Andhra HC (Pre-Telangana)
Nuka Kamalamba And Ors. vs M. Ramaiah And Ors. on 3 August, 1992
Equivalent citations: 1992(3)ALT673
JUDGMENT A. Gopal Rao, J.
1. This appeal is from the judgment and decree in Original Suit No. 18 of 1984, on the file of the Principal Subordinate Judge, Warangal, dismissing the suit of the plaintiffs for a preliminary decree directing partition of plaint schedule estate and allot 0-24 paise share to the plaintiffs, to appoint a Commission to divide the suit estate as per the preliminary decree, to pass a final decree in respect of the shares of the plaintiffs and to put them in separate possession of such shares, for rendition of accounts with effect from May, 1978 by the 1st defendant and for a permanent injunction, restraining the 1st defendant from receiving the rents from the 8th defendant in respect of the suit estate. As plaintiffs 1 and 2 sold away their shares in the partnership subsequent to the institution of the suit, the appeal was preferred by the unsuccessful plaintiffs 3 to 8.
2. The 1st defendant was the owner of an extent of Ac. 3-07 guntas of land covered by survey numbers 1683, and 1693 within the Municipal limits of Warangal Town. It appears, the Food Corporation of India, Warangal branch, was in need of a godown and with a view to construct the godowns for the purpose of renting them out to the Food Corporation of India, a partnership was constituted by eleven persons under Ex.A-12, partnership agreement, dated 14-9-1977. Defendants 1 to 7, D-10, D-11, first plaintiff and one Lingamurty signed the partnership agreement. The object of the partnership business, as recited in clause (4) of Ext. A-12, was "to acquire the site bearing municipal survey numbers 1683 and 1693 and construction of godowns for leasing purposes to the Food Corporation of India", for which lease agreement was obtained in the name of M. Ramaiah, the first defendant. It was mentioned in clause (5) that the capital required for the business shall be contributed by "all or any partners and mutually" and the site in the name of the 1st defendant, M. Ramaiah, would belong to the firm, in consideration of which a sum of Rs. 40,000/- would be credited to D-l's account in the books of the partnership firm. Clause (6) specified that the site and godowns would belong to the firm consisting of the partners and "their interest in the property is according to shares mentioned in clause (7)". The shares of the plaintiffs and defendants 1 to 4 were 46% and 54% respectively. Defendants 1 to 4 purchased the share of the 6th defendant (6 per cent) and entered into a compromise with plaintiff No. 2 and got six more per cent of the shares and likewise, from 7th defendant they obtained five per cent of the shares. The total shares of D-1 to D-4 thus came to 71% as against 29% shares of plaintiffs 3 to 8. The agreement contemplated that Ramaiah, the first defendant and D. Linga Murthy, one of the partners (who died subsequently), should manage the day-to-day business of the partnership. Defendants 1 to 4 and D-9 go together. D-1 is the father of D-2 and D-3, D-4 is the mother-in-law of D-l. D-9 is the wife of D-1 and she came on record by impleading herself subsequently. The 8th defendant is the Food Corporation of India, Warangal Branch. By May, 1978, construction of four godowns and an office building was completed and possession was delivered to the Food Corporation of India, on a monthly rental of Rs. 28,587-56 ps., i.e., at the rate of 0-47 paise per square foot. Seven out of the eleven partners (other than D-1 to D-4), executed an agreement on 6-2-1978, Ex.B-1, in favour of the 1st defendant, stating that they were unable to contribute their share of Rs. 3,68,000/- at the time of the formation of the partnership because of financial difficulties and they undertook to secure and deposit the said amount "within six months from this day otherwise we will cease to be partners and have no rights in the partnership deed executed on 14-9-1977 (Ex.A-12 regarding F.C.I. godowns) in which event we will execute a deed of relinquishment as and when you desire". Nooka Vijayalaxmi, one of the signatories to Ex.B-1 subsequently died in January, 1979. The rest of the six partners executed a deed of relinquishment, Ex.B-2, on 26-9-1980, in favour of the 1st defendant, stating that they failed to contribute their share of capital as per the partnership agreement, dt. 14-9-1977 (Ex.A-12) and a later agreement, Ex.B-1, dated 6-2-1978, and as such "we do hereby relinquish our total rights obtained by the said partnership deed. We have nothing more to do with the partnership, its assets and liabilities with retrospective effect. Further, we agree to execute any further deed you may desire at any time." On 17-1-1984, the suit was instituted without any prior suit notice averring that as per the partnership deed its duration was 'at will', that profits and losses were to be shared as per the shares of the partners and the firm obtained a loan of Rs. 12,50,000/- from the State Bank of Hyderabad, Warangal branch and thereafter construction was completed and the godowns were let out to the Food Corporation of India, Warangal, the 8th defendant. The partners also constructed a house and office room in the site for the beneficial use and requirement of the godowns. By December 1983, only a sum of Rs. 17,609/- was due to the State Bank of Hyderabad, Warangal and the remaining entire loan was cleared. They alleged that the 1st defendant, in whom by virtue of his being the eldest among the partners all the other partners reposed confidence, ceased to evince interest and evaded to render account. The firm was dissolved in the year 1979 and there was no agreement for continuance. Therefore, the plaintiffs claim 0-25 paise share in the entire suit estate.
3. In the written statement filed by D-1 to D-4 it was asserted that the venture needed an investment of about Rs. 20,00,000/- and out of that Rs. 12,50,000/was obtained as loan from the State Bank of Hyderabad, Warangal Branch in the name of the partnership firm against security of the properties of the 1st defendant. From out of the balance of Rs. 7,50,000/- the parties to the agreement Ex.B-1 agreed to invest Rs. 3,68,000/- in proportion to their shares in the partnership and the balance was to be raised by way of loans from private parties. Lingamurthy, who was one of the Managing Partners, failed to invest any amount in the firm although he was operating the accounts of the firm and signing the cheques whenever he was required to do so. After the construction was completed by May 1978, possession of the godowns was handed-over to the Food Corporation of India, which started paying rent from May, 1978 and the amounts were being credited to the loan account in the State Bank of Hyderabad, Warangal branch for adjustment towards the loan. By Ex.B-1 dated 6-2-78 the seven partners who failed to invest Rs. 3,68,000/- undertook to relinquish their interest in the partnership if they fail to invest their share of the amount within six months from that date. In the year 1979, Smt. Nooka Vijayalaxmi one of the partners died and on her death the original firm stood dissolved. On 26-9-80 the partners who executed Ex.B-1 whereby they undertook to contribute Rs. 3,68,000/- on their failure to do so, executed Ex.B-2 deed of relinquishment as a consequence of which the partnership dt. 14-9-77 (Ex.A-12) became only nominal so far as the parties who are signatories to Ex.B-2 were concerned. Lingamurty one of the two Managing Partners, died in 1980. Afresh firm was constituted by Ex.B-3 on 1-4-81 with six partners comprising D-l, D-2, D-3, D-4 and two others. They also pleaded that the suit was speculative in character and was hopelessly barred by limitation. They also stated that the loan due to the State Bank of Hyderabad Warangal was cleared and the period of lease was extended upto May, 1979. But, the other loans raised by D-1 from private parties were still due and payable.
4. Defendant No. 9 came on record pursuant to the order in CRP No. 2439/ 86 dt. 23-9r86. She pleaded in her written statement that the pucca RCC building constructed along with the godowns was her 'stridhana property' and the partnership had nothing to do with that building as the entire land of Ac. 3-07 guntas covered by survey Nos. 1683 and 1693 was not the subject-matter of partnership business, that portion of the land on which the building stands was excluded from the partnership business. The building was allotted two Municipal numbers and mutation was also effected in the municipal registers in her name.
5. Two rejoinders were filed by the plaintiffs, one denying the assertion of D-9 and by the other they denied the execution of the agreement Ex.B-1 and the relinquishment deed Ex.D-2. They asserted that those two documents Exs.B-1 and B-2 were brought into existence by D-1 by forging the same at a belated stage in order to deprive the plaintiffs of their shares in the partnership. They also asserted that they contributed Rs. 1,58,487-50 ps. towards their share of the partnership and that amount they got from the funds of Bojjuri Sammayya & Co., in which they were all partners. The entire suit schedule property was constructed at a cost of Rs. 15,00,000/- but not at Rs. 20,00,000/- as pleaded by D-1 to D-4 in their written statement.
6. On behalf of the plaintiffs, five witnesses were examined and 32 documents were marked. On the side of the defendants, 7 witnesses were examined and 87 documents were brought on record as exhibits. The learned trial Judge on a consideration of the evidence held that the 9th defendant is the absolute owner of the building standing on the land in survey Nos. 1683 and 1693 and it was constructed with her own funds and the same was outside the purview of the partnership business. The documentary evidence adduced on behalf of the defendants as regards the permission granted by the Municipality and the exemption from the operation of the Urban Ceiling Law granted by the Competent Authority were believed by the learned trial Judge. The evidence adduced by the plaintiffs as to the amounts contributed by them towards their share in the partnership business was disbelieved by the learned trial Judge: the entries in the account books of B. Sammayya & Co. of which the plaintiffs were partners were held to be manipulated. The documents Exs.B-1 and B-2 were held to be true and genuine in consequence of which a finding was recorded that the signatories to the documents had no right or interest in the partnership business having relinquished the same under Ex.B-2. On the question of limitation, the finding recorded was that the suit was barred by time inasmuch as the partnership stood dissolved in January 1979 with the death of Vijayalakshmi one of the partners but the suit was filed in 1984 long after the expiry of the three-year limitation prescribed under Article 5 of the Limitation Act. The claim of the plaintiffs that Article 113 the residual article applies, was rejected.
7. Sri T. Veerabhadraiah, learned Counsel for the appellants has raised four contentions. They are:
(1) The entire land shown in the plaint schedule and covered by survey Nos. 1683 and 1693 was the asset of the partnership firm; (2) Defendant No. 9 is not the absolute owner of the building constructed on the eastern side of the godowns within the boundaries of Sy. Nos. 1683 and 1693; (3) Besides D-1 to D-4 the plaintiffs also contributed amounts for the construction of the godowns and Exs.B-1, B-2 and B-3 were not true and genuine; and (4) The suit was not barred by time.
8. Re. 1 and 2: There two contentions go together. In the written statement filed by D-1 to D-4 in the first instance no plea was taken that any part of the land covered by the partnership agreement Ex.A-12 belonged to D-9 the wife of D-l. The partnership agreement, Ex.A-12, also does not recite that any extent of the land covered by survey numbers 1683 and 1693 belonged to D-9. If there was any truth in the assertion of D-9 that she was the owner of a certain extent of the land including the partnership land that would have figured in the forefront in the written statement filed by her husband and children, who are defendants 1 to 4. The documentary evidence, on which considerable reliance was placed in support of D-9's plea comprises Exs.B-22 and B-23. Ex.B-22 is G.O.Ms. No. 1388 Revenue (U.C.III) Department dt. 17-10-77 by which exemption was granted by the Government under the Urban Land Ceiling Law to an extent of 9,920 square metres covered by survey number 1693. Ex.B-23 dt. 15-7-82 is the memo issued by the Special Officer, Urban Ceilings. These two documents in our considered opinion do not in any manner strengthen the case of D-9. Ex. B-22 mentions only one survey number 1693 and if we are to go by Ex.B-22 necessarily we much hold that the land covered by the other survey number 1683 was outside the partnership business and this was nobody's case. Having regard to the specific recital in the partnership agreement Ex.A-12 that on the land covered by survey Nos. 1683 and 1693 the partners agreed to construct the godowns for renting them out to the Food Corporation of India it is difficult to believe that a part of that land was intended to be excluded from the partnership business. The other documentary evidence like Exs.B-75 and B-76 agreements under which D-9 sold certain landed property to some third parties, Exs.B-77 and B-78 receipts for purposes of showing the source of funds for constructing house by D-9 are not circumstances preponderating the view as to D-9's ownership of the building. The learned trial Judge without adverting to any of these aspects recorded a finding in favour of D-9.
9. What needs to be noticed in this context is the fact that D-1 to D-4, after filing the written statement sought permission of the trial court for amendment of the written statement by filing I.A. No. 1384/85. By that interlocutory application they sought amendment of the written statement, so as to take the plea that the house standing on the land covered by the two survey numbers was outside the purview of the partnership business and it belonged exclusively to D-9. That application was dismissed on 1-7-86 by the trial court in consequence of which the plea taken by D-1 to D-4 in the written statement as originally filed by them stood unaltered. The subsequent impleading of D-9 and the written statement filed by her taking a stand contrary to what was averred in the written statement of D-1 to D-4 would not add any further credibility to the plea as regards D-9's ownership of the house in question. We therefore, hold that the entire land shown in the plaint schedule and covered by survey numbers 1683 and 1693 was the asset of the partnership firm and that the 9th defendant was not the absolute owner of the building constructed on the eastern side of the partnership land.
10. Re. 2 and 3: No plea was taken in the plaint as to the investments made by the plaintiffs. On the other hand in the written statement filed by D-1 to D-4 on 27-11-84, they asserted that the plaintiffs did not make any investments at all. The evidence was commenced on 18-7-86. On 23-7-86, plaintiffs filed an interlocutory application, I.A. 1272/86 for permission to file rejoinder to the written statement of D-1 to D-4, but that application was dismissed and that order became final. Quite paradoxically, the learned trial Judge permitted the rejoinder to remain in the record and alluded to the same in the judgment. Even that rejoinder which stricto sensu should not form part of the record does not spell out the details as to how much each of the plaintiffs had contributed to the partnership business: it only mentions the aggregate figure Rs. 1,58,487-50 ps. as having been invested into the suit partnership business from the funds of M/s. Bajjuri Sammayya & Co. of which the plaintiffs are partners. Ex.A-10 is the ledger and Ex. A-l 1 is the day book of M/s. Bajjuri Sammayya & Co. for the relevant period. The entries in these two books are not entitled to any credence. The books were not submitted to the Income tax Department nor they were shown to auditors although M/s. Sammayya & Co. was an income tax assessee. There is no continuity in the entries in the day-book: there are several unexplained gaps between the entries. In the normal course of business, the entries in day book should reflect all the transactions of the day and there should be no gap left between the transactions of one day and the transactions of the succeeding day. The entries in the day book in question Ex.A-11 do not conform to the above practice. For example, the day-book entries under date 10-11-77 (at p. 18) cover half a page, the rest of the page was left blank. The next entry is on page 181 under date 14-11-77. It is difficult to believe that for four days there were no transactions. There are only three transactions recorded under date 14-11-77. The subsequent recording of entries was made under date 16-11-77. The entire day book is full of this kind of unexplained inconsistencies, detracting their credibility. The counter foils of cheques Exs.A-4 to A-7 cover a sum of Rs. 18,000/-. As to the balance (Rs. 1,58,481-50 ps. (minus) Rs. 18,000/-), Rs. 1,40,481-50 ps. was claimed to have been paid by way of cash.
11. Civil Miscellaneous Petition No. 5693 of 1992 was filed to receive the pass book relating to the Current Account No. 1451 of M/s. Sammayya & Co. We are not inclined to admit additional evidence. There is no averment in the affidavit as to what are the circumstances that disabled the appellants from filing the pass-book at the time of the trial. We are not satisfied that after exercise of due diligence the appellants could not produce the same in the court below. This pass book is also not required by us in this appeal to pronounce judgment muchless there is any other substantial cause inducing us to receive additional evidence. The rules laid down in Order 41, Rule 27 of the Civil Procedure Code have not been complied with. Above all the absence of an averment in the plaint as to the investments made by the plaintiffs-appellants, more particularly from M/s. B. Sammayya & Co. is a strong circumstance propelling us to negative the request for receiving additional evidence. CMP. 5693 of 1992 is, therefore, dismissed.
12. The evidence as to investment of funds from M/s. B. Sammayya & Co. does not inspire confidence in any manner P.W. 2 is the Managing Partner of M/s. B. Sammayya and Company. His assertion in the chief examination that the firm funds were invested for the construction of suit godowns could not stand the test of cross-examination. He attempted to attribute authenticity to the accounts by claiming that the accounts were checked by the Income tax authorities. But, after a little while obviously realising the falsity of his assertion he admitted that mere is no stamp of the Income-tax authorities on the account books. There was a police case with regard to these account books. The account books were removed from the firm for fabricating entries and when they were about to be replaced the person so doing was caught and in that connection a criminal complaint Ex.B-68 was filed. This was admitted by P.W. 2 in his cross examination; he and the 4th plaintiff who figured as P.W.I were arrested by the police. Nothing more is needed to discredit the entries in the account books and the evidence based upon those entries.
13. A subsidiary contention strongly urged in this context by the learned Counsel for the appellants, is that mere was no warrant for the inference that each and every partner should contribute towards the capital of the business and the extent and nature of the share has to be ascertained with reference to the express language employed in the partnership agreement. Depending upon the nature of the business the extent of investment varies. The partnership business in question being a non-trading venture even if the evidence of the plaintiffs as to the amounts claimed to have been contributed by them for the partnership business is disbelieved still the suit cannot be dismissed on that ground in view of the specific recitals in the partnership agreement. In this context he strongly relies upon clauses (5) and (6) of Ex.A-12 partnership agreement. The relevant portion of clause (5) reads "the capital required for the purpose shall be contributed by all or any partners and mutually". Clause (6) says that "the site and godowns constructed in survey Nos. 1683 and 1693 will belong to the firm consisting of these partners and their interest in the property is according to the shares mentioned in clause (7)". According to the learned counsel the words in clause (5) "all or any partners and mutually" do not imply contribution of capital by any of the partners. Even if one partner contributes it would amount to mutual contribution on the part of all the partners. The interest of the partners in the property by virtue of clause (6), without any regard to the factum of investment shall be in proportion to the shares as considered in clause (7). We think it unnecessary to consider this aspect in the view we are taking in respect of Exs.B-1 to B-3 and having regard to the preponderance of evidence to the effect that the plaintiffs have not contributed any capital in the partnership business.
14. Ex.B-1 is the agreement dated 6-2-1977, signed by 7 of the 11 partners, including plaintiffs 2 and 3, Ex.B-2 is the relinquishment deed dated 26-9-1980, signed by six of the seven signatories to Ex.B-1, as by that date Vijayalaxmi, one of the signatories to Ex.B-1 died. Ex.B-3 is a subsequent partnership deed dated 1-4-1981. The plea of the appellants is that all these three documents are not true and genuine. We are not inclined to accept the same. Defendant No. 7 is a signatory to Ex.B-1 and B-2 and he also signed as a witness on Ex.B-3, the new partnership deed. In his evidence, he denied his signatures on Exs.B-1 and B-2. We have compared his signatures on the original partnership agreement Ex.A-12, with his signatures on Exs.B-1 and B-2 and we are convinced that all the signatures are by one and the same person. The signature of D.W. 7 on the deposition appears to be slightly different and we are able to discern conscious attempt on part of D.W. 7 to change the style of writing. The 5th defendant figured as D.W. 3. She was the mother of Lingamurty, one of the original partners. She was a signatory to Exs.B-1 and B-2. Although she denied her signatures on Exs.B-1 and B-2, a comparison of her admitted signatures on her written statement and the vakalat with Exs.B-1 and B-2 would leave no trace of doubt that both the signatures are by one and the same person. P.W. 3, Sudarshan, is plaintiff No. 2. He is also a signatory to Exs.B-1 and B-2 and he too denied his signatures on the two documents. His signature on the plaint tallies with his signatures on Exs.B-1 and B-2, leaving us without any doubt that his denial was false. For both these two documents the attestors are common and the comment of the learned Counsel for the appellants is that there was no need to have the same attestors for both the documents. It is not uncommon for the same attestors to figure in more than one document and from that circumstance, no inference follows as to the genuiness or otherwise of the document put in doubt. The new partnership deed, Ex.B-3 does not suffer from any infirmity. There is a specific recital in that as to the intention expressed by the other partners (covered by Exs.B-1 and B-2) to retire from the partnership business on the ground of their inability to contribute the required capital. We, therefore, hold that the documents Exs.B-1 to B-3 are true and genuine and the appellants failed to substantiate their plea as to the alleged invalidity of these three documents.
15. Re. 4: Elaborate arguments were advanced on the question of limitation by both sides. The contention of the learned counsel for the respondents-defendants is that the partnership stood dissolved in January, 1979 with the death of Vijayalaxmi, one of the partners and as the suit was filed in 1984, it was clearly barred by time; Article 5 of the Limitation Act is the relevant Article under which the suit ought to have been filed within three years from the date of the dissolution. In opposition to this, Sri Veerabhadraiah, has contended that there was an implied clause in the partnership agreement to continue the partnership business till the venture was completed notwithstanding the death of any of the partners. Ex.B-2, relinquishment deed negatives the plea as to the dissolution of the partnership in January, 1979. Under Article 5 of the Limitation Act, time runs from the date of the dissolution of the partnership for the purpose of filing a suit for an account and a share of dissolved partnership. Clause (4) of the partnership agreement, Ex. A-12, recites that the object of the business was "construction of godowns for leasing purposes to F.C.I.". That leasing purpose was over when the godowns were handedover in May, 1978 to the Food Corporation of India. There is no mention in the partnership agreement that the partnership shall continue until all the losses/loans were cleared. It could be said that the venture was completed when possession of the godowns was handedover to the Food Corporation of India in May, 1978. Smt. Nooka Vijayalaxmi, one of the partners died in January, 1979. In paragraph 4 of the plaint it was averred that the duration of the partnership is 'at will'. Section 43 of the Partnership Act lays down that, for dissolution of a partnership at will, notice is a necessary pre-condition. Admittedly, no notice was given in this case. But, this circumstance will not result in the partnership continuing till the date of the filing of the suit in 1984, for the obvious reason that one of the partners, viz., Vijayalaxmi, died in January, 1979 and the plaintiffs themselves in paragraph 8 of the plaint specifically averred that "the firm was dissolved in the year 1979 and there was no agreement for continuation". The fourth plaintiff, in his evidence, as P.W.I admitted in cross examination that the firm was dissolved in 1979. The averment to that effect in the plaint was correct and the plaint was drafted on the instructions of the plaintiffs. Having taken a specific plea as to the dissolution of the firm in January 1979, it is not open to the plaintiffs to wriggle out of that averment and contend that the suit-firm continued even in 1984, when the suit was filed. The rulings cited by the learned Counsel for the appellants in Gherulal Parakh v. Mahadeodas, , Navinchandra v. Moolchand, , Thiagarajan v. Muthappa, and Ramnarayan v. Kashinath, for the proposition that the partnership will come to an end only when the venture is completed, are of no relevance. It is true that in Ex.B-3, the new partnership agreement, it was averred that the earlier partnership continued till 31-3-1981. But, that would not, in any manner, save the period of limitation. The plaintiffs were conscious of the fact that with the death of Vijayalaxmi in 1979, the partnership stood dissolved, as this was reinforced by the admission of plaintiff No. 4 in his evidence as P.W.I. We, therefore, hold mat the suit was barred by limitation and the court below was justified in recording a finding against the plaintiffs on this issue.
16. For the above reasons, as we have answered points 3 and 4 against the appellants the appeal fails and accordingly it is dismissed. No costs.