Gujarat High Court
Vinubhai Najibhai Chavda vs Maheshkumar Ramchandra on 20 February, 2013
Equivalent citations: AIR 2013 GUJARAT 254
Author: C.L.Soni
Bench: C.L. Soni
VINUBHAI NAJIBHAI CHAVDA....Appellant(s)V/SMAHESHKUMAR RAMCHANDRA RAVAL....Respondent(s) C/SA/30/2008 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SECOND APPEAL NO. 30 of 2008 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE C.L. SONI ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ VINUBHAI NAJIBHAI CHAVDA....Appellant Versus MAHESHKUMAR RAMCHANDRA RAVAL....Respondent ================================================================ Appearance: MR KIRTIDEV R DAVE, ADVOCATE for the Appellant(s) No. 1 MR RAHUL K DAVE, ADVOCATE for the Appellant(s) No. 1 MS AMRITA AJMERA, ADVOCATE for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE C.L. SONI Date : 20/02/2013 ORAL JUDGMENT
1. This appeal under Section 100 of the Code of Civil Procedure is at the instance of the original plaintiff who had filed Special Civil Suit No. 74 of 1999 against the respondent original defendant for recovery of Rs.1,08,009.00 and for rendition of accounts of unregistered oral partnership between the parties. It is the case of the plaintiff that the plaintiff and the defendant decided to purchase one truck belonging to Shri Dipakkumar Himatlal Shah and to do the business of transportation with the said truck in partnership and agreed to equal share in the business of partnership. It is further case of the plaintiff that on 4.9.1998, the plaintiff paid Rs.75,000.00 in cash to the defendant for purchase of the truck and thereafter, paid further amount of Rs.17,000.00. Thus, in all, the plaintiff paid Rs.92,000.00 and the truck was purchased from said Shri Dipakkumar Himatlal Shah. That the value of the truck was fixed at Rs.3,21,000.00, out of which, the plaintiff paid Rs.92,000.00 and the defendant gave his plot of Rs.83,250.00 and also paid Rs.7636.00 in cash. There was outstanding loan from the bank for Rs.1,38,114.00 and on repayment of the said loan, Shri Dipakkumar Himatlal Shah was to transfer the said truck in the name of the plaintiff and defendant, jointly. It is the further case of the plaintiff that after the truck was purchased in partnership, defendant was managing the business of the truck and was also receiving income from the said business and was keeping the said income with him. The plaintiff s further case is that he paid Rs.8000.00 for the purpose of payment of installment, Rs.6700.00 for the purpose of tyre, Rs.400.00 and Rs.250.00 for head light cut out and sidelight cover, Rs.519.00 for repairing and wire checking and Rs.65.00 for wheel service. The plaintiff thus paid Rs.1,08,099.00 to the defendant for purchase of truck and for the purpose of repairing of the truck. The defendant however did not give any account of the income and expenses of business of truck and the plaintiff when insisted that if the defendant did not want to give account of the business of the truck, defendant should give him possession of the truck so that the plaintiff could manage the business of truck and maintain accounts. However, the plaintiff came to know that the defendant sold away the truck and cheated the plaintiff and the plaintiff was, therefore, required to file criminal complaint against the defendant. The plaintiff also served legal notice to the defendant dated 14.8.99 asking the defendant to repay the amount of Rs.1,08,900.00 given by the plaintiff to the defendant. Since the defendant has not acted as per the notice, the suit is filed. Prayer made in the suit is for passing decree for recovery of Rs.1,08,009.00 and also for giving of accounts for the business of truck and also for passing decree for 50% share from the income of truck by rendering accounts for business of the truck as the defendant had sold out the truck and from that date, not rendered any accounts.
2. The suit was resisted by the defendant denying the existence of partnership, payment of money by the plaintiff to the defendant, purchase of truck to do the business in partnership, and also denying that the defendant was managing the business of truck and receiving income there-from.
The learned trial Judge on appreciation of the evidence, though recorded that it is proved that the plaintiff invested Rs.89700.00 in partnership business and the defendant managed the business oftruck and was receiving income from the truck and still failed to render accounts to the plaintiff, came to the conclusion that the suit of the plaintiff is barred by the provisions of section 69(1) of the Partnership Act. Learned trial Judge has held that in absence of the relief of dissolution of partnership and of taking accounts, the suit is merely for recovering the sum which is not maintainable. The learned trial Judge, thus, dismissed the suit by judgment and decree dated 29th November, 2003.
The plaintiff therefore filed Regular Civil Appeal No. 144 of 2005. The learned appellate Judge, without adverting to the issues on merits about the business in partnership and about the entitlement of the plaintiff from such business, came to the conclusion that the plaintiff has failed to point out any error committed by the trial Court. On such cursorily recorded conclusion, the learned appellate Judge dismissed the appeal vide judgment and decree dated 28.9.2007. The plaintiff has, therefore, come in this appeal before this Court.
This appeal was admitted by order dated 19.2.2008 on the following substantial questions of law:
Whether the Courts below have failed to construe and interpret the provisions of Sec. 63(3)(a) of the Indian Partnership Act?
2.
Whether the Courts below have failed to construe and interpret the provisions of Sec.69 of the Indian Partnership Act?
3. Whether the Courts below have erred in appreciating the facts and material evidence on record as the defendant has specifically denied about any existence of a partnership and, therefore, the Courts below have committed an error of law in appreciating the evidence and deciding the claim of the appellant-original plaintiff with reference to Sec. 69 of the Indian Partnership Act?
6. I have heard learned advocates for the parties. Mr. Kirtidev R. Dave learned advocate for the appellant submitted that the suit was filed for rendition of accounts of partnership business after the partnership stood dissolved and, therefore, suit of the plaintiff was maintainable. He submitted that the trial court has come to the conclusion that there was partnership between the parties to do the business of transportation with the help of the truck purchased by the parties by contributing the funds in partnership. He submitted that the plaintiff has clearly averred in the plaint that the defendant had sold out the truck and no business in partnership was continuing and the defendant was not giving accounts of the partnership. He submitted that the factum of sale of the truck was not in dispute. The dispute was who sold the truck. He submitted that if the business of partnership was by use of the truck and if the truck was admittedly sold out, the partnership had automatically stood dissolved. He submitted that the prayer made in the suit is for recovery of Rs.1,08,009.00 which the plaintiff contributed in the partnership business and for taking 50% share from the partnership business by directing the defendant to give accounts. He submitted that the prayer is also made in the suit that if the defendant fails to render accounts of the partnership business, then, the defendant be ordered to pay an amount of Rs.1,08,009.00 contributed by the plaintiff in the partnership business with interest at the rate of 18% per annum. He submitted that the suit of the plaintiff, therefore, was not barred under section 69(1) of the Partnership Act. He submitted that the trial court though recorded finding of fact that there was partnership between the parties and the defendant was receiving income from the partnership business and did not render accounts to the plaintiff, still the suit is dismissed by holding that the suit was not maintainable. He submitted that not only the suit is maintainable but the plaintiff is also entitled to relief prayed for in the suit. He submitted that the learned appellate Judge unfortunately failed to discharge the appellate jurisdiction in accordance with law. He pointed out that the learned appellate Judge has neither decided the issues involved in the suit as regards rendition of the accounts by the defendant and entitlement of the plaintiff from the business of the partnership firm nor decided the appeal on the question as to whether the suit of the plaintiff was barred under the provisions of section 69(1) of the Partnership Act. He thus submitted that the judgment and decree passed by the first appellate court is required to be quashed and decided and it is required to be held that the suit of the plaintiff is maintainable for the prayers made therein and the matter is required to be remanded to the first appellate court to decide the appeal on its own merits on the basis of the evidence available on record and in accordance with law after giving full opportunities to the parties.
7. As against the above arguments, learned advocate Ms. Amrita Ajmera appearing for the respondent submitted that the trial court has not committed any error in holding that the suit of the plaintiff is not maintainable. She submitted that the plaintiff has not stated in the plaint that the partnership was dissolved. She submitted that if the partnership was not dissolved, the suit for accounts was not maintainable. She submitted that the suit was in fact for recovery of the amount alleged to have been contributed by the plaintiff in the partnership business and, therefore, if the partnership is not proved to have been dissolved, suit for either recovery of the amount contributed by the plaintiff in the partnership business or for rendition of accounts of such partnership is not maintainable. She submitted that the so called partnership was not registered partnership. She further submitted that the plaintiff has also failed to prove that the defendant had sold out the truck. Trial court has recorded finding that the defendant has not sold out the truck but it was one Dipakkumar Himatlal Shah from whom the truck was purchased had taken back the truck and sold out the truck as the installment of the financial institution was not paid towards the loan taken for purchase of the truck by said Shri Dipakkumar Himatlal Shah. She submitted that if the plaintiff has failed to prove that the truck was sold by the defendant and if the plaintiff has further failed to prove that the defendant was responsible to manage the business of the truck, the plaintiff was not entitled to any claim in the suit even if the suit is held to be maintainable. She submitted that the trial court has also on merits recorded finding of fact that the plaintiff is not entitled to any claim in the suit. She submitted that the learned appellate Judge has on appreciation of the evidence also came to the conclusion that the trial court has rightly held that the plaintiff is not entitled to any claim in the suit and that the suit of the plaintiff was not maintainable by virtue of the provisions of sec. 69(1) of the Partnership Act. She submitted that since the appellate court was affirming the judgment passed by the trial court, detailed reasoning was not required to be given by the appellate court. Appellate Court has focused on all the issues arose for determining the controversy involved in the appeal and, therefore, the appellate court could not be said to have not discharged the appellate function. She, thus, urged to dismiss the appeal.
8. Having heard the learned advocates for the parties and having perused the judgment and decree passed by the courts below with the R&P of the case, it appears that the plaintiff has prayed for recovery of Rs.1,08,900.00 from the defendant. This recovery is sought on the basis of the pleadings in the plaint that the plaintiff had contributed Rs.92,000.00 and further amount total of which came to Rs.1,08,009.00 and the defendant has not given any account as regards business of truck in partnership, therefore, at least, the plaintiff was entitled to get back the amount invested by him in the partnership business. The plaintiff has further prayed that since the plaintiff is having equal share in the partnership business and since the defendant has sold out the truck without knowledge of the plaintiff, plaintiff has become entitled to accounts of partnership business and to 50% share from the income of partnership business. Plaintiff has further prayed that if the defendant fails to give accounts of the partnership business to the plaintiff, then, the defendant be ordered to give back the amount of Rs.1,08,009.00 which was contributed by the plaintiff for the purpose of partnership with interest at the rate of 18% p.a. This prayer for giving of accounts of partnership business is also on the basis of the pleadings in the plaint to the effect that the plaintiff and defendant had agreed to do the business of transportation in partnership with the help of truck and for that purpose, it was decided to purchase the truck from one Shri Dipakkumar H. Shah. Further pleadings in the plaint are that for the purchase of truck, plaintiff as also defendant both contributed different amounts and it was decided even to pay the installments of the truck for the amount which was outstanding when the truck was purchased from Shri Dipakkumar H. Shah. The plaintiff has also given further pleading in the plaint that the defendant was managing the business of truck and was even receiving the income from the said business but did not give accounts to the plaintiff and the truck was sold out without knowledge of the plaintiff. The plaintiff has supported the pleadings with his evidence. The defendant has also given evidence and accepted that there was business of transportation in partnership with the help of the truck purchased by them. The defendant has not denied that the truck was not sold but it was the stand of the defendant that the truck was taken back by Shri Dipakkumar K. Shah in view of the non-payment of the installments.
9. From the above pleadings and from the evidence, it clearly appears that there was partnership between the parties for doing the business of transportation with the help of the truck purchased jointly by the parties from Shri Dipakkumar and the truck was taken back by Dipakkumar in view of the non-payment of installments and subsequently sold out by said Shri Dipakkumar, therefore, when the suit was filed, since the truck was already sold out, the business of truck came to an end and the partnership stood dissolved. It is required to be noted that the partnership between the parties was for a specific purpose. The purpose was to do the transportation business by purchasing the truck. Once it is proved that the partnership had taken place between the parties and the business was also started with the help of the truck and when the truck itself was sold out, business in partnership could be said to have come to end. Therefore, even if there are no specific averments as regards dissolution of partnership firm between the parties, by virtue of the provisions of section 42 of the Act, partnership firm stood dissolved. Section 42 of the Act reads as under:
42.
Dissolution on the happening of certain contingencies.- Subject to contract between the parties a firm is dissolved, -
(a) if constituted for a fixed term, by the expiry of that term;
(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;
by the death of a partner; and
(d) by the adjudication of a partner as an insolvent.
10. Section 42 sub-clause (b) provides that subject to contract between the partners, a firm is dissolved if constituted to carry out one or more adventures or undertakings by the completion thereof. As stated above, the adventure or undertaking of carrying business with the help of truck between the parties stood completed on the truck being sold out. Who sold out the truck is not the question relevant but what is relevant is the factum of selling out the truck with the help of which the business in partnership was started. Once the truck did not remain, adventure or undertaking of doing the business in partnership came to an end and, therefore, for all purposes, partnership firm stood dissolved.
11. Sub section (3) of section 69 of the Act provides that sub-sec.(1) and (2) 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, by virtue of such provisions, even if the partnership was not registered, once the partnership firm is proved or is believed to be dissolved, the suit for accounts of dissolved firm even if unregistered is maintainable.
12. As discussed above, the partnership firm between the parties had stood dissolved as per section 42 of the Act, therefore, suit even with the only prayer for rendition of the accounts of unregistered firm was maintainable. In my view, the trial court has therefore committed serious error in holding that the suit of the plaintiff was barred under section 69(1) of the Act and not maintainable. Unfortunately, the learned appellate Judge has not addressed the question about maintainability of the suit and has cursorily stated that the defendant is not liable to any amount claimed by the plaintiff against the unregistered firm as per section 69 of the Act. The appellate court has also failed to address the other issues involved in the suit in the context of the evidence available on record which was focused and decided by the learned trial Judge.
13. In view of the above, since the suit of the plaintiff is held to be maintainable and since the appellate court has not decided the claim of the plaintiff as regards his entitlement in respect of the partnership business by adverting to the evidence available on record, the matter is required to be remanded to the first appellate court to decide the appeal on its own merits on the basis of the evidence available on record and in accordance with law after giving full opportunities to the parties. The appeal is, therefore, required to be allowed while answering the substantial questions of law accordingly.
14. In the result, the appeal is allowed. Judgment and decree passed by the first appellate court is quashed and set aside. It is held that the suit of the plaintiff is not barred by section 69(1) of the Act and is maintainable for the prayers made in the suit. The matter is remanded to the first appellate court to decide the first appeal afresh on its own merits on the basis of the evidence available on record and in accordance with law after giving full opportunities to the parties. Since the suit is of the year 1999, appellate court is directed to make endeavour to decide the appeal within the period of one year from today. For this purpose, the parties are directed remain present either in person or through their advocates before the first appellate court on 25th March, 2013 and, thereafter, the first appellate court shall decide the future course of action. R&P be sent back forthwith.
(C.L.SONI, J.) anvyaspp Page 14 of 14