M V PARVATHAVARDHANA Vs. M V GANESH PRASAD

JUDGEMENT

(1.) WITH usual allegations and counter allegations of usurping each other's share in the joint property, has brought stated to be respectable family, in the Court litigating over a matter apparently having not much of the controversy. The litigation has been stretched to various forms by giving it judicial twists. Scores of cases are stated to be pending between the parties in various Courts in the State. All efforts made for reconciliation or at least finding out an agreed amicable way of settling the disputes have proved futile. Under the cloak of technicalities and taking advantage of the procedural wrangles, the parties to this litigation have left no stone unturned to allegedly frustrate each other's rights in the property which was earlier jointly owned and possessed by the parties, all being members of one family. Most of the facts are admitted, but the mode of resolving the disputes is in controversy. The only son in the family, namely, Shri m. V. Ganesh Prasad is in confrontation with the other members of the family who are none else other than his father, mother and sisters. The son is being termed as belligerent towards the members of the family who alleges on the other hand, that the other members of the family have united against him with the object of not only usurping his rights, but ruining him by deprivation of his due share in the joint property.

(2.) ALL the warring members of the family are the partners of a partnership firm under the name and style of M/s. Ganesha and Company which is unregistered company within the meaning of section 582 of the Companies Act, 1956 (hereinafter called the 'act' ). The principal place of business and registered office of the partnership firm is at Hosamane Extension, Chickmagalur. The firm is admitted to be a partnership at will giving liberty to any of the partners to retire from it at any time by giving six months advance notice in writing. 'the capital contribution of the firm is stated to be Rs. 14,50,000/- wherein the petitioner's son claims to have contributed Rs. 5,00,000/ -. The son (hereinafter called the 'petitioner') and the father (hereinafter called the 'managing partner') have 40% share each, whereas, the mother of the petitioner, namely, Smt. M. V. Parvathavardhana has 10% share. Five daughters of the family have shares of 2 per cent each. The father of the petitioner, Shri M. L. Vasudeva Murthy, was designated as Managing partner of the firm who was vested with the right and powers to carry out the day-today management of the firm and also being responsible for the maintenance of books of accounts of the firm. The petitioner who filed Company Petition No. 47 of 1988 in this Court submitted that in the event of dissolution of the firm, the assets of the firm were to be valued and each partner entitled to receive towards his or her capital either a portion of the assets of the firm in the shape of immovable property or any other property and also a share in proportion to their capital in the surplus assets, if any. It was contended that the partnership firm purchased a coffee estate known as 'lalitha Bandara Estate' in a public auction. The partnership firm is stated to have developed the said estate which is claimed to be very valuable having an area of 650 acres upon which, coffee is grown. The estate also claim to have valuable timber, cardamom and arecanut grown in it. It was alleged that the income of the Estate exceeded Rs. 25 lakhs annually. It was alleged by the petitioner that he was never given access to the property and books of accounts of the firm. He claims to have raised loans on the strength of his personal estate and the money so realized was utilised for the development of the firm. It is alleged that the managing partner and the firm did not repay the loan with the result that the charges/mortgage in favour of the personal estate of the son continued to be in force and his bankers restricted further credit facilities/release of funds/renewal of existing loans to his personal estate. He was warned that unless the credits are completed, accounts regularised, the loans would be recalled with penal interest. The father was alleged to have failed to properly manage the affairs of the estate belonging to the partnership firm. It was further alleged that the petitioner had not received any income from the estate or from the firm since 1984 and that the other partners had regularly been getting huge amounts from the firm towards their shares of income, apart from overdrawing their personal current accounts with the firm. Serious allegations of inflating the expenditure of the firm were levelled against the managing partner. He was also attributed various illegal acts and deeds as specified in para 12 of the petition.

(3.) RELATIONS between the parties are stated to have taken a new turn on 27-2-1988 when the managing partner called a meeting of the partners of the firm at Gayathri Hall, Hotel Woodlands, sampangi Tank Road, Bangalore. The meeting was attended by all the partners which is stated to have commenced at 4. 20 p. m. and went up to 5. 30 p. m. The Auditor of the firm, alleged to be a henchman of the managing partner was also present, despite the fact that he had no right to participate in the meeting of the partners. It was alleged by the petitioner that in the meeting of the partners the auditor suggested that the firm should be dissolved. The managing partner is stated to have given a ruled notebook of about 170 pages asking all the partners to sign the same. The petitioner refused to sign in the last page of the note book allegedly called as attendance register. He further claimed to have expressed his dissent with regard to the dissolution of the firm on the ground that there could be better income for the firm by change in the management or by improved management. He is stated to have contended that even after paying the tax as per amendment made in Karnataka Agricultural Income-tax Act, the income would be greater than what it was at that time. According to the petitioner, no decision was taken in the meeting and the same was abruptly ended at 5. 30 p. m. He alleged that the managing partner wrote a letter to him on 28-2-1988 enclosing therewith a copy of the alleged minutes of the meeting held on 27-2-1988 wherein, it was mentioned that the petitioner had left the meeting hall in the middle and all the partners had resolved to dissolve the partnership firm, According to the petitioner, no decision was taken in the meeting for the dissolution of the firm. No discussion took place with regard to the distribution and disposal of the assets and liabilities of the firm. The minutes of the meeting were stated to be false and fabricated. According to the petitioner, upon dissolution of the partnership, the partners are entitled to receive towards their capital either a portion of the assets in the shape of immovable properties or other properties. He claims that in case of dissolution of the firm, he is entitled to 40 per cent of the estate. The petitioner contended that the managing partner, with the sole intention of harassing him and to defraud the other partners managed to fabricate the minutes of the meeting making it to appear as if all the partners other than the petitioner had agreed to the dissolution of the firm and further resolved that the entire assets be taken over by the managing partner with a further right vested in him to pay and settle the accounts of all the partners within two years with a meagre interest of 10%. It was contended that the entire conduct of the managing partner had been unfair intended to defraud the petitioner and other partners of the firm. The alleged resolution was stated to be contrary to Clause 14 of the Partnership Deed. The petitioner alleged that as there was lack of faith between the partners especially between him and his father who were the major shareholders in the firm, it was just and proper that the firm be dissolved and wounded up by the High Court under the relevant provisions of the Companies Act. According to the petitioner, the firm stood dissolved with effect from 28-2-1988 and only the formalities of its winding up were to be completed under the companies Act.