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High Court of Judicature at Madras
P. R. SHIVAKUMAR
Ponnusamy & Others
Versus
K.K. Subramaniam
A.S. No. 749 of 2002 & Cross Objection No. 35 of 2003
Decided On : 21-06-2010
(B)Indian Partnership Act, 1932(9 of 1932)-Sec.69-Partnership-Registration-Failure-Unregistered- Dissolution-Suit-Maintainability-In respect of an unregistered partnership firm, the suit could be filed for the enforcement of any right to dissolution, accounts and for the enforcement of any right or power to realise the property of a dissolved firm is maintainable.
Though the firm might not have been registered, the following suits are not barred under Section 69 of the Indian Partnership Act, 1932.
i. Suit for enforcement of any right to dissolution of an unregistered firm
ii. Suit for accounts of a dissolved firm and
iii. Suit for enforcement of any right or power to realise the property of a dissolved firm. Para 12
(C)Indian Evidence Act, 1872(1 of 1872)-Sec.103-Evidence-Burden of proof-Document-Denial-Sham and nominal-Burden to prove that any registered document is sham and nominal is heavy on the person who makes such plea.
Since the appellants have come forward with a plea that the sale deed dated 04.07.1974 was a sham and nominal one they are bound to prove it by reliable evidence. As pointed out supra, the burden of proof is heavy on the appellants. Para 25
(D)Indian Partnership Act, 1932(9 of 1932)-Sec.46, 53-Partnership-Dissolution-Properties-Division-Partners-Right-The properties of the partnership firm that remain after meeting its liabilities are to be divided among the partners according to their share/ ratio and in case the properties left after meeting the liabilities of the firm are not divisible or that it would not be profitable to divide it, then each partner shall have a right to make an offer for the purchase of the others’ share. In case, none of the partners comes forward to purchase the shares of others in such immovable properties of the firm, which are impartible or cannot be partitioned without causing diminution of its value, then the same can be sold to third parties, either by auction or otherwise and the sale proceeds can be divided among the partners according to their share ratio.
In such cases, either they should be divided according to the share ratio or in case it is found that the properties left after meeting the liabilities of the firm are not divisible or that it would not be profitable to divide it, then each partner shall have a right to make an offer for the purchase of the others’ share. Which partner shall take the property and pay the money of the value of the shares to the other appellants, shall be decided by a limited auction among them or by drawing lot, if there is consensus to that effect. In case, none of the partners comes forward to purchase the shares of others in such immovable properties of the firm, which are impartible or cannot be partitioned without causing diminution of its value, then the same can be sold to third parties, either by auction or otherwise and the sale proceeds can be divided among the partners according to their share ratio. Para 31
1. This appeal and cross objection have been filed against the judgment and decree of the trial court, namely the court of the Additional District Judge (Fast Track Court II), Gopichettipalayam dated 19.09.2002 made in O.S.No.5/2001 on the file of the said court. The defendants 1 to 3 in the original suit are the appellants herein. The suit was filed by the respondent herein for a perpetual injunction restraining the appellants/defendants from running the rice and oil mill, which had been run as a partnership business, the subject matter of the suit and for settlement of accounts and distribution of assets of the partnership to the partners. The suit was partly allowed in respect of the second prayer, namely settlement of accounts and distribution of the assets of the partnership to the partners. A preliminary decree to that effect declaring the entitlement of the respondent/plaintiff to 50% of the assets of the partnership was granted. However, the suit was dismissed so far as the relief of permanent injunction sought for in the plaint is concerned. As against the preliminary decree directing settlement of accounts and payment of 50% of the assets of the partnership to the respondent/plaintiff, the appellants/defendants have preferred the appeal. As against the other part of the decree of the trial court dismissing the suit in respect of the relief of permanent injunction, the respondent/plaintiff has preferred the Cross Objection No.35/2003.
2. The case of the respondent/cross objector/plaintiff, as per the contents of the plaint, in brief, can be stated thus:-
The appellants 1 and 2/defendants 1 and 2 are the sons of the third appellant/third defendant. The third appellant/third defendant was the manager of the joint family consisting of the three appellants till a partition took place among them on 06.09.1984. In 1974 itself, the third appellant/third defendant, as the joint family manager entered into an oral partnership agreement with the respondent/plaintiff for jointly constructing and running a rice mill. The respondent/plaintiff contributed a sum of Rs.1,00,000/-and the third appellant/third defendant as the kartha of the joint family contributed one lakh for the construction of the rice mill. The said rice mill was named as Sri Vijayalakshmi Rice and Oil Mill. License was obtained jointly in the names of the respondent/plaintiff and the third appellant/third defendant. The income derived from the mill was shared between the partners. After a partition took place in the family of the defendants in 1984, the first appellant/first defendant purchased the shares of the other two appellants, namely appellants 2 and 3/defendants 2 and 3 in the rice mill and after such purchase the first defendant became entitled to the half share of their family in the rice mill and thus both the first appellant/first defendant and the respondent/plaintiff alone continued the partnership business as partner. After such purchase of the shares of the other appellants/other defendants was paid by the first appellant/first defendant, in February 1998 the first appellant/first defendant due to misunderstanding locked the rice mill and stopped the business, pursuant to which the respondent/plaintiff had to issue a notice dated 26.03.1998 dissolving the partnership with effect from 01.04.1998. The said notice was received by the first appellant/first defendant and the first appellant/first defendant issued a reply notice dated 11.04.1998 questioning the respondents/plaintiffs right to dissolve the partnership and also denying his half share in the site on which the rice mill stands. The reasons assigned in the reply notice for not running the rice mill are false. The first appellant/first defendant, who was running the rice mill has to account for all the incomes received by him. Denying the title of the respondent/plaintiff to an undivided extent of 13 17/54 cents in the land over which the rice mill building was constructed, the appe
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