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2010 Supreme(Mad) 110
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. CHOCKALINGAM & THE HONOURABLE MR. JUSTICE T. RAJA
P.Marimuthu
Versus
P.Mandiramoorthy & Another.
O.S.A.No.15 of 2010
Decided On :Decided On : 12-01-2010
For the Appellant:Karthik Advocate, For the Respondents:R1, Ravishankar Rao, R2, C.Gurulingam Advocates.
Premature sale of partnership property and eviction of tenants must be based on settled accounts and pending final decree proceedings. Violation of the Partnership Act warrants intervention by the Court.
Headnote:
Appeal - Partnership Dissolution - Preliminary Decree - Sale of Property - Eviction of Tenants - Partnership Act - Receiver - Consent Decree
Fact of the Case:
The appeal challenges the order of the learned single Judge directing the Receiver to proceed with the sale process of the partnership property and to evict the tenants within six months. The appellant argued that the sale of the property and eviction of tenants were premature as the final decree proceedings were pending and the accounts were not settled. The caveator contended that the appellant, being a party to the consent decree, should not contest the sale of the property. The Receiver filed a memo stating reasons for eviction, citing the creation of lease agreements detrimental to the minor partners and violation of the Partnership Act.
Finding of the Court:
The Court found that the sale of the property and eviction of tenants were premature as the accounts were not settled and the final decree proceedings were pending. The Court also noted the creation of lease agreements detrimental to the minor partners and violation of the Partnership Act. The order directing sale of the property was set aside, and six months were granted for the eviction of the tenants.
Issues: Premature sale of partnership property, eviction of tenants, violation of Partnership Act, consent decree
Ratio Decidendi: The sale of partnership property and eviction of tenants must be considered in light of settled accounts and pending final decree proceedings. Violation of the Partnership Act and creation of lease agreements detrimental to the minor partners warrant intervention by the Court.
Final Decision: The order directing sale of the partnership property was set aside, and six months were granted for the eviction of the tenants. The appellant was directed to produce the accounts before the Receiver within six months.
M. CHOCKALINGAM, J.
This intra-court appeal challenges the order of the learned single Judge of this Court made in Application No.3244 of 2008, the application seeking production of certain documents in C.S.No.564 of 2006, a suit for partition.
2. The Court heard the learned Senior Counsel for the appellant and also for the Caveator.
3. The appeal came to be filed on the following facts and circumstances.
In a suit for dissolution of partnership firm consists of the appellant who is the first defendant, the plaintiff and the second defendant, a preliminary decree came to be passed against which the appeal was preferred in OSA.No.30 of 2008. By consent, the preliminary decree which was originally passed was withdrawn and substituted by another preliminary decree. The above application was filed seeking a direction to the first defendant to file the original documents. Pending the same, a memo was filed by the Receiver seeking a direction from the Court to vacate the tenants and also for sale of the immovable property belonged to the partnership firm. The learned single Judge, after giving opportunity to all sides and hearing the submissions made, passed an order that the Receiver could sell the property calling for the bids as expeditiously as possible and also ordered for eviction of the tenants. Aggrieved over the same, the first defendant has brought forth this appeal.
4. As could be seen from the available materials, originally, a preliminary decree came to be passed by the learned Single Judge. Aggrieved over the same, the appeal was preferred therefrom and thereafter, the same was set aside. Again, a preliminary decree came to be passed. Originally, an order came to be passed appointing joint receivers, an Advocate and the first defendant. Later, it was modified, whereby, the first defendant were removed from the Receivership and the Advocate Receiver was permitted to continue. Aggrieved first defendant, took it on appeal, challenging the said preliminary decree, whereby the First Bench of this Court in O.S.A.No.90 of 2008 passed an order which reads as follows:
"2. By consent of the parties, the judgment and the decree passed by the learned single Judge dated 19.12.2007 is set aside, and the following preliminary decree is passed for dissolution of partnership as under:-
(1) It is declared that the proportionate shares of the parties in the partnership are as follows:
First respondent/plaintiff Mr.P.Mandiramoorthy 50%, and the appellant/first defendant Mr.P.Marimuthu and the 2nd respondent/2nd defendant Mr.P.Arun 25% each.
(2) It is declared that the partnership shall stand dissolved (or shall be deemed to have been dissolved) as from 03rd day of July, 2006, and it is ordered that the dissolution thereof as from that day be advertised in the Tamil Nadu Government Gazette.
And it is ordered that Mr.S.Raghunathan, Advocate be the receiver of the partnership estate and effects in the suit and do get in all the outstanding book-debts and claims of the partnership.
And it is ordered that the following accounts be taken:
(i) An account of the credits, property and effects now belonging to the said partnership;
(ii) An account of the debts and liabilities of the said partnership;
(iii) An account of all dealings and transactions between the plaintiff and defendants, from the foot of the settled account exhibited in the suit and marked (A), and not disturbing any subsequent settled accounts.
And it is ordered that the goodwill of the business heretofore carried on by the plaintiff and the defendants as in the plaint mentioned, and the stock-in-trade, be sold on the premises, and that Mr.S.Raghunathan, receiver may, on the application of any of the parties, fix a reserved bidding for all or any of the lots at such sale, and that either of the parties is to be at liberty to bid at the sale.
And it is ordered that the above accounts be taken and all the other acts required to be done be completed, before the 15th day of September,
