Karnataka High Court
Sri Manohar V Khanolkar vs Sri Prabhakar V Khanolkar on 27 September, 2023
Author: V. Srishananda
Bench: V. Srishananda
1
®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF SEPTEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE V. SRISHANANDA
R.F.A.NO.1404/2006(PAR)
BETWEEN
1. SRI MANOHAR V. KHANOLKAR
SINCE DEAD BY LEGAL REPRESENTATIVES
1(a) SHALINI M. KHANOLKAR
W/O LATE MANOHAR V. KHANOLKAR
AGED 68 YEARS
RESIDING AT 910, 17TH MAIN,
NEAR POLICE BOOTH
J.P.NAGAR
MYSORE - 570 008.
1(b) DHANANJAY M. KHANOLKAR
S/O MANOHAR V. KHANOLKAR
AGED ABOUT 43 YEARS
RESIDING AT NO.910, 17TH MAIN,
NEAR POLICE BOOTH
JP NAGAR
MYSORE - 570 008
1(c) PRIYA REDDY
D/O LATE MANOHAR
RESIDING AT 89, PAVITHRAM
2ND CROSS, LAKSHORE GARDEN
2
VIDYARANYAPURA POST,
THINDLU MAIN ROAD
BENGALURU - 560 097.
2. SRI MADHUKAR V. KHANOLKAR
SINCE DEAD BY LEGAL REPRESENTATIVES
2(a) SMT.ASHA M. KHANOLKAR
MAJOR
2(b) SRI GYANESH M. KHANOLKAR
S/O LATE MADHUKAR V. KHANOLKAR
MAJOR
2(c) SRI GANAPATHI M. KHANOLKAR
S/O LATE MADHUKAR V. KHANOLKAR
MAJOR
ALL ARE RESIDING AT
DOOR NO.6/A, 2ND CROSS
PARAMAHAMSA ROAD
YADAVAGIRI
MYSORE -570 003
3. SMT.SEETA KRISHNASWAMY (DEAD)
W/O LATE KRISHNASWAMY
MAJOR
RESIDING AT NO.7, 4TH CROSS
LAKSHMI ROAD
SHANTHANAGAR
BANGALORE - 560 027.
...APPELLANTS
(BY SRI MANMOHAN.P.N, ADVOCATE)
3
AND :
1. SRI PRABHAKAR V KHANOLKAR
SINCE DECEASED BY LEGAL REPRESENTATIVES
1(a) KALPANA P. KHANOLKAR
MAJOR
D/O PRABHAKAR V. KHANOLKAR
AGED 59 YEARS
R/AT C 203, ADARSH PALACE,
47TH CROSS, 5TH BLOCK
JAYANAGAR
BANGALORE - 560 041.
1(b) JYOTSNA A GAVANKAR
D/O PRABHAKAR V KHANOLKAR
AGE NOT KNOWN
RESIDING AT C 303, ADARSH PALACE
47TH CROSS
5TH BLOCK, JAYANAGAR
BANGALORE - 560 041
1(c) VANDANA PRADEEP PAI
D/O PRABHAKAR V KHANOLKAR
AGED 55 YEARS
RESIDING AT #221, MAPLE B
PRESTIGE GREENWOODS
NAGAVARPALYA, C V RAMAN NAGAR
BENGALURU - 560 093
2. SRI ANAND V KHANOLKAR
SINCE DECEASED BY LEGAL REPRESENTATIVES
4
2(a) SMT. PUSHPA A KHANOLKAR
W/O LATE ANAND V KHANOLKAR
AGED 66 YEARS,
2(b). APARNA A KHANOLKAR
D/O LATE ANAND V KHANOLKAR
AGED 41 YEARS
2(c). SRI ROHAT A KHANOLKAR
S/O LATE ANAND V KHANOLKAR
AGED 39 YEARS
2(d). ANAGHA A KHANOLKAR
D/O LATE ANAND V KHANOLKAR
AGED 37 YEARS
ALL ARE RESIDING AT
DOOR NO.150, VISHRAM
3RD CROSS, 10TH MAIN,
KUVEMPUNAGAR
MYSORE -570 023
3. POORNIMA KRISHNASWAMY
AGED 48 YEARS
D/O LATE SEETHA KRISHNASWAMY
R/AT APARTMENT 6932,
PRESTIGE SILVER DANE
NEAR WIPRO CORPORATE OFFICE
6/1 AND 6/2, JANNASANDRA VILLAGE
OFF SARJAPURA ROAD
VARTHUR HOBLI,
BANGALORE - 560 035
5
4. PRADEEP KRISHNASWAMY
AGED 43 YEARS
S/O LATE SEETHA KRISHNASWAMY
RESIDING AT 13/303, ZED WOODS,
AVALAHALLY
DODDABALLAPURA ROAD
YELAHANKA,
BANGALORE -560 064.
...RESPONDENTS
[BY SRI Y K NARAYANA SHARMA, ADVOCATE FOR R1(A
AND C), R2(A TO D);
SRI ASHOK N. PATIL, ADVOCATE FOR R3 TO R4;
SMT.SHWETHA ANAND, ADVOCATE FOR R1(B)]
THIS REGULAR FIRST APPEAL IS FILED UNDER
SECTION 96 OF CIVIL PROCEDURE CODE AGAINST THE
JUDGMENT AND DECREE DATED 05.04.2006 PASSED IN
O.S.NO.403/1995 ON THE FILE OF THE II ADDL.CIVIL
JUDGE(SR.DN.) AND CJM, MYSORE, DISMISSING THE
SUIT FOR PARTITION AND SEPARATE POSSESSION.
THIS REGULAR FIRST APPEAL HAVING BEEN HEARD
AND RESERVED FOR JUDGMENT ON 16.08.2023, COMING
ON FOR 'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE
COURT DELIVERED THE FOLLOWING:-
6
JUDGMENT
The present appeal is filed by the unsuccessful plaintiffs challenging the validity of judgment and decree passed in O.S.No.403/1995 on the file of II Addl.Civil Judge (Sr.Dn), Mysore, dated 05.04.2006.
2. Parties are referred to as plaintiffs and defendants for the sake of convenience as per their original rankings before the Trial Court.
3. A memo came to be filed by the appellants which reads as under:
"The appellants submit that item No.1 of the plaint schedule property belonged to late Sarojini Khanolkar and she was not a partner of the partnership firm. The appellants restrict this appeal in respect of item No.1 only. The appeal in respect of item Nos.2 and 3 of the plaint schedule is not pressed. This memo may kindly be taken on record, in the interest of justice and equity."7
4. The said memo was objected by counsel for respondent Nos.1, 2 (a) and 2 (c) as under:
1. The Appellant is not entitled to give up the claim regarding Item Nos.2 and 3 of the suit schedule at this stage, as the judgment and decree is passed and the validity of the same has to be considered, looking into claims of all the items 1 to 3 of the suit schedule. The rights of the parties and equities have to be considered in accordance with law by considering into the rights of the parties in respect of all the properties belonging to them in the above case.
2. In view of the memo filed by the appellant on 11.08.2023 the item No.2 and 3 of the suit schedule are not part of the suit, the suit is only against the item No.1 of the suit schedule. The suit being one for partition, the suit is not maintainable."
5. In support of objections, learned counsel for respondents has relied on following judgment of Hon'ble Supreme Court in the case of Kenchegowda v.
Siddegowda, AIR Online (1994) SC 138 where in it is held that without including all the properties suit for 8 partition is not maintainable. Relevant portion of the said judgment reads as under:
16. Therefore, what has been held is that the property had not been allotted in favour of the first defendant in the partition. That is very different from holding that the case of partition had not been accepted by the first appellate court. This being so, a decree for partition could not have been passed on a mere application for amendment. In fact, as rightly urged by the learned counsel for the appellant that the causes of action are different and the reliefs are also different. To hold that the relief of declaration and injunction are larger reliefs and smaller relief for partition could be granted is incorrect. Even otherwise, a suit for partial partition in the absence of the inclusion of other joint family properties and the impleadment of the other co-sharers was not warranted in law. Thus, we find no difficulty in allowing these appeals which are accordingly allowed. The judgment and decree of the trial court as affirmed by the first appellate court are restored. However, there shall be no order as to costs.
6. In the plaint, suit properties are described in the schedule as under:
9Item No.1:-
All the part and parcel of the premises bearing No. 1670, specifically known as "Annapurna", Hanumantha Rao street, Mysore, measuring 90 feet by East to West 27 feet by North to South bounded on the:
East by : Conservancy
West by : Road
North by : Prabha Talkies
South by : Chamundi Electroplating work
Item No.2:-
The proceeds derived from the sale of the property bearing corporation No.6, situated at Shanthi Nagar, Bangalore in a sum of Rs.30,000/- (Rupees Thirty Thousand Only).
Item No.3:-
Proceeds of the sale of the property which was known as Usman Buildings, Bangalore in a s um of Rs.20,000/- only.
7. Since the plaintiffs are the masters of the suit, the memo is accepted and the appeal is now restricted to only item No.1 of the suit property. Further, there cannot be dispute as to the principles of law enunciated in the 10 Kenchegowda's case supra. But in the case on hand facts pleaded in the suit are different and therefore the said ruling is not applicable to the case on hand for the reasons discussed infra in the present judgment. Hence discussion in the present appeal is restricted to Item No.1 of suit properties only.
8. Accordingly, necessary facts and pleadings are culled out as under:
i. The plaintiffs and defendant Nos.1 and 2 are the children of one V.S. Khanolkar. He had a wife by name Smt. Sarojini Khanolkar. Couple had several properties during their life time and one such property held by Smt. Sarojini Khanolkar which is item No.1 of the suit properties. V.S.Khanolkar and his sons were partners in a firm called M/S.V.S.Khanolkar, Mysore. A Dissolution Deed executed on 15.01.1987 whereby the partnership firm was dissolved and assets of the firm was subjected to the process of dissolution.11
ii. It is further contended that suit item No.1 of the suit properties was the individual property of Sarojini Khanolkar and not the property of the firm and after the death of Smt. Sarojini Khanolkar, all her children have got share in the suit property. Despite repeated demands made by the plaintiffs, defendants did not agree to partition item No.1 of the property and therefore, a legal notice came to be issued calling upon the defendants to effect the partition in the suit properties.
9. After service of notice, defendant Nos.1 and 2 entered appearance and filed their written statement. The second defendant died during pendency of the suit, his legal heirs were brought on record.
10. In the said written statement there is an admission as to the relationship and also the date of death of Smt. Sarojini Khanolkar as 10.12.1982 and it is admitted that item No.1 was owned by Smt. Sarojini Khanolkar.
However, it is further contended that after death of Sarojini Khanolkar, all the legal heirs of Smt. Sarojini 12 Khanolkar joined and in division of estate. In such division, suit item fell into the share of all the legal representatives and they on their volition, thrown the right, title and interest in suit item No.1 of the property to staff of the partnership firm namely; V.S. Khanolkar.
11. It is also contended that said property was taken as asset of the partnership firm in the books of account of the said firm and value was shown as sum of Rs.4,05,000/- in the books of account of the said firm. When the item No.1 of the property was thrown into the joint stock of the partnership firm namely; V.S. Khanolkar, his sons and daughters; Prabhakar, Anand, Madhukar, Manohar, Josna and Gyanesh and Dhananjaya being the partnership firm of M/s. V.S.Khanolkar, Mysore, by mutual understanding, the right, title and interest in item No.1 of the suit property was brought to the accounts of plaintiffs and defendants in 1/4th share each.
12. It is further contended that M/s. V.S. Khanolkar firm was dissolved on 15.01.1987 and in such dissolution of the 13 firm, suit item No.1 was given to the share of Sri Anand V.K. It is also contended that the first plaintiff was given site No.6 at Shanthinagar, second plaintiff was given 50% right in the Usmania building situated at Narasimharaja road, Bengaluru. First defendant was allotted remaining 50% right over the said Usmania building and as such, the suit is not maintainable and sought for dismissal of the suit.
13. Rejoinder was filed by the plaintiffs denying the allegation in the written statement. It is further contended that the alleged division took place on 16.06.1983 is not in accordance with law. As admittedly, plaintiffs were not parties to the division said to have been taken place on 16.06.1983 and they denied that suit item No.1 was thrown into the joint stock of the partnership firm M/s.
V.S. Khanolkar, Mysore and further denied the allegations that 1/4th share was given in respect of the said property.
1414. When the suit was pending, third defendant was impleaded as party and she had filed her written statement denying the contentions of the plaintiffs, except admitting the relationship between the parties. She also demanded her share in the suit property and contended that during the life time of V.S. Khanolkar, he had sold second item of the suit property. She admits that plaintiffs and defendants remained jointly in relation to the item No.1 of suit schedule properties. She has admitted that item No.3 has been allotted to the share of the first defendant by his father and therefore, he did not claim any right in respect of suit item No.3. However, she prayed for her share in item No.1 and prayed for dismissal of the suit in respect of item Nos.2 and 3.
15. Based on the rival contentions of the parties, following issues were framed by the Trial Court:
1. Do the defendants prove that in the month of December, 1986, the suit Pr was thrown in to the joint stock of partnership firm of M/s.V.S.Kanolkar, Mysore constituted by plaintiffs, defendants and others?15
2. Do the defendants further prove that the said firm came to be dissolved on 15.01.1987 and on such dissolution first plaintiff was given site No.6 of Akkithimmanahalli, 2nd plaintiff and 1st defendant were given 50% of the rights each in Usmania Building, Narasimharaja Road, Bangalore and the suit property was given to the 2nd defendant?
3. Is the 1st plaintiff estopped from questioning the property of the said distribution of the assets, as pleaded in para.5 of the written statement?
4. Did the 2nd plaintiff relinquish his rights in Usmania Building in favour of the 1st defendant?
5. Is the suit bad for non joinder of site allotted by Madhuvana House Building Co-operative Societies ?
6. Is the suit property valued and the court fee paid sufficient?
7. Are the plaintiffs entitled for the relief of partition?
8. What decree or order?
Addl. Issues
1. Whether the plaintiffs prove the deed of resolution did not disturb their right in the schedule property for the reason stated in para.5, 6 and 7 of the rejoinder?
162. Whether defendants prove that the suit of the plaintiffs bad for non/joinder of necessary parties for the reasons stated in the written statement?
3. What order or decree?"
16. In order to prove the case of the plaintiffs, Asha Khanolkar who is the first legal representative of second plaintiff got examined herself as P.W.1 and as many as 12 documents were relied upon to prove the case of the plaintiffs which were exhibited and marked as Exs.P.1 to P.12, comprising of certified copy of sale deed as Ex.P.1, Release Deed as Ex.P.2, Partition letter as Ex.P.3, Receipt as Ex.P.4, Cash bill as Ex.P.5, Certified copy of order as Ex.P.6, Order sheet copy as Ex.P.7, Photo as Ex.P.8, Cash Bill as Ex.P.9, Deed of resolution as Ex.P.10, Copy of order as Ex.P.11, Katha endorsement as Ex.P.12.
17. On behalf of the defendants, Pushpa Khanolkar who is the first legal representative of Anand V. Khanolkar, is examined as D.W.1 and Sri H. Ramachandra is examined as D.W.2. On behalf of the defendants, seven documents 17 were exhibited and marked as Exs.D.1 to D.7, comprising of Partnership deed as Ex.D.1, Valuation report as Ex.D.2, Statement as Ex.D.3, Statement of accounts Ex.D.4, Certified Copy of the notice as Ex.D5, Balance Sheet as Ex.D6, Profit and loss account as Ex.D7.
18. On conclusion of recording of evidence, the learned Trial Judge heard the parties in detail and by impugned judgment, dismissed the suit of the plaintiffs.
19. Being aggrieved by dismissal of the suit, the plaintiffs have preferred the present appeal on the following grounds:
The lower court has committed an error in holding that the title to the property can be transferred by means of a dissolution-deed relating to dissolution of a partnership firm. A partnership firm had been constituted for running certain business for which late VS Khanolkar and his sons were partners. The building in question belongs to Sarojini, who died on 10.12.1982, and the partnership business was allowed to be run in the said building. However, while dissolving the partnership business, the dissolution-deed dated 18 15.1.1987 stated that the building in question is allotted to the share of the 2nddefendant. The lower court has committed an error in accepting the contention of the defendants / respondents that the property has gone solely to the share of the 2nddefendant by virtue of the dissolution-deed and other family members do not have any right over the same.
The judgment & decree passed by the lower court is erroneous for the following reasons -
o The lower court ought to have noticed that the title to the building, which originally belonged to late Sarojini could not have been transferred to another person by virtue of a dissolution of a partnership firm. The transfer of title can only take place in accordance with the provisions of the Transfer of Property Act, and the Registration Act. There can be no transfer of title merely by including the same in a dissolution-deed.
o The partnership firm business was being run by some of the family members. The 3rd appellant herein was not a partner at all. The property which belongs to Sarojini ought to have come to the share of the 3rd appellant as she is also her daughter. It is not permissible for the sons of V S Khanolkar to enter into a dissolution-deed and thereby allot the building in favour of one of them.
19 The lower court has committed an error in dismissing the suit solely placing reliance upon the dissolution-deed dated 15.1.1987. The mere fact that the appellant Nos. 1 & 2 are signatories to the said document, does not in any way prevent them from claiming the right in respect of the said property. The title to the property can only be transferred by way of a registered document. The mere execution of any un-registered document does not have the effect of transferring a title of the property. The mode of transfer of title in a property is regulated by legal provisions and the concept of waiver or estoppel has no role to play in such a situation. The Principles of Estoppel & Waiver are all principles of evidence, which cannot operate as against a statute. Even otherwise the appellant No. 3 is not a party to any of the said document, and as such the question of dismissing the suit on the said basis, does not arise. In a suit for partition, all parties are in position of plaintiffs, and the suit could not have been dismissed merely because the appellants No. 1 & 2 were also parties to the dissolution-deed.
The property belongs to Sarojini and after her death, the partnership business continued in the said premise. The dissolution-deed came to be executed on 15.1.1987 pursuant to which the katha was got transferred in the name of the 2nddefendant after the death of Sarojini.
20The appellants demanded for partition and also issued a legal notice on 14.2.1994. As the respondents did not concede the demand for partition, the present suit came to be filed. The respondents have not produced any This crucial aspect has been lost sight of by the lower court.
(iii) The lower court has failed to note that the building in question which belongs to Sarojini has never been shown as the property of the partnership firm. The katha of the property and the payment of tax have always been made only in the name of Sarojini till her death on 10.12.1982. The property continued in the name of Sarojini till 1987. It is only in the year 1988, the 2nd defendant got the katha changed in his name on the basis of the dissolution-deed dated 15.1.1987. Hence the property was always the individual property of Sarojini, over which all her children have a share in the same.
(iv) The lower court ought to have noticed that D1 & D2 have clearly admitted that the building in question was always in the name of Sarojini; that Sarojini was never a partner in the business; and that this property never belonged to the firm as such.
The above-mentioned crucial aspects have not been properly appreciated by the lower court, and as such the said judgment is unsustainable.
21 document to show as to how the building became property of the partnership firm. The lower court has observed in the judgment as under, "....the plaintiffs who have acted upon Ex. P.10 who have enjoyed the benefits of the assets given to them under Ex. P.10 are estopped from leading any evidence challenging the contents of Ex. P.10 and allotment of 'Annapurna' building in favour of defendant No. 2".
This reasoning fails to take note of the fact that there are no legal consequences which flow out of the said document inasmuch as the said document does not have the effect of transferring the title. Assuming without conceding that the said document is admitted, then also there is no transfer of title. Merely because of execution of a dissolution-deed, this aspect has not been considered by the lower court.
The lower court has committed an error in denying the claim of the 3rd appellant by observing as under, "Under these circumstances, it is nothing but defendant No.3 has waived her right over the schedule properties. At this belated state, she is not entitled for any share in suit items".
22 This reasoning is clearly unsustainable and incorrect. So long as the property of Sarojini has not been divided, it is open to the appellants to claim for a share at any point of time. The share in the said property cannot be denied merely because some of the family members have chosen to allot the property to themselves by executing a dissolution deed. The concept of Waiver or Estoppel has no place in such matters.
The lower court ought to have noticed that the dissolution-deed dated 15.1.1987 has been prepared only for the purpose of submitted the same to the Income-tax Department. The parties have clearly understood that the said dissolution-deed is not meant to regulate the parties interse in respect of the property, but is only for the purpose of assessment of tax. This has been made clear in the valuation report- dated 11.11.1986 (Ex. D2). The said valuation report states that, "Valuation report is stated to be required by the owners for Income-tax purpose".
The lower court has failed to notice that there is no document on record, which shows that the building in question has been transferred to the partnership firm by Sarojini. Merely because the balance sheet of the firm 23 shows the said property, does not mean that the said property has been included in the assets of the partnership firm. The property belongs to Sarojini, who was not a partner in the firm, and the partnership firm never had any right in respect of the said property. The only link between the partnership firm and the building in question was that the partnership business was allowed to do business in the said building.
The lower court ought to have noticed that on the death of Sarojini on 10.12.1982, the property devolved upon all her legal heirs. The devolution of interest on the property of Sarojini is by operation of law, and the question of denying the claim of her legal representatives by placing reliance on Principles of Estoppel or Waiver, does not arise.
The lower court ought to have noticed that the property at Shanthinagar and Usman Building was valued at several lakhs of rupees. However the dissolution-deed makes a reference to the value of the said property at Rs 30,000 and Rs 20,000/= respectively. This clearly shows that the dissolution- deed itself was only a sham document, did not give a true picture.
The defendants have produced a Statement of Division of Estate of late Sarojini, which is marked as 24 Ex. D3. As per the said document the property should be transferred to the joint names of Prabhakar V Khanolkar, Anand V Khanolkar, Madhukar V Khanolkar and Manohar V Khanolkar by filing necessary affidavits. This document is said to have been signed by appellant No. 3 also. As per this, the katha of the property should be continued in the joint names of four persons subject to completion of legal formalities. To perpetuate the said division, the said document was only a tentative document, which was prepared for the purpose of change of katha, and cannot be treated as a document, by which the 3rd appellant has relinquished her rights. Even otherwise, an un-registered document relates to relinquishment of rights, does not have any effect unless the same is registered. The lower court has committed an error in denying the just claim of the 3rd appellant by placing reliance on this statement.
The lower court has not properly answered the issue No. 1, which relates to throwing the building to the joint stock of partnership firm. While answering this issue, the court has not given any categorical finding as to when the building was treated as a partnership firm. On the other hand, it is treated as a partnership property, merely because the balance sheet of the partnership firm covers this property also. The right over properties cannot be transferred from one to another by just covering it in a balance sheet. The lower court has 25 dismissed the suit by placing reliance on the concepts of Waiver or Estoppel.
The lower court has committed an error in denying the claim of the 3rd appellant by placing reliance on Principles of Estoppel or Waiver. There is no issue framed regarding this, in so far as it relates to the 3rd appellant. It is no doubt true that an issue is framed in relation to plaintiff regarding estoppel. However there is no such issue in relation to the 3rd appellant and hence the claim of the 3rd appellant could not have been rejected on the said ground."
20. Reiterating the grounds urged in the appeal memorandum, Sri. P.N.Manmohan, learned counsel for the appellants vehemently contended that the learned Trial Judge failed to note that admittedly the suit item No.1 is the individual property of Sarojini Khanolkar, who died on 10.12.1982 and thereafter, as per Section 15 of the Hindu Succession Act, the property would devolve upon all the legal representatives of Sarojini Khanolkar and therefore, dismissal of the suit by the Trial Court in respect of suit item No.1 for which the present appeal restricted is 26 incorrect and has resulted in miscarriage of justice and sought for allowing the appeal.
21. He also pointed out that at no point of time, the suit item No.1 of the property was thrown into the common assets of the partnership firm and therefore, the contentions urged on behalf of the defendants that by way of dissolution of the firm on 15.01.1987, the property being allotted in favour of second defendant - Anand Khanolkar exclusively is thus incorrect and sought for allowing the appeal.
22. He also pointed out that all the legal representatives of Sarojini Khanolkar are not the partners of the firm and therefore, the alleged settlement is incorrect and sought for allowing the appeal.
23. The legal representatives of Smt. Seetha Krishnaswamy have filed affidavits whereby they have given up their rights in the suit item No.1 of the property.
The affidavits reads as under:
27"I, Pradeep Krishnaswamy S/o Late Seetha Krishnaswamy, Age 43 Years Residing at No.13/303, Zed Woods, Avalahally, Doddaballapura Road, Yelahanka, Bengaluru-560064, do hereby state on solemn affirmation and state on oath as under:
1) I am the Respondent No.4 in the above appeal, I know the facts of the case, Hence I am swearing to this Affidavit.
2) I submit that the suit in O.S.No.403/1995, on the file of II Additional Civil Judge (Senior Division), at Mysuru is filed seeking Partition. I submit that, my mother Seetha Krishnaswamy was arrayed as party to the suit proceedings and on death of my mother, I have been brought on record as LR's along with my brother in this appeal proceedings as Respondent No.4.
3) I submit that, the suit is filed seeking partition in respect of Schedule Property, I further submit that, I am not inclined and interested and further do not desire to remain an active party to the present proceedings.
4) I submit that, I declare and undertake not to claim share in the suit schedule property, even in case the suit is allowed in part or otherwise in any manner. I submit that, as I have declared that, I am not inclined and interested in having 28 any share in the suit schedule property, I may be freed and discharged and released of the share and deemed to be separated.
5) I submit that, above statements made at paragraphs No.1 to 4 are true and correct to the best of my knowledge, belief and information, which I believe them to be true."
"I, Poornima Krishnaswamy D/o Late. Seetha Krishnaswamy. Age: 48 Years, Residing at Apart No.6932, Prestige Silver Dane, Near Wipro Corporate Office, 6/1 and 6/2, Junnasandra Village. Off. Sarjapura Road, Varthur Hobli, Bengaluru- 560035, do hereby state on solemn affirmation and state on oath as under:
1) I am the Respondent No.3 in the above appeal, I know the facts of the case, Hence I am swearing to this Affidavit.
2) I submit that the suit in O.S.No.403/1995, on the file of II Additional Civil Judge (Senior Division), at Mysuru is filed seeking Partition. I submit that, my mother Seetha Krishnaswamy was arrayed as party to the suit proceedings and on death of my mother, I have been brought on record as LR's along with my brother in this appeal proceedings as Respondent No.3.29
3) I submit that, the suit is filed seeking partition in respect of Schedule Property, I further submit that, I am not inclined and interested and further do not desire to remain an active party to the present proceedings.
4) I submit that, I declare and undertake not to claim share in the suit schedule property, even in case the suit is allowed in part or otherwise in any manner. I submit that, as I have declared that, I am not inclined and interested in having any share in the suit schedule property, I may be freed and discharged and released of the share and deemed to be separated.
5) I submit that, above statements made at paragraphs No.1 to 4 are true and correct to the best of my knowledge, belief and information, which I believe them to be true."
24. Per contra, learned counsel for the contesting respondent No.1 (a) and (c) Sri Y.K. Narayanasharma vehemently contended that the property of Sarojini Khanolkar which is the suit item No.1 was taken into the partnership firm on the volition of the parties after the death of Sarojini Khanolkar and thereafter when the partnership came to be dissolved on 15.01.1987 vide 30 Ex.P.10, the suit item No.1 of the property has been allotted in favour of second defendant exclusively and therefore, the suit has been rightly rejected by the learned Trial Judge.
25. It is also pointed out that under the settlement, 50% of the share in the suit item No.2, (N.R.road) has been allotted in favour of second plaintiff and first defendant each. First plaintiff has given up his exclusive right in respect of Shanthinagar property and therefore, the plaintiffs having received their respective shares in respect of Shanthinagar property and N.R. Road property, cannot now turn around and contend that they also have got right in the suit item No.1 of the property.
26. He further pointed out that there is no bar to throw the property of an individual into the assets of firm and in such circumstances, the property would be treated as property of the firm as is evident from Ex.P.6 which is dated 31.12.1986 wherein it is mentioned that suit item 31 No.1 is the property of the firm for which the plaintiffs are signatories and therefore, they are estopped from contending contra and their claim in respect of suit item No.1 of the property which has been rightly appreciated by the learned Trial Judge in the impugned judgment in dismissing the suit of the plaintiffs which is just and proper and therefore, sought for dismissal of the appeal.
27. In view of the rival contentions of the parties and peculiar facts and circumstances narrated supra, the points that would arise for determination in the present appeal are formulated as under:
1) Whether the plaintiffs have made out a case for seeking partition only in respect of suit item No.1 of the property in view of the memo dated 11.08.2023?
2) Whether the impugned judgment in dismissing the suit of the plaintiffs in respect of item No.1 of the property only, (as item Nos.2 and 3 are given up by the plaintiffs) is suffering from legal 32 infirmity and perversity and thus calls for interference?
3) What order?
28. Having regard to the limited scope of the present appeal, in view of the fact that the plaintiffs have given up their right in respect of item Nos.2 and 3 of the suit property, detailed discussion of the oral evidence of the parties is unnecessary.
29. It is an admitted fact that item No.1 of the suit property is the exclusive and absolute property of Smt.Sarojini Khanolkar, who is the mother of plaintiffs and defendant Nos.1 and 2. Admittedly, M/s. V.S. Khanolkar is a partnership firm. Same was in the business sale of tools and had its own assets. Smt. Sarojini Khanolkar being the wife of Sri. V.S. Khanolkar possessed the property at item No.1 of the suit property, individually and she died intestate on 10.12.1982.
3330. According to the plaintiffs, after the death of Smt. Sarojini Khanolkar, all the children of Sarojini Khanolar are entitled for share in the property equally, as per Section 15 of Hindu Succession Act, as Smt. Sarojini Khanolar died intestate. According to defendant Nos.1 and 2, item No.1 of the suit property was thrown into the joint stock of partnership firm M/s. V.S. Khanolkar, Mysore. On this aspect of the matter, plaintiffs and defendants are on loggerheads.
31. In order to substantiate the contentions of the defendants, they strongly relied on Ex.D.6 and Ex.P.10.
Ex.D.6 is the statement of accounts of the partnership firm dated 31.12.1986. On perusal of Ex.D.6 it is crystal clear that item No.1 of the suit property is shown as the property of the firm which has been allotted in favour of the second defendant in the Dissolution Deed dated 15.01.1987 marked at Ex.P.10. On 01.01.1987 reconstitution of the partnership firm has taken place and ultimately it was dissolved on 15.01.1987. The legal 34 representatives of Smt Seetha Krishnaswamy, who is the daughter of Khanolkar couple, have filed affidavit giving up their share in the suit property in respect of item No.1 as referred to supra. However, written statement of Smt. Seetha (defendant No.3) would go to show that item No.1 of the suit property was not taken into the firm and she supported the plaintiffs and she also demanded a share in the suit property in respect of item No.1 of the property.
32. In the light of the above disputed factual aspects, this Court has to re-examine the reasoning assigned by the Trial Court in the impugned judgment in respect of suit item No.1 of the property.
33. Parties have relied upon the following judgments in support of their case:
On behalf of the appellants
1) Arm Group Enterprises Ltd. v. Waldorf Restaurant, (2003) 6 SCC 423 "35. Under Section 14 of the Partnership Act, 1932, in the absence of an agreement to the contrary, property exclusively belonging to a person, on his 35 entering into partnership with others, does not become a property of the partnership merely because it is used for the business of the partnership. Such property will become property of the partnership only if there is an agreement -- express or implied -- that the property was, under the agreement of the partnership, to be treated as the property of the partnership. See decision of this Court in the case of Arjun Kanoji Tankar v. Santaram Kanoji Tankar [(1969) 3 SCC 555]."
2) Shashi Kapila v. R.P. Ashwin, (2002) 1 SCC 583 "8. The agreement dated 17-4-1986 was between the respondent landlord on the one part and M/s Shiva and Co. on the other part. The hurdle which the appellant has to surmount initially was to show that he was a partner of the firm M/s Shiva and Co. We will assume, for the present, that he was a partner and hence for all practical purposes he could also represent the firm. Of course, the agreement is totally silent about the fact that the appellant was a partner of M/s Shiva and Co. Even assuming that he was a partner thereof it is legally impermissible for him to individually claim all the rights of the firm. Nor can he project himself as a transferee under the agreement.
9. A partnership firm is an association of persons. But in spite of that unity between themselves, every 36 partner can have his own separate existence from the firm. Any right which a partner has over any property, other than the partnership property, would remain as his individual asset. The mere fact that the particular person has chosen to include himself as a partner of a firm will not result in incorporation of all his individual properties as the assets of the partnership. Section 14 of the Indian Partnership Act, 1932 says:
"14. Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.""
3) Arjun Kanoji Tankar v. Santaram Kanoji Tankar, (1969) 3 SCC 555 "13. Counsel for the defendant contends that in any event by virtue of Section 14 of the Partnership Act, 1932, all the assets with aid of which the business was carried on by the plaintiff must be deemed in law to have become partnership assets, under the deed of partnership, dated March 16, 1953. Section 14 of the Partnership Act, 1932, provides:
37"Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business."
Property belonging to a person, in the absence of an agreement to the contrary, does not, on the person entering into a partnership with others, become the property of the partnership merely because it is used for the business of the partnership. It will become property of the partnership only if there is an -- agreement express or impliedth -- at the property was, under the agreement of partnership, to be treated as the property of the partnership. In Lindley on Partnership, 12th Edn., it is stated at p. 365:
"Again, it by no means follows that property used by all the partners for partnership purposes is partnership property. For example, the house and land in and upon which the partnership business is carried on often belongs to one of the partners only, either subject to lease to the firm, or without any lease at all.... If, however, a partner brings such property into the common stock as part of his capital it becomes partnership property, and any increase in its value will belong to the firm.38
... the only true method of determining as between the partners themselves what belongs to the firm, and what not, is to ascertain what agreement has been come to upon the subject. But this is by no means always an easy matter."
We are unable to agree with counsel for the defendant that whenever there is a partnership and the assets which originally belonged to one of the partners are used for the purposes of the partnership, they must be presumed to have become partnership assets. In Miles v. Clarke [(1953) 1 All ER 779] the defendant started the business of a photographer and then admitted the plaintiff -- a successful free lance photographer -- as a partner. The leasehold premises, furniture and studio equipment belonged to the defendant. It was intended to record the terms of partnership into a formal agreement, but no terms were ever settled, except that the partners were to share the profits equally. On dissolution of the partnership it was held that no terms ought to be implied except such as were essential to business efficacy and that only the consumable items of stock- in-trade were to be regarded as assets of the partnership, and the lease of the property, equipment and personal goodwill were to be treated as being the property of the partners who brought them into the business.
3914. There is no evidence in the present case that the plaintiff had, when entering into a partnership with the defendant, surrendered his individual interest in the assets brought by him into business, or had admitted that the defendant was to be the owner in equal share with him in all the assets brought into the partnership. The right of the defendant to a share in the assets brought into the business depended upon the terms of the agreement of partnership. There is no rule that whatever is brought by a partner in the partnership and is continued to be used by the members is presumed to have become the property of the partnership."
.......
25. Section 49(c) of Registration Act prohibits the admitting of compulsorily registrable documents which are unregistered as evidence of any transaction affecting immovable property unless it has been registered. In the very same Judgment, we notice the following discussion:
"The other consequence of non-registration is to prohibit the document from being received not "in"
evidence, but "as" evidence of any transaction affecting such property. The emphasis on the word "as" was, in my opinion, rightly laid by Venkatasubba Rao J. in Saraswathamma v. Paddayya, 46 Mad. 349 :
40(AIR 1923 Mad 297), where the learned Judge observed:
"What is prohibited by the section is receiving a document as evidence of a transaction, not merely receiving it in evidence, i.e., as a piece of evidence having a bearing on the question to be ultimately decided."
In other words, the prohibition is to prevent a person from establishing by the use of the document in evidence a "transaction, affecting Immovable property". A person should not be permitted to establish indirectly by use of the document what he is prevented from doing directly under Clause (a).""
Decisions relied on behalf of the respondents I. Without any document, property can be thrown into the Partnership stock and a Deed of Dissolution of Partnership need not be registered.
1) Chief Controlling Revenue Authority v.
Chidambaram, AIR 1970 Madras 5 "4) Upon this, we are of the view that this is not a conveyance, and cannot be construed as such. It is only a deed of partnership, and, as such, it is dutiable under Art. 46 of Sch. I of the Stamp Act. There are two related aspects of reasoning, upon which this 41 matter must be held conclusively determined. First of all, as we earlier observed, under S. 14 of the Partnership Act, it is always possible for a partner to bring into the partnership, property belonging to him by the evidence of his intention to make it part of the assets of the partnership. There is a very early decision of the English Court, namely, Robinson v. Ashton which embodies this principle, where a man became a member of a partnership, and the agreement was that the business should be conducted at the mill belonging to him, and he was credited in the books of the partnership with the value of the Mills, Jessel M.R. said that it made no difference that his contribution was in the form of mill and machinery, and not in the form of money. The property, therefore, became the property of the partnership. On the same principle of S 14, we have the decision of the Full Bench of the Calcutta High Court in Premraj Brahmin v. Bhaniram Brahmin and the learned Judges pointed out that, by virtue of S. 14, property could be thrown into the partnership stock without any formal document, and would, therefore, become the property of the firm.
2) I.J.J. Rebello v. Chief Controlling Revenue Authority in Mysore, Bangalore , AIR 1971 Mysore 318 (FB) 42 "8. The concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital, money or property including immovable property. When it is shown that property, whatever its character, is brought into the common stock of the partnership firm, it would cease to be the exclusive property of the person who brought it in and it would be the trading asset of the partnership in which all the partners would have Interest in proportion to their share in the joint venture of the business of the partnership. Since the firm has no legal existence, the partnership property will vest in all the partners. The provisions of the Indian Partnership Act, 1932 do not prescribe any particular mode by which properties whether moveable or immoveable have to be brought into common stock. For the purpose of bringing the separate property of a partner into the common stock of the firm, it is not necessary to have recourse to any written document at all.
3) M.C. Sivagamui v. M.C. Kuppusamy, AIR 2010 Mad 1 "16. Section 48 of the Indian Partnership Act, 1932 deals with mode of settlement of accounts between the partners. The aforesaid provision of law deals with the rules to be observed by the partners while settling the accounts of a firm after dissolution. The assets of the firm are finally distributed during the course of 43 settlement of the account of the firm. Basically the distribution of assets among partners on dissolution of the Partnership Firm does not amount to transfer of assets. Therefore, it does not attract the mischief of Section 17 of the Registration Act if it deals with the share of a partner in the assets of the Partnership Firm inclusive of immovable property. The assignment of the share on dissolution of the Partnership Firm does not require registration under Section 17 of the Registration Act.
17. The said legal position, which has been ruling the field was reaffirmed by the Supreme Court in S.V. Chandra Pandian v. S.V. Sivalinga Nadar, 1993 (1) SCC 589. However, the Supreme Court quoted therein with approval, the following observations made in an earlier case:
"If the award did not seek to assign the share of the Respondents to the Appellant, but on the contrary made an exclusive allotment of the partnership assets including the factory and liabilities to the Appellant, thereby creating an absolute interest on payment of consideration of Rs. 17,000/- plus half the amount of the realizable debts, which was held to the compulsorily registrable under Section 17 of the Registration Act."
18. It has been further held therein that when a particular property is allotted to a partner in proportion to his share in the profits of the firm, there 44 is no partition or transfer taking place nor is there any extinguishment of interest of other partners in the allocated property in the sense of transfer or extinguishment of interest as contemplated under Section 17 of the Registration Act. Therefore, when a dissolution of the Partnership Firm takes place and the residue is distributed among the partners after settlement of accounts, there is no partition, transfer or extinguishment of interest attracting the mischief of Section 17 of the Registration Act.
4) S.V. Chandra Pandian v. S.V. Sivalinga Nadar, (1993) 1 SCC 589 "7. Before we examine the contention based on Section 17 of the Registration Act we may notice a few relevant provisions bearing on the interest of partners in partnership property as found in the Partnership Act, 1932. Section 4 defines partnership as a relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all. Section 14 provides that subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business. It is also clarified that unless the 45 contrary intention appears, property and rights and interest in property acquired with money belonging to the firm shall be deemed to have been acquired for the firm.
8. The above provisions make it clear that regardless of the character of the property brought in by the partners on the constitution of the partnership firm or that which is acquired in the course of business of the partnership, such property shall become the property of the firm and an individual partner shall only be entitled to his share of profits, if any, accruing to the partnership from the realisation of this property and upon dissolution of the partnership to a share in the money representing the value of the property. It is well settled that the firm is not a legal entity, it has no legal existence, it is merely a compendious name and hence the partnership property would vest in all the partners of the firm. Accordingly, each and every partner of the firm would have an interest in the property or asset of the firm but during its subsistence no partner can deal with any portion of the property as belonging to him, nor can he assign his interest in any specific item thereof to anyone.
16. From the foregoing discussion it seems clear to us that regardless of its character the property brought into stock of the firm or acquired by the firm during its subsistence for the purposes and in the course of the business of the firm shall constitute the 46 property of the firm unless the contract between the partners provides otherwise. On the dissolution of the firm each partner becomes entitled to his share in the profits, if any, after the accounts are settled in accordance with Section 48 of the Partnership Act. Thus in the entire asset of the firm all the partners have an interest albeit in proportion to their share and the residue, if any, after the settlement of accounts on dissolution would have to be divided among the partners in the same proportion in which they were entitled to a share in the profit. Thus during the subsistence of the partnership a partner would be entitled to a share in the profits and after its dissolution to a share in the residue, if any, on settlement of accounts. The mode of settlement of accounts set out in Section 48 clearly indicates that the partnership asset in its entirety must be converted into money and from the pool the disbursement has to be made as set out in clause (a) and sub-clauses (i),
(ii) and (iii) of clause (b) and thereafter if there is any residue that has to be divided among the partners in the proportions in which they were entitled to a share in the profits of the firm. So viewed, it becomes obvious that the residue would in the eye of law be moveable property i.e. cash, and hence distribution of the residue among the partners in proportion to their shares in the profits would not attract Section 17 of the Registration Act. Viewed from another angle it 47 must be realised that since a partnership is not a legal entity but is only a compendious name each and every partner has a beneficial interest in the property of the firm even though he cannot lay a claim on any earmarked portion thereof as the same cannot be predicated. Therefore, when any property is allocated to him from the residue it cannot be said that he had only a definite limited interest in that property and that there is a transfer of the remaining interest in his favour within the meaning of Section 17 of the Registration Act. Each and every partner of a firm has an undefined interest in each and every property of the firm and it is not possible to say unless the accounts are settled and the residue or surplus determined what would be the extent of the interest of each partner in the property. It is, however, clear that since no partner can claim a definite or earmarked interest in one or all of the properties of the firm because the interest is a fluctuating one depending on various factors, such as, the losses incurred by the firm, the advances made by the partners as distinguished from the capital brought in the firm, etc., it cannot be said, unless the accounts are settled in the manner indicated by Section 48 of the Partnership Act, what would be the residue which would ultimately be allocable to the partners. In that residue, which becomes divisible among the partners, every partner has an interest and when a particular property is 48 allocated to a partner in proportion to his share in the profits of the firm, there is no partition or transfer taking place nor is there any extinguishment of interest of other partners in the allocated property in the sense of a transfer or extinguishment of interest under Section 17 of the Registration Act. Therefore, viewed from this angle also it seems clear to us that when a dissolution of the partnership takes place and the residue is distributed among the partners after settlement of accounts there is no partition, transfer or extinguishment of interest attracting Section 17 of the Registration Act.
5) N. Khadervali Saheb v. N. Gudu Sahib, AIR (2003) SC 1524 "3. We have carefully perused the award in question. By the award the arbitrators have distributed the assets of the dissolved firm between the partners in accordance with their respective shares in the partnership. The real question for consideration is whether such an award amounts to creation of or transfer of any fresh rights in movable or immovable properties so as to bring it within the ambit of Section 17 of the Registration Act. A perusal of the award shows that it is simply a case of distribution of assets of the dissolved firm amongst the partners themselves. A partnership firm is not an independent legal entity, the partners are the real owners of the 49 assets of the partnership firm. Actually the firm name is only a compendious name given to the partnership for the sake of convenience. The assets of the partnership belong to and are owned by the partners of the firm. So long as partnership continues each partner is interested in all the assets of the partnership firm as each partner is owner of the assets to the extent of his share in the partnership. On dissolution of the partnership firm, accounts are settled amongst the partners and the assets of the partnership are distributed amongst the partners as per their respective shares in the partnership firm. Thus, on dissolution of a partnership firm, the allotment of assets to individual partners is not a case of transfer of any assets of the firm. The assets which hereinbefore belonged to each partner, will after dissolution of the firm stand allotted to the partners individually. There is no transfer or assignment of ownership in any of the assets. This is the legal consequence of distribution of assets on dissolution of a partnership firm. The distribution of assets may be done either by way of an arbitration award or by mutual settlement between the partners themselves. The document which records the settlement in this case is an award which does not require registration under Section 17 of the Registration Act since the document does not transfer or assign interest in any asset. This question stands concluded by a decision of 50 this Court in S.V. Chandra Pandian v. S.V. Sivalinga Nadar [(1993) 1 SCC 589] . This was also a case of distribution of assets of a dissolved firm by way of an award. This Court noticed that the award read as a whole made it clear that the arbitrators had confined themselves to the property belonging to the partnership firm and had scrupulously avoided other properties. While distributing the residue assets, the arbitrators allocated the properties to the partners. Section 48 of the Partnership Act was applied and the properties were allocated to the partners as per their share on the distribution of the residue. The award sought to distribute the assets of the partnership firm after settlement of accounts on dissolution. This Court took the view that the property falling to the share of the partner on distribution of the residue would naturally belong to him exclusively but since in the eye of law it is money and not immovable property there is no question of registration under Section 17 of the Registration Act.
It was further observed (at SCC p. 607, para 18) "even if one looks at the award as allocating certain immovable property since there is no transfer, no partition or extinguishment of any right therein there is no question of application of Section 17(1) of the Registration Act".
51As observed in the above case, in the present case also we are satisfied that the award seeks to distribute the residue after settlement of accounts on dissolution, while distributing their residue the arbitrators allocated the properties to the partners. The award in such circumstances did not require registration under Section 17(1) of the Registration Act."
6) Addanki Narayanappa v. Bhaskara Krishtappa, AIR 1966 SC 1300 II. Family Arrangement or Settlement to be treated differently
7) Kale v. Dy. Director of Consolidation, AIR (1976) SC 807 "10. In other words to put the binding effect and the essentials of a family settlement in a concretised form, the matter may be reduced into the form of the following propositions:
"(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;
(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;52
(3) The family arrangement may be even oral in which case no registration is necessary;
(4) It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2) of the Registration Act and is, therefore, not compulsorily registrable;
(5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the courts will find no difficulty in giving assent to the same;53
(6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement."
27. As regards the first point it appears to us to be wholly untenable in law. From the principles enunciated by us and the case law discussed above, it is absolutely clear that the word "family" cannot be construed in a narrow sense so as to confine the parties to the family arrangement only to persons who have a legal title to the property. Even so it cannot be disputed that appellant Kale being the grandson of Lachman and therefore a reversioner at the time when the talks for compromise took place was undoubtedly a prospective heir and also a member of the family. Since Respondents 4 and 5 relinquished their claims in favour of appellant Kale in respect of Khatas Nos. 5 and 90 the appellant, according to the authorities mentioned above, would be deemed to have antecedent title which was acknowledged by Respondents 4 and 5. Apart from this there is one more important consideration which clearly shows that the family arrangement was undoubtedly a bona fide settlement of disputes. Under the family arrangement as referred to in the mutation petition the Respondents 4 and 5 were given absolute and permanent rights in the lands in dispute. In 1955 54 when the compromise is alleged to have taken place the Hindu Succession Act, 1956, was not passed and Respondents 4 & 5 would have only a limited interest even if they had got the entire property which would ultimately pass to appellant Kale after their death. Respondents 4 & 5 thought that it would be a good bargain if by dividing the properties equally they could retain part of the properties as absolute owners. At that time they did not know that the Hindu Succession Act would be passed a few months later. Finally the compromise sought to divide the properties between the children of Lachman, namely, his two daughters and his daughter's son appellant Kale in equal shares and was, therefore, both fair and equitable. In fact if Respondents 4 & 5 would have got all the lands the total area of which would be somewhere about 39 acres they might have to give away a substantial portion in view of the ceiling law. We have, therefore, to see the circumstances prevailing not after the order of the Assistant Commissioner was passed on the mutation petition but at the time when the parties sat down together to iron out differences. Having regard to the circumstances indicated above, we cannot conceive of a more just and equitable division of the properties than what appears to have been done by the family arrangement. In these circumstances, therefore, it cannot be said that the family settlement was not bona fide. Moreover, Respondents 4 and 5 55 had at no stage raised the issue before the revenue courts or even before the High Court that the settlement was not bona fide. The High Court as also Respondent 1 have both proceeded on the footing that the compromise was against the statutory provisions of law or that it was not registered although it should have been registered under the Registration Act.
8. Hari Shankar Singhania (2) v. Gaur Hari Singhania, AIR (2006) SC 2488 Family arrangement/family settlement 43. Another fact that assumes importance at this stage is that, a family settlement is treated differently from any other formal commercial settlement as such settlement in the eye of the law ensures peace and goodwill among the family members. Such family settlements generally meet with approval of the courts. Such settlements are governed by a special equity principle where the terms are fair and bona fide, taking into account the well-being of a family. 44. The concept of "family arrangement or settlement" and the present one in hand, in our opinion, should be treated differently. Technicalities of limitation, etc. should not be put at risk of the implementation of a settlement drawn by a family, which is essential for maintaining peace and harmony in a family. Also it can be seen from decided cases of 56 this Court that, any such arrangement would be upheld if family settlements were entered into to allay disputes existing or apprehended and even any dispute or difference apart, if it was entered into bona fide to maintain peace or to bring about harmony in the family. Even a semblance of a claim or some other ground, as say affection, may suffice as observed by this Court in Ram Charan Das v. Girjanandini Devi [(1965) 3 SCR 841 : AIR 1966 SC 323].
54. Therefore, in our opinion, technical considerations should give way to peace and harmony in the enforcement of family arrangements or settlements.
9. Ravinder Kaur Grewal v. Manjit Kaur, AIR (2020) SC 3799 16. Be that as it may, the High Court has clearly misapplied the dictum in the relied upon decisions. The settled legal position is that when by virtue of a family settlement or arrangement, members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once and for all in order to buy peace of mind and bring about complete harmony and goodwill in the family, such arrangement ought to be governed by a special equity peculiar to them and would be enforced if honestly made. The object of such arrangement is to 57 protect the family from long-drawn litigation or perpetual strives which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family, as observed in Kale [Kale v. Director of Consolidation, (1976) 3 SCC 119] . .....
10. Khushi Ram v. Nawal Singh, AIR 2021 SC 1117 III. Estoppel and Contents of Documents Prevails
11. B. Manjunatha Prabhu v. C.G. Srinivas, ILR 2005 Kar 467 16. The City Civil Judge negatived the contention of the contesting defendants 5 and 6 that the plaintiff is estopped for challenging the Will Exhibit D1 only on the ground that Will Exhibit D1 is surrounded by suspicious circumstances and the said Will does not satisfy the requirement of a Will. In our view, the entire approach made by the City Civil Judge on this question is erroneous in law. As noticed by us earlier, it is no doubt true that the size of the paper in which Will Exhibit D1 is written may lead to suspicious circumstances of due execution and genuineness of the Will. However, it is necessary to point out that if the scribe of the Will Exhibit D1 -- Sri Nagesh Rao, who is also one of the attesting witnesses along with 58 M.R. Krishnan, were to be available to examine in the course of the proceedings, what explanation they would have offered for execution of the Will in a small piece of paper, is difficult to guess at this length of time. Therefore, once it is admitted by the plaintiff that he has accepted the Will Exhibit D1 and on that basis he was a party to several transactions and his statement that he came to know the Will Exhibit P16 for the first time in July 1982, cannot be accepted as true, in our view, the plaintiff should not be permitted to challenge the validity of the Will Exhibit D1 after eleven years from the date when it came to light and had accepted the genuineness of the said Will. As noticed by us earlier, the plaintiff who is also carrying on a hotel business very close to Hotel Rajmahal, would definitely have the knowledge of the development of Hotel Rajmahal and the several transactions that had taken place even after he ceased to hold any interest in the said property by virtue of his going out of partnership after receiving an amount of Rs. 3.82 lakh in terms of Deed of dissolution Exhibit D12 dated 11th May 1972. The sum of Rs. 3.82 lakh in the year 1972 was a huge money. The evidence on record show that late C.G. Rama Rao, after the plaintiff went out of the Partnership, applied for a loan of Rs. 15 lakh from Syndicate Bank. The property in question changed many hands and ultimately the appellant has become the owner of the said property.
59The elder brother of the plaintiff Sri Rama Rao has expired. Plaintiff waited for five years to initiate the proceedings after his death. If Rama Rao were to be alive, he would have been in a position to counter each one of the grievances made against him by the plaintiff. In the case of B.L. Sreedhar v. K.M. Munireddy, reported in ((2003) 2 SCC 355 : AIR 2003 SC 578) the Supreme Court has laid down that though estoppel is described a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. In the said decision, it is further observed that an estoppel, which enables a party as against another party to claim a right over a party which in fact he does not possess is described as estoppel by negligence or by conduct or by representation or by holding out the ostensible authority. The Supreme Court, after discussing the law relating to estoppel has succinctly, at paragraphs 23 to 27 and 37, observed as follows:
"23. "Estoppe", commeth of a French word "estoupe"
from whence the English word stopped, and it is called an estoppel, or conclusion, because a man's own act or acceptance stoppeth or closeth up his mouth to allege or plead the truth; and Littleton's case proveth this description' (Co. Ltd. 352 a where it is said estoppel is of three kinds, i.e., matter (1) of record, (2), in writing, i.e., semble, by deed, (3) in Paiis). To the same effect is the definition in Termes de la Ley.
60(See Stroud's Judicial Dictionary, Fourth Edition, Page
943).
24. "An Estoppel", says Lord Coke, "is where a man is concluded by his own act of acceptance to say the truth". Mr. Smith, in his note to the Duchess of Kingston's case, characterizes this definition as a little startling but it nevertheless gives a good idea of what it is, by no means easy to include within the limits of a definition. (1 Smith L.C. 760).
25. Though estoppel is described as a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. An estoppel which enables a party as against another party to claim a right of property which in fact he does not possess is described as estoppel by negligence or by conduct or by representation or by holding out ostensible authority.
26. Estoppel, then, may itself be the foundation of a right as against the person estopped, and indeed, if it were not so, it is difficult to see what protection the principle of estoppel can afford to the person by whom it may be invoked or what disability it can create in the person against whom it operates in cases affecting rights. Where rights are involved estoppel may with equal justification be described both as a rule of evidence and as a rule creating or defeating rights. It would be useful to refer in this connection to the case 61 of Depuru Veeraraghava Reddi v. Depuru Kamalamma (AIR 1951 Madras 403) where Vishwanatha Shastry J., observed:
"An estoppel though a branch of the law of evidence is also capable of being viewed as a substantive rule of law in so far as it helps to create or defeat rights which would not exist and be taken away but for that doctrine."
27. Of course, an estoppel cannot have the effect of conferring upon a person a legal status expressly denied to him by a statute. But where such is not the case a right may be claimed as having come into existence on the basis of estoppel and it is capable of being enforced or defenced as against the person precluded from denying it.
28 to 36 ......
37. If a man either by word or by consent has intimated that he consents to an act which has been done and that he will not offer any opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to do that which they otherwise might have abstained from, he cannot question legality of the act he had sanctioned to the prejudice of these who have so given faith to his words or to the fair inference to be drawn from his conduct."
62No doubt, it is the contention of Sri Parasaran that since the plaintiff was not aware of the Will Exhibit P16 and he was totally kept in dark about the execution of the said Will in his favour by his elder brother late C.G. Rama Rao, there is absolutely no scope to deny relief to the plaintiff on the ground of estoppel as according to the learned Counsel, the essential element of waiver is that there has to be a voluntary and intention of the relinquishment of a known right or such conduct as warrants the inference of relinquishment of such right and the said requirement is not satisfied in this case. We are unable to accede to this submission. So far as estoppel is concerned, it is necessary to point out that estoppel may result though the party estopped did not intend to lose any existing right. However, in the case of waiver, the essential element is actual intention to abandon or surrender such right. In the instant case, as pointed out by us earlier, the plaintiff having accepted the Will Exhibit D1 is estopped from going back on that and turn round contending that the Will is not genuine. We are unable to accede to the submission of Sri Parasaran that in the instant case there is no estoppel against the plaintiff, as the contesting defendants did not act upon the conduct or the assurance held out by the plaintiff, since according to the learned Counsel, the said C.G. Rama Rao and defendants 5 and 6 were fully aware of existence of Will Exhibit P16. So long as the 63 Will Exhibit D1 in unequivocal terms states that the testator has revoked the earlier Will, the knowledge of C.G. Rama Rao and defendants 5 and 6 about the existence of Will Exhibit P16, in our view, would not make any difference so far as the plea of estoppel against plaintiff is concerned.
In this connection, it is useful to refer to Section 115 of the Evidence Act which states that when a person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing,. Instead of challenging the Will-Exhibit D1 as soon as it was brought to his notice he had accepted the said Will. Under these circumstances, if the plaintiff has accepted the Will Exhibit D1 and on that basis the plaintiff and his brother, mother and sister have dealt with their rights in respect of the property covered under the Will Exhibit P16 and the defendants 5 and 6, who were total strangers to the family, had dealt with the property and developed the same by investing huge money to the knowledge of the plaintiff, the plaintiff cannot be permitted to go back on his representation and conduct which indicates that he had accepted the Will Exhibit D1 to the detriment of the 5th defendant. In our view, the law enunciated by 64 the Supreme Court in the case of B.L. Sreedhar (supra) would fully apply to the facts of the present case.
12. M/s. Bhandari Construction Company v. Narayan Gopal Upadhye, AIR 2007 SC 1441
13. Roop Kumar v. Mohan Thedani, AIR (2003) SC 2418 19. Sections 91 and 92 apply only when the document on the face of it contains or appears to contain all the terms of the contract. Section 91 is concerned solely with the mode of proof of a document with limitation imposed by Section 92 relates only to the parties to the document. If after the document has been produced to prove its terms under Section 91, provisions of Section 92 come into operation for the purpose of excluding evidence of any oral agreement or statement for the purpose of contradicting, varying, adding or subtracting from its terms. Sections 91 and 92 in effect supplement each other. Section 91 would be inoperative without the aid of Section 92, and similarly Section 92 would be inoperative without the aid of Section 91. 20. The two sections, however, differ in some material particulars. Section 91 applies to all documents, whether they purport to dispose of rights or not, whereas Section 92 applies to documents which can be described as dispositive. Section 91 65 applies to documents which are both bilateral and unilateral, unlike Section 92 the application of which is confined to only bilateral documents. (See : Bai Hira Devi v. Official Assignee of Bombay [AIR 1958 SC 448] .) Both these provisions are based on "best-evidence rule". In Bacon's Maxim Regulation 23, Lord Bacon said "The law will not couple and mingle matters of speciality, which is of the higher account, with matter of averment which is of inferior account in law." It would be inconvenient that matters in writing made by advice and on consideration, and which finally import the certain truth of the agreement of parties should be controlled by averment of the parties to be proved by the uncertain testimony of slippery memory.
14. Azeez Sait v. Aman Bai, AIR (2003) SC 4444 14. We have given our thoughtful consideration in regard to the contentions raised by both the parties. We have perused the pleadings and exhibits marked and, in particular, the partition deed. In our opinion, it is not correct to say that the original plaintiff and Mohd. Sait effected a nominal partition deed. The plaintiff, in fact, has accepted the rights under the partition deed and has acted upon its recitals. He has on his own account sold the bungalow that was allotted to him known as "Shakoor Manzil" to Mrs Ganjami, w/o Mr Abdul Rahim Ganjami. The original plaintiff has utilised the sale proceeds for himself and 66 he has also disposed of the site which was allotted to him under the said partition deed. Therefore, in our opinion, the plaintiff-appellants are estopped from alleging that the partition deed was a nominal one and not intended to be acted upon. The original plaintiff and Mohd. Sait have dealt with the properties as independent owners and never as joint owners. 15. The evidence adduced in this case would clearly disclose that the original plaintiff and Mohd. Sait have dealt with the properties as independent owners and never as joint owners. The partition deed, in our view, is complete, effective and irrevocable. Even on the assumption that provisions of the Hindu law or Muslim law are attracted as alleged by the learned counsel for the appellants, the said partition is valid and effective and has vested in the plaintiff and Mohd. Sait absolute and unalterable right in the properties under the said deed.
17. It was argued by the learned counsel for the appellants that if the properties mentioned in Ext. D-2 partition deed, had really been allotted to the share of the plaintiff and Mohd. Abba Sait and if the debt was obtained by Mohd. Abba Sait under Ext. P-12 in his individual capacity and for himself, there was no need to include the two items of the properties mentioned in Ext. D-2 allotted to the share of the plaintiff in Ext. P-12 and for the plaintiff to join Mohd. Abba Sait in execution of Ext. P-12. The argument appears to be 67 attractive at first blush. But on a deeper consideration of the evidence, it appears to be very facile and weak. In the first instance, the possibility of S. Chammaiah having insisted on the two properties allotted to the share of the plaintiff under Ext. D-2 being included in the hypothecation deed as a security for the repayment of loan advanced by him to Mohd. Abba Sait and the plaintiff to join Mohd. Abba Sait to execute the deed in view of the fact that the plaintiff and Mohd. Abba Sait were carrying on business jointly, living jointly and acquiring properties in their names out of the family business profits, is again a reasonable possibility that cannot be excluded. There is again the possibility of S. Chammaiah to ensure complete security for the repayment of the loan, having asked Mohd. Abba Sait to hypothecate the two properties of his brother and of having compelled Mohd. Abba Sait to persuade the plaintiff to join the execution of the hypothecation deed, which cannot be dismissed as unacceptable. The subsequent conduct of Mohd. Abba Sait and his legal representatives in the matter of discharge of hypothecation debt highlights the conclusion that the loan obtained under Ext. P-12 was by Mohd. Abba Sait for himself. As rightly pointed out by the High Court, clear evidence has come on record to show that Mohd. Abba Sait, during his lifetime, to discharge part of the hypothecation debt, sold his two sites in favour of S. Chammaiah under 68 Ext. P-7. To discharge the hypothecation debt, after his death, his legal representatives mortgaged a portion of Abba Manzil, Item 1, in favour of Defendant 6 for Rs 60,000 on 24-4-1970. Though the plaintiff was a party to the suit filed by S. Chammaiah and in the execution taken out by Boraiah Basaviah and Sons, he did not contribute a single pie to discharge the decretal amount. That belies his claim that Item 1, subsequent to 1914, was treated as a family property. It is also in evidence that the plaintiff himself built Shakoor Manzil in 1924 and sold it in 1935 and that he sold the site allotted to him under Ext. D-2 in 1935 which would also show that the inclusion of the said two properties in Ext. P-12 did not constitute an impediment to dispose of the same as owner. It is also clear from the evidence that ever since 24-6-1914, Item 1 was in possession of Mohd. Abba Sait till his lifetime and after his death, his legal representatives have continued to remain in possession of the same, letting out a portion of it. There is unimpeachable evidence placed on record to show that for a long period between 1925-26 and 1967-68, it was Mohd. Abba Sait who was paying taxes levied in respect of Item 1 to the municipality.
18. In our opinion, the fact that the plaintiff and Mohd. Abba Sait even after the partition continued the business jointly, stayed together under the same roof for some time or the other and acquired properties out 69 of their business in the names of either of them, cannot render Ext. D-2 a sham document. We have, therefore, no option but to reach the inevitable conclusion that the plaintiff and his legal representatives have failed to establish that Ext. D-2 is a sham and nominal document and it was not acted upon.
20. The learned counsel appearing for the appellants contended that the parties are governed by the provisions of the Cutchi Memons Act. We are of the view that the issue as to whether the Hindu law or Mohammedan law should be applied to the parties under suit is not really relevant and does not alter the situation because the partition had taken place in the year 1914 as between the brothers. The factum of partition and the deed of 1914 having been accepted, and in the absence of any evidence to destroy the validity of the partition deed, the application of the Hindu law or Muslim law would not alter the findings in the case. When the partition of 1914 has been accepted and acted upon by the brother for all these years and had brought about an equitable settlement of the distribution of the properties between them, the plaintiff-appellants cannot now come round and say that the document is sham and nominal. A reading of the plaint would show that the plaintiff had never asked for a share in "Abba Manzil" during the lifetime of Mohd. Abba Sait, and the suit was filed only after 70 the death of Mohd. Abba Sait in 1967. It is also admitted by the plaintiff that Suit Item 1 was in possession of Mohd. Abba Sait during his lifetime. Subsequently, the defendants are in possession of the same. The entire evidence on record shows that the parties have been in possession and occupation of their respective shares and properties allotted under the partition deed and have dealt with the same. The trial court as well as the High Court have accepted the partition of 1914 for the cogent and convincing reasons recorded thereunder. The appellants have not shown any reason to interfere with the judgment of the High Court.
34. In order to appreciate whether at all the property of an individual would be treated as the property of the partnership firm, necessarily this Court has to consider the provision under Section 14 of the Partnership Act, 1932.
Section 14 of the Partnership Act reads as under:
"14. The property of the firm:- Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm for the purposes and in the course of 71 the business of the firm, and includes also the goodwill of the business.
Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm."
35. In the judgment relied on by the appellants, in the case of Arm Group Enterprises Limited, referred to supra, it has been specifically held that, in the absence of an agreement to the contrary, property exclusively belonged to a person does become the property of the partnership merely because it is used for the partnership business.
36. Further, in the case of Shashi Kapila supra, the Hon'ble Apex Court, while examining the operation of Section 14 of the Act, has held that assets belonging to one of the partners which are used for the purpose of partnership firm cannot be presumed to become the assets of the partnership firm.
7237. In the decision relied on by the counsel for contesting respondents, in the case of Kale and others, cited supra, their Lordship's of the Hon'ble Apex Court, while dealing with operation of Section 14 of the partnership Act have held that, the properties which are brought into the stock of the firm are acquired by the firm and in the course of the business of the firm would become the assets of the firm. Likewise the principles of law enunciated in the case of Addanki Narayanappa, supra was approved by the Hon'ble Apex Court in the case of S.V. Chandra Pandian supra, which was further referred and approved in N. Khadar vali saheb, their lordships ruled that the core concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even throw into joint stock of the partnership firm the individual property should be construed as property and assets of the partnership firm for all practical purposes and no separate documentation is necessary to treat the individual properties of the one of the partners 73 when it is thrown into joint stock of the firm by express or implied agreement.
38. Sri Y.K. Narayana Sharma, learned counsel for respondent No.1 (a) and (c) also emphasized that in respect of item Nos.2 and 3 of the property there is a family settlement and while so settling the property in favour of plaintiffs, in respect of Shanthinagar and N.R. Road property, the share in the property at Mysore which is item No.1 of the suit property belonged to Sarojini was also taken into consideration and settlement has been arrived at as a whole and therefore, the plaintiffs cannot now turn around and seek for partition only in respect of item No.1 of the property. In this regard, he relied on the judgment in Kale v. Dy. Director of Consolidation, Hari Shankar Singhania, Ravinder Kaur Grewal and Khushi Ram v. Nawal singh, supra.
39. Sri Sharma also contended that having taken the property share in the property at N.R. Road and Shanthi 74 Nagar, plaintiff are estopped from contending contra with regard to the family settlement. In this regard he placed reliance on B. Manjunatha Prabhu, M/s. Bhandari Construction Company and Azeez Sait, supra.
40. In reply, counsel for the appellants has relied upon the judgment in the cases of Indira Bai, Star Bone Mill Fertilizer company and Gitashree Dutta, supra and argued that there cannot be estoppel against the statute.
41. In the light of above factual aspects and the legal principles enunciated supra, when this Court analyses the material on record in cumulative and analytical manner, there is no dispute that the item No.1 of suit properties belonged to Smt. Sarojini Khanolkar and she was the absolute owner. No evidence is available on record that the said property was purchased by her by utilizing profits from the firm.
7542. On careful reading of Section 14 of the Partnership Act, it is crystal clear that, by way of an agreement, any of the partners of firm can throw into the joint stock of partnership firm, his individual property on his volition or his contribution. If he does so either by express or implied agreement, then no other document is necessary to treat the said individual property of a partner as the asset of the partnership firm. In which event, the individual property of the partner would loose its status of individual property and it could be a subject matter of settlement at the time of dissolution of the partnership firm.
43. According to the defendants, by virtue of the dissolution deed dated 15.01.1987 M/s. V.S. Khanolkar, Mysore Firm has been dissolved. There is no dispute as to the same. According to Ex.D.6, the item No.1 of the suit property has been shown as the property of the firm.
Same is taken advantage by the defendants in contenting that parties on their volition treated the individual property of Sarojini Khanolkar, after her death on 10.12.1982, was 76 divided among partners and their individual shares have been thrown into the joint stock of the partnership firm.
44. Except Ex.D.6, there is no other document to show that item No.1 of the suit property was thrown into the joint stock of partnership firm soon after the death of Smt.Sarojini Khanolkar.
45. On the contrary, Ex.P.12 is an endorsement dated 24.08.2004, issued by Mysore Mahanagara Palike to Smt. Asha N Khanolkar, who is the plaintiff No.2 (a), where under the Corporation has specifically stated that the revenue records cannot be mutated in view of the pendency of the suit.
46. In other words, the revenue records remained in the name of Sarojini Khanolkar even after her death. If the contention of the respondents/defendant Nos.1 and 2 are to be accepted that soon after the death of Sarojini Khanolkar, the item No.1 of the property was put into joint stock of the partnership firm, necessarily the revenue 77 entries should have been mutated in the name of firm-M/s.
V.S. Khanolkar, Mysore by filing requisite application by firm signed by all partners. No such documents are forthcoming from the records.
47. It is also pertinent to note that firm got reconstituted on 01.01.1987 and it was dissolved on 15.01.1987 and a day prior to reconstitution of the firm, Ex.D.6 - Balance Sheet has been prepared.
48. On close reading of Section 14 of Indian Partnership Act, it is crystal clear that any one of the partners of the firm, can bring (throw) his individual property to the joint stock of the firm by express or implied agreement.
Thereafter it would become asset of the firm without any other document or registration.
49. In the case on hand, at no point of time, Smt. Sarojini Khanolkar was a partner of M/s. V.S. Khanolkar, Mysore. If that were to be so, how property of an 78 individual though used for the purpose of business of the firm, would become the asset of the firm, is a question that remains unanswered on the part of the defendant.
Therefore, at no stretch of imagination by applying Section 14 of the Act, the property of individual, namely Sarojini Khanolkar is treated as the asset of the firm.
50. Further, it is the argument of Sri Y.K. Narayana Sharma that after the death of Sarojini Khanolkar, the children of Khanolkar, got 1/4th share and the same was thrown into the joint stock of the firm. There is no agreement in this regard. Further, Smt. Seetha Krishnaswamy being one of the legal representatives of Sarojini being not a partner to the firm, the said argument of the defendants that all the children of Sarojini decided to throw into their respective share into the M/s. V.S. Khanolkar firm cannot be countenanced in law.
51. If said argument is to be accepted, Seetha Krishnaswamy being the third defendant would not have 79 filed a written statement stating that she also entitled to share in the item No.1 of the suit property.
52. Further, the plaintiffs have flatly denied that they have thrown their respective shares into the joint stock of the firm in respect of suit item No.1 of the property.
Under such circumstances, the argument putforth on behalf of the defendants that suit item No.1 is the property of the firm and therefore, by virtue of dissolution dated 15.01.1987, the entire right, title and interest in respect of the suit item No.1 has fallen to the share of second defendant-Anand V. Khanolkar cannot be countenanced in law.
53. Insofar as the contentions regarding the family settlement and estoppel, there cannot be any dispute as to the principles of law enunciated in the judgments relied on by the respondent. However, in the instant case, the alleged family settlement could only be considered in respect of the properties belonging to the firm. Individual 80 property of Sarojini Khanolkar having not been thrown into the joint assets of the firm, as is discussed and held supra, there could not be any family settlement of individual property of Sarojini Khanolkar. Therefore, the decisions relied on behalf of respondents wherein family settlement is held to be conclusive cannot be pressed into service on behalf of the respondents. Further, since the item No.1 of the suit property is the individual property of Sarojini Khanolkar, the same cannot be subject matter of distribution of the assets of the firm by dissolution deed dated 15.01.1987. Therefore, the argument put forth on behalf of the respondents that plaintiffs are estopped from contending contra being the beneficiary under the dissolution deed having derived their share of the property in respect of properties at N.R. road and Shanthinagar cannot be countenanced in law.
54. However, Sri Y.K. Narayanasharma, learned counsel for the contesting respondent contended that at this juncture that if the said settlement that took place in the 81 year 1987 by virtue of the dissolution dated 15.01.1987 is to be disturbed, then the very purpose of family arrangement would get frustrated and second defendant would also be entitled for the share in N.R. Road property and property at Shanthinagar. Only on the said ground, the suit of the plaintiffs cannot be dismissed inasmuch as the property at N.R.Road and property at Shanthinagar are the properties of the firm and therefore, they would definitely govern the parties under the Dissolution Deed dated 15.01.987 marked at Ex.P.10. But, the individual property of Sarojini Khanolkar would, at no stretch of imagination could not have been included in Ex.P.10 either by resorting to provision of law i.e., section 14 of Indian Partnership Act or by volition of the parties.
55. It is always open for the second defendant to seek his share in the properties of the firm, if he is not granted any share either by raising necessary objections in the final decree proceedings or by initiating appropriate 82 proceedings insofar as his rights are concerned in respect of properties of the firm.
56. Reserving such liberty for the second defendant, to rework in respect of the properties of the partnership firm M/s. V.S. Khanolkar, this Court is of the considered opinion that the impugned judgment which has not taken into consideration the operation of Section 14 of the partnership Act in dismissing the suit of the plaintiffs, needs to be set aside.
57. In view of the foregoing discussion, dismissal of the suit of the plaintiffs in toto especially with regard to the item No.1 of the property for which the present appeal is now restricted is definitely suffering from legal infirmity and on factual aspects. As such, to that extent impugned judgment is suffering from legal infirmity resulting in terming the same as perverse in nature calling for interference by this Court.
8358. Thus from the above discussion, this Court has no hesitation whatsoever in holding point Nos.1 and 2 in the Affirmative.
59. Regarding point No.3: In view of findings on point Nos.1 and 2, this Court passes the following order.
ORDER
(i) Appeal is allowed.
(ii) Impugned judgment and decree is set aside. Suit of the plaintiffs is decreed only in respect of property bearing No.1 ('Annapurna', Hanumantha Rao Street, Mysore, measuring 90 feet by East to West, 27 feet by North to South, bounded on the East by conservancy, West by road, North by Prabha Talkies, South by Chamundi electroplating work) of the suit schedule property granting 1/4th share to each of the plaintiffs and defendant Nos.1 and 2 (In view 84 of the fact that legal representatives of defendant No.3 have given up their share by filing affidavit.)
(iii) No order as to costs.
Sd/-
JUDGE MR