The liability of a partner who retains the surplus stock of a dissolved partnership and sells it without keeping separate accounts is to pay the other partners the value of the stock as per the prices realized by the defendant or those which he should be deemed to have realized when the sale was made.

( 1 ) THIS appeal arises out of proceedings for preparation of a final decree in a suit for rendition of partnership accounts after dissolution. The parties, Shiam Sunder, plaintiff, and Pratap Chandra, defendant, entered into a partnership business on 2-9-1939, for sale of cloth, in mohalla Daliganj, lucknow. The defendant was to pro-vide the funds and the plaintiff was to act as the working partner. The business was dissolved on 20-8-1940. A fresh partnership was begun on 3-9-1940, and was dissolved in January 1941. The shop was then finally closed. The stock, which was in hand at the time, was in possession of Pratap Chandra. A major portion of it was mixed up by him with the goods of his own cloth shops and was sold sometime between 1941 and 1942 without any separate account being kept of its sale.

( 2 ) SHIAM Sundars suit was instituted on 11-4-1942 and the preliminary decree was passed on 28-11-1942. The application for preparation of the final decree was preferred on 1-5-1943, and on 11-5-1943, a Commissioner was appointed by the learned Munsif South Lucknow, for evaluating the surplus partnership stock which had been sold. According to the Order, the value was to be determined at the prevailing rates, in other words, at the prices current on 11-5-1943. Apart of the stock was in hand and the Commissioner, auctioned it for Rs. 1. 262/8. The order of 11th May, was passed ex parte and Pratap Chandra when he got to know of it filed an application, on 5-7-1943, claiming that the plaintiffs share in the stock disposed of between 1941 and 1942 should be determined with reference to the prices current in January 1941 which was the date of dissolution of the partnership. The order sheet of 14-12-1944, shows that the parties arrived at an agreement on that date to the effect that the Commissioner should also ascertain the prices which the defendant realized and he should prepare another account on the basis thereof. The Court ordered that this should be done and the Commissioner after examining the evidence, prepared two sets of accounts: account (A) based on the prices of May 1943 and account (B) relating to the prices which the defendant should be deemed to have realised by sales. There was considerable difficulty in preparing the second account in view of the absence of any separate records of those sales but eventually a modus operandi was found by the commissioner and there is no objection by any side to the method of accounting. According to account (A), a sum Rs. 13,220-6 was payable to the plaintiff. In account (B) Rs. 55-2-9 were shownas due to the plaintiff and Rs. 1207-5-3 to the defendant. The question, whether the liability of the defendant should be made dependent upon the prices prevalent in May 1943 or upon the prices fetched when they were sold was on the date of the agreement reserved for disposal at the time of judgment. The learned Munsif eventually held that account (A) was more appropriate and he accordingly passed a final decree in favour of Shiam Sunder for Rs. 13,220-6 the defendant Pratap Chandra went up in appeal and the view which the learned Civil Judge took was that the liabilities of the parties should be determined on the basis of prices current at the date of the suit, namely, April, 1942. The case was, therefore, remanded for a fresh account on that footing. The new account prepared by the same Commissioner showed that Rs. 1242-1-9 were due to the plaintiff. The lower appellate Court reversed the trial Courts decree and entered instead a decree for the plaintiff for Rs. 1242-1-9. The defendant was satisfied with the decision but the plaintiff has appealed.

( 3 ) THE sole question which needs decision is whether the lower appellate Court was justified in taking the date of the suit as the correct date with reference to which the price of the stock in hand left with the defendant on the date of the dissolution fell to be ascertained. It is conceded on all hands, and I think rightly, that