M. Ramesh Nayak vs Hemalatha D. Nayak and Others

N. Kumar, J.—This is a plaintiffs Regular First Appeal challenging the judgment and decree of the Trial Court which has dismissed the suit for partition and separate possession of his half share in the suit schedule property.

For the sake of convenience, the parties are referred to, as they are referred to in the original suit.

The subject matter of the suit is an immovable property situated at Attavar village, Mangalore taluk, falling within the limits of City Corporation, Mangalore, measuring about 42 cents in Sy. No. 260, with non-residential building bearing door No. 24-11-1170 (factory) and 24-11-1171 (assembly) and all other installations thereon along with right of way, water, etc. (for short hereinafter referred to as ''schedule property''). The `B'' schedule property consists of movable properties.

The case of the plaintiff is, schedule `A'' and `B'' properties originally belonged to late M. Vaman Nayak, father of the plaintiff who had acquired the same on ''mulgeni'' rights by virtue of a sale dt. 15-01-48. Subsequently, he formed a partnership with his sons under the name and style of `M/s. M. Vaman Nayak and Sons''. The `mulgeni'' right in respect of the schedule property was surrendered in favour of `M/s. M. Vaman Nayak and Sons'' by late M. Vaman Nayak as per the terms of a Deed of Surrender dt. 08-01-70. Thus, the `mulageni'' rights in the schedule property vested in the firm M/s. M. Vaman Nayak and Sons. Subsequently, the `mulgeni'' right in respect of the schedule property was purchased by the firm as per the terms of deed of sale dt. 31-07-69. Thus, the partnership firm became the absolute owner of the schedule property. After the death of M. Vaman Nayak, the partnership firm was reconstituted as per the Deed of Partnership dt. 29-07-1977. The said firm was dissolved on 05-04-80 as per the Deed of Dissolution.

The case of the plaintiff is, on such dissolution on 05-04-80, the suit schedule property was jointly allotted to the plaintiff and his brother M. Devadas Nayak i.e. the husband of the first defendant and father of defendants 2 to 4. Thus, plaintiff and late M. Devadas Nayak are the co-owners of the schedule property and the plaintiff is having half share in the same. Since then they have been in possession and enjoyment of the schedule property jointly as co-owners with equal right, title and interest therein. Since the plaintiff is not willing to continue with the joint right, he demanded his share from his brother M. Devadas Nayak, for which he agreed and went on postponing to settle the matter amicably. Unfortunately on 11-03-06 M. Devadas Nayak died due to massive heart attack. After his death, the defendants being his legal heirs inherited his undivided half share in the schedule properties. Even though the plaintiff and defendants are in joint and constructive possession of the schedule properties, the defendants are enjoying the same and deriving income, approximately at Rs. 70,000/- per month from clock manufacturing and turned part manufacturing unit. The schedule property contains a multi-storeyed building approximately measuring about 35,000 square feet. Out of this, rent is being collected at the rate of Rs. 20,000/- per month. The defendants are collecting the rent from the tenants. Therefore, the plaintiff is also entitled to claim mesne profits out of the income derived by the defendants from the suit schedule property. The plaintiff is not interested in continuing with the joint status. He wanted to have a separate share and possession of his share. Therefore, he got issued a legal notice dt. 10-06-06 requesting the defendants to effect partition and give his half share in the plaint schedule property. This notice was properly replied through their Counsel. Therefore, the plaintiff was constrained to file a suit for partition and separate possession of his half share in the suit schedule property.

After service of summons, the defendants entered appearance and filed a detailed written statement traversing all the averments in the plaint.

Their case is, the suit has been filed to black mail the defendants. The plaintiff has totally suppressed the true facts and approached the Court with unclean hands. They admit that the suit schedule properties originally belonged to late M. Vaman Nayak, who acquired the same under a registered sale deed. Formation of the partnership as averred in the plaint was admitted. Purchase of `mulageni'' right by the firm under a registered sale deed is also admitted. After the death of M. Vaman Nayak, the firm reconstituted on 29-07-1977 was also admitted. The dissolution of the firm on 05-04-80 was also admitted. However, they specifically pleaded, after the dissolution of the partnership firm, the suit schedule properties were jointly allotted to the share of M. Devadas Nayak and plaintiff and they were the co-owners of the plaint schedule properties and plaintiff had half right in the property. Further they plead that the said firm was continued till 31-08-86 and on that date, the plaintiff and his wife retired from the firm by executing a separate retirement deed dt. 31-08-86. As per the said retirement deed, all the properties including the plaint schedule property owned by the firm were allotted to the share of the aforesaid M. Devadas Nayak and first defendant. In view of their retirement, the plaintiff has absolutely no manner of right of whatsoever nature, over the assets of M/s. M. Vaman Nayak and Sons - a partnership firm. Therefore, they denied the allegation that the plaintiff continued as the co-owner of the plaint schedule property and the allegation of dividing the properties has absolutely no meaning under the circumstance. They also denied the joint possession and enjoyment of the plaint schedule properties as the co-owners of equal right as alleged. The said M. Devadas Nayak died on 11-03-06. Defendants are his legal representatives. The defendants are enjoying the suit schedule properties and deriving income from the said properties. However, they deny that the meager income from the plaint schedule property at Rs. 70,000/- per month is false. They also denied that the plinth area of the building is 35,000 square feet and that they are deriving Rs. 20,000/- being the rents collected by them from the tenants. Plaintiff has no manner of right over the plaint schedule property. Hence, his claim for mesne profits is redundant. Plaintiff was never in joint possession of the property. The notice dt. 10-06-06 issued by the plaintiff has been properly replied through their Counsel. Therefore they contend, the suit of the plaintiff is not maintainable and accordingly they prayed for dismissal of the suit.

On the aforesaid pleadings, the trial Court has framed the following issues:

"(1) Whether the plaintiff proves that he is the co-owner of the suit schedule property and also in joint and constructive possession along with the defendants ?

(2) Whether the defendants No. 1 and 2 prove that plaintiff and his wife have retired from the firm on 31-08-86 as pleaded in para No. 5 of the written statement ?

(3) Whether the plaintiff proves the cause of action ?

(4) Whether the plaintiff is entitled for the relief as prayed for ?

(5) To what order or decree ?"

The plaintiff in order to substantiate his claim, examined himself as P.W.1 and produced 9 documents which were marked as Exs. P.1 to P.9. On behalf of the defendants, Vijaya Nayak was examined as D.W.1 and three witnesses by name S. Padmanabha Shetty, Sadashiva Moily and Ramesh Mugudoran were examined as D.Ws. 2 to 4. They also produced 48 documents which were marked as Exs. D.1 to D.48.

The trial Court on appreciation of the aforesaid oral and documentary evidence on record held, the plaintiff has failed to prove that on the date of the suit, he was the co-owner of the suit schedule property and also in joint and constructive possession along with the defendants. The defendants 1 and 2 have proved that plaintiff and his wife have retired from the partnership firm on 31-08-86. With the retirement, the plaintiff relinquished all his right and interest in the schedule property in favour of the firm and therefore plaintiff ceased to be the co-owner of the schedule property. As such, he has no right. Accordingly, the suit of the plaintiff for partition and separate possession was dismissed.

Aggrieved by the said judgment and decree of the trial Court, the plaintiff is in appeal.

The learned Counsel for the appellant -plaintiff, assailing the impugned judgment and decree of the trial Court contended, admittedly, after the dissolution of the partnership on 05-04-80, the schedule property became the joint property of the plaintiff and the deceased Devadas Nayak, his brother. He continued to be the Co-owner in joint possession of the schedule property. The property is not partitioned. Therefore, the plaintiff is entitled to half share in the schedule property. The trial Court committed a serious error in dismissing the suit of the plaintiff on the ground, after the dissolution of the earlier partnership on 05-04-80, a new partnership came into existence on 06-04-80, which came to be dissolved on 31-08-86, under which the plaintiff relinquished all his interest in the half share of the schedule properties for a consideration of Rs. 5,25,000/-, which was payable in 76 monthly instalments. In the entire written statement, there is no whisper of the partnership dt. 06-04-80. The original partnership deed is not produced. No foundation was laid to lead secondary evidence. If the attested copy of the partnership deed could be obtained from the Bank as well as from ESI, they could have summoned the original document itself, which has not been done. Though there was no plea, the trial Court committed a serious error in accepting the case of the defendant and dismissing the case of the plaintiff. He submitted, when an immovable property belonging to a partner is sought to be transferred in favour of another partner by virtue of a dissolution deed, there is a transfer and it requires registration under Sec. 17 of the Indian Registration Act. Admittedly, there is no registered document evidencing such transfer. Therefore he contends, the judgment and decree of the trial Court is erroneous and requires to be set aside.

Per contra, the learned Counsel for the defendants - respondents submitted, though there is no mention about the partnership deed dt. 06-04-80, the evidence on record shows, the same is not in dispute at all. After the dissolution of the partnership dated 06-04-80 on 31-08-86, when excise authorities issued notice to the plaintiff- Ramesh Nayak and his wife, they have replied by stating that they ceased to be partners from 01-09-86 and in proof thereof, they have enclosed a copy of the dissolution deed dt. 31-08-86, which is marked in the case as Ex. D.43. The other evidence on record also establishes, the plaintiff and his wife ceased to be the partners. All their rights and liabilities have been transferred in favour of the partnership firm and therefore, the authorities cannot proceed against them for violation of any statutory requirement. Therefore he contends when these letters and the retirement deed has come into existence at an undisputed point of time, now it is too late in the day to contend, that document came into existence earlier or the said partnership was dissolved on 31-08-86. The retirement deed shows, the plaintiff has relinquished all his right and interest in the schedule property. In consideration of the same, they had to pay Rs. 5,25,000/- in 76 equal monthly installments and thus, whatever right the plaintiff had in the schedule property, on retirement he ceased to be the co-owner. He is not in joint possession and therefore the suit of the plaintiff is rightly dismissed by the trial Court. It does not call for any interference.

In the light of the aforesaid pleadings and rival contentions, the points that arise for our consideration in this appeal are as under:

"(1) Whether the finding of the trial Court that the defendant has established the creation of a partnership firm on 06-04-80 and it is dissolved on 31-08-86 calls for interference ?

(2) Whether the defendants have paid Rs. 5,25,000/-, the amount legally payable to the plaintiffs under the partnership retirement deed as consideration for the relinquishment of all his interest in the schedule property?

(3) If not, what order ?"

POINT NO. 1

The averment in the plaint makes it clear that "A" schedule property originally belonged to late M Vaman Nayak - the father of the plaintiff who had acquired the same on Mulageni right by virtue of a sale deed dated 15.1.1948, which was duly registered. Subsequently, Sri. M. Vaman Nayak formed a partnership firm with his sons under the name and Style of ''M/s. Vaman Nayak and Sons''. The ''mulgeni'' right which was owned by M Vaman Nayak was surrendered by him in favour of the partnership firm by virtue of a surrender deed dated 08.01.1970 which was also duly registered. By virtue of the said transfer, the ''mulgeni'' right vested with the partnership firm. Subsequently, the ''mulgeni'' right in respect of the schedule property was purchased by the firm under a registered sale deed dated 31.7.1969. Thus, the partnership firm became the absolute owner of the schedule property. After the death of M Vaman Nayak, the firm was reconstituted by executing a deed of partnership dated 29.7.1977. It is not in dispute that the said firm was dissolved on 05.04.1980 by way of a written deed of dissolution. Now the controversy is after the dissolution of the partnership firm on 5.4.1980, whether any new partnership between the brothers came into existence?

The case of the plaintiff is after the dissolution of the partnership, the property which was owned by the partnership became the property of the partners. Plaintiff had half share and his brother defendant had half share. In the dissolution deed, the schedule properties were jointly allotted to the plaintiff and his brother Mr. Devadas Nayak. Therefore, they became co-owners and plaintiff has half share in the suit schedule property. The defence is after the dissolution of the partnership on 5.4.1980, the firm continued till 31.8.1986 and on that day, the plaintiff and his wife having retired from the firm, executed a separate retirement deed on 31.8.1986. As per the said retirement deed, all the properties including the plaint schedule properties owned by the firm were allotted to the share of the aforesaid M Devadas Nayak the 1st defendant. In view of the retirement, the plaintiff has absolutely no manner of right what-so-ever nature over the assets of the partnership firm and therefore, they denied that plaintiff has half right in the schedule property. In the written statement filed, there is no reference to the new partnership between the brothers coming into existence on 6.4.1980. Similarly, prior to the filing of the suit, plaintiff got issued a legal notice as per Ex. P.8. In the reply sent to the said legal notice also, there is no reference to the new partnership firm coming into existence on 6.4.1980. But, it is specifically stated in the reply notice also that the plaintiff and his wife retired from the firm on 31.8.1986 by executing necessary deed of retirement and other documents under which the plaintiff and his wife gave up all their rights in the schedule property. Relying on this circumstance, it was contended by the learned counsel for the plaintiff, in the absence of a plea, any amount of evidence by the defendant would not help them in proving the existence of the partnership firm which came into existence on 06.04.1980. Further, it was contended, the original partnership deed and the original retirement deed are not produced before the Court. However, secondary evidence is adduced. But, before adducing secondary evidence, the proper foundation was not laid and therefore, the Xerox copies of the partnership deed as well as the retirement deed are not proved in accordance with law and cannot be looked into and the trial Court committed a serious error in acting on the same.

It was further contended the bank officials who were summoned to produce these documents have produced before the Court, duly attested copies of the partnership deed as well as the retirement deed. Therefore, it means the original documents were with them. Therefore, the proper course for the plaintiff would have been to summon those original documents only. In the absence of original documents, the secondary evidence is not permissible and therefore, it is contended this is a case of partnership coming into existence on 6.4.1980 and its dissolution on 31.8.1986 is not proved. Once it is not proved, admittedly plaintiff and the deceased Devdas Nayak were the co-owners of the schedule property in terms of the dissolution deed dated 5.4.1980. They continued to be in joint possession and therefore, the suit filed for partition and separate possession of half share of the plaintiff is maintainable and the suit ought to have been decreed. It was also contended when by way of a registered document, this property was brought into the partnership firm, even if the retirement deed dated 31.8.1986 is accepted, it is an unregistered document. There cannot be a transfer of a right in an immovable property belonging to a partnership firm in favour of one partner excluding the other partners as it is hit by Section 17 of the Indian Registration Act. Therefore, it was contended even if the case of the defendant is to be accepted, right which the plaintiff possessed in the schedule property is not extinguished by virtue of the dissolution deed dated 31.8.1986.

Insofar as the necessity for a proper pleading in a civil suit which is being condition precedent for the Courts to consider such claim, this Court had an occasion to consider the legal effect of the same in the case of Janatha Dal Party Vs. The Indian National Congress and Others, where it was held as under:

"42. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. Provisions relating to pleadings are meant to give each side intimation of the case of the other so that it may be met, to enable the court to determine what is the real issue between parties and to prevent deviation from the course which litigation, on particular of causes of action, must take. It is to ensure that the litigants came to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. To ensure that each side is fully alive to the question that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the Court for its consideration. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise.

When the facts necessary to make out a particular claim, or to seek particular relief are not found in the plaint, the Court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. The general rule, is that the relief should be founded on pleadings made by the parties. It is equally well settled that in the absence of pleadings, evidence if any produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it.

The pleadings however should receive a liberal construction. No pedantic approach should be adopted to defeat justice on hair splitting technicalities. Procedural law is intended to facilitate and not to obstruct the course of substantive justice. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law. In such a case, it is the duty of the Court to ascertain the substance of the pleadings to determine the question. It is not desirable to place undue emphasis on form, instead the substance of the pleadings should be considered. Whenever the question about lack of pleading is raised, the enquiry should not be so much about the form of the pleadings, instead the court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings parties knew the case and they proceeded to trial on those issues by producing evidence, in that event it would not be open to a party to raise the question of absence of pleadings in appeal. The pleadings have to be interpreted with latitude and not with formalists rigour. In order to determine the precise nature of the action, the pleadings should be taken as a whole. Stray or loose expression, which abound in in artistically drafted plaints should not be taken into account. Real substance of the case should be gathered by construing the pleadings as a whole. It is the settled legal position that if the parties have understood the pleadings of each other correctly, issue was also framed by the Court, the parties led evidence in support of their respective cases, then the absence of specific plea would make no difference.

A case not specifically pleaded can be considered by the Court only where the pleadings in substance, though not in specific terms, contains the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon. This should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactorily proved by evidence.

But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is, did the parties know that the matter in question was involved in the trial? and did they lead evidence about it? If it appears that the parties did not know what the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another."

In the light of this legal position, when we look at the pleadings in this case, it is true neither in the written statement nor in the reply notice, the defendant has specifically pleaded that after the dissolution of the earlier partnership on 5.4.1980, the next day a new partnership deed came into existence on 6.4.1980. But the pleadings contain an averment that after the dissolution of the earlier partnership on 05.04.1980, the partnership continued and deed of retirement came to be executed by the defendant on 31.8.1986. It is the specific case of the defendant that by virtue of the dissolution dated 31.8.1986, the plaintiff who had half share in the schedule property gave up his right in the said property and therefore, plaintiff has no right, title or interest in the schedule property. Therefore, the question for consideration is, "Whether there was retirement deed on 31.8.1986 as pleaded by the defendants and under that document, whether the plaintiff gave up his right to the schedule property?"

The retirement deed or the dissolution deed presupposes the existence of a partnership. Now the question is, Whether the plaintiff was taken by surprise? Whether the plaintiff was put to disadvantageous position by the defendants not pleading the creation of a new partnership on 6.4.1980. It is in this context, we have to see the conduct of the plaintiff at an undisputed point of time and how he and his wife have responded to the situation.

Ex. D.26 is a copy of the application filed under Sec. 8 of the Arbitration Act, 1940, which is numbered as A.C. No. 11/1984. The petitioners in this petition are M. Devadas Nayak and his wife Hemaltha D. Nayak and it is filed against M. Ramesh Nayak - the plaintiff in the suit and his wife Amitha R. Nayak. The said application disclose that the petitioners and respondents therein are partners in the business carried on in the name of `M.Vaman Nayak and Sons''. The partnership is governed by the terms of the deed of partnership dt. 06-04-80 executed by the petitioners and the respondents. It further states, it has become impossible to carry on the partnership business to the mutual advantage of the partners on account of difference of opinion between the parties. Hence, the partnership has to be dissolved. However, to avoid closure of the business with liability to pay retrenchment compensation, it is advisable that at least two of the partners should continue the business after dissolution and settlement of accounts. The petitioners are willing to take over the business and continue the firm after settlement of accounts and payment of the share of the respondents. Alternatively, the petitioners are willing that the respondents may take over the firm after settlement of accounts and payment of the share of the petitioners. It is further averred, by notice dt. 14-10-84 sent by the petitioners under certificate of posting to the respondents, the petitioners proposed the appointment of Sri. P. Madhava Rao, Advocate, Bunts Hostel road, Mangalore as the sole arbitrator. The respondents have not communicated their concurrence or dissent though more than 15 days have passed since the receipt of the notice by them. Therefore, they filed a petition for appointment of Sri. P. Madhava Rao as the arbitrator to adjudicate and deliberate between the petitioners and the respondents relating to the partnership of M/s. M. Vaman Nayak and Sons. This petition is dt. 04-12-84. After service of notice, the first respondent filed statement of objections. He contended, there are no disputes between the partners to the best knowledge of these respondents. The application is silent about the alleged disputes. The business is being carried on to the mutual benefit of all the partners. The partnership business cannot be and need not be dissolved. It is also not possible to dissolve the business at this stage as there are lot of liabilities due to the Bank, etc. The term suggested by the petitioners in the application is not acceptable to the respondents. It is not known whether the petitioners are trying to oust the respondents or they want to retire from the partnership business, for their own good. This cannot be done by resorting to this procedure. Assets and liabilities of the firm are clearly mentioned in the account books and there has been no dispute in this respect. Even so, shares of each partner is found in the account books or balance sheet or in the statement of loss and profit. There are no disputes to refer to arbitration. The notice dt. 14-10-84 was not served on the respondents. Hence, the question of appointing an arbitrator does not arise. Sri. P. Madhava Rao, Advocate was a lawyer of the petitioners and therefore, he sought for dismissal of the application. Whereas, the second respondent filed a memo adopting the said statement. This statement of objection was filed on 26-07-85. This document is not disputed.

From the aforesaid material on record, it is clear that the petitioners in the said petition who are defendants in this case, have specifically mentioned about the partnership dt. 06-04-80. They wanted the said partnership to be dissolved and they wanted appointment of an arbitrator to dissolve the disputes. The reply given by the plaintiff in the suit is, there are no disputes between the partners. The partnership business cannot be and need not be dissolved. It is also not possible to dissolve the business at that stage, as there are lot of liabilities due to the Bank, etc. Therefore, the plaintiff herein in categorical terms has admitted the existence of a partnership dt. 06-04-80 and he did not want the said partnership to be dissolved as there is no dispute between the parties. When this was the stand of the plaintiff, at an undisputed point of time in the year, 1985, it is too late in the day for him to contend, because the defendants have not pleaded in the written statement the existence of a partnership deed dt. 06-04-80, their case cannot be believed, even if they have adduced evidence showing the existence of the partnership dt. 06-04-80, though the partnership deed dt. 06-04-80 has not been mentioned in the written statement/defence. The partnership was dissolved on 31-08-86. They have produced evidence to show, the firm was dissolved on 31-08-86 by the plaintiff and his wife executing a Deed of Retirement and not a Deed of Dissolution.

In this context, it is useful to refer to Ex. D.41. It is a letter addressed by the plaintiff to the Deputy Regional Director, which is dt. 28-01-93. It was written in reply to the notice served on him and his wife on 18-01-93, when the cheque issued by them had bounced. In the said letter, they have categorically stated that the plaintiff ceased to be the partner of ''M/s. Vaman Nayak and Sons'', since 01-09-86. Hence, the responsibilities of the said firm does not hold on him, but on the existing continuing partners. The copy of the dissolution deed is enclosed. They also stated that they have received numerous show cause notices from the Deputy Regional Director, E.S.I. Corporation after the date 01-09-86 and they have also filed a criminal case against them in the JMFC Court for nonpayment of the E.S.I. dues that are due from the firm. As they have informed that they are responsible to the said firm only up to 31-08-86 and the responsibility lies entirely and solely on the existing partners. Therefore, they requested to withdraw all the proceedings against them and not to hold them responsible for the commitment of the said firm and hold only the existing partners of the firm. They also gave particulars of the existing partners as : (1) M. Devadas Nayak, (2) Hemalatha D. Nayak, and further stated they are the partners responsible for all the deeds, action and the commitment of the said firm from 01-09-86. Along with the said letter, they have enclosed the Deed of Retirement. In the said Deed of Retirement, it is stated that the plaintiff and defendants were carrying on the business of manufacture under the name and style of ''M.Vaman Nayak and Sons'', pursuant to the date of partnership executed on 06-04-80. Whereas, the retiring partners expressed their desire to retire from the partnership with effect from 31-08-86, as a result of the various disputes and misunderstanding which arose among the partners. Therefore, the plaintiff after mutual discussions and deliberations agreed for relieving the retiring partners from the partnership with effect from the close of business on 31-08-86, on the terms and conditions mutually agreed to. It was further made clear, the above said retirement shall not have the effect of dissolving the firm by the name of M. Vaman Nayak and Sons. The continuing partners shall have the complete right to continue to carry on the same business under the name and style of M. Vaman Nayak and Sons, taking over all assets and liabilities of the firm as on 31-08-86 and they do hereby take over all such assets and liabilities of the firm. The retiring partners have agreed that the amount of Rs. 5,25,000/-is payable to them from the partnership within 76 months from the day of retirement towards their share in the assets of whatever nature of the firm. In consideration of the covenant, the continuing partners would hereby agree that they have no claim against the retiring partners towards any amount of deficit irrespective of capital by reasons of their representative share in the losses or in the drawing, since the inception of the firm till the date of retirement. In consideration of the mutual covenant as in clause 2, retiring partners jointly and each one of them severally relinquished and released all their right, title and interest and possession in all the properties, assets, book debts, etc. of the firm in favour of the said continuing partners with effect from 31-08-86 and the continuing partners undertake to save the retiring partners of all the liabilities of whatsoever nature of the firm, including the amount due to the State Bank of India and other Banks, the sales tax and income tax liabilities, provident fund and E.S.I. liabilities and accrued dues or hereafter accruing dues to the Government or other authorities or person or persons. Therefore, the Deed of Retirement made it clear, the Partnership Deed came into existence on 06-04-80, the plaintiff retired from the said partnership by executing the Deed of Retirement dt. 31-08-86 and in consideration of their capital contribution as well as share in the partnership, they received a sum of Rs. 5,25,000/- payable in 76 equal monthly installments and relinquished all their right, title and interest in the assets of the partnership, which included the schedule property.

The argument was, the original retirement deed is not produced. No foundation is laid for leading secondary evidence to reject the partnership deed and retirement deed produced by the authorities who had issued attested copies. In these circumstances, in the absence of the original being produced, the trial Court committed a serious error in acting on the secondary evidence and dismissing the suit.

As stated earlier, D.W.1 has categorically stated that he is not in possession of the original. The original may be in the possession of the plaintiff or may be in the possession of the authorities. That is the foundation he has laid to enable him to lead secondary evidence. By way of secondary evidence, xerox copies of all these documents were produced. Attested copies are also produced. Though the plaintiff has denied the existence of such documents, in the light of the statements in Ex. P.27, partnership dt. 06-04-80 was admitted. Subsequent deeds were also admitted. In Ex. D.41 they have categorically stated, they have retired from the partnership firm on 31-08-86 and they have executed Deeds of Retirement and they have enclosed a xerox copy of the said deed of retirement. Therefore, when the defendants admit the existence of the partnership on 06-04-80, put forth a case of retirement as per their retirement deed dt. 31-08-86, and further state in Ex. D.41, from 01-09-86 they are not liable to any extent, regarding the liability of the partnership firm and the authorities have to proceed against the defendants of the firm, it is now not open to them in the circumstances to contend that the partnership dt. 06-04-80 is not proved, the deed of retirement dt. 31-08-86 is not proved and the schedule property continues to be the joint property of the plaintiffs and the defendants.

It is in this context, the trial Court on careful consideration of the entire oral and documentary evidence on record, has rightly held, the defendants have proved the partnership of 06-04-80. They have proved the deed of retirement dt. 31-08-86 and consequently, the contents of the document are proved, which goes to show that the plaintiff relinquished all his right, title and interest in the schedule property on receipt of consideration of Rs. 5,25,000/- payable in 76 monthly instalments. They have disowned their liability accruing subsequent to 01-09-86 and they have made it very clear that the authorities should proceed against the partnership firm from the continuing partners. Therefore the finding recorded by the trial Court on this aspect cannot be found fault with.

In this context, it is necessary to look into the judgment of the Apex Court in the case of N. Khadervali Saheb (Dead) by LRs. and Another Vs. N. Gudu Sahib (Dead) and Others, , where it has been held that:

"A partnership firm is not an independent legal entity, the partners are the real owners of the assets of the partnership firm. Actually the firm name is only a compendious name given to the partnership for sake of convenience. The assets of the partnership belong to and are owned by the partners of the firm. So long as partnership continues each partner is interested in all the assets of the partnership firm as each partner is owner of the assets to the extent of his share in the partnership. On dissolution of the partnership firm, accounts are settled amongst the partners and the assets of the partnership are distributed amongst the partners as per their respective shares in the partnership firm. Thus, on dissolution of a partnership firm, the allotment of assets to individual partner is not a case of transfer of any assets of the firm. The assets which hereinbefore belonged to each partner, will after dissolution of the firm stand allotted to the partners individually. There is no transfer or assignment of ownership in any of the assets. This is the legal consequence of distribution of assets on dissolution of a partnership firm. The distribution of assets may be done either by way of an arbitration award or by mutual settlement between the partners themselves. The document which records the settlement in this case is an award which does not require registration under Section 17 of the Registration Act since the document does not transfer or assign interest in any asset."

In the instant case, it is not a case of dissolution. The firm which owned this property by virtue of a registered deed of surrender and registered sale deed which came into existence on 29-07-77 was dissolved on 05-04-80. Immediately thereafter on 06-04-80, a new firm was constituted with the same partners. Therefore, the partnership asset continued to be the partnership asset of the new firm. The said new firm continued up to 31-08-86. On 31-08-86 by a Deed of Retirement, the plaintiff retired from the partnership firm. On plaintiffs retirement from the partnership firm, the partnership business was not dissolved. Partners continued to carry on the same business with the partnership assets. On retirement, on receipt of Rs. 5,25,000/- the retiring partners relinquished their right, title and interest in the partnership firm and its assets. As the partnership asset belonged to the partnership firm and the partnership continued, the asset continued to be the asset of the partnership firm. The retiring partners ceased to have any interest in the said partnership asset on their retirement. Their contribution to the partnership and their share in the partnership was adjudicated at Rs. 5,25,000/- and they were paid the said amount in the manner set out in the said document. In consideration of the same, they relinquished their interest in the partnership firm as well as its assets and therefore the retiring plaintiff ceased to have any interest in the schedule property from 01-09-86. They have said so categorically in Ex. D.41 which is dt. 28-01-93. Nearly for more than twenty long years, they did not raise their little finger to claim any right in the partnership or in the partnership assets. It is only on 14-07-06, after the death of Devadas Nayak, they filed a suit contending that on dissolution of the partnership on 05-04-80, the partnership assets became the assets of the partners and the plaintiffs and defendants became co-owners and that there is no division, they are entitled to half share. They suppressed the fact of a new partnership firm coming into existence on 06-04-80, taking over the assets and liabilities of the previous partnership firm and the plaintiffs retiring from the said partnership firm by executing a Deed of Retirement on 31-08-86 and receiving towards their share, consideration of Rs. 5,25,000/-. Therefore, the plaintiff has not come to the Court with clean hands. He has suppressed material facts.

The trial Court on appreciation of the oral and documentary evidence on record, rightly held, on retirement on 31-08-86, the plaintiff has no right in the schedule property. Therefore, we do not find any error committed by the trial Court in dismissing the suit of the plaintiff for partition and separate possession of his half share in the schedule property.

Point No. 2:

Under the terms of the retirement deed, the retiring partners were entitled to a sum of Rs. 5,25,000/- which is payable in 76 equal monthly installments. The material on record does not disclose whether the defendants had paid Rs. 5,25,000/- As could be seen from the records, though the partnership firm owned valuable immovable asset, it had incurred huge liabilities. Authorities had initiated several legal proceedings under various enactments. It is under these circumstances, dispute arose between the parties because of non-cooperation among the partners. The only way was to allow one fraction to retire and another fraction to carry on the business. Option was given to the defendants as is clear from Exs. P.26 and 27. The plaintiff pleaded that there is no dispute at all. It is thereafter the Deed of Retirement came into existence on 31-08-86. The amount payable to the retiring partners was crystallized at Rs. 5,25,000/-. It is obvious that the amount was not available with the defendants to make the payment. Therefore, it was agreed that the same would be made payable in 76 equal monthly installments. There is no evidence on record to show that any one of these installments was ever paid. Probably after the death of Devadas Nayak, when the plaintiff was sure that he would not get any amount from his L.Rs., has come up with this case, seeking for his half share in the schedule property.

Though the defendants have set up the plea of retirement, in the pleadings they have not stated what is the amount agreed to be paid under the Deed of Retirement. They are in possession of the books of accounts of the firm. No evidence was adduced to show the said payment. That appears to be the real cause for this litigation. It was contended on behalf of the defendants, the claim for the said amount is barred by limitation and therefore, the question of they paying the said amount at this stage, would not arise. Moreover, they have not put forth their claim. It only shows, both of them are quite intelligent and the plaintiff demanded his 50% of the share in the immoveable property, taking advantage of the fact that there is a considerable appreciation of value in the immovable property. The defendants are taking advantage of the fact that there is no alternative prayer and therefore they deny the said claim. Even in the absence of a specific prayer, the Court has ample prayer under Order VII Rule 7 of CPC to grant such relief which is just to the same extent as if it had been asked for. This provision read along with Order XXXXI Rule 33, to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection. Therefore when the Deed of Retirement is held to be proved and the said document is the foundation of the defence of the defendants, if they want to have the benefit of the said deed of retirement, they should comply with the said terms of retirement deed namely, pay Rs. 5,25,000/- to the plaintiff towards full and final settlement of his claim. It is only thereafter they would be entitled to the entire schedule property exclusively.

Therefore in the facts of this case, we deem it proper to pass a decree for payment of Rs. 5,25,000/-with interest at 10% per annum from the date of the deed of retirement till the date of payment.

Hence, we pass the following order:

"a) The appeal is partly allowed.

b) The judgment and decree of the trial Court holding that the plaintiff has no right in the schedule property is hereby confirmed and the plaintiff is not entitled to any partition and separate possession of his half share in the schedule property.

c) The defendants shall pay a sum of Rs. 5,25,000/- to the plaintiff with interest at 10% per annum from 01-09-86 till the date of payment."

Parties to bear their own cost.