B. Kishanlal and Others vs Sukhdev Prasad

Kodandaramayya, J.—Defendants are the Appellants in this appeal which arises out of final decree proceedings. The suit was laid for dissolution of partnership firm and rendition of accounts. Preliminary decree was passed in the suiton 14.11.1958.

In this appeal the only controversy is with regard to payment of interest. In the decree under appeal the court below directed that interest is payable from the date of the preliminary decree. The learned Counsel for the Appellants argued that in a suit for dissolution of partnership direction regarding payment of interest from the date of preliminary decree is unsustainable and the parties are entitled to interest only from the date of the final decree. Now, the substantive provision in respect of which the Judicial pronouncements are made on this question is Section 48 of the Indian Partnership Act, 9 of 1932. The earliest pronouncement on this question was made in AIR 1930 185 (Privy Council) where Lord Russel of Killowen observed thus:

This is not an action to recover some debt, of which it can be said that it was due at the date of the plaint. It is an action to dissolve and wind up the affairs of a partnership; and until the accounts have been taken, it is impossible to say what, if anything is due from any partner to his co-partners. In their Lordships opinion interest should only be allowed (there being no agreement to the contrary) to the Plaintiffs from the date of the final decree by which the amount if any is found due from the Defendants to the Plaintiffs.

This view has been consistently accepted by the Madras High Court and in Palla Veeraswami and Another Vs. Bandaru Chitti Naidu and Others, Satyanarayana Rao, J. clearly Ruled that in a suit for dissolution of existing partnership interest should be allowed only from the date of the final decree. No doubt in a case where the suit is laid in respect of dissolved partnership interest may be given even from the date of filing of the plaint if the circumstances establish that the other partner was in possession of assets or utilised them for the purpose of his business or was otherwise guilty of latches. Vide Swaminatha Chettiar and Another Vs. Nagalingam Chettiar and Another, . Thus, it is seen that the courts have made a distinction while granting interest in a partnership action. The court has in the first instance to see whether the partnership agreement provided any interest and if it does not provide such interest, interest is payable only from the date of the final decree. If the suit is for dissolution of a dissolved firm, interest is payable from the date of plaint.

Applying the above principles, the learned Counsel for the Appellants contended that the direction for payment of interest from the date of preliminary decree is unsustainable as the present action is an action for dissolution of existing firm. It is true that the legal position submitted by the learned Counsel is correct but factually I am unable to give effect to his submission on the ground that the court below found that there are no account books on the basis of which final decree has to be passed and the amount due has to be arrived at. In paragraph 8 of the Judgment the lower Court held: "In the present case the suit firm had no account books as per the written statement of the first Defendant. It was found by the High Court that all the partners are entitled for equal shares. It was also found that there is no other property belonging to the partnership firm" when once there is no necessity to ascertain the accounts and there is on need to pass a final decree on the basis of such ascertainment, though formally a final decree has to be drafted, the court below virtually treated the date of the preliminary decree as the final decree itself. In this view of the matter, though the learned Counsel is strictly right in contending that interest is payable only from the date of the final decree, I am constrained to hold that the direction in the decree under appeal is sustainable as no separate date of final decree need be mentioned for payment of interest. The court below is justified in directing payment of interest from the date of preliminary decree, treating virtually that date as the date of final decree in view of the fact that no further steps need be taken in passing the final decree as such though formally final decree has to be drafted.

In view of the above circumstances, I see no substance in this appeal which is accordingly dismissed. I make no order as to costs.

In appears that the Appellants have paid an excess court fee on the memorandum of appeal as is evident from the endorsement noted. Therefore, a certificate of refund shall issue in favour of the learned Counsel for the Appellants entitling him collect the excess amount of court fee paid.