Panyam Thirumalappa vs Alasyam Ramappa and Others

Varadachariar, J.—This second appeal arises out of a suit for the recovery of the plaintiff''s one-third share in certain items of immovable

property and for incidental reliefs. It is the plaintiff''s case that his deceased brother Yerikalappa, the second defendant and Nettekalappa the

father of the first defendant were partners in an Abkari business from 1892 to 1904, that out of the funds of that business they purchased the suit

properties, that in 1904, there was a dissolution and settlement of accounts between them evidenced by Ex. A, that under that arrangement

provision was made for the discharge of debts and for division of the outstandings and that as regards the immovable properties which had been

purchased with the funds of the partnership, the three partners agreed that they should be entitled to the same in equal shares. The plaint adds that

for many years after the date of Ex. A, Yerikalappa and after his death the plaintiff as his surviving brother were receiving his one-third share of the

income of the suit properties. The plaint prayed for division of the immovable properties thus held in common. The first defendant, who is the

principal contesting defendant, pleaded ignorance of the alleged partnership and of all that is said to have happened in 1904, though in the written

statement some kind of reference is made to a dissolution 25 years ago. The positive case put forward on behalf of the first defendant was that the

items now claimed by the plaintiff to be the common properties of the partners were the self-acquisitions or separate properties of the first

defendant''s father and the first defendant also raised pleas of limitation and adverse possession.

A number of issues were framed in the case and they were substantially decided in the plaintiff''s favour by the first Court which gave him a

decree for partition. On appeal, the learned District Judge reversed the trial Court''s decree and dismissed the suit partly on certain grounds of law

and partly on what may best be described as a mixed finding. Hence this second appeal by the plaintiff. So far as the lower appellate Court''s

judgment can be described as embodying a finding of fact, such finding is based on such an obviously erroneous approach to the case that I am

unable to accept it as a finding binding on me.

The learned District Judge accepts the existence of the partnership alleged in the plaint and its dissolution in 1904, and also seems to agree with

the trial Court''s view that the items of immovable property now claimed were purchased with the funds of that partnership. Though with reference

to Ex. A he makes some observations suggesting a feeling of distrust in his mind, I do not read them as throwing any doubt on the genuineness of

Ex. A because the first defendant himself accepts its genuineness. What seems to have oppressed the learned Judge is that in spite of Ex. A the first

defendant''s father was allowed to have the properties registered in his own name during all the time that he lived, that is, up to 1918, and that he

was allowed to enjoy the properties exclusively. The strongest disproof of the exclusive enjoyment or exclusive title of the first defendant''s family is

the admitted partition deed Ex. D in that family which proceeds on the footing that family had only a third share in these items; and without any

conceivable reason or explanation, the learned Judge brushes it aside with the remark that the recital in Ex. D that the first defendant''s family was

entitled only to a third share in those properties might be due to the ignorance of the first defendant as to the exact properties to which he and his

father are entitled. The first defendant never pleaded ignorance and till he came into the witness-box he had never suggested that there has been

any mistake, in this respect in Ex. D. Even when he was put questions about Ex. D he nonchalantly pretended ignorance that there was any such

statement in Ex. D. It passes my comprehension how the learned Judge when asked to consider the weight of an admission of that kind by a party

could ignore it on some guess of his own without any plea or explanation by the party making the admission.

If it were necessary for the case, I should be prepared to say that Ex. D is the strongest proof that the first defendant''s family must have been

giving to the other two sharers their shares of the income; but it is not necessary for the purpose of the case to come to any such finding. It is

sufficient to rely upon Ex. D for two purposes (1) to repel all suspicion which the learned Judge gratuitously casts on Ex. A because so late as in

1921, Ex. D asserts just the one-third right which Ex. A gave to the first defendant''s family, and (2) to negative the plea of adverse possession; the

first defendant candidly admits in the witness-box that he never asserted any exclusive title in himself to the knowledge of the plaintiff and in the

face of the claim of a title only to one-third in Ex. D it is impossible to hold that the first defendant who was only a co-tenant could ever have

proved ouster of the plaintiff.

The learned Judge''s suspicion against Ex. A seems to have been excited by the disappearance of the later pages in Ex. A. No question has

been put suggesting any particular hypothesis as to this disappearance. In the very nature of things the book could not have been in the plaintiff''s

custody from the outset and so long as the genuineness of Ex. A is undisputed, it seems to me immaterial for the purpose of the decision of the

questions raised in this case, what happened in the course of the later business said to have been carried on in partnership between the plaintiff and

the first defendant''s father. If the first defendant had pleaded that in connection with the later partnership the rights of the parties as settled at the

time of Ex. A had been changed, I can understand a comment about the disappearance of the later pages in Ex. A or the non-production of

accounts relating to the later partnership. Neither in the written statement nor in his evidence did the first defendant put forward any such case. His

whole case was that the property was from the very beginning the separate property of his father except as regards a one-third in certain items in

respect of which the case as put forward through D.W. 2 was that the plaintiff''s brother gave it up some time in 1901. This last story is clearly

disproved by Ex. A. In this state of the pleadings, I am unable to appreciate the learned Judge''s criticism against the plaintiff''s case, on the ground

that the Court has not been put in possession of any information as to what happened in connection with the later partnership. Neither party made

these later transactions any part of the case and the plaintiff was therefore not called upon to adduce any information about what happened during

that later partnership. Knowing something of the habits of the people of this country, I am unable to attach any importance to the registry in the

revenue records in the first defendant''s father''s sole name or to the issue of patta in his name. In the face of Ex. D, these considerations seem to

me very slender to base any argument upon. I have therefore no doubt that the first defendant on whom the onus should properly be laid of

disproving the continuance of the title evidenced by Ex. A has wholly failed to discharge that onus and that on that ground the finding of the trial

Court in plaintiff''s favour on the question of title should be restored.

The learned District Judge has also decided against the plaintiff on two points of law (1) a question of limitation and (2) a point of registration.

So far as the decision on the auestion of limitation is concerned, I am unable to accept the learned Judge''s conclusion that Article 106 is any bar to

the maintainability of the present suit. In Gopala Chetty v. Vijaya-raghavachariar (1922) 43 M.L.J. 305 : L.R. 49 IndAp 181 : ILR 45 Mad. 378

(P.C) the Privy Council recognise the possibility that on a dissolution the partners may settle the accounts of the partnership between themselves. If

that has been done, there is no longer any question of a suit for dissolution and accounts within the meaning of Article 106. That is just what

happened in this case. Ex. A is admittedly a memorandum drawn up on the dissolution of the partnership and embodying the settlement between

the partners as to their respective rights on settlement of the accounts of that partnership. I fail to see how any question of Article 106 arises after

that stage. The decision in Gobardhan v. Ganeshi Lal (1911) 11 I.C. 288 cited before me by the learned Counsel for the respondent is clearly

distinguishable. In that case, there had been no settlement of accounts between the partners after dissolution and the suit itself was brought as one

for dissolution and taking of accounts. The Court however found that by reason of the death of one of the partners, the partnership had become

dissolved in law more than three years before the institution of the suit. It was therefore obviously a case in which the accounts of a dissolved

partnership had to be taken. To such a suit Article 106 clearly applies. An attempt was then made to dissociate so much of the plaintiff''s claim as

related to certain items of immovable property from the bar under Article 106. The learned Judges, if I may say so, rightly held that such a

dissociation was impossible. It was not a suit governed by Article 142 or Article 144; the immovable properties were claimed on the very ground

that they formed part of the partnership assets and where the accounts had not been taken, no Court could grant relief in respect of some items

alone of the partnership without taking the accounts of the partnership as a whole. It is in those circumstances that the learned Judges observed that

a right to a division of the house could not be established until after a full account had been taken of all the partnership assets and as a suit for the

latter purpose was barred, it was not possible to grant any independent relief in respect of the items of immovable properties alone.

The objection under the Registration Act has caused me greater difficulty, not on the particular ground adopted by the learned District Judge but

on a somewhat different ground. The learned District Judge speaks of a transfer of title from the partnership to the partners individually, as the

reason for insisting upon the registration of Ex. A. That perhaps is not a correct way of putting it; because a partnership is not a legal entity like an

incorporated body and during the subsistence of the partnership the title to immovable properties brought into the partnership or purchased with its

funds vests in the partners and not in the partnership as such. As pointed out in R.N. Samuvier and Another Vs. R.N. Ramasubbier, it follows from

the provisions of Section 253 of the Contract Act that all immovable property purchased with partnership funds must be deemed to be held by the

partners as joint owners. Though Ex. A is therefore not a transfer from the partnership to the individual partners, there can be no doubt that a

settlement arrived at on a dissolution might vest the immovable properties of the partnership in the former partners in proportions very different

from the interests held by them during the subsistence of the partnership. Section 253(1) of the Contract Act provides that the share of each

partner in the partnership property is the value of his original contribution increased or diminished by his share of profit or loss. It would thus follow

that while partners may be joint owners of the partnership property they need not necessarily be owners in equal shares. On a dissolution, when

the partners, settle their affairs, they may either allot to one or other of them particular items in entirety or in varying shares not necessarily in the

particular proportion of the share of each partner in the whole partnership property. There is much to be said in favour of the view taken in R.N.

Samuvier and Another Vs. R.N. Ramasubbier, that a question of registration may arise in such cases, though there is also authority to the contrary.

If in the present case there was anything to suggest that the arrangement under Ex. A gave to the various partners shares in immovable property

different from the shares which they held prior to the dissolution, the question of registration of Ex. A might have been a more serious difficulty in

the plaintiff''s way. But there has been no suggestion anywhere that during the partnership stage the partners were not entitled to equal shares and if

all that happened at the time of Ex. A was that their respective rights and liabilities were fixed in particular ways as regards the movable assets and

that as regards the immovable property they continued to hold the same shares in them as they had prior to the dissolution, I do not feel that I am

bound to reject Ex. A on the ground on non-registration. u/s 45 of the Transfer of Property Act, the presumption in the case of co-owners, in the

absence of evidence to the contrary, is that they held the property in equal shares and that is just what Ex. A provides for. It is on this narrow

ground that I have come to the conclusion that Ex. A is not inadmissible on the ground of want of registration.

I accordingly allow the second appeal and setting aside the decree of the lower appellate Court restore the decree of the District Munsiff with

costs here and in the lower appellate Court, payable by the first defendant.

Leave granted.