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2001 Supreme(Mad) 691

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K.P. SIVASUBRAMANIAM
H.G. Oomor Sait and another
Versus
O. Aslam Sait
C.R.P.No.1383 of 2000 and C.M.P.7887 of 2000
Decided on: 28-06-2001

Advocates Appeared:
Mr.Srinath Sridevan, Advocate for Petitioners. Mrs.N. Krishnaveni for Mr.T.R. Rajaraman for Respondents.

Appointment of receiver to run the business is not just.

Headnote:Code of Civil Procedure, 1908—Order 40 Rule 1—Appointment of receiver in a suit for dissolution of form and accounts between partners—Held, appointment of receiver is not proper and just—Only to save the goods from being destroyed appointment of receiver may be done for a very limited purpose of selling the outstanding goods with the consent of the parties—Order for appointment of receiver set aside.

Judgment :

1. This revision is directed against the order of the learned subordinate Judge, Ootacamund, in T.A.No.295 of 2000 in O.S.No.243 of 1999. This said application in I.A.No.295 of 2000 was filed by the revision petitioners/defendants 2 and 3 in the suit, under Section 8 of the Arbitration and Conciliation Act, 1996 to direct the dispute raised by the plaintiff to arbitration and refer the parties to such arbitration.

2. Thefacts which are necessary for the disposal of this petition are as follows: for convenience, the parties are described as plaintiff and defendants. The plaintiffs and defendants 2 and 3 had constituted a partnership (un-registered). While the second defendant is the father, the plaintiff and the third defendant are brothers being the sons of the second defendant. The partnership related to the business which they were running under the name and Style "M/s English Boot House", dealing with foot wears and other allied product. While the father was entitled to a share of 40% of the profit and loss, the other sons were entitled to 30% each.

3. Misunderstandings arose as between the plaintiff on one hand and defendants 2 and 3 on the other. The plaintiff filed a suit in O.S.No.184 of 1999 praying for a direction to defendants to furnish true and proper accounts of the firm M/s English Boot House. The plaintiff alleged that the firm had two show room at Coonoor and two Reduction Sales Centres at Coimbatore. He was looking after the business at one of the show rooms at Coonoor. The second defendant was looking after the other show room at Coonoor and the third defendant was looking after the business at Coimbatore. The entire accounts of the business was looked after by defendants 2 and 3 and having regard to the relationship between the parties, the plaintiff had reposed utmost trust. But later, the plaintiff came to know that defendants 2 and 3 had started a new business of their own in the Head Office itself in the name and style "Foot Fashion" in a clandestine manner. He came across a printed cash bill dated 25.3.1999 bearing No.23325. There was no proper answer when they were questioned. The defendants failed to furnish proper information or statement of accounts for verification. The Auditor with whom the accounts were said to be available also replied very evasively when contacted by the plaintiff. The plaintiff suspected that there was misappropriation of funds from the account of M/s English Boot House. Therefore, according to him, the said suit was filed reserving his right to seek dissolution of the firm and for recovery of the amounts due to him.

3. In the written statement filed by the second defendant while denying the plaint allegations he contented that the suit was hit by Section 69 of the Partnership Act, being an un-registered firm. The firm was subsequently dissolved only on 7.12.1999 after the suit had been filed. The allegations in the suit were vague and the period for which the accounts were sought for was not given in the plaint. The plaintiff was given to wayward life and making unreasonable demands. The plaintiff had no other source of income and only to accommodate him, the firm was constituted in 1982 though the business had been successfully conducted by him from 1948. It was the plaintiff who was trying to make unlawful gains and was of little assistance. He was contributing only nuisance. The third defendant was running his own separate business "Foot Fashion" which was in fact commenced only with the consent of all the partners. But the plaintiff taking advantage of the absence of a written consent, was laying false claim to the said firm. The contention that the plaintiff was not aware of the business earlier, was highly dramatic and artificial considering the location of the business. The accounts of English Book House was being properly and regularly maintained subject to prompt Income-Tax and Sales-Tax assessment. The defendants have not caused any breach of trust or m
























































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