Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Mad) 2280

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.N. Manjula, J.
D.Gunasekaran(died), S/o D.V.Sami Naidu and ors. - Appellants
Versus
V.Shanmugam, S/o Venkatasamy and ors. - Respondents
S.A.No.190 of 2011
Decided On : 19-12-2024
Advocate Appeared :
For the Appellant : Mr.A.S.Vijyaraghavan for Mr.N.P.Kumar
For the Respondent : Mr.C.Kanagaraj

Advocates:
Advocate Appeared:
For the Appellant : Mr.A.S.Vijyaraghavan for Mr.N.P.Kumar
For the Respondent: Mr.C.Kanagaraj for R1

The court established that a release deed concerning partnership interests does not affect ownership rights in property purchased in individual names, affirming the plaintiff's entitlement to a 1/3rd share.

Headnote:(A) Partition Act, 1893 - Claim for partition of property - The plaintiff filed a suit for partition claiming 1/3rd share in the suit property purchased jointly with defendants - The Trial Court and First Appellate Court dismissed the suit, stating the property belonged to the partnership firm - The plaintiff retired from the partnership and executed a release deed, but the property remained in individual names - The court found that the plaintiff is entitled to 1/3rd share as the property was not transferred to the partnership firm. (Paras 10, 16, 19)

(B) Release Deed - The court clarified that the release deed executed by the plaintiff pertained to his interest in the partnership business and did not affect his ownership rights in the immovable property purchased jointly. (Paras 17, 19)

Facts of the case:
The plaintiff and defendants jointly purchased property for a small scale industry, but the plaintiff later retired from the partnership and executed a release deed. The defendants claimed the property belonged to the partnership firm, while the plaintiff sought partition of his share.

Findings of Court:
The court ruled that the plaintiff is entitled to 1/3rd share in the suit property as it was purchased in individual names and not in the name of the partnership firm.

Issues: Whether the courts below were correct in rejecting the plaintiff's claim for partition based on the partnership's ownership of the property.

Ratio Decidendi: The court held that the property purchased in individual names does not automatically belong to the partnership firm, and the plaintiff's release deed did not relinquish his rights to the property.

Result: Second Appeal allowed, suit decreed for 1/3rd share in the suit property.

JUDGMENT :

R.N. Manjula, J.

The appellant is the plaintiff, who has filed a suit for partition. The Trial Court had dismissed the suit and the appeal filed by the plaintiff also got dismissed by the First Appellate Court. Hence, the plaintiff has filed this Second Appeal.

2.The short facts leading to the case of the plaintiff, as pleaded in the plaint, are as under:

The plaintiff was involved in hardware and painting business. The defendants had approached the plaintiff to sell the suit property for running a small scale industry. Thereafter, the plaintiff and the defendants jointly purchased the land from plaintiffs' wife Vasantha, through a sale deed dated 18.01.1996. Hence, the plaintiff is entitled to 1/3^rd share in the suit property. A partnership agreement was entered into between the plaintiff and the defendants.

2.1. Before starting the small scale industry the plaintiff got himself released from the partnership by executing a release deed dated 27.11.1996. However, the small scale industry by name 'Sri Lakshmi Narayana Engineering Works' is being run in the suit property by the defendants 1 and 2. As per the release deed the defendants are liable to settle a sum of Rs.2,00,000/- in 8 installments at the rate of Rs.25,000/- per installment; out of Rs.2,00,000/- a sum of R.1,75,000/- was already paid to the plaintiff. The last cheque given by the defendants was not honored and it was returned for 'want of funds'. Hence, the plaintiffs has filed the suit in OS.No.29/98 for recovery of money and the same is pending.

2.2. When the plaintiff and the defendants were together in a partnership, buildings were constructed for the small scale industry in the name and style 'Sri Lakshmi Narayana Engineering Works'. As the plaintiffs and the defendants were jointly enjoying the property and subsequently, the partnership was revoked, as against the plaintiff. The construction that has been erected in the suit property should be removed and the plaintiff''s 1/3 rd share should be given to him. As the defendants did not give the plaintiff's 1/3^rd share by partition, he has filed this suit claiming partition of 1/3^rd share .

3. The written statement filed by the defendants 1 & 2 in brief is as follows:

'Sri Lakshmi Narayana Engineering Works' was run by both the plaintiffs and the defendants. The suit is barred by non joinder of necessary party namely 'Sri Lakshmi Narayana Engineering Works'. The plaintiff had relieved himself from the partnership business on 31.03.1996 by getting a sum of Rs.2,00,000/- and the plaintiff had given his consent to conduct the business by the defendants. Under such circumstances the plaintiff cannot claim that he is one of the joint owners to the suit property. According to the defendants, the suit schedule property belongs to the firm and not to the plaintiff. As, the plaintiff has already relinquished his rights by receiving a consideration, he is not entitled for partition. Hence, the plaintiff is not entitled to the relief prayed.

4. The 3^rd defendant's written statement is in brief;

The plaintiff and the defendants were partners of 'Sri Lakshmi Narayana Engineering Works'. The plaintiff and the defendants have jointly availed a loan of Rs. 13,67,000/- by showing the suit property as security. The plaintiff had retired from partnership on 29.01.1997. The remaining partners who are conducting the partnership business and the partnership firm are the owner of the properties. Hence, the plaintiff is not entitled to the relief.

5. On the basis of the pleadings the Trial Court has framed the following issues:

1.Whether the plaintiff is entitled to get 1/3 share?

2. whether the plaintiff is entitled to the relief of injunction?

3. To what other relief is he entitled to?

6. During the course of the trial, on the side of the plaintiff, two witnesses have been examined as PW.1 and PW.2 and Ex.A1 to Ex.A22 were marked. On the side of the defendants, one witness has been examined as D.W.1 and Ex.B1 to Ex.B15 were marked.

7. Af