A Local Commissioner appointed by the Court after the dissolution of a partnership can take control of the assets of the partnership and apply them in accordance with the provisions of Section 48 of the Indian Partnership Act, 1932.

1. M/s. Gupta Steel Industries and others, have through this regular second appeal, assailed the judgement and decree, passed by the Additional District Judge, Jullundur, whereby he modified the judgement and decree passed by the trial Court to the effect that the Local Commissioner, appointed to take accounts, was directed to take control and apply the assets of the firm.

2. Brief facts of the case are that Balbir Kumar and Ranjit Kumar filed a suit against M/s. Gupta Steel industries and others for dissolution of the partnership and rendition of accounts. Their case was that the parties to the suit entered into a partnership on 22nd of May, 1970. The share of the plaintiffs was 44 per cent. The plaintiffs were minors and the business of the firm was being carried on by defendants 2 to 4. They alleged that these defendants had misappropriated the funds of the partnership business and had closed the factory. Since the defendants had refused to render the accounts of the partnership business, a suit was filed against them. The trial Court passed a preliminary decree and ordered that the partnership shall stand dissolved as from 2nd of May, 1978 and appointed Mr. J.S. Uppal, Advocate as Local Commissioner to take the accounts. The plaintiffs were not satisfied with the judgement and decree of the trial Court and filed an appeal. The learned Additional District Judge, upheld the preliminary decree and modified it to the extent that the Local Commissioner shall take control and apply the assets of the firm. The defendant-respondents have filed this regular second appeal against the judgement and decree of the learned District Judge.

3. It has been argued on behalf of the appellants that during the pendency of the suit in the trial Court, the plaintiffs made application for appointment of a receiver, the same was declined. During the pendency of the appeal, they moved another application for appointment of the receiver, this was also rejected by the lower Appellate Court. The prayer for appointment of a receiver having been declined, the lower Appellate Court directed the Local Commissioner to take control of the assets of the partnership and apply the same in accordance with the provisions of Section 48 of the Indian Partnership Act (hereinafter called the Act). These are the functions of a receiver and not of a Local Commissioner. The Local Commissioner can only take accounts and he cannot take possession of the assets of the partnership and apply them in accordance with the provisions of the Partnership Act. In support of this, the learned counsel has relied on a decision of the Supreme Court in Padam Sen V/s. State of Uttar Pradesh AIR 1961 SC 218, wherein it has been held as under :-

"Court has no inherent powers under Section 151 to appoint a Commissioner to seize account books in the possession of the plaintiff, upon an application by the defendant that he has apprehension that they would be tampered with."

4. On the other hand Mr. H.L. Sarizi, learned counsel for the respondents, has argued that the partnership stood dissolved from 2nd of May, 1978. After this date the defendant-appellants had no right to manage the affairs of the partnership. They could not deal with the assets of the firm. In view of the provisions of Sections 46, 47 and 48 of the Act, after the dissolution of the firm, however, a partner has a right to have the property of the firm applied in the payment of debts and liabilities of the firm and to have the surplus distributed amongst the partners. After the dissolution, the partners can bind others only to the extent it is necessary to wind up the affairs of the firm and to complete the unfinished transactions. The mode for settling the accounts, after the dissolution, has also been given. He has also placed strong reliance on the language of Form 21 in Appendix D to the Civil P.C. It has been specifically given in this form that while passing a preliminary decree, the Court shall order t