Peeran Sahib and another vs Pedda Jamaluddin Sahib and others

Subba Rao, C.J.—This is an appeal by the plaintiffs against the decree and judgment of the Court of the Sub-ordinate Judge, Cuddapah, dismissing the suit filed by the appellants for partition and separate possession of their share in the A schedule properties and for dissolution of partnership and settlement of accounts in respect of Khajameah Company.

The following section of the genealogy may be useful to appreciate the facts and the contentions of the parties.

(See genealogy on next page.)

Khajameah shown in the genealogy possessed large extent of moveable and immoveable properties. He was carrying indigo business in partnership with Muhammad Hussain, Ibrahim Sahib and Murthuja under the name and style of Khajameah Company wherein Khajameah owned half share and the other half was owned by the other partners. The company owned moveable and immoveable properties, outstandings and other stock-in-trade. Khajameah died at Proddatur in 1900, leaving behind him his widow and four sons, namely, Aminuddin, Hussain, Dastagir Sahib and Kamal Sahib and a daughter Syda Bi. On 14-7-1900 he executed a will whereunder he directed that the said business should, after his death, be continued by his four sons along with other partners.

He further gave directions that one of his sons and a representative of the other partners should jointly manage the business. After the death of Khajameah, the business was carried on, as it was carried on before, till the death of Muhammad Hussain in 1903 and Aminuddin and Muhammad Hussain were jointly managing the business. Thereafter, Ibrahim jointly manager the same with Aminuddin till Ibrahim died in 1907. After his death, Murthuza Sahib was in joint management of the business until his death. After he passed away in 1911. Muhammad Yusuf, the brother of Muhammad Hussain was in management till 1913. After the death of Yusuf in about 1913, Aminuddin jointly managed the same assisted by the 1st defendant the son of Ibrahim Sahib and Muhammad Hanif, son of Muhammad Yusuf.

Aminuddin died in 1926 when his brother Dastagiri Sahib, the third son of Khajameah jointly managed the business with the 1st defendant and Hanif Sahib. After the death of Dastagiri Sahib in 1940, the 8th defendant and another grand-son of Khajameah were jointly managing the business with the 1st defendant and Hanif Sahib. The 1st plaintiff is the son of Syda Bi, the daughter of Khajameah and the 2nd plaintiff is Syed Peeran''s daughter. Syed Peeran was married to Jaibun Bi, the grand-daughter of Khajameah''s second son Hussain, Syda Bi, her husband Syed Hussain and their daughter-in-law Jrbun Bi died in 1918, 1934 and 1940 respectively. The plaintiffs, who are the son and grand-daughter of Syeda Bi and also the husband and the daughter of Jaibun Bi filed the suit for the aforesaid reliefs.

It was alleged in the plaint that the business of Khajameah was carried on by the managers chosen from the representatives of the two main shares and the said managers were managing the affairs of the company for themselves and for the benefit of all the heirs of Khajameah and the partners including the heirs of such of those who died subsequently. On those allegations, though they claimed a higher share, they finally accepted that, as heirs of Syeda Bi, Syed Hussain and Jaibun Bi, they would be entitled only to 65/864th share in Khajameah''s interest in the business. They also claimed the same share in his personal properties.

Defendants 1, 2 and 7 to 10 represent the branches of Dastagiri Sahib and Ibrahim Sahib respectively and defendants 4 to 7, 13 and 14 represent the branches of Muhammad Hussain and Muhammad Yusuf respectively. The 12th defendant is the widow of Khajameah''s eldest son Aminuddin. The defendants'' version was that after the death of Khajameah the business was not conducted for the benefit of all the heirs of Khajameah but only for the benefit of sons of Khajameah and the other partners and that there was no agreement that the business was to be carried on for the benefit of all the heirs of the original partners born and to be born. They averred that the actual partners of the business were registered under the Partnership Act and that the business was carried on for the benefit of those partners. They also pleaded that the suit was barred by limitation.

The learned Subordinate Judge held on the evidence, that either the 1st plaintiff or his wife Jaibun Bi or his father Syed Hussain or his mother Syeda Bi was not recognised as a partner of the suit firm or was given any share in the profits of the company at any time. The learned Judge held that the suit in so far as it asked for rendition of accounts of the business was barred by limitation under Art. 106 of the Indian Limitation Act and in so far as it prayed for division of the personal properties of Khajameah; it was barred under Art. 145. In the result the suit was dismissed with costs of the contesting defendants. The plaintiffs preferred the above appeal.

The main question in the appeal is whether Syeda Bi, Syed Hussain or Jaibun Bi under whom the plaintiffs claim, were partners of Burandingari Khajameah Company. Ex. B-1 dated 14-6-1900 is the will executed by Khajameah before his death. In paragraph 6 of the will, it is stated thus:

After my death, my sons shall possess right to half-share relating to my half share and (1) Muhammad Hussain (2) Ibrahim Saheb and (3) Murtuza Saheb shall possess right to half share in the aforesaid joint business; the aforesaid joint business shall be named Khajameah and Company; in respect of my sons'' half share there shall be entry in the name of my eldest son, Aminuddin and in respect of the half share of other three persons shall be entry in the name of Muhammad Hussain and all proceedings and business shall be carried on accordingly.

There is no evidence that late Khajameah''s heirs assented to the will after his death and the learned Judge found that the will was not valid. But though the will might have been invalid, it is

clear from the evidence that the business was carried on as per the directions given in paragraph 6. The will clearly excluded Syda Bi. It is also admitted that the partners doing business from time to time were registered as partners under the Partnership Act, and neither Syda Bi, Syed Hussain nor Jaibun Bi was registered as a partner.

There is also not a scintilla of documentary evidence to prove that any of them was ever treated as a partner. Admittedly, no amounts were paid towards the sharers in the business nor do the accounts disclose that any separate ledger folios were kept for them nor were any amounts credited to such accounts. There was no correspondence or notice wherein their claim to a share in the business was admitted by persons who were actually doing business.

Strong reliance is placed upon the proceedings in O. S. No. 8 of 1928 and O.S. No. 5 of 1944 on the file of the District judge, Cuddapah, and it is contended that in the written statements the defendants admitted that the plaintiffs had shares in Khajameah Company, O.S. No. 8 of 1928 was a suit filed by Fatima Bi, the widow of Aminuddin, for a share in the assets of Aminuddin. The suit was filed against Dastagiri Saheb the brother of Aminuddin and others. The defendants took the objection that the suit was bad for non-joinder of the other heirs of Khajameah and thereupon his widow Farid Bi, the 1st plaintiff and Hussain Bi were impleaded as party defendants. Ex. A-2 was the written statement filed by Syed Khaja Hussain and it was adopted by all the other defendants.

There was no admission in the written statement that either Syda Bi or Syed Hussain or Jaibun Bi or Syed Peeran was a partner of Khajameah and company. It was only mentioned that Syda Bi''s son and daughter Farida Bi were according to Muhammadan Law entitled to inherit Khajameah''s share including his share in Khajameah company. The statement that Syda Bi, Syed Hussain and the plaintiff were entitled to the share of Khajameah would not, in our view, imply an admission that they were admitted as partners in the business. Ex. A-8 was the judgment of the District Judge in that suit and there was no finding in that suit that any of the aforesaid four persons was admitted as a partner in the business.

Nor does O. S. No. 5 of 1944 carry the matter further. That was a suit filed by the widow and the son of Hussain, the second son of Khajameah. By the time that suit was filed, Syda Bi, Hussain Bi and Syed Hussain died. The 1st plaintiff was added as the 12th defendant and the 22nd defendant was the 2nd plaintiff. In the plaint it was alleged that after the death of Khajameah, the business he left was continued as directed by him under the name of Burandingari Khajameah Company for the benefit of all the heirs and partners concerned till that day. In the written statements filed by the contesting defendants, those allegations were definitely denied.

It was stated that after the death of Amlnuddin, the business of Khajameah company was not carried on for the benefit of all the heirs of Khajameah born and yet to be born or that the business was carried on only by Dastagiri Saheb and the 4th defendant for their sole benefit. That suit ended in a compromise and one of the terms of the compromise was that the 13th defendant and his son and daughters, defendants 14 to 21 should be given Rs. 6,000/- in lieu of Syda Bi''s share. 13th defendant was the son-in-law of Syda Bi. In the written statement filed by the contesting defendants, there was no admission that either Syeda Bi or her husband or Jaibun Bi was admitted as a partner in the business.

It is true that under the compromise decree a sum of Rs. 6,000/- was paid to the other heirs of Syda Bi in lieu of Syda Bi''s share. Though this may imply an admission that Syda Bi had a share in the assets of Khajameah, we cannot from this cryptic recital, hold that there was a clear admission that after the death of Khajameah, Syda Bi was taken as a partner in the business. It may be that the amount was given to purchase peace towards the profits which accrued by utilising the share of Syda Bi in the assets left by Khajameah. Be that as it may, there was absolutely no admission that either Syed Hussain or the plaintiffs were partners in the business.

The oral evidence does not advance the case any further. P.W. 1 is the plaintiff. He says in his evidence that he filed O. P. 6 of 1941 in forma pauperis in the District Court, Cuddapah, for partition of his share but it was dismissed for default as the 1st defendant and Muhammad Hanif induced him to get it dismissed by promising to give him something. He also admits that he was the 12th defendant in O. S. No. 5 of 1944 but he did not file any written statement. He says that he did not claim a share in that suit as the 1st defendant and the 8th defendant induced him not to do so saying that they would settle his share.

He would add that they were paying Rs. 10/-and Rs. 5/- now and then and so he trusted them. This evidence, even if entirely believed, cannot sustain the case of the plaintiffs that they were partners in the company. From the mere fact that out of grace or affection some small amounts were paid to the plaintiffs, it is not possible to conclude that those petty amounts were paid towards the share of the plaintiffs. In cross-examination he says that on the whole he was paid about Rs. 120/- per annum which works out at Rs. 10/- per month. This witness though he claims to be a partner of the firm never set up a claim from the date of death of his wife Syda Bi, which took place in 1918, till he filed a pauper petition in the year 1941.

Nor was he paid any amounts, which could properly be attributed towards the profits pertaining to his share. The same dribblets of money received by him must have been paid by the defendants not as a partner but as a poor relative. The 1st defendant as D.W. 1 asserts that they were never admitted as partners. As regards the compromise decree in O. S. No. 5 of 1944, he says that as the elders intervened, they gave a sum of Rs. 6,000/- to the 1st plaintiff''s sister''s children in lieu of Syed Bi''s share. He cannot explain why it was so described. But as we have already pointed out that Syda Bi had admittedly a share in assets left by Khajameah, that description would not amount to an admission that Syda Bi was admitted as a partner of the firm.

The oral evidence adduced on the side of the plaintiffs is absolutely worthless and it cannot sustain the case of partnership. In this state of evidence, we have no hesitation to hold that the plaintiffs have failed to prove that either Syda Bi or Syed Hussain or Syed Peeran or Jaibun Bi was ever admitted as a partner of Khajameah company.

Under S. 42 of the Indian Partnership Act, subject to a contract between the parties, a firm is dissolved by the death of a partner. In the present case, the partnership dissolved by the death of Khajameah. The subsequent partnerships were entered into Between specific individuals and they were registered as partners under the Partnership Act.

The argument of the learned counsel is that under an implied agreement, the partnership business was carried on by the partners ex facie shown as partners not only on their own behalf but also on behalf of all the members of the families, and that after the death of any of the partners, his legal representatives automatically stepped into his shoes. But as we have already pointed out there is absolutely no evidence on record for implying such a contract between the parties to exclude the operation of the statutory termination of the partnership under S. 42 on the death of one of the partners.

The decision of a Division Bench of the Madras High Court in S.K. Sahul Hamid and Another Vs. S.M. Sulthan and Others, is instructive. There when. a similar contention was raised the learned Judges negatived that contention. At p. 24 (of Mad LJ) : (at P. 290 of AIR) the learned Judges observed :

There is no doubt that if the parties had been governed by the Hindu Law according to Mitakshara and had constituted a joint Hindu family and the business that the members of the family were carrying on had been an ancestral business and the properties in suit had been acquired in the course and from and out of the profits of the business then the properties would become the assets of the joint family in which every member of the joint family would have a share.

But it is now well established that the Mohammedan Law by which prima facie the parties in this case are governed does not recognize such a system of holding property and the principle on which the system is founded cannot be applied to the determination of questions relating to the tenure and devolution of property among Mohammadans. Mohammedan heirs take their shares in severalty and they are deemed to be tenants-in-common without any rights of survivorship. The Mohammadan Law does not recognise a joint family as a legal entity. In fact, according to the rules of the Mohammadan Law of Succession, heirship does not necessarily go with membership of the family.

The plaintiff must then be able to support his claim by relying on some known principles of general law. There are scattered in the several paragraphs of the plaint allegations which may be used to support a case founded on the law of partnership and the law relating to constructive trust.

The learned Judges held on a consideration of the evidence that the plaintiff failed to substantiate his case either on principles of partnership or on those of constructive trust. In the present case also, the plaintiffs being members of a Muliammadan family, cannot claim the business as a family asset.

They have also failed, as we have found, to establish that they were taken as partners in the business. We cannot sustain their claim on any principles of constructive trust. It has been held that there is no fiduciary relationship between co-heirs or co-owners under Muhammadan Law as such. See Abdul Samad Khan Khiladar and Another Vs. Bibijan alias Hanifa Khathu and Others, and Abdul Khader v. Chidambaram Chettiar, ILR 32 Mad 276 (C). Neither Syda Bi nor her husband nor the plaintiffs were minors or were under the protection of persons, who were doing business. Therefore there is no scope for invoking the doctrine of constructive trust.

The only other basis on which the claim of the plaintiffs could be sustained is under S. 37 of the Partnership Act.

Section 37 reads:

Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and outgoing partner or his estate, then in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representative to such share of the profits made since he ceases to be partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six per cent per annum on the amount of his share in the property of the firm.

Under this section, in the absence of a contract to the contrary, the representative of a deceased partner is entitled to the share of profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of 6 percent. per annum on the amount of his share in the property of the firm. The suit was not to enforce rights under S. 37, for the plaintiffs did not claim as representatives of a deceased partner for recovery of the profits earned by the partner''s assets being utilised by the surviving partners but for accounts as partners of the firm. Assuming that the suit could be viewed as one governed by this section, the plaintiffs would be entitled only to the profits attributable to the share of Syda Bi or Syed Hussain or Jaibun Bi in the assets of Khajameah. The question is what is the article of limitation applicable to such a relief.

Learned counsel Mr. Ramachandrarao contends that the residuary Art. 120 applies, whereas learned counsel for the respondents argues that such a suit is governed by Art''. 106. of the Limitation Act. Art. 106 reads:

"For an account and a share of the profits of a dissolved partnership.

Three years.

The Date of the Dissolution."

It is true that though the suit was originally framed as one for an account of the assets and liabilities of Khajameah company for partition and for separate possession of the plaintiffs'' share in the said properties, later on a prayer was added for dissolution of'' the partnership as well. The relief was asked for on the basis that the partnership was not dissolved but was continuing upto the date of the filing of the suit. But for the application of the articles of limitation, the real nature of the suit and not its formal or verbal description should be criterion.

We have already pointed out that there was no evidence worth the name to support the case of any implied agreement to carry on the business in partnership by taking in the legal representatives of a deceased partner. If so, it follows that there was dissolution of the partnership so far as the plaintiffs are concerned either at the time of the death of Syed Bi in 1918 or Syed Hussain in 1934 or Jaibun Bi in 1940. The heirs of the said persons at best would be entitled to relief only under S. 37 of the Act.

The Judicial Committee in AIR 1923 136 (Privy Council) , applied Art. 106 of the Limitation Act to such a suit. There, the suit was filed by the legal representative of a erstwhile partner for dissolution of partnership and for recovery of 1/3 share in the assets on the grounds that on the death of her husband, she was admitted into the partnership. The trial court as well as the 1st appellate court held that the plaintiff failed to prove that she had become a partner but that the suit was barred under the Limitation Act. In holding that the suit was barred by limitation, the Judicial Committee observed at p. 353 (of ILR) : (at p. 138 of AIR).

On the death of Rup Chand, the plaintiff''s husband the partnership was dissolved and a right to an accounting arose. But Rup Chand died in 1905, and this suit was not raised until 1914. It is, therefore, time barred as a suit for such an accounting.

This decision is therefore authority for the position that a suit by the legal representative of a deceased partner for accounts would governed by Art. 106 of the Limitation Act.

Wadsworth, Officiating Chief Justice and Rajamannar, J., in 1947-1 Mad LJ 20 S.K. Sahul Hamid and Another Vs. S.M. Sulthan and Others, ), held that the suit would be barred by limitation if the plaintiff therein had filed a suit for recovery of his share of the profits of the dissolved partnership. At p. 25 (of MLJ) : (at PP. 291 and 292 of AIR), the learned Judges observed:

The learned Advocate General strongly urged that the suit is barred by limitation because Art. 106 of the Schedule 1 to the Indian Limitation Act gives only a period of three years from the date of dissolution to sue for an account and share of the profits of a dissolved partnership. We do not think it necessary to deal with this aspect of the case because the suit as framed is not for an account of a dissolved partnership. It may be that the plaintiff framed his plaint in this manner because he was afraid that he would be met by the plea of limitation.

Though the inclination of the learned Judges'' mind is indicated, the judgment cannot be relied upon as a decision on the point.

Benson and Bhashyam Ayyangar, JJ. in Ahinsa Bibi v. Abdul Kader Sahib, ILR 25 Mad 26 (E). ''held that the starting point for computing the period of limitation for a suit for an account and for recovery of his share of the profits by a legal representative of a deceased partner was the date of his death and such a suit was governed by Art. 106 of the Limitation Act. In that case, the learned Judges held that the suit was not barred by invoking the provisions of Ss. 7 and 8 of the Limitation Act.

We cannot agree with the learned counsel for the appellant that the present suit is governed by Art. 120 of the Limitation Act. Art. 120 is a residuary article and it can be invoked only in a case where there is no specific article governing a particular relief. We have held that the plaintiffs were not partners. We have further held that there was no agreement for taking in the legal representatives of the deceased partners as partners. So, for the purpose of the plaintiffs'' claim, the partnership must be deemed to have been dissolved on the date of the death of the partners.

From the date of the death of any of the aforesaid persons the suit was beyond three years, The plaintiff''s relief conceived as one and made under s. 37 is for an account and for a share in the profits of a dissolved partnership. To such a suit, Art. 106 directly applies. If so, there is no scope for invoking the residuary article. The suit having been filed more than three years from the date of the death of Syda Bi, Syed Hussain and Jaibun Bi, is clearly barred by limitation.

The next question is about the A schedule properties, which were the personal properties of Khajameah, as distinguished from the assets of Khajameah and Company. The learned Subordinate Judge held that the terms of the will of Khajameah were not acceded to by his heirs and therefore it was not binding on them. It is not disputed that Syda Bi inherited a share in his assets and that after her death Syed Hussain, Syed Peeran and Mahabub Bi would be entitled to specific shares in her interest. Syda Bi and her heirs were co-sharers along with other heirs of Khajameah in respect of the properties. The learned Judge held that after Syda Bi''s death in 1918, neither her husband nor the first plaintiff ever came into possession or enjoyment of these properties nor received any rents or other usufruct therefrom during a period of over 20 years and therefore they lost their right by ouster. Learned counsel for the appellants contends that mere non-participation in the usufruct of the lands by one of the co-sharers even if true would not constitute ouster in law.

Venkatarama Ayyar J., as Judge of the Madras High Court, restated the law of ouster in Krishnayya v. Udayalakshmamma, 1953-2 Mad LJ 241 (F). In that case it was held by the courts below that the 2nd defendant was in exclusive possession and enjoyment, of the lands from 1928 to 1946 and that the plaintiff did not at any time participate in the profits therefrom. The learned Judge on those facts held that the defendants have failed to establish ouster for the statutory period. In coming to that conclusion the Learned Judge accepted the following principle of law.

In law, the possession of one co-owner is the possession of all the co-owners. To constitute adverse possession, therefore, there must be some thing more than mere exclusive, perception of profits. There must be an ouster. That is to say, there must be a denial of the rights of the co-owners over the property and that denial must be made to their knowledge.

Adverting to the argument that a presumption should be drawn that there was ouster from, the continued non-participation of the plaintiff in the profits from the lands, the learned Judge, after noticing the cases, concluded at p. 246 thus:

These cases do not mark any departure from the well-settled principle that to establish adverse possession against co-owners there must be a denial of their title to their knowledge and that it is not sufficient merely to prove non-participation by them in profits. When possession dates back to a time beyond living memory and it becomes impossible to prove by direct evidence that the original co-owners had knowledge of the denial of their title and the attendant circumstances are in accord therewith a presumption of ouster can be made. In Doe d Fishar and Taylor v. Prosser, (1774) 98 ER 1052 (G), Ashhurst, J., put the matter thus:

After so long an acquiescence I think the jury were well warranted to presume anything in support of the defendant''s title, and they might presume, either an actual ouster or a conveyance.

The presumption is thus analogous to one of a lost grant and is not to be applied when the transactions are recent and the primary parties are alive.

We respectfully accept the aforesaid observations as laying down the correct law on the subject.

Reliance is placed by the learned counsel for the respondent on the judgment of a Division Bench of the Bombay High Court in Gangadhar v. Parashram, ILR 29 Bom 300 (H), where the learned Judges held that sole possession by one tenant-in-common continuously for a long period without any claim or demand by any person claiming under the other tenant-in-common is evidence from which an actual ouster of the other tenants-in-common may be presumed. There, the predecessors of the plaintiffs left the family house in or about 1857 and, from that year there had been no participation by them in the profits of the property till the year 1901 i. e., for over 40 years.

During this entire period, no claim was made by any of the predecessors-interest of the plaintiff. There was no other act indicating and such claim. In those circumstances, the learned Judges held that it was impossible for them to hold that there was no evidence, as an English lawyer would express it, to go to a Jury. That decision is authority for the position that non-participation by one of the co-tenants in the profits of the property for a long period of time involving different generations without any demand or claim affords a basis for the Jury to come to a conclusion of ouster.

It is not necessary to multiply cases as the law is well-settled. The possession of one co-owner is the possession of all co-owners. A co-owner who pleads ouster must establish that there was a denial of the other co-owners right to his knowledge and that he continued to enjoy the property exclusively for the statutory period after such unambiguous denial. Ouster in suitable cases can be presumed from non-participation in the profits of the land for a long period of time affecting different generations under such circumstances that denial could not be proved but could only be inferred.

Can it be said that ouster is a legitimate inference in the circumstances of the present case? It is true that the plaintiffs have not produced any receipts or vouchers or accounts indicating that either Syda Bi or after her death her. heirs ever enjoyed any share of the income from Khajameah''s properties. P.W. 1 says in his evidence that he was paid by the other co-owners in possession of the properties about Rs. 120/- per annum on the average. This evidence is vague and does not in itself indicate participation in the profits of the properties of Khajameah.

But the previous proceedings in O. S. No. 8 of 1928 and C. S. No. 5 of 1944 show that the other co-owners did not deny the title of Syda Bi. Ex. A-2 is the written statement filed by the 2nd defendant, wherein a clear admission was made to the effect that Syda Bi died leaving behind her a son and a daughter by name Syed Peeran and Hussain Bi and that they were necessary parties to the suit. That written statement was adopted by all the other defendants. In O. S. No. 5 of 1944 the 13th defendant and his children, who are some of the heirs of Syda Bi, were given Rs. 6000/- in lieu of Syda Bi''s share.

Though these admissions, are not sufficient to hold that Syda Bi and her heirs were made partners of Khajameah and Company, they would establish that there was no unambiguous denial till 1946, when the compromise decree was made, of the joint interest of Syda Bi or her heirs in the properties of Khajameah. In these circumstances we find it difficult to hold that there was ouster from, the mere fact of non-participation in the enjoyment of the income of the properties. The plaintiffs, therefore, would be entitled to 65/864th share in the properties left by Khajameah other than his interest in the company.

Though learned counsel for the appellants faintly raised the plea of res judicata, he did not pursue it.

In the result, we modify the decree of the learned Subordinate Judge. There will be a preliminary decree for partition in regard to the A schedule properties. The parties will pay and receive proportionate costs here and in the court below.