Sadhu Narayana Aiyangar vs Ramaswami Aiyangar

The first question we have to consider is whether the suit is barred by article 106 of schedule II of the Limitation Act. In support of the

memorandum of objections filed on behalf of the respondent it is contended that the suit, though a suit for an account of partnership dealings, is not

also a suit for a share of the profits of the dissolved partnership and is, therefore, not within article 106.

We think, however, that the plaintiff seeks to recover a share of the profits. He says in effect in his plaint that he has prepared an account himself

which he sots out in schedules (see paragraphs 18-20 of the plaint) and that this shows that the defendant has to pay to him two sums under

circumstances set out in paragraphs 8 and 12 of the plaint (vide, paragraph 15). But he is willing, if this should not prove correct, to pay whatever

may be found due by him (paragraph 17). Finally he prays this Court to settle the accounts and direct the defendant to pay him the two sums due

to him, and to direct the defendant and himself to collect whatever assets of the partnership remain outstanding, and after deducting expenses to

divide the balance. This last prayer makes it clear that the plaintiff is suing for a share of the profits if any.

The suit as a suit for an account and a share is clearly barred by limitation. The next question is whether as a suit for contribution it can be

maintained.

The plaintiff was compelled at the suit of certain creditors of the partnership to pay the whole amount due to them and seeks to recover from the

defendants one moiety of what he has paid. The decree and payment were after the dissolution of the partnership, but there was at dissolution no

settlement of accounts.

Now this is not a case of a transaction outside the partnership : certain persons having dealings with the firm in respect of the partnership

business became entitled in the course of the dealings to receive money from the firm. They sued and obtained decrees against the partners : the

liability is beyond any doubt a partnership liability, The English cases referred to in Subbarayadu v. Adinarayudu 18 M. 134 have therefore, no

application and the facts of that case itself are not sufficiently clear either in the report or in the printed papers to enable us to say certainly that that

case is on all fours with the present case. But, if that case is not distinguishable on the facts, we should find some difficulty in following it on the

grounds stated in the judgment; for, it is not easy to see how the making of a decree against the partners imposes upon them any liability which did

not attach to them as partners before the suit.

But in Sokkanadha Vannimundar v. Sokkanadha Vanmmundar 28 M. 344 a representative of a deceased partner was allowed to sue for a

share of assets collected after dissolution by a surviving partner, though a suit for a general account was barred by limitation. The fact that neither

partner has thought fit in proper time to secure a settlement of accounts does not, it is there pointed out, afford a reason why one partner should be

enabled to secure an advantage over the other. Justice is done if the defendant is allowed to show that on a settlement of accounts he would not be

liable. This principle is, we think, applicable and should be applied to the present case; the fact that here the plaintiff has paid a debt, while there

the defendant had realized assets, dot''s not affect the principle, nor are we able to distinguish this case on the ground that in Sokkanadha

Vannimundar v. Sokkanadha Vannimundar 28 M. 344 and the other cases which support the view there taken, the suit was by a representative of

a deceased partner. The suit is, therefore, good as a suit for contribution, but the first defendant must he allowed to show, if he can, that on a

settlement of accounts the amount payable by him as contribution is wiped out or reduced. The District Munsif has gone into the account, but the

District Judge has not done so; and, unless the parties agree either to accept the District Munsif''s findings or to fix some other amount, a finding by

the District Judge will be required.

The District Munsif finds that the plaintiff was entirely responsible for the suits by the creditors as he alone declined and unnecessarily declined,

to admit their claims : if this is so (the District Judge has not expressed his opinion yet), the first defendant is not liable to re-pay a share of the

interest which the plaintiff was compelled to pay, but he should pay interest at 6 per cent. on the share due from him, from the date of payment by

the plaintiff to date of payment to the plaintiff by him.

The parties agree to judgment for the plaintiff for Rs. 385 instead of Rs. 364-0-5 awarded by the District Munsif : the decree will be amended

accordingly, the defendant undertaking to withdraw the appeal preferred by him against the decision of the District Munsif of Srivilliputtur in

Original Suit No. 64 of 1907.

Each party will pay and receive proportionate costs throughout.