SUKHRANI DEAD Vs. HARI SHANKER

JUDGEMENT

(1.) The legal representatives of the fifth defendant and defendants 6 to 15 in Civil Suit No. 17-A of 1957 in the Court of the Additional District Judge, Narsinghpur are the appellants in this appeal by special leave. Mannulal (5th defendant) and Rajaram 1st defendant, both of whom died during the pendency of the suit, were brothers. They were the sons of Pusau. The plaintiff, a son of Rajaram and a minor on the date of the institution of the suit filed the suit for partition and separate possession of a one-eighth share in the properties mentioned in Schedule 'A' of the plaint and also for an account from defendants 5 to 8 of the assets and income of the business, "Mannulal Lakhanlal". It was alleged in the plaint that with the capital given to them by their father, Pusau, Mannulal and Rajaram started the business of manufacturing Bidis. After the death of Pusau in 1936 the business was continued by the two brothers. In 1948 Mannulal represented to Rajaram that in order to avoid income-tax it was necessary that there should be a nominal partition and that the joint family business should be converted into a partnership business. Accordingly the firm "Mannulal Lakhanlal" was registered under the Partnership Act. Mannulal's share was shown as 10 Ans. 8 ps. in a rupee while Rajaram's share was shown as 5 Ans. 4 ps. In 1953 Babulal and Sunderlal, sons of Mannulal, were also shown as partners. The share of Mannulal was reduced to 5 Ans. 4ps. and the share of Babulal and Sunderlal was shown as 5 Ans. 4 ps. All this was done nominally with a view to avoid income-tax. The houses belonging to the family were also divided. Rajaram was given one-third share and Mannulal took two-thirds share. The partition of ancestral property and business between the two brothers Rajaram and Mannulal, even if true, was "unequal, unfair and unconscionable." The partition and the formation and dissolution of the firm did not bind the interest of the minor plaintiff and all his brothers. It was further alleged in the plaint that Mannulal promised Rajaram at the time of the fictitious partition that he would be given his half share when a real partition was made. It was on those allegations that the plaintiff, a minor, represented by his next friend Harchand filed the suit, out of which the appeal arises, for the reliefs already mentioned. The suit was contested by Mannulal and his sons who pleaded that the business was not a joint family business and that it was a purely partnership business. The allegations that the partition was nominal and that the formation and dissolution of the partnership were nominal, were denied. It was pleaded that there was a complete disruption of the family on 31st March, 1948. The partition was not unfair. After the partition the two brothers decided to run the Bidi manufacturing business in partnership, with Rajaram taking a share of 5 Ans. 4 ps. and Mannulal taking a share of 10 Ans. 8ps. During the pendency of the suit a reference was made to arbitration and the arbitrators gave an award under which it was directed that a sum of Rs. 12,000/- was to be paid to each of the two minor sons of Rajaram to equalize the shares of the two branches. The contesting defendants filed an application to set aside the award claiming that the Arbitrators had given their award without any enquiry and without giving the parties a chance to adduce evidence. It was also claimed that the Arbitrators had found that the earlier partition was not fraudulent and that it was also not the result of any misrepresentation and on that finding the Arbitrators had no jurisdiction to reopen the partition. The Trial Court set aside the award on the ground that the Arbitrators had made the award without any enquiry and without giving the parties a chance to adduce evidence. The plaintiff preferred an appeal to the High Court. The appeal was dismissed by the High Court on 10th January, 1962. The High Court upheld the finding of the Trial Court that the award was vitiated as it was made without enquiry and without opportunity being afforded to the parties to adduce evidence. The High Court also found that there was an error of law on the face of the award inasmuch as the Arbitrators had found that there was neither fraud for misrepresentation and that unequal shares had been accepted voluntarily and yet had reopened the partition. It was observed that this was contrary to law as the plaintiff and his other minor brother were duly represented by their father Rajaram.

(2.) Thereafter, consequent to the setting aside of the award, the suit proceeded to trial. The plaintiff attained majority during the pendency of the suit and elected to continue the suit. Among the witnesses examined on behalf of the plaintiff was Rajaram. Mannulal, the 5th defendant, did not step into the witness box and he also objected to answer the interrogatories which were sought to be served on him. The learned Trial Judge found that the business was not ancestral business but only a joint business and that there was a complete partition of the joint family property and the Bidi business on 31st March, 1948. There was neither fraud nor misrepresentation practised on Rajaram to bring about the said partition. The learned Trial Judge, however, observed that though Rajaram voluntarily agreed to accept one-third share only, the partition of the joint business appeared to be 'unequal, unfair and unconscionable'. The suit was, however, dismissed in view of the finding that the business was not ancestral business, and the plaintiff, therefore, had no right to reopen the partition on the ground that the partition of the joint business was 'unequal, unfair and unconscionable'. The plaintiff preferred an appeal to the High Court. The High Court found that the oral evidence adduced on behalf of the plaintiff which was practically unrebutted by the defendants and the documentary evidence including the deed of partition and the deed of partnership clearly established that the business of "Mannulal Lakhanlal" was ancestral business in which the sons of Mannulal and Rajaram acquired interest by birth. The High Court also found that there was no fraud or undue influence vitiating the partition. The High Court, however, affirmed the finding of the Trial Court that the partition of the joint family business resulting in the formation of a partnership in which Mannulal took 10 Ans. 8 ps. share and Rajaram took 5 Ans. 4 ps. share was unfair and prejudicial to the interests of the minor sons of Rajaram. On those findings the High Court granted a decree in favour of the plaintiff for an account of his one-eighth share of the Bidi business upto 30th November, 1955, on which date the partnership business of which Rajaram was a partner was dissolved. It was also directed that a sum of Rupees 5,000/- representing one-eighth of the amount which had already been received by Rajaram should be adjusted when accounts were taken to determine the amount to which the plaintiff was entitled. The contesting defendants have preferred this appeal by special leave of this Court.

(3.) The learned Counsel for the appellants submitted that the finding of the High Court in the proceeding to set aside the award to the effect that the partition could not be reopened since there was no fraud or misrepresentation and since unequal shares had been voluntarily accepted was binding on the parties at all subsequent stages of the suit. He pointed out that, in any event, on the facts of the present case, the plaintiff and his brothers were effectively represented in the partition by their father Rajaram and in that situation the partition could not be reopened by the plaintiff on the mere ground of unequality of shares, in the absence of fraud or misrepresentation. He further questioned the findings of the High Court that the business was ancestral and that the partition was unfair. In support of his contentions the learned Counsel relied upon a passage from N. R. Raghavachariar's Hindu Law (5th Edn.) p. 428. He also drew our attention to Balkishan Das v. Ram Narain Sahu (1903) 30 Ind App 139 (PC). On the other hand the learned Counsel for the respondent urged that an erstwhile minor coparcener could always seek to reopen a partition on attaining majority if he could show that it was unfair or prejudicial to his interest. He also contended that the decision of the High Court in the proceeding to set aside the award would not be binding on this Court at a later stage of the same suit and that it was open to him to challenge in this Court the earlier finding of the High Court. The learned Counsel placed reliance on Ratnam Chettiar v. S. M. Kuppuswami Chettiar, AIR 1976 SC 1 and Jas Raj Inder Singh v. Hem Raj Multan Chand (1977) 2 SCR 973 at page No. 981.