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2015 Supreme(Online)(Chh) 162

CHATTISGARH HIGH COURT
Sanjay K. Agrawal, J
Udaynarayan Agarwal – Appellant
Versus
Trilokinath Agarwal, Smt. Usha Kiran Agarwal, Deepak Agrawal – Respondent
Civil Appeal No. 37 - A / 97 | Civil Suit No. 226 - A / 96



Advocates:
For the Appellant: [Lawyer 1]
For the Respondents: [Lawyer 2]

The court held that a partner's possession of dissolved firm property does not create ownership rights against co-owners, and claims of adverse possession are not maintainable.

Headnote:(A) Indian Partnership Act, 1932 - Sections 46, 47, and 48 - Dissolution of firm - Adverse possession claim by partner - The firm was dissolved on 02.11.1956. The plaintiff's claim to exclusive possession of property for 12 years did not create ownership rights due to the ongoing co-ownership status among partners. The court found that the property, originally immovable, became a movable asset due to the dissolution and that the plaintiff could not claim adverse possession against co-sharers. (Paras 23, 19)

(B) Limitation Act, 1963 - Article 5 - The limitation period for accounting and sharing of profits is three years post-dissolution of partnership. The plaintiff's claim was barred as it was not pursued within the prescribed period. (Paras 20)

Facts of the case:
The appellant claimed ownership through adverse possession of property mistakenly believed to have been declared as jointly owned after dissolution of a partnership firm. The trial court upheld the plaintiff's claim, while the appellate court overturned this conclusion.

Findings of Court:
The court affirmed that after the dissolution, property became a movable asset and could not be claimed exclusively by a single partner against others. It clarified that a suit based on adverse possession against co-owners is not maintainable.

Issues: Whether the First Appellate Court erred in reversing the trial court's finding regarding the plaintiff's title by adverse possession.

Ratio Decidendi: The court determined that a partner’s possession of firm property post-dissolution does not amount to exclusive ownership through adverse possession, and such possession remained permissive, not adverse.

Result: Second appeal dismissed, suit found not maintainable.

Table of Content
1. initiation of appeal against earlier court decree. (Para 1 , 2)
2. court reverses findings based on partnership status. (Para 4 , 5)
3. arguments presented regarding property rights and adverse possession. (Para 6 , 7)
4. discussion on property's legal character post-dissolution. (Para 8 , 9 , 10)
5. legal interpretations of the partnership act. (Para 11 , 12)
6. summarizing case laws and principles governing partnerships. (Para 13 , 14 , 15)
7. final interpretation on property status and suit maintainability. (Para 16 , 19)
8. conclusion on claim dismissal based on adverse possession. (Para 22 , 24)

1. This instant appeal is preferred against the judgment & decree dated 04.07.1998 passed in Civil Appeal No.37 - A / 97 by the Second Additional District Judge, Bastar (Jagdalpur). By such judgment & decree, the appellate Court reversed the judgment & decree dated 25.01.1997 passed in Civil Suit No.226 - A / 96 by the Third Civil Judge Class - II, Jagdalpur. The instant appeal is by the plaintiff.

2. The briefly stated facts of the case is that a suit was filed by the appellant against Trilokinath Agarwal, Smt. Usha Kiran Agarwal and Deepak Agrawal for declaration and permanent injunction. The undisputed facts are that the house comprised over the Nazul sheet No. 78, Plot No.103/2, admeasuring 6285 sq.ft. was recorded in name of M/s. Gajadhar Prasad Kashi Prasad, a partnership firm. The firm had four partners namely Bhuwneshwar Prasad Agarwal (died on 13.07.1962), Udaynarayan Agarwal (Plaintiff), Trilokinath Agarwal (Defendant - 1) and Smt. Singharabai (died on 21.09.1973). The said property was in name of the firm M/s. Gajadhar Prasad Kashi Prasad and plaintiff was residing in the said property right from the year 1943. The partnership firm was dissolved on 02.11.1956. After dissolution of the firm, the plaintiff, who was a partner continuing to reside in the house and was in possession thereof which had also a shop in some portion of the house. It was case of the plaintiff that he was / is in exclusive possession of the suit property for last 12 years after the dissolution, as the suit was filed in the month of September, 1994. The plaintiff / appellant pleaded that by ouster of the title of the defendants after dissolution, the plaintiff was in possession and therefore had acquired the right and title over the suit property by way of adverse possession. It was stated that one of the partner Bhuwneshwar Prasad Agarwal died on 13.07.1962 and Smt. Singharabai died on 21.09.1973 and it was also contended that during the life time of Bhuwneshwar Prasad Agarwal, the plaintiff was in possession of the suit land. It was further contended that on 23.06.1992, the defendants filed an application before the Nazul Tahsildar, Jagdalpur to mutate their name. It was therefore for such reason, the title of the plaintiff was denied as the plaintiff had acquired the title over the suit land by way of adverse possession. Consequently, the suit for declaration and permanent injunction was filed.

3. In reply to the averments, the defendants stated that the subject land is recorded in name of M/s. Gajadhar Prasad Kashi Prasad at Pratapganj Ward, Main Road, Jagdalpur. It was also stated that the suit property comprised to be the property of the firm. The death of the two partners were also admitted and further this fact was also admitted that on 02.11.1956 the firm was dissolved. It was further denied that the plaintiff was in exclusive possession of the land for last 12 years from the date of filing, thereby has acquired ownership of the property. It was further contended that Bhuwneshwar Prasad had bequeath his part of property in favour of the defendants No.2 & 3 by Will dated 12.07.1961 and as such they were entitled to get their name mutated in respect of the suit land.

4. On the basis of the pleadings and the evidence of the parties, the learned trial Court found that the Will was not proved whereby the defendants had claimed their righ












































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