Madras High Court
Dr.Vijayakumar Rau vs Dr.B.Manohar Rama Rau on 16 December, 1937
C.S.No.912 of 2004
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 18.08.2020
Delivered on : 26.08.2020
CORAM :
THE HONOURABLE MR. JUSTICE N. SATHISH KUMAR
C.S.No.912 of 2004
Dr.Vijayakumar Rau ... Plaintiff
Vs.
1.Dr.B.Manohar Rama Rau
2.Mrs.Pushpa Vijaychander ... Defendants
Prayer : Plaint filed under Order IV Rule 1 and XXIV Rule 1 of the
Original Side Rules read with Order VII Rule 1 and Order IV Rule 1 of the
Code of Civil Procedure, to pass a judgment and decree to :
i. partition the suit schedule property at 829 (Old No.453), Poonamallee
High Road, Kilpauk, Chennai – 600 010 by metes and bounds and
allot to the plaintiff his 4/9th share in the same.
ii. appoint an Advocate Commissioner to divide the assets including the
immovable property by metes and bounds and allot to each sharers
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C.S.No.912 of 2004
their respective shares.
iii. direct the 1st defendant to render true and proper account of all the
income and expenditure of the partnership firm, “Rama Rau Poly
Clinic” for the period 01.04.2002 to till date of decree.
iv. direct the settlement of accounts of the firm in terms of Sections 46
and 48 of the Indian Partnership Act read with the terms of the
partnership deed for the period 01.04.2002 to 12.06.2004 and upon
ascertainment of the amount payable to plaintiff direct the first
defendant to pay the same.
v. pay the costs
For Plaintiff : Mr.M.K.Kabir,
Senior Counsel
for Mr.A.Dhiraviyanathan
For D1 : Mr.Perumbulavil Radhakrishnan
For D2 : Mr.Ravi
for M/s.Gupta & Ravi
JUDGMENT
This Civil Suit has been laid for Page 2 / 40 http://www.judis.nic.in C.S.No.912 of 2004 i. partitioning the suit schedule property at 829 (Old No.453), Poonamallee High Road, Kilpauk, Chennai – 600 010 by metes and bounds and allot to the plaintiff his 4/9th share in the same. ii. appointing an Advocate Commissioner to divide the assets including the immovable property by metes and bounds and allotting to each sharers their respective shares.
iii. directing the 1st defendant to render true and proper accounts of all the income and expenditure of the partnership firm, “Rama Rau Poly Clinic” for the period 01.04.2002 till the date of decree. iv. directing the settlement of accounts of the firm in terms of Sections 46 and 48 of the Indian Partnership Act read with the terms of the partnership deed for the period 01.04.2002 to 12.06.2004 and upon ascertainment of the amount payable to plaintiff, directing the 1st defendant to pay the same.
v. costs
2.The brief facts of the case are as under :
2.1.The plaintiff and the defendants are brothers and sisters born Page 3 / 40 http://www.judis.nic.in C.S.No.912 of 2004 to one Late Dr.B.Rama Rau and Late Smt.Sumathi Rama Rau.
2.2.The property at No.829 (Old No.453), Poonamallee High Road, Kilpauk, Chennai – 600 010, was originally purchased by one Late Dr.P.Rama Rau, father of Dr.B.Rama Rau, by sale deed dated 16.12.1937.
The said Dr.P.Rama Rau had three children, viz., Dr.B.Rama Rau (father of the parties herein), Dr.Madhava Rama Rau, and Smt.Malathy Sripathy Rau. He established a nursing home in the said property. Originally, Dr.P.Rama Rau was in possession and enjoyment of the property till his death on 11.05.1956. He died intestate. His estate was succeeded by his wife and three children. The daughter of the said Dr.P.Rama Rau, viz., Smt.Malathy Sripathy Rau, severed her interest from the family after obtaining her 1/4 th share by way of registered partition deed dated 25.01.1961. The other members continued as members of the joint family in respect of the remaining 3/4th share of the property.
2.3.Thereafter, by a partition deed dated 16.05.1962, an extent of 20 grounds 961 sq.ft. was allotted to Dr.B.Rama Rau, on condition that he pays a sum of Rs.1,00,000/- each to his mother and brother as owelty. On such payment, Dr.B.Rama Rau became the absolute owner of the property. Page 4 / 40 http://www.judis.nic.in C.S.No.912 of 2004 He continued the nursing home established by his father in the name and style of “Rama Rau Poly Clinic”. On 10.04.1972, Dr.B.Rama Rau, the father of the parties, constituted a partnership, inducting the plaintiff and the 1st defendant as partners in the nursing home, along with him. In the above partnership deed dated 10.04.1972 (Ex.P4), it is admitted that Dr.B.Rama Rau effected a partition on 31.03.1972 dividing the capital of the nursing home into three equal shares. Thereafter, a supplementary deed of partnership was entered into on 01.04.1992 and a further agreement was also drawn on 01.07.2001.
2.4.Thereafter, by a deed of partial partition dated 23.01.1980 (Ex.P5), the properties mentioned therein under Schedules II, III and IV were allotted to Dr.B.Rama Rau, 1st defendant and the plaintiff respectively, and the remaining extent of 11 grounds 563 sq.ft as mentioned under Schedule I therein, as mentioned at Item No.1 under Part-II of Schedule-II to this suit (hereinafter referred to as “the suit schedule property”) was retained for the partnership business.
3.1.After the demise of Dr.B.Rama Rau, the father of the parties Page 5 / 40 http://www.judis.nic.in C.S.No.912 of 2004 on 05.01.2003, the partnership was reconstituted on 06.01.2003 vide partnership deed (Ex.P10) at the instance of the 1st defendant without final settlement of accounts and the partnership was one at will. Thereafter, the partnership suffered loss. Except granting licence to one Dr.C.Geetha Haripriya to carry on her practice and M/s.Ambalavana Pharmacy to run their business, nothing was done in the partnership business. Therefore, the plaintiff decided to severe his connection and decided to dissolve the partnership firm and issued a letter. Despite reply, no further action was initiated and the partnership business was not carried out and therefore, the plaintiff terminated the partnership with immediate effect by his letter dated 12.06.2004 (Ex.P13).
3.2.The 1st defendant, in his reply dated 14.06.2004, admitted that the plaintiff and himself (1st defendant) are entitled to 2/3rd shares and the 2nd defendant is entitled to a moiety of the estate of Dr.B.Rama Rau, the share of Dr.B.Rama Rau being 1/3rd in the partnership business. The said share is also divisible between the plaintiff and the defendants. Hence, the plaintiff and the 1st defendant are entitled to 4/9th share each and the 2nd defendant is entitled to 1/9th share.
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4.Therefore, this Civil Suit has been filed for partition of the suit schedule property and calling for accounts of the partnership firm, as stated supra.
5.The 1st defendant has filed his written statement before this Court, wherein, he has taken the following stand:
5.1.Admitting the relationship between the parties, it is the stand of the 1st defendant that the suit is not maintainable, since the subject property is an asset of the partnership firm.
5.2.The 1st defendant has admitted that on 10.04.1972, their father Dr.B.Rama Rau constituted a partnership firm and inducted the 1 st defendant and the plaintiff as partners. However, the further agreement, between the plaintiff and the 1st defendant, was not drawn to enable the 1st defendant to draw additional amounts and the 1st defendant also denies that the plaintiff and the defendants are in joint possession. The 1 st defendant alone is running the partnership hospital, while the plaintiff is a dormant partner and the 2nd defendant has no right at all.Page 7 / 40
http://www.judis.nic.in C.S.No.912 of 2004 5.3.It is the stand of the 1st defendant that the partnership asset is 11 grounds 563 sq.ft. under partnership deed dated 10.04.1972. After demise of the father of the parties, the partnership was reconstituted on 06.01.2003, which was constituted only at the instance of the plaintiff. Therefore, the alleged partnership deed dated 06.01.2003 is non-est in law and unenforceable. Hence, the subsequent letter terminating the alleged partnership has no legal validity. The 1st defendant dedicated his life to uplift the hospital, while the plaintiff was in USA and abandoned the partnership hospital.
5.4.It is the further case of the 1st defendant that his father Dr.B.Rama Rau has transferred considerable property during his life time to his only daughter, the 2nd defendant herein, and further, his father bequeathed some properties to the plaintiff and the 1st defendant for personal enjoyment and the balance property for the hospital/nursing home and constituted it as partnership asset. The ultimate intention of their father is to preserve the hospital and do service to the society. Contrarily, the intention of the plaintiff and the 2nd defendant is to sell the hospital premises to developers and destroy the intention with which their father developed Page 8 / 40 http://www.judis.nic.in C.S.No.912 of 2004 the hospital. Therefore, in any event, a suit for partition of the property of a partnership firm cannot lie and the same is not maintainable.
6.The 2nd defendant has filed her written statement before this Court, wherein, she has taken the following stand:
6.1.Though the plaintiff and the 1st defendant were inducted as partners in the partnership business, they were merely nominal participants in the business. The entire business and the affairs of the firm was attended to and nurtured single-handedly by Dr.B.Rama Rau, the father of the parties.
On 23.01.1980, a deed of partial partition was entered between their father Dr.B.Rama Rau, the 1st defendant and the plaintiff herein, wherein certain allotments among themselves and the remaining extent continued to be held jointly for the business of the firm “Rama Rau Poly Clinic”. The said property also consists of a residential portion, wherein, their father was residing. Their father died on 05.01.2003 and his estate devolved upon his children in three equal shares. After the death of their father Dr.B.Rama Rau, she is also entitled to an equal share in the estate of her father as Class-I Legal Heir, along with the plaintiff and the 1st defendant. Page 9 / 40 http://www.judis.nic.in C.S.No.912 of 2004
7.Based on the pleadings, the following issues were framed :
i. Whether, on the demise of Dr.B.Rama Rau intestate on 05.01.2003, the plaintiff is entitled to partition and separate possession of 4/9th share in the suit property ?
ii. Whether, on the termination of the partnership at will on 12.06.2004, the partnership having been dissolved, the 1st defendant is liable to render true and proper accounts from 10.04.1972 onwards ?
iii. Whether the accounts of the partnership is liable to be settled under Section 46 and 48 of the Act for the period 10.04.1972 onwards ?
iv. Whether the plaintiff and the defendants are entitled to divide assets including the immovable properties mentioned in the schedule by metes and bounds ?
v. Whether the suit is not maintainable ?
vi. Whether the 1st defendant is entitled to continue the partnership business, despite dissolution of the firm ? Page 10 / 40 http://www.judis.nic.in C.S.No.912 of 2004 vii.To what reliefs are the parties are entitled to ?
8.On the side of the plaintiff, the plaintiff was examined as P.W.1 and Exs.P1 to P18 marked. On the side of the defendants, the 1st defendant was examined as D.W.1 and Exs.D1 to D3 marked. There is no oral or documentary evidence on the side of the 2nd defendant.
9.1.It is the contention of the learned Senior Counsel appearing for the plaintiff that the character of the property is not disputed. The property was originally owned by Dr.P.Rama Rau, who purchased the property in the year 1937. After his demise, the property came into the hands of Dr.B.Rama Rau, the father of the parties herein, and this fact is not in dispute. The property all along remained as a joint family property. The father of the parties continued the clinic established by his father in the name and style of “Rama Rau Poly Clinic”. In the year 1972, Dr.B.Rama Rau, as a karta of the family, inducted the plaintiff and the 1st defendant as partners in the firm. Thereafter, a partial partition deed was executed allotting certain portions to the father and two sons and the remaining Page 11 / 40 http://www.judis.nic.in C.S.No.912 of 2004 property was retained only for the purpose of running the business of the firm.
9.2.It is the further contention of the learned Senior Counsel that, after the partial partition, the father sold his share in favour of third party, wherein the 2nd defendant was also made as confirming party and that itself clearly indicates that the property has never been brought into the stocks of the partnership firm and it always remained as a joint family property.
9.3.It is the contention of the learned Senior Counsel that the statement of the father Dr.B.Rama Rau in subsequent documents also elucidates that he never intended to treat the suit schedule property as an asset of the partnership firm. What was intended by him is only to use the property for the purpose of business of the firm. Therefore, in the absence of any evidence to show that the suit schedule property was brought into the stocks of the firm, it cannot be said that the suit is not maintainable for partition. Admittedly, the partnership was reconstituted between the two brothers which was at will and moreover, the letter issued by the plaintiff terminating the partnership is also admitted by the 1st defendant. Also, the father of the parties died in the year 2003. Therefore, the suit schedule Page 12 / 40 http://www.judis.nic.in C.S.No.912 of 2004 property all along retained the character of joint family property.
9.4.Hence, it is the contention of the learned Senior Counsel that, after the death of the father of the parties, the plaintiff is certainly entitled to divide the property and there is no need whatsoever to file a suit for dissolution of the firm, inasmuch as the joint family property was only used for the business of the partnership firm.
9.5.It is the further contention of the learned Senior Counsel that Section 69(3) of the Indian Partnership Act, 1932, does not bar the suit by an unregistered firm. Therefore, merely because the firm was unregistered, the plaintiff cannot be prevented from laying a suit only on the ground of non-registration of the firm.
9.6.In the above background, the learned Senior Counsel concluded his arguments by submitting that the suit for partition is maintainable and the plaintiff is entitled for allotment of his respective share in the suit schedule property.
9.7.In support of his arguments, the learned Senior Counsel has placed reliance on the following judgments :
i. P.Venkateswarlu v. C.Lakshmi Narasimha Rao (died) Page 13 / 40 http://www.judis.nic.in C.S.No.912 of 2004 [AIR 2002 AP 62] ii. Sharad Vasant Kotak and others v. Ramniklal Mohanlal Chawda and another [(1998) 2 SCC 171] iii. Dinesh Jangid v. Laxmi Kant Jangi [AIR 2007 Rajasthan 203] iv. M/s.Malabar Fisheries Co., Calicut v. Commissioner of Income Tax, Kerala [(1979) 4 SCC 766] v. K.Mohammad Ziauddin Sahib v. Kosha Abdul Munaf Sahed and others [(1973) 4 SCC 57] vi. Heather Luiz v. Nirene Dennis Luiz and others [MANU/KE/0786/2018] vii.Uttam Singh Duggal & Co. Ltd. v. United Bank of India and others [(2000) 7 SCC 120] viii.Karam Kapahi and others v. Lalchand Public Charitable Trust and another [(2010) 4 SCC 753]
10.1.The learned counsel for the 1st defendant mainly contended that the suit is not maintainable, since the entire property has been brought Page 14 / 40 http://www.judis.nic.in C.S.No.912 of 2004 under the assets of the partnership firm as early as in the year 1972 and the subsequent partial partition deed of the year 1980 (Ex.P5) also clearly indicates that the property is treated as a partnership asset. Hence, it is his contention that the suit is not maintainable.
10.2.The learned counsel further contended that, all the documents marked by the plaintiff are only photocopies, which are not admissible.
10.3.It is his further contention that the partnership deed (Ex.P4) dated 10.04.1972 is also not terminated. The plaintiff (P.W.1), as per his own evidence, has now become a citizen of USA. Therefore, reconstitution of the partnership by the plaintiff, vide Ex.P10, without permission of RBI, is not possible. The execution of Ex.P10 is highly doubtful in this case. Therefore, Ex.P10 and Ex.P13 (letter of the plaintiff terminating the partnership) are not valid in the eye of law and are void. If at all the firm is dissolved, according to the learned counsel, only a suit for dissolution of the partnership firm is alone maintainable before this Court and the mode of settlement of accounts between the partners shall be in terms of Section 48 of the Indian Partnership Act, but not a suit for partition. Hence, it is his Page 15 / 40 http://www.judis.nic.in C.S.No.912 of 2004 contention that the suit is not maintainable.
10.4.The learned counsel further submitted that the intention of the 1st defendant is to continue the firm to run the polyclinic as established by his father and the same cannot be defeated.
10.5.The 2nd defendant is taking advantage of the present law and seeks for a larger share. In fact, the specific allegation made by the 1st defendant that the 2nd defendant has received a huge amount has not been denied by her. Moreover, she has not come into the witness box during trial.
10.6.The learned counsel concluded his arguments by submitting that the suit is not maintainable before this Court and prayed for dismissal of the suit.
10.7.In support of his arguments, the learned counsel has placed reliance on the following judgments :
i. Chitturi Venkataratnam & others v. Siram Subba Rao of Bandur & others [CDJ 1926 MHC 049] ii. Syed Nizamuddin & others v. Shaik Akbar & others [CDJ 2014 MHC 2013] Page 16 / 40 http://www.judis.nic.in C.S.No.912 of 2004 iii. Sudarsanam Maistri v. Narasimhulu Maistei and others [MANU/TN/0138/1901] iv. M/s.Shreeram Finance Corporation v. Yasin Khan and others [1989 (3) SCC 476] v. M.Muthukumaraswami v. Kumar Textiles [MANU/TN/0080/1996] vi. Bijendra Prasad v. Smt.Duleshwari Devi [1998 AIR (Patna) 122]
11.1.The learned counsel appearing for the 2nd defendant contended that there is no material on record to show that the property was shown as an asset of the partnership firm, whereas the evidence clearly indicate that the property is all along treated as Hindu Undivided Family (HUF) property. If the entire property was brought into the stocks of the firm, the partial partition deed (Ex.P5) would have not come into existence at a later point of time. Merely because the property was used for the firm's business, the right of the coparceners of the property cannot be taken away.
11.2.The learned counsel further contended that, though the 2nd Page 17 / 40 http://www.judis.nic.in C.S.No.912 of 2004 defendant had wrongly claimed 1/9th share after the demise of their father in the year 2003, in view of the law laid down by the Hon'ble Apex Court, daughter is also entitled to equal share as that of son, and hence, the 2 nd defendant is also entitled to 1/3rd share in the suit schedule property.
11.3.In support of his arguments, the learned counsel has placed reliance on the following judgments :
i. Addanki Narayanappa and another v. Bhaskara Krishtappa and 13 others [AIR 1966 SC 1300] ii. M/s.Boda Narayana Murthy and Sons v. Valluri Venkata Suguna and others [AIR 1978 AP 257] iii. M.V.Karunakaran v. Krishan [(2009) 7 SCC 334] iv. Ganduri Koteshwaramma and another v. Chakiri Yanadi and another [(2011) 9 SCC 788] v. Danamma alias Suman Surpur and another v. Amar and others [(2018) 3 SCC 343] vi. Heather Luiz v. Nirene Dennis Luiz [2018 SCC Online Ker 1232 : (2018) 2 KLJ 723] Page 18 / 40 http://www.judis.nic.in C.S.No.912 of 2004
12.This Court gave its anxious consideration to the rival submissions and also perused the entire materials available on record.
13.This Civil Suit has been laid for partition of the suit schedule property by metes and bounds and also to direct the 1st defendant to render true and proper accounts of all the income and expenditure of the partnership firm, “Rama Rau Poly Clinic”. The plaintiff and the 1st defendant are brothers and the 2nd defendant is their sister. It is admitted that, originally, the property at 829 (Old No.453), Poonamallee High Road, Kilpauk, Chennai – 600 010 was purchased by one Dr.P.Rama Rau, grandfather of the parties herein. The said Dr.P.Rama Rau established a nursing home in the above property. The fact that the said Dr.P.Rama Rau died on 11.05.1956 is also not disputed by both sides. After the death of the said Dr.P.Rama Rau, his three children, viz., Dr.B.Rama Rau, the father of the parties herein, the uncle, and the aunt of the parties herein, entered into a partition and thereafter, Dr.B.Rama Rau, the fathers of the parties became the absolute owner of the property. This fact is also not disputed by both the sides. From the analysis of the evidence of the plaintiff (P.W.1) and the Page 19 / 40 http://www.judis.nic.in C.S.No.912 of 2004 1st defendant (D.W.1), it can be seen that the nursing home run by the grandfather of the parties was continued by the father of the parties in the suit schedule property till 1972. Thereafter, the father of the parties, being the karta of the joint family consisting of the plaintiff, defendants and their mother, constituted a partnership firm along with his two sons viz., the plaintiff and the 1st defendant on 31.03.1972 to run the nursing home in the suit schedule property.
14.The Exhibits filed by the plaintiff, particularly, Ex.P4 (partnership deed) and Ex.P5 (partial partition deed) and Ex.P7 (family agreement) are not seriously disputed by the defendants. Though the 1st defendant raised an objection that they are only photocopies, the parties have not disputed the existence of those agreements between them. The 1st defendant (D.W.1), in his evidence, has categorically admitted the existence of Exs.P4 and P5 and other documents executed by them. Therefore, having regard to the fact that the parties had not disputed the existence of the documents, rather admitted their existence, this Court is of the view that there is no need for rejecting those documents at the threshold, merely Page 20 / 40 http://www.judis.nic.in C.S.No.912 of 2004 because they are photocopies, taking note of the nature of the litigation pending between the parties pending from the year 2004, for partition of the suit schedule property.
15.Ex.P1 (sale deed), under which the entire property was purchased by the grandfather of the parties, has not been disputed by the parties. Under Exs.P2 and P3 (partition deeds), the suit schedule property fell into the share of the father of the parties herein. The same clearly indicates that the father of the parties inherited the property from his father. These documents are also not in dispute.
16.Ex.P4 (partnership deed), entered between the father of the parties, plaintiff and the 1st defendant, indicates that the father, as a karta of the family, constituted a partnership in respect of the nursing home originally owned by his father and run by the joint family. Though the plaintiff and the 1st defendant were majors at the relevant point of time, the recitals of the document make it clear that, being the karta of the Hindu Undivided Family, the father of the parties constituted a partnership firm by Page 21 / 40 http://www.judis.nic.in C.S.No.912 of 2004 dividing the capital of the nursing home business standing in its books as on 31.03.1972 into three equal shares among his two sons and himself. The recitals further indicate that, considering it beneficial for the members of the family to effect partition of the nursing home, the partnership was entered between them. The capital of the nursing home business was divided into three equal shares as among his two sons and himself, wherein, the capital of the partnership is the assets and liabilities of the nursing home, hitherto run by the Hindu Undivided Family, which has been divided and credited equally in the capital account of each of the partners in the accounts of the firm. From the above deed, it can be seen that, only the assets and liabilities of the nursing home run by the Hindu Undivided Family have been shown as the capital of the partnership firm.
17.Thereafter, under partition deed (Ex.P5), they effected partial partition, allotting certain properties shown under Schedules II, III and IV therein in favour of the father of the parties, 1st defendant and the plaintiff respectively. If really the entire property of 20 grounds was retained as the partnership asset, there would have been no necessity for the parties to enter Page 22 / 40 http://www.judis.nic.in C.S.No.912 of 2004 partial partition at a later point of time. Ex.D1, the sale deed of the year 1988 executed by the father of the parties herein, makes it clear that the property was originally allotted to him as a Hindu Undivided Family property by his father, as his sons are coparceners of the property. The statements of the father of the parties in the sale deed with regard to the status and character of the property are relevant to ascertain the nature and character of property, under Section 32 of the Indian Evidence Act.
18.From the above documents, it is clear that, only the nursing home which was originally run by the grandfather of the parties was continued by the father of the parties till 1972. Thereafter, he inducted his two sons as partners in the nursing home. The primary object of creating the partnership seems to be to continue the nursing home established by the grandfather of the parties. Therefore, merely because the partnership was created by the father of the parties in respect of a joint family property, now the parties cannot contend that the entire property has been brought into the stocks of the partnership firm.
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19.The evidence of P.W.1 and D.W.1, when meticulously seen, clearly shows that the capital of the partnership firm is only the assets and liabilities of the nursing home run by the Hindu Undivided Family. It is clearly spoken by D.W.1 in his evidence that, only the nursing home run by the Hindu Undivided Family was shown as the capital of the partnership firm. On a clear perusal of the evidence of D.W.1, it could be seen that he has also admitted that the nursing home was originally established by his grandfather; in a partition, the polyclinic came into the possession of the father of the parties; the front portion of the polyclinic building was used as hospital and the back portion was used for their father's residential purpose; behind the residential portion, there was a vacant land and it was divided between the plaintiff and himself (1st defendant) and a house has been constructed by him (1st defendant) there and his brother, the plaintiff, has not constructed any house and still his portion of land is vacant. Thus, the evidence of D.W.1 makes it clear that the front portion alone was used as hospital and the other area was used only for residential purposes, behind which, the 1st defendant has also put up a construction and the remaining Page 24 / 40 http://www.judis.nic.in C.S.No.912 of 2004 area is still vacant. His further admission shows that, only the assets and liabilities of the polyclinic was divided into three, among the plaintiff, 1st defendant and their father. The assets and liabilities of the nursing home, which was run by the Hindu Undivided Family, was only shown as the capital of the partnership firm. It is also admitted by the parties, particularly D.W.1 that, after the death of their father, Ex.P10 dated 06.01.2003 came to be executed between the two brothers, and in Ex.P10 itself, it is stated that the partnership is at will. D.W.1 has also admitted that, under Ex.P13 (letter dated 12.06.2004), the plaintiff had terminated the partnership. He has also admitted that, vide his letter dated 14.06.2004 (Ex.P14), he has stated that he and his brother (plaintiff) are entitled to equal share and her sister (2nd defendant) is also entitled to a moiety in their father's personal estate.
20.While the capital of the firm is only the nursing home and its assets and liabilities, merely because the entire Survey Number was shown in Ex.P5, it cannot be said that the entire property mentioned under Schedule-I therein has been brought into the stocks of the partnership firm. It is relevant to note that there is absolutely no evidence as to whether the Page 25 / 40 http://www.judis.nic.in C.S.No.912 of 2004 entire immovable property shown under Schedule-I in Ex.P5 was brought into the stocks of the partnership firm. No account, whatsoever, filed so far indicating that the immovable property is also shown in the balance sheet of the partnership firm or shown in their Income Tax Returns, etc. Therefore, merely on the basis of the submissions of the 1st defendant that the property is an asset of the partnership firm, it cannot be concluded so, inasmuch as no material, whatsoever, is available on record, nor any document filed on either side to show that the property has been shown as assets of the firm. Whereas, the oral evidence of the parties particularly the admission by both sides and also Ex.P4 and Ex.D1 make it clear that the property was originally a joint family property and was used only for the purpose of the partnership business and no document has been filed in this regard to show that the property is all along treated as partnership asset. Therefore, as the nursing home was actually run on a family property, which had originally devolved upon the father of the parties, and he had constituted a Hindu Undivided Family with other members of the family, merely on the basis of an unregistered partnership firm constituted by the father and only the assets of the nursing home being shown as its capital, it cannot be concluded that Page 26 / 40 http://www.judis.nic.in C.S.No.912 of 2004 the entire property has been brought into the stocks of the partnership firm.
21.In Heather Luiz v. Nirene Dennis Luiz [2018 SCC Online Ker 1232], the Division Bench of Kerala High Court has held as follows :
“31. ... If the property is brought into the stock of the firm, necessarily, it will be borne out in the balance sheet of the firm. No such documents relating to accounts of the firm were produced to arrive at a conclusion that the immovable properties were brought into the stock of the firm.”
22.In M.V.Karunakaran v. Krishan (supra), the Hon'ble Apex Court has held as follows :
“11.Herein we have to consider the case from altogether a different angle. It is not a case where the partners of the firm were not the owners of the property. It is also not a case where the property was owned by the partnership firm. The partners as pre-existing co-owners had a definite share of the property. They merely applied their own property for running a business in partnership. On dissolution of the partnership, their right in the property revived. Using of a premises for business Page 27 / 40 http://www.judis.nic.in C.S.No.912 of 2004 purpose would not automatically lead to the conclusion that the premises belonged to the partnership firm. The terms and conditions of the partnership agreement, in any event, are not known. It is also not the case where the partners ceased to be co-owners. If they continued to have undivided share in the property even during subsistence of partnership, question of their ceasing to have any interest therein on its automatic dissolution would not arise.”
23.In the given case also, the parties are coparceners as per the submissions of the father himself in Ex.D1. Further, the partnership agreement (Ex.P4) also indicates that the polyclinic was run by the Hindu Undivided Family, consisting of plaintiff, defendants, their father and mother. Therefore, as long as there is no evidence on record to show that the entire property has been brought into the stocks of the partnership firm, mere usage of the family property for business purpose would not automatically lead to the conclusion that the entire property is an asset of the partnership firm.
24.In a judgment cited by the 1st defendant in Chitturi Page 28 / 40 http://www.judis.nic.in C.S.No.912 of 2004 Venkataratnam & others v. Siram Subba Rao of Bandur & others (supra), this Court has held that, in a partnership business, a partner may be a coparcener, but he has no right to ask for a share in that property, but only that the partnership business should be wound up, including therein the sale of the immovable property, and to ask for his share in the resulting assets.
25.In Syed Nizamuddin & others v. Shaik Akbar & others (supra), this Court has held that, when partnership firm got dissolved by the death of one of the partners, they will have to take recourse as per the provisions of the Indian Partnership Act and they cannot treat those properties as joint properties of the persons in whose name the properties were purchased.
26.In Sudarsanam Maistri v. Narasimhulu Maistei and others (supra), this Court has held that a property bought with money belonging to the firm, is deemed to have been bought on account of the firm and based on the said finding, the suit therein was dismissed as not maintainable.
27.In M/s.Shreeram Finance Corporation v. Yasin Khan and Page 29 / 40 http://www.judis.nic.in C.S.No.912 of 2004 others (supra), the Hon'ble Apex Court has held that the suit instituted by an unregistered partnership firm is not maintainable as per Section 69(3) of the Indian Partnership Act.
28.Similarly, in M.Muthukumaraswami v. Kumar Textiles (supra), this Court has held that the Court cannot take cognizance of the suit brought by an unregistered firm.
29.In Bijendra Prasad v. Smt.Duleshwari Devi (supra), the Patna High Court has also held that the suit brought by an unregistered partnership firm is not maintainable.
30.It will be useful to extract Section 69 of the Indian Partnership Act. Section 69 of the Indian Partnership Act reads as follows :
“69.Effect of non-- registration (1) No suit to enforce a right arising from a contract of or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm Page 30 / 40 http://www.judis.nic.in C.S.No.912 of 2004 unless the firm is registered and the person suing is or has been shown in the Register of firms as a partner in the firm.
2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the person suing are or have been shown in the Register of firm as partners in the firm
3) The provisions of sub section (1) and (2) shall apply also to a claim of Set - off or other proceeding to enforce a right arising from a contract, but shall not affect -
a) The enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm or
b) The powers of an official assignee, receiver of Court under the Presidency, towns insolvency Act 1909, or the Provincial insolvency Act, 1920, to realise the property of an insolvent partner.
4) This section shall not apply
a) To firms or to partners in firms which Page 31 / 40 http://www.judis.nic.in C.S.No.912 of 2004 have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which by notification under section 56, this chapter does not apply, or
b) to any suit or claim of set off not exceeding one hundred rupees in value which in the presidency towns, is not of a kind specified in section 19 of the Presidency shall cause Court Act, 1882 or outside the Presidency towns, is not of a kind specified in the Second Schedule to the Provisional small cause Courts Act 1887. or to any proceeding or execution in other proceeding incidental to or arising from any such suit or claim.”
31.Sub Section (3) of Section 69 of the Indian Partnership Act makes it clear that the Sub Sections (1) and (2) of Section 69 ibid., shall not affect the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm. Therefore, Section 69(3)(a) makes it clear that the present Page 32 / 40 http://www.judis.nic.in C.S.No.912 of 2004 suit is maintainable.
32.In P.Venkateswarlu v. C.Lakshmi Narasimha Rao (supra), the Andhra Pradesh High Court has held that, even though a firm is unregistered, enforcement of right to sue for dissolution of firm, rendition of accounts or realisation of property of dissolved firm is kept intact and such suit is maintainable in view of Sub Section (3) of Section 69 of the Indian Partnership Act.
33.The deed of reconstitution of the partnership (Ex.P10) and its execution has been admitted by the 1st defendant (D.W.1). The 1st defendant (D.W.1) has also admitted that the plaintiff has terminated the partnership. The evidence adduced by the plaintiff (P.W.1) and the 1st defendant (D.W.1) make it clear that, except the nursing home, the other properties surrounding the nursing home were used only for the business of the nursing home. Therefore, unless there is any evidence to show that the entire property was brought into the stocks of the partnership firm, it cannot be said that the family property which was used for the business of the partnership firm is Page 33 / 40 http://www.judis.nic.in C.S.No.912 of 2004 also an asset of the partnership firm and the suit is not maintainable. From Ex.P4 and the evidence of P.W.1 and D.W.1, it is clear that the property originally belonged to the Hindu Undivided Family which was inherited by the father of the parties and he constituted a joint family and in a portion of which, the partnership was run separately by some members of the family and the above partnership was also at will and thereafter got dissolved by issuance of notice. Therefore the property used by the firm for its business revived to the family. Therefore, all the members of the joint family are certainly entitled to equal share in that property.
34.Though the plaintiff has claimed 4/9th share and has taken a stand that the 2nd defendant, being a female member, is entitled only to 1/9th share as the suit schedule property is a joint family property and all the members were coparceners, in view of the fact that the suit schedule property was originally held by the joint family and the 1st defendant and the plaintiff are the coparceners along with their father, but the property remained undivided, no one can claim with precision the extent of his right in the undivided property as long as there is no partition as the interest in Page 34 / 40 http://www.judis.nic.in C.S.No.912 of 2004 coparcenary is fluctuating. As daughter has also now become a coparcener and elevated on par with son and is entitled to claim a share as that of a son irrespective of the date of death of her father, as per the dictum laid down by the Hon'ble Supreme Court in Vineeta Sharma v. Rakesh Sharma and others [Civil Appeal Diary No.32601 of 2018, Special Leave Petition (C) No.684 of 2006, etc. dated 11.08.2020], this Court is of the view that, though a claim for lesser share had been made earlier by the 2 nd defendant, in view of the authoritative pronouncement of the Hon'ble Supreme Court that daughter is also entitled to equal share in the coparcenery property, the 2nd defendant is also entitled to an equal share on par with the plaintiff and the 1st defendant.
35.Yet another submission of the learned counsel for the 1st defendant is that the 2nd defendant had not entered into the box and therefore, the allegation made against her stands proved. Such a contention cannot be countenanced by this Court for the simple reason that the main contention of the 1st defendant that the suit schedule property is a partnership asset has not been established in evidence, whereas, the Page 35 / 40 http://www.judis.nic.in C.S.No.912 of 2004 evidence of D.W.1 clearly substantiates the fact that the property is a joint family property. Therefore, by virtue of the Hindu Succession (Amendment) Act, 2005 (39 of 2005), the 2nd defendant is also now equally placed on par with the plaintiff and the 1st defendant, and the same has also been laid down by the Full Bench of the Hon'ble Supreme Court. Therefore, mere non-appearance of the 2nd defendant during trial will not take away her right which was created by the statute.
36.In the light of the narrative supra, this Court holds that the suit schedule property is liable for partition and accordingly, the plaintiff and the defendants are entitled to 1/3rd share each.
37.As the plaintiff and the 1st defendant have admitted that they were running a hospital in the partnership business and the partnership was at will as per Ex.P10, and thereafter, the partnership was terminated and a notice was issued in this regard, and also the father of the parties died in the year 2003, the learned counsel appearing for the plaintiff fairly submitted that, though they made a claim of rendition of the accounts in respect of the Page 36 / 40 http://www.judis.nic.in C.S.No.912 of 2004 hospital from the year 1972, now they restrict their claim only from 06.01.2003 till date. Therefore, this Court is of the opinion that the 1st defendant can be directed to render the accounts of the firm only from 06.01.2003. Accordingly, all the issues are answered.
38.In fine, suit is decreed in part, preliminary decree is passed
a) dividing the suit schedule property (immovable property) into three equal shares, and allotting 1/3rd share to the plaintiff and the defendants 1 and 2 are also entitled for allotment of 1/3rd share each on payment of necessary Court Fee;
b) directing the first defendant to render the accounts relating to the affairs of the firm, viz., “Rama Rau Poly Clinic” from 06.01.2003 till date, within six months from the date of receipt of a copy of this judgment. As far as Part I movable property is concerned, no separate relief is granted by this Court, in view of the relief granted in Clause(b).
Having regard to the nature of relationship between the parties, there shall be no order as to costs and the parties shall bear their own costs.
26.08.2020 mkn Page 37 / 40 http://www.judis.nic.in C.S.No.912 of 2004 List of Witnesses examined on the side of the Plaintiff :
1. P.W.1 Dr.Vijayakumar Rau List of Exhibits marked on the side of the Plaintiff :
Sl. Exhibits Description of documents Date
No.
1 Ex.P1 Xerox copy of the Sale Deed 06.12.1937
2 Ex.P2 Deed of Partition 25.01.1961
3 Ex.P3 Xerox copy of the deed of partition 16.05.1962
4 Ex.P4 Xerox copy of the deed of partnership 10.04.1972
5 Ex.P5 Xerox copy of the deed of partial 23.01.1980
partnership
6 Ex.P6 Xerox copy of the supplementary deed of 01.04.1992
partnership
7 Ex.P7 Xerox copy of the family agreement 01.07.2001
8 Ex.P8 Death Certificate (2 Nos.) 05.01.2003
series
9 Ex.P9 Xerox copy of the legal heirship certificate 28.01.2003
10 Ex.P10 Xerox copy of the deed of partnership 06.01.2003
11 Ex.P11 Letter written by the 1st defendant 04.02.2003
12 Ex.P12 Reply Letter 27.12.2003
13 Ex.P13 Letter to the 1st defendant 12.06.2004
14 Ex.P14 Letter by the 1st defendant 14.06.2004
15 Ex.P15 Notice and Postal Acknowledgement Cards -
series
16 Ex.P16 Xerox copy of the letter of licence 29.06.2002
17 Ex.P17 Xerox copy of the letter of licence 04.02.2002
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Sl. Exhibits Description of documents Date
No.
18 Ex.P18 Letter written by the 1st defendant to the 15.06.2004
plaintiff
List of Witnesses examined on the side of the Defendants:
1. D.W.1 Dr.B.Manohar Rama Rau List of Exhibits marked on the side of the Defendants:
Sl. Exhibits Description of documents Date
No.
1 Ex.D1 Photocopy of the sale deed 28.11.1998
2 Ex.D2 Photocopy of the deed of declaration 05.05.1988
3 Ex.D3 Photocopy of the deed of partial partition 23.01.1980
26.08.2020
mkn
Internet : Yes
Index : Yes / No
Speaking order / Non Speaking order
To
The Sub-Assistant Registrar,
Original Side,
High Court, Madras.
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C.S.No.912 of 2004
N. SATHISH KUMAR, J.
mkn
Pre Delivery Judgment
C.S.No.912 of 2004
26.08.2020
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