Ahamad Meera Sahib vs Mohammed Mohideen Maracayar and Others

Mohan, J.—The Plaintiff who was unsuccessful in both the Courts below has preferred this second Appeal. The short facts are as follows :-

The partnership firm, consisting of the 1st defendant, plaintiff''s father, P.W.2 one Abdul Khader and Meera Pillai, was carrying on business at

Rengola in Ceylon. Meera Pillai died in the year 1933 and his assets were taken over by the 1st defendant and plaintiff''s father. On 12th February

1938, plaintiff''s father died. In 1938 P.W.2 retired from the partnership and in 1939 Abdul Khader also died. Thereafter, the 1st respondent

continued the business with his co-heirs until it was stopped in 1959. The plaintiff who was born on 11th June, 1936 filed the suit for recovery of

possession of the plaintiff''s share in respect of the 1st schedule, for accounting and other incidental reliefs.

In the written statement concerning this partnership at Rengola, it was contended that the plaintiff''s father was never a partner and it was the

sole business of the 1st defendant alone. The father of the plaintiff was only a paid employee.

The learned Subordinate Judge, on a consideration of the oral and documentary evidence, passed a preliminary decree for partition with respect

to the 2nd schedule property and in other respects, the suit was dismissed. On appeal by the plaintiff in A.S. No. 11 of 1965, the learned District

Judge of Tirunelveli confirmed the findings of the trial Court. Hence the present Second Appeal.

The only controversy before me now in the second Appeal is concerning the point of limitation. Since the lower Appellate Court but

categorically found that the plea put forth by the defendants that the father of the plaintiff was only a paid employee was not true and that there was

no settlement of his accounts, posing the point of limitation under point No. 5, the learned Appellate Judge held that it is only Article 106 of the Old

Limitation Act that would apply in which event the suit having been brought on 20th November, 1961 long after the plaintiff had attained majority

would be clearly barred by limitation. In attacking this finding, the learned Advocate General submits that in so far as the evidence tends to disclose

that the assets belonging to the father of the plaintiff had been utilised and inasmuch as it has been found that the partnership continued even after

the death of the plaintiff''s father, be would be entitled to profits and there is no clear evidence as to the date of dissolution because the stand of the

defendants, as already seen, is only that the plaintiff''s father was a paid employee. Therefore, it is incumbent upon the defendants to prove the date

on which the dissolution took place. Concerning this the learned appellate Judge has assumed that it stood dissolved on 12th March 1938 and on

that basis held the suit to be barred.

In meeting these submissions of the learned Advocate General, Mr. A. Sundaram Iyer, learned counsel for the respondents submits that on the

death of the partner viz., the plaintiff''s father, the partnership automatically stood dissolved and merely because it was carried on with the

remaining partners it would not mean that it was the original partnership that carried on the business. It is only Art. 106 of the Old Limitation Act,

as applied by the lower Appellate Court, would govern the present case. In support of this contention the learned counsel relies on the decisions in

Mohideen Bee v. Syed Meer Saheb ILR 38 Mad. 1099 Peeran Sahib v. Jamaludin Saheb AIR 1958 A.P. 48 and P. Someswara Rao v. J.A.

Rama Arya 1968-1 A.W.R. 456. Even otherwise, according to the learned counsel for the respondents, all the other partners excepting the 1st

defendant had neither retired from the partnership or died by 1929, as a result of which the first defendant alone became the sole proprietor in

which case there was no further partnership. So even reckoning the date from 1939 the suit would be barred.

Lastly, a technical objection put forth is that the 1st defendant died pending the Second appeal, C.M.P. Sons. 2962/1973 and 2963 of 1973

were taken out to appoint the 8th respondent as the guardian for minors 13 to 15 and to bring on record the legal representatives respondents 3 to

18 as the legal representatives of the defendant (1st respondent). These two applications were dismissed on 12th December 1973, for want of

representations. However, C.M.P. No. 3847 of 1975 was taken out to restore one of the above Civil Miscellaneous Petitions Viz, C.M.P. No.

2962 of 1973. It was restored by an order dated 27th March 1975. The result is that the order of dismissal concerning C.M.P. No. 2962 of 1973

still stands and if that be so, the entire second Appeal will stand abated. The last of the contentions is, no doubt, well founded. But I am not

inclined to dismiss the second appeal on this mere technical plea since there cannot be an order of restoration of C.M.P. No. 2963 of 1973

without respondents 13 to 15 being added as legal representatives and the 8th respondent being appointed as guardian.

Be that so; the real question is what is the effect of the death of the plaintiff''s father concerning the partnership. S.42(c) of the Partnership Act

clearly lays down subject to the contract between the partners, a firm is dissolved......(c) by the death of a partner. Therefore, on the date on which

the plaintiff''s father died viz., 12th March 1938, the partnership concerning all the four partners (I am leaving out Meera Pillai since he died in

1933) viz., Rengola business got dissolved. If that be so, under Art. 106 of the Old Limitation Act., the suit ought to have been filed within three

years from the date of dissolution. But inasmuch as plaintiff was a minor, certainly he could have filed the suit within three years on attaining

majority on 11th June 1952 the plaintiff having been born on 11th June 1936. But in the instant case, the suit came to be filed on 20th November

1961 i.e., far beyond the period of limitation. Therefore, his right to demand accounts of the partnership was not available. Even then could it be

said that in so far as the assets of the father were utilised by the remaining partners whether the plaintiff would be entitled to the profits accruing

therefrom. My answer is no, for the reason that if he is unable to recover the assets, he cannot ask for the profits because those profits accrue from

out of the assets. I am fortified in my conclusion if reference is made to Mohideen Bee v. Syed Meer Saheb ILR 33 Mad. 1099 where it was held

that if it was a suit for accounts and a share of the profits of a dissolved Partnership, it was only Art. 106 of the Limitation Act that would apply.

To the same effect in the decision in Peeran Sahib v. Jamaluddin Sahib AIR 1958 A.P. 48 wherein the Division Bench held that a suit by the heirs

or legal representatives of a deceased partner for accounts and a share of profit under S 37 of the Partnership Act, could be governed by Art. 106

and not by the residuary Art. 120 of the Limitation Act and time would commence to run from the date of death of the partner on which date the

partnership must be deemed to be dissolved in the absence of any agreement for taking in the legal representative of the deceased partner as

partners. Reference may also be made in this connection to P. Someswara Rao v. J.A. Rama Arya 1968-1 A.W.R. 456 wherein it was held thus:

The legal representatives of the deceased partner do not automatically become partners in the firm, whose business may be continued by the

surviving partner or partners. If they want to become partners, there has to be a fresh agreement between the surviving partners and the legal

representatives of the deceased partner. If they have not agreed to continue to be partners in the continued firm, they have only a right of getting an

account of the dissolved firm in so far as the share of the deceased partner is concerned and to the extent the amount is found due to the deceased.

It is a loan which is recoverable by the legal representatives of the deceased partner. That, however, does not make them partners in the continuing

firm. If the surviving partner or partners without settling the accounts continue the business of the firm with the aid of the property of the dissolved

firm, the legal representatives of the deceased partner Would also be entitled to a share in the profit, which has to be related to the share of the

deceased in the property used for interest upon the share of the deceased partner in the property used by the surviving partner. That being the

position of law. Art 106 clearly applies to a suit where the legal representatives of the deceased partner file a suit for accounts after the firm is

dissolved by the death of the deceased partner. Whether the legal representatives of the deceased partner bring the suit or the suit is brought by the

purchaser of their right, title and interest in the share of the deceased in the property of the firm; it would hardly make any change in law. Even in

such a case, it is Art. 106 which would apply.

Mr. A. Sundaram Iyer is, therefore, well justified in relying on these authorities. It is, no doubt, true as the learned Advocate General would submit

that the defendants look the extreme step of contending that the plaintiff''s father was only a paid employee. But from that it does not mean that

once it is proved that the plaintiff''s father was a partner, the dissolution would not take place on his death. As observed above, S. 42(e) of the

Partnership Act is clear in its terms. In this view, I find the judgment of the lower appellate Court relating to limitation as unassailable. This Second

Appeal will stand dismissed. There will be no order at to coils. No leave.