High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.S. SUBRAMANI
V.V. Durairaj
Versus
M/s.Sakthi & Company and another
C.R.P.No.1450 of 1997
Decided On : 29-02-2000
Judgment-debtor in O.S.No.135 of 1982 on the file of Sub Court, Vellore is the revision petitioner here in.
2. M/s.Sakthi & Company and M/s.Sivasakthi & Company obtained a decree for sale of mortgaged properties. Preliminary decree was passed on 30.4.1985 and final decree was passed on 17. 1985. In execution when the properties were brought for sale, an application was filed by petitioner under Sec.151 of Code of Civil Procedure contending that the decree is not executable. It was contended in that application that Chandrasekara Mudaliar, who represented both these firms was only one of the partners and since he died long before execution petition was filed, execution cannot be proceeded. It is also contended that M/s.Sakthi & Company and M/s.Sivasakthi & Company are only firms having two partners viz., Chandrashekara Mudaliar and his wife and automatically on the death of one of the partners, entire firm stands dissolved since the degree is in favour of the firm and a firm is not in existence, property cannot be brought for sale and execution petition is also not maintainable.
3. Against the said contention, counter affidavit was filed by first respondent alleging that two firms are really Hindu Joint Family Firms and Chandrasekara Mudaliar was representing family as Karta. First respondent who has now been impleaded is the Karta of the family on his death being elder male member of the family. It is also contended that first respondent is already on record representing second respondent as its partner. It is also alleged that the present application is only to delay the execution proceedings and they prayed for dismissal of the application.
4. Lower court after hearing both sides held that the application filed by petitioner is not maintainable. It is joint family firm and on the death of a member, firm is not dissolved and consequently respondents herein are entitled to execute decree. The same is challenged in this revision petition.
5. Learned counsel for petitioner put forward his argument as was urged before the lower court, i.e., both respondents are Firms in which they are only two partners, Chandrasekara Mudaliar and his wife and on the death of Chandrasekhar Mudaliar, the firm gets automatically dissolved. Since the firms are dissolved, decree in favour of the Firms cannot be executed. Reliance was also placed on the decision reported in Commissioner of Income Tax v. G.S.Mills Commissioner of Income Tax v. G.S.Mills Commissioner of Income Tax v. G.S.Mills , A.I.R. 1966 S.C. 24 for the said purpose. In para. 7 of the judgment, it is held thus:
“….Partnership, under Sec.4 of the Partnership Act, is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Sec.5 of the said Act says that the relation of partnership arises from contract and not from status. The fundamental principle of partnership, therefore, is that the relation of partnership arises out of contract and (not) out of status. To accept the argument of the learned counsel is to negative the basic principle of law of partnership. Sec.42 can be interpreted without doing violence either to the language used or to the said basic principle. Sec.42(c) of the Partnership Act can appropriately be applied to a partnership where there are more than two partners. If one of them dies, the firm is dissolved; but if there is a contract to the contrary, the surviving partners will continue the firm. On the other hand, if one of the two partners offer firm dies, the firm automatically comes to an end and, thereafter there is no partnership for a third party to be introduced therein and, therefore, there is no scope for applying Cl.(c) of Sec.42 to such a situation. It may be that pursuant to the wishes or the directions of the deceased partner the surviving partner may enter into a new partnership with the heir of the deceased partner, but that would constitute a new partnership. In thi
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