1915 Supreme(Mad) 667
IN THE HIGH COURT OF MARAS
Coutts-Trotter, S Aiyangar
Ramanathan Chetty
Versus
Yegappa Chetty And Ors.
Decided On : 6 December, 1915
The death of a partner from an undivided Hindu family does not automatically dissolve the partnership, and the applicability of limitation in such cases is determined by the provisions of the Partnership Act, 1932.
Headnote:
Dissolution of Partnership - Limitation - Partnership Act, 1932 - Section 69 - Section 72 - Section 76 - Section 78 - Section 79
Fact of the Case:
The suit was for dissolution of partnership entered into in 1902 or 1903, and the question was whether the suit, launched in 1912, was barred by limitation. The main issue was whether the death of a partner from an undivided Hindu family automatically dissolved the partnership.
Finding of the Court:
The court held that the suit was time-barred as there was no evidence of any new partnership after the death of the partner from the undivided Hindu family, and the partnership had terminated.
Issues: The main issue was whether the death of a partner from an undivided Hindu family automatically dissolved the partnership.
Ratio Decidendi: The court relied on the Partnership Act, 1932 and specifically considered Sections 69, 72, 76, 78, and 79 to determine the dissolution of the partnership and the applicability of limitation.
Final Decision: The appeal was dismissed with costs as the court found the suit to be time-barred.
Coutts-Trotter, J.
1. This was a suit for dissolution of partnership. The partnership was entered into in 1902 or 1903 between plaintiff, the 1st defendant, the 5th defendant and one Subramaniam Chetty. The sole question we have to determine is whether this suit for dissolution, which was launched on the 12th March 1912, is or is not barred by limitation, the period of limitation in such cases being three years. Various points of the time were suggested when it was said that the plaintiffs cause of action arose, but in my opinion it is sufficient to confine our attention to the year 1908 when Subramaniam Chetty died. It is clear that if, on his death, the cause of action arose, the plaintiffs suit cannot be in time. Prima facie, one would suppose that if a person who was a partner in a firm died, the partnership would stand dissolved. But it is contended on behalf of the appellant that the ordinary rule of law is not applicable to cases where the partner who dies is a member of an undivided Hindu family and where it is to be supposed that he enters into the partnership in his capacity as a member of the undivided family to which he belongs, with the intention of creating an interest in the partnership business for his family as a whole. One may take the case of a partner who is the managing member of his family. Then on this doctrine, the family as a whole becomes a member of the partnership firm. In that case the death of the particular individual who happened to join the partnership and take part in its affairs is quite irrelevant, because the family still subsists as an entity. It is a family partnership and, therefore, there is no alteration of the personomposing the partnership. Such a doctrine would, of course, cause commercial inconvenience of the most extreme type. I do not think anybody would doubt that.
2. The question is whether it can be supported in law. Chief reliance was placed on a judgment of the Privy Council delivered by Lord Shaw reported as Joopoody Sarayya v. Pulavarti Lakshmanaswamy 19 Ind Cas. 513; 36 M.185; 11 A.L.J. 556; 18 C.L.J. 13; 15 Bom. L.R. 634; 14 M.L.T. 7; 17 C.W.N. 1006; (1913) M.W.N. 571; 25 M.L.J. 128 (P.C.) in the middle of page 192. It appears from the report that the matter was not touched upon either in the argument of the appellant or that of the respondent. The decision of the Privy Council was one which confirmed the judgment of this Court on the facts and held that a certain partnership which was the subject of that case had been dissolved in the year 1891 and did not, as the appellant contended, subsist after that date. The main fact which appears to have carried weight with their Lordships was that in 1891, final accounts of the partnership were taken in a way in which they were never taken before and that after that date no partnership accounts of profits and losses were made up at all, and they also considered the fact that there was almost simultaneously a division of the family property which rendered it very likely that there had been at the same time a dissolution of the partnership. The particular passage in the judgment relied upon by the appellants Counsel in support of his contention is, different person had arisen in law and with these it was open to Venkanna to say whether he should be allied in partnership or not." It is said that this sentence suggests that whenever there is a partition as between the members of a joint Hindu family, ipso facto there is a dissolution of any partnership in which the family is interested by reason of the fact that it removes from the partnership a large number of persons and it is argued that conversely it must be held that so long as the family is not divided as long the partnership subsists. Mr. Krishnaswami Iyer, for the respondents, suggested various ways of interpreting the sentence so as to give it a different meaning from that suggested by the appellants Counsel. I think it is quite wrong to take a sentence of the judgmen