Bangalore District Court
In Sri.C.R. Ashwin vs C.N. Revanna on 8 April, 2019
IN THE COURT OF XVII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (C.C.H.16)
Dated this 8 th Day of April, 2019
Present: Sri. R. Ravi,
B.Sc., LL.B.
XVII Addl. City Civil & Sessions Judge.
O.S.No. 4538/2012 & OS.No.4539/2012
Plaintiff/s in Sri.C.R. Ashwin
OS.4538/12 : Aged about 35 years,
S/o. Sri.C.N. Rudramurthy,
No.40, Hospital Road,
Bangalore- 560 001.
Plaintiff/s in Smt. Renuka Murthy
OS.4539/12 : Aged about 57 years,
W/o. Sri.C.N. Rudramurthy,
No.40, Hospital Road,
Bangalore- 560 001.
-Vs-
Defendant/s C.N. Revanna
in both Suits : Aged about 71 years,
S/o. Late.C.R. Nagappa,
No.93/13, 1st Cross,
Nandi Durga Road,
Bangalore- 560 046.
Managing Partner
M/s. Choudri Nagappa Enterprises,
(since dissolved)
No.16, Kasturba Road,
Bangalore- 560 001.
[D - By Sri. V.M., Adv.]
Date of institution of the suit 27.06.2012
Nature of the suit Recovery of money
2 OS.No.4538/12 & 4539/12
Date of commencement of 06.2.2014 & 12.01.2015
recording the evidence
Date on which the judgment 08.04.2019
was pronounced
Total duration Years Months Days
06 09 12
(R. Ravi),
XVII Addl. City Civil & Sessions Judge.
**********
COMMON JUDGMENT
By an order dated 06.03.2019 one passed in
OS.No.4538/2012 and OS.No.4539/2012, the above cases
are clubbed together to pass a common judgment.
Both the above said suits are for recovery of money.
2. The plaintiffs of both the suits and defendant are
admittedly the partners in the Partnership Firm M/s.
Choudri Nagappa Enterprises.
3. Though the plaintiffs of both the suits are
different still the defendant of both the suits are one and the
same.
4. The case of the plaintiffs of both the suits is that,
they were Partners in the Partnership Firm M/s. Choudri
Nagappa Enterprises of which C.N. Revanna, the defendant
3 OS.No.4538/12 & 4539/12
herein was the Managing Partner. In addition to the plaintiffs
and defendant, there were other partners of the firm. The
Partnership Firm was constituted vide Partnership Deed
dated 24-08-1978 which was subsequently reconstituted on
31-03-1995 and 01-04-1997. The further case of the
plaintiffs is that during the subsistence of the partnership,
being the Managing Partner C.N. Revanna, the defendant
herein was in charge of all the affairs of the firm and the
entire profits/monies of the firm as well as all documents
were in his custody and possession. Under a registered
deed of dissolution dated 31-12-2008, the said partnership
firm M/s Choudri Nagappa Enterprises was dissolved with
effect from 31.12.2008. Under the aforesaid dissolution deed
dated 31-12-2008, the defendant herein undertook to take
steps and get the accounts of the firm prepared and settle
and pay the Plaintiffs' share in the profits of the firm. As per
the terms of partnership, the plaintiff of OS.No.4538/2012
was entitled to 11% share in the profits and so also the
plaintiff of OS.No.4539/2012 was entitled to 15% share in
the profits. Accordingly, pursuant to dissolution of the firm,
the plaintiff of OS.No.4538/2012 became entitled to receive a
sum of Rs.9,88,843/-(Rupees Nine Lakhs, Eighty Eight
4 OS.No.4538/12 & 4539/12
Thousand, Eight Hundred and Forty Three Only) towards his
share in the profits and so also the plaintiff of
OS.No.4539/2012 became entitled to receive a sum of
Rs.11,05,526/-(Rupees Eleven Lakhs FiveThousand Five
Hundred Twenty Six Only) towards his share in the profits.
Despite several requests made by the plaintiffs, the defendant
evaded the issue and showed no inclination to pay the said
amount due to the plaintiffs from the defendant. The
defendant illegally and high handedly appropriated the said
amounts which the plaintiffs were entitled to with the
malafide intention of causing wrongful loss to the plaintiffs
and to make wrongful gain for himself. The defendant also
did not take any steps for settlement of accounts of the
partnership firm as well as all other acts necessary to
complete the process of dissolution as undertaken by him
under the deed of dissolution dated 31-12-2008. In view of
the illegal and highhanded attitude adopted by the defendant
in refusing to pay the amounts due to the plaintiffs, the
plaintiffs got issued a Notice dated 12-07-2010 through their
advocate to the defendant and other partners calling upon
the defendant to pay the aforesaid sums to the plaintiffs
together with interest at 24% per annum and thereafter on
5 OS.No.4538/12 & 4539/12
15-06-2011, the defendant paid the said sum of
Rs.9,88,843/- to the plaintiff of OS.No.4538/2012 by
executing a Cheque bearing No.514365 dated 15-06-2011
drawn on Indian Bank, Cantonment Branch, Bangalore and
so also paid the said sum of Rs.11,05,526/- to the plaintiff of
OS.No.4539/2012 by executing a Cheque bearing No.514366
dated 15-06-2011 drawn on Indian Bank, Cantonment
Branch, Bangalore. At that time, the plaintiffs called upon
the defendant to pay the plaintiffs the interest also on the
said sums from 31-12-2008 onwards when the defendant
became liable to pay the said amount to the plaintiffs. The
defendant assured the plaintiffs that he would pay the said
interest liable to be paid by him to the plaintiffs for the period
from 31-12-2008 to 15-06-2011. However, despite repeated
requests and demands by the plaintiffs, defendant is not
showing any inclination to pay the said interest amount to
the plaintiffs. In their notice dated 12-07-2010, the plaintiffs
have called upon the defendant to pay interest at 24% per
annum on the outstanding principal amounts. As stated
supra, the defendant committed default in paying the said
interest on the principal amount from 31-12-2008 to 15-06-
2011. Thus the defendant is liable to pay a sum of
6 OS.No.4538/12 & 4539/12
Rs.5,93,305/- to the plaintiff of OS.No.4538/2012 towards
interest from 31-12-2008 to 15-06-2011 and so also liable to
pay a sum of Rs.6,63,315/- to the plaintiff of
OS.No.4539/2012 towards interest from 31-12-2008 to 15-
06-2011. The defendant is also liable to pay future interest at
24% p.a from the date of suit till realization. Hence the above
suits for recovery of money.
5. On the other hand, the defendant has filed his
written statement in both the suits and denied the averments
of the plaint as false and incorrect and further contended
that the above suits have been filed seeking to recover
interest on the amount that was due to the plaintiffs from a
Partnership Firm known as M/s Choudri Nagappa
Enterprises. The said firm has now been dissolved and as
such, a suit for recovery of interest from the said dissolved
Partnership Firm ought to be filed against all persons who
were the partners of the firm at the time of its dissolution. All
the partners of the dissolved partnership firm are necessary
and essential parties for the adjudication of the above suits
and this Hon'ble Court would not be able to decide the lis in
the absence of the other partners of the dissolved partnership
firm. Hence the above suits are liable to be dismissed for not
7 OS.No.4538/12 & 4539/12
impleading all the partners of the dissolved partnership firm.
During December 2008 all the partners of the firm decided to
dissolve the firm. Accordingly, under a deed of dissolution
dated 31-12-2008 the said Partnership Firm was dissolved
with effect from 31-12-2008. Under the said dissolution deed
it was agreed that the Managing Partner, the defendant
herein shall take steps and get the accounts of the firm be
prepared for the period 01-04-2008 to 31-12-2008 to show
the assets and liabilities of the partnership as on that date
and to ascertain the profit or loss incurred up to that date
and the same be duly audited and ascertain the stocks,
securities, actionable claims and all other assets, movable
and immovable and undertaking of the firm. It was further
agreed that the said audited account shall be signed by all
the partners of the Partnership Firm. Accordingly, the annual
accounts of the firm for the period from 01-04-2008 to 31-12-
2008 were finalised and the same was audited by the
Chartered Accountant of the said firm. As stated above, the
audited accounts of the firm needs to be approved by all the
partners of the firm by affixing their signature as per clause 2
of the Deed of Dissolution dated 31-12-2008. The plaintiffs
who were both partners in the firm, refused to sign the
8 OS.No.4538/12 & 4539/12
audited accounts produced before them. The defendant, in
his capacity as the Managing Partner of the firm, followed up
with the plaintiffs and requested them to cooperate for the
finalisation of the accounts of the firm. However the plaintiffs
did not cooperate or sign the audited accounts causing
unnecessary delay in closure of accounts and settlement of
amount due to partners. As per the audited and finalised
accounts of the firm, the plaintiff of OS.No.4538/2012 was
entitled to be paid Rs.9,88,843/-(Rupees Nine Lakhs Eighty
Eight Thousand Eight Hundred Forty Three Only) as his
share in the profits. On 15-06-2011, the plaintiff was paid his
dues by way of cheque and so also the plaintiff of
OS.No.4539/2012 was entitled to be paid Rs.11,05,526/-
(Rupees Eleven Lakhs Five Thousand Five Hundred Twenty
Six Only) as his share in the profits. On 15-06-2011, the
plaintiff was paid his dues by way of cheque. The plaintiffs
have accepted the amount without any demur and were
satisfied that the dues were all cleared. Further, the Deed of
Dissolution does not contain any provision/clause fixing the
liability on the defendant or the firm to pay interest to the
partners if there is any delay in making the payments. Hence,
the defendant is not liable to pay any interest as claimed by
9 OS.No.4538/12 & 4539/12
the plaintiffs and accordingly prayed for dismissal of the
above suits for want of cause of action.
6. On the basis of the pleadings, one of my learned
predecessor has framed the following issues in both the
suits : -
Issues in OS.No.4538/2012 :
1) Whether the plaintiff proves that, as per
the deed of dissolution of the partnership
firm the defendant or the firm is liable to
pay interest to the partners if there is
any delay in making the payments?
2) Whether the defendant proves that the
plaintiff and his mother
Smt.Renukamurthy did not co-operate
and signed the audited accounts for the
finalization of the accounts of the firm?
3) Whether the defendant proves that the
suit of the plaintiff is bad for non-joinder
of all the partners of the dissolved firm?
4) Whether the plaintiff is entitled to
recover an amount of Rs.5,93,305/-
from the defendant with interest at 24%
p.a.?
5) What decree or order?
Issues in OS.No.4539/2012 :
1) Whether the plaintiff proves that, during
the subsistence of the partnership firm
M/s Choudri Nagappa Enterprises the
defendant was in charge of all the affairs
of the firm and all the documents were
10 OS.No.4538/12 & 4539/12
in his custody and possession and after
dissolution of the firm the defendant had
undertaken to take steps to get the
accounts of the firm prepared and
settled and pay the plaintiff his share in
the profits of the firm?
2) Whether the plaintiff proves that the
defendant has issued a cheque for
Rs.11,05,526/- on 15.6.2011 drawn on
Indian Bank, Cantonment Branch,
Bangalore but failed to pay the interest
on the said amount?
3) Whether the plaintiff is entitled to
recover an amount of Rs.6,63,315/-
from the defendant with interest at 24%
p.a. from the date of suit till recovery
being the interest on his share in the
profits?
4) What decree or order?
Addl. Issues in OS.No.4539/2012:-
1) Whether the defendant proves that the
plaintiff and her son Mr. C.R.Ashwin did
not co-operate and sign the audited
accounts for the finalization of the
account of the firm?
2) Whether the defendant proves that the
suit of the plaintiff is bad for non-joinder
of all the partners of the dissolved firm?
7. In order to prove the above issues, the plaintiff of
OS.No.4538/2012 got examined himself as PW.1 and got
marked the documents at Ex.P1 to P4 and the said plaintiff
being the GPA holder of the plaintiff of OS.No.4539/2012
further examined himself as PW.1 and also got marked the
11 OS.No.4538/12 & 4539/12
documents at Ex.P1 to P3. On the other hand the SPA holder
of the defendant in both the suits got himself examined as
DW.1 and got marked the documents at Ex.D1 to D3 and
thereafter the matter was posted for arguments.
8. And I have heard the arguments of both sides in
both the suits and perused the entire materials placed on
record.
9. And my findings on the above issues in both the
suits are as under:-
OS.No.4538/2012 :
Issue No.1: In the negative
Issue No.2: In the affirmative
Issue No.3: In the affirmative
Issue No.4: In the negative
Issue No.5: As per final order, for the following:
OS.No.4539/2012 :
Issue No.1: In the negative
Issue No.2: In the negative
Issue No.3: In the negative
Addl. Issue No.1: In the affirmative
Addl. Issue No.2: In the affirmative
Issue No.4: As per final order, for the following:
12 OS.No.4538/12 & 4539/12
R E A S ON S
10. Issue No.1 to 4 of OS.No.4538/12 and Issue
No.1 to 3 & Addl. Issue No.1 & 2 in OS.No.4539/12 :-
Since these issues are inter-related then they are hereby
discussed commonly in order to avoid repetition of facts.
11. On perusal of the entire materials placed on
record by both the parties I found that it is an admitted fact
by both the parties that the plaintiffs of both the suits were
Partners in the Partnership Firm M/s. Choudri Nagappa
Enterprises of which C.N. Revanna, the defendant herein was
the Managing Partner.
12. It is also an admitted fact by both the parties that
the said Partnership Firm was constituted vide Partnership
Deed dated 24-08-1978 which was subsequently
reconstituted on 31-03-1995 and 01-04-1997.
13. It is also an admitted fact by both the parties that
under a registered deed of dissolution dated 31-12-2008, the
said partnership firm M/s Choudri Nagappa Enterprises was
dissolved with effect from 31.12.2008.
13 OS.No.4538/12 & 4539/12
14. It is also an admitted fact by both the parties that
as per the audited and finalised accounts of the firm, the
plaintiff of OS.No.4538/12 was entitled to be paid
Rs.9,88,843/-(Rupees Nine Lakhs Eighty Eight Thousand
Eight Hundred Forty Three Only) as his share in the profits
and accordingly the same was paid to the plaintiff by way of
cheque on 15-06-2011.
15. It is also an admitted fact by both the parties that
as per the audited and finalised accounts of the firm, the
plaintiff of OS.No.4539/12 was entitled to be paid
Rs.11,05,526/-(Rupees Eleven Lakhs Five Thousand Five
Hundred Twenty Six Only) as his share in the profits and
accordingly the same was paid to the plaintiff by way of
cheque on 15-06-2011.
16. Now it is the specific case of the plaintiff of
OS.No.4538/12 that the defendant is liable to pay a sum of
Rs.5,93,305/- to the plaintiff towards interest from 31-12-
2008 to 15-06-2011.
17. And so also it is the specific case of the plaintiff of
OS.No.4539/12 that the defendant is liable to pay a sum of
14 OS.No.4538/12 & 4539/12
Rs.,6,63,315/- to the plaintiff towards interest from 31-12-
2008 to 15-06-2011.
18. In order to prove the above facts though the
plaintiff of OS.No.4538/12 got examined himself as PW.1 and
got marked the documents at Ex.P1 to P4, the same do not
hold any water as first of all, the plaintiff has neither
produced the said deed of dissolution dated 31-12-2008 nor
even placed any other cogent documentary evidence to show
that there exist a provision/clause that stipulates payment of
interest for any delayed payment.
19. And even otherwise contrary to his pleadings and
evidence, the plaintiff of OS.No.4538/12/PW.1 himself at
page-8 of his cross-examination has clearly admitted that
there is no condition in the said deed of dissolution to pay
any interest on the delayed payment as below : " ºÀt ¸ÀAzÁAiÀÄ
ªÀiÁqÀĪÀÅzÀgÀ°è «¼ÀA§ DzÀgÉ CzÀPÉÌ §rØ PÉÆqÀ¨ÉÃPÉA§ µÀgÀvÀÛ£ÀÄß «¸Àdð£É D
¥Á®ÄzÁjPÉ ¥ÀvÀæzÀ°è £ÀªÀÄÆzÀÄ ªÀiÁr®è J£ÀÄߪÀÅzÀÄ ¤d«z É".
20. And further in order to prove the above facts
though the SPA holder of the plaintiff of OS.No.4539/12 got
examined himself as PW.1 and got marked the documents at
15 OS.No.4538/12 & 4539/12
Ex.P1 to P3, the same do not hold any water as first of all,
the said plaintiff has also neither produced the said deed of
dissolution dated 31-12-2008 nor even placed any other
cogent documentary evidence to show that there exist a
provision/clause that stipulates payment of interest for any
delayed payment.
21. And even otherwise contrary to his pleadings and
evidence, the SPA holder of the plaintiff of
OS.No.4539/12/PW.1 himself at page-8 of his cross-
examination has clearly admitted that there is no condition in
the said deed of dissolution to pay any interest on the
delayed payment as below : "ºÀt ¸ÀAzÁAiÀÄ ªÀiÁqÀĪÀÅzÀgÀ°è «¼ÀA§
DzÀgÉ CzÀPÉÌ §rØ PÉÆqÀ¨ÉÃPÉA§ µÀgÀvÀÛ£ÀÄß «¸Àdð£É D ¥Á®ÄzÁjPÉ ¥ÀvÀæzÀ°è
£ÀªÀÄÆzÀÄ ªÀiÁr®è J£ÀÄߪÀÅzÀÄ ¤d«zÉ".
22. In view of the above material admission of PW.1s
of both the suits, the provisions of Law i.e., section 9, 12(b),
15, 16, 37, 46 and 47 of th Partnership Act, 1932 & Section
23, 88 of Indian Trust Act & Section 46 of the Indian
Contract Act & Section 3 of the Interest Act and so also the
ruling of 2008 (4) MHLJ 843 one relied on by the said
16 OS.No.4538/12 & 4539/12
plaintiffs in their written arguments are of no help to their
case.
23. And even otherwise on careful perusal of the
above provisions of Law and so also the above dictum of 2008
(4) MHLJ 843 one can easily make out that there exists no
provision to pay interest on the delayed payment in case of
the dissolution of a Partnership Deed.
24. And above all since the above said PW.1s of both
suits have clearly admitted in their cross-examinations that
there exist no provision/clause that stipulates payment of
interest for any delayed payment then it has to be held in
unequivocal terms that the above suits of the plaintiffs for
recovery of the alleged interest amount is not at all
maintainable in law.
25. On the other hand the defendant of both the suits
by clearly pleading and leading the oral evidence of his SPA
holder at DW.1 and further producing the said Deed of
Dissolution at Ex.D2 has clearly proved that since there exist
no provision/clause that stipulates payment of interest for
any delayed payment then the plaintiffs are not at all entitled
to any relief as sought by them.
17 OS.No.4538/12 & 4539/12
26. In support of the above facts the defendant has
also relied upon a ruling of AIR 1966 S.C. 275 wherein the
Hon'ble Supreme Court of India has clearly held that "When
there is no usage or contract to award interest then the
party is not entitled to a decree for interest".
27. And in fact the pleadings of the defendant in both
the suits and so also the oral evidence of DW.1 further proved
that the suits of the plaintiffs are bad for non-joinder of all
the partners of the dissolved firm.
28. On the above point also the defendant has relied
upon a ruling of AIR 1965 S.C. 271 wherein the Hon'ble
Supreme Court of India has clearly held that "The suit of the
plaintiff ought to be dismissed for non-joinder of
necessary parties".
29. And even in a ruling of 1990 (4) CCC [AP] one
relied on by the defendant it has been further held that
"Every partner of a firm is a necessary party when a
dispute arises among the partners".
30. It is interesting to note at this stage that though
this Court in both the suits vide Orders passed on IA.No.3
18 OS.No.4538/12 & 4539/12
dated 21.07.2014 has directed the plaintiffs to implead the
other partners of the firm as parties to the above suits still
the plaintiffs have not at all taken any cogent steps to
implead the other partners of the said Deed of Dissolution as
parties and as such on this ground also the above suits of the
plaintiffs are liable to be dismissed.
31. And lastly though there are some minor
discrepancies in the oral version of DW.1 with regard to the
signing of the audited accounts by the plaintiffs, the same is
not at all fatal to the case of the defendant as the PW.1s of
both the suits at page-8 of their cross-examination has
clearly admitted the above facts as below : " ªÁ¶ðPÀ ¯ÉPÀÌPÉÌ J¯Áè
¥Á®ÄzÁgÀgÀÄ ¸À» ªÀiÁqÀ¨ÉÃPÁVzÉ J£ÀÄߪÀÅzÀÄ ¤d«zÉ. £Á£ÀÄ ªÁ¶ðPÀ ¯ÉPÀÌ¥ÀvÀæPÉÌ
¸À» ªÀiÁr®è. CzÀgÀAvÉ £ÀªÀÄä vÁ¬Ä ¸ÀºÀ ªÁ¶ðPÀ ¯ÉPÀÌPÉÌ ¸À» ªàiÁr®è " and
when that is so as per Section 58 of the Indian Evidence Act
the above admitted facts need not be further proved by the
defendant.
32. So in view of the discussion made above I am of
the opinion that since the plaintiffs of both the suits have
failed to prove that as per the Deed of Dissolution dated
31.12.2008 they are entitled to interest from 31.12.2008 till
19 OS.No.4538/12 & 4539/12
15.06.2011 on the delayed payment with cogent material
evidence and since the defendant of both the suits has clearly
rebutted the case of the plaintiffs and further proved that
there exists no provision/clause to pay interest on any
delayed payment in the above said Deed of Dissolution dated
31.12.2008 and further proved that the plaintiffs of both the
suits have not at all co-operated and signed the audited
accounts for the finalization of the accounts of the firm and
further proved that the above suits of the plaintiffs are bad
for non-joinder of all the partners of the dissolved firm with
cogent material evidence then the plaintiffs of both the suits
are not at all entitled to any reliefs as sought by them and
accordingly I have answered issue No.1 of both the suits in
the negative. Issue No.2 and 3 of OS.No.4538/12 in the
affirmative, issue No.2 and 3 of OS.No.4539/12 in the
negative, additional issue No.1 and 2 of OS.No.4539/12 in
the affirmative and issue No.4 of OS.No.4538/12 in the
negative.
33. Issue No.5 in OS.No.4538/12 & Issue No.4 in
OS.No.4539/12:- In view of the discussion made on issue
No.1 to 4 in OS.No.4538/12 and Issue No.1 to 3 & Addl.
Issue Nos.1 & 2 in OS.No.4539/12 and further holding issue
20 OS.No.4538/12 & 4539/12
No.1 of both the suits in the negative. Issue No.2 and 3 of
OS.No.4538/12 in the affirmative, issue No.2 and 3 of
OS.No.4539/12 in the negative, additional issue No.1 and 2
of OS.No.4539/12 in the affirmative and issue No.4 of
OS.No.4538/12 in the negative, I proceed to pass the
following order:-
ORDER
The above suits of the plaintiffs of OS.No.4538/2012 and OS.No.4539/2012 for the relief of recovery of money against the defendant of both the suits are hereby dismissed.
In view of the peculiar circumstances the parties are directed to bear their own cost.
Draw a decree accordingly.
Keep the original judgment in OS.No.4538/2012 and a copy of the same in OS.No.4539/2012.
(Dictated to the Judgment Writer on computer, corrected and then pronounced by me in the open court, on this the 8th day of April, 2019).
(R. Ravi), XVII Addl. City Civil & Sessions Judge, Bengaluru.
21 OS.No.4538/12 & 4539/12ANNEXURE List of witnesses examined for plaintiff in both the Suits:
P.W.1 C.R. Ashwin List of documents exhibited for plaintiff in OS.4538/12:
Ex.P1 Copy of Legal notice Ex.P2 Postal Receipt Ex.P3 Postal acknowledgment card Ex.P4 Statement of account from 01.04.2008 to 31.03.2012 List of documents exhibited for plaintiff in OS.4539/12:
Ex.P1 G.P.A. Ex.P2 Copy of notice Ex.P3 Postal receipt
List of witnesses examined for defendant in both Suits:
DW.1 C.N. Kumar List of documents exhibited for defendant in OS.4538/12:
Ex.D1 Notarized copy of S.P.A Ex.D2 Deed of Dissolution Ex.D3 Statement of account from 01.04.2008 to 31.12.2008 XVII Addl. City Civil & Sessions Judge, Bengaluru.Digitally signed by R RAVI DN: cn=R RAVI,ou=HIGH COURT
R RAVI OF KARNATAKA,o=GOVERNMENT OF KARNATAKA,st=Karnataka,c=IN Date: 2019.04.16 10:22:04 IST