam, the 1st defendant in the present suit (O. S. 16 of 1957) was the 3rd defendant. Two other persons with whom we are not now concerned, were impleaded as alienees. It will be seen that Ponnalagi and her sons Solamalai and Ramaswami are respectively defendants 3 to 5 in the present suit. In that suit the assets of the partnership KR. PR. in Malaya were described in the C schedule to the plaint. That suit was compromised on 5-4-1949. Ex. A.5 is the certified copy of the compromise. Its terms are very important, particularly, Clause (1). We shall set out Clause (1) in original and also give a free translation of all the clauses. (Here followed the Clause (1) in Native Script)
"Regarding the shop s
