Guduthuru Thimmappa vs V. Balakrishna Mudaliar and Another

The question in this appeal is whether the Subordinate Judge''s Court at Bellary had jurisdiction to try the suit. The suit was filed so far back as

5th March, 1921, and the Subordinate Judge decided that the Court had no jurisdiction on the 7th March, 1923. The defendants raised the

question of jurisdiction in issue 15. A preliminary issue like this should have been disposed of at the earliest opportunity. The learned Subordinate

Judge did not do that, but after a number of witnesses were examined on commission and after the defendant took time to adduce evidence he

decided this question in favour of the defendant.

The suit is for dissolution of partnership. The plaintiff, who is a resident of Bellary, entered into partnership with the defendant, a resident of

Coimbatore, for the purchase and sale of cotton. Under the arrangement they were to share the profits. It is unnecessary to consider what shares

the plaintiff and defendant had in the partnership as it is a matter which has to be determined in a suit. The defendant admits that partnership

arrangement was entered into and that the plaintiff and he were partners. But his contention is that the partnership business was carried on only in

Coimbatore and not in Bellary and therefore the Court at Bellary had no jurisdiction. Under the arrangement the plaintiff was to purchase cotton

not only at Bellary but in other places, but the sale of the cotton was to be effected at Coimbatore where cotton mills are situate. The accounts of

the business were maintained at Bellary as alleged in paragraph 20 of the written statement. The defendant, though he denied that the accounts

were maintained in Bellary, did not choose to say where the partnership accounts were maintained. His vakil now says no accounts were

necessary as it was arranged that the profits of each consignment should be settled at once. This is a very strange arrangement of settling accounts

of a partnership in which very large consignments of cotton were made. Inasmuch as the defendant chooses to say that no accounts were kept by

him at Coimbatore in connection with the partnership it cannot be said that the partnership was carried on only at Coimbatore. The learned

Subordinate judge has evidently made a mistake in holding that the substantial portion of the business should be carried on at Bellary in order to

give jurisdiction to the Bellary Court. Where partnership business is carried on at two places, the cause of action arises in both the places and the

Courts have jurisdiction to entertain the suit for dissolution of partnership in either of these places. In this case both the Coimbatore as well as the

Bellary Courts have jurisdiction to entertain the suit. This suit was filed in Bellary Court. That Court had jurisdiction to try the case. In Bavah Meah

Saib v. Khajee Meah Saib (1869) 4 MHCR 218 Bittleston, J. observes:

As regards a suit of this nature, when it appears that the partnership business is carried on substantially in two or more places, I think that the cause

of action does partly arise in each of those places within the meaning of Section 12 of our Charter.

Their Lordships of the Privy Council attach importance in connection with the carrying on of the business to the fact that the partnership

accounts are kept at a particular place. In Luchmee Chand v. Zoreswar Mull (1860) 8 MIA 291 their Lordships observe:

Where can it be said that the cause of action, supposing it exists for that balance, properly arose? Muttra was, undoubtedly, the central place of

business; at Muttra the partnership books were kept; at Muttra the partners would have recourse to those books for the purpose of ascertaining

the state of the transactions; between them, and if, in the result, a balance was due to the appellants, Muttra would be the place where the payment

of that balance would have to be made. It therefore appears clear to their Lordships that if there is a cause of action arising out of the balance

resulting from these partnership transactions, that cause of action arose at Muttra.

Here as already observed the books of the partnership were maintained by the plaintiff at Bellary. Therefore the cause of action for a suit of this

kind did arise within the jurisdiction of the Bellary Court. The Subordinate Judge has entirely gone out of his way in considering whether the

accounts have been satisfactorily kept or not. That is a matter which will have to be dealt with when the suit is tried on the merits.

In the result we set aside the decree of the Subordinate Judge and direct him to restore the suit to file and proceed with it according to law. The

respondent will pay the costs of this appeal.