JAYALAKSHMI Vs. SHANMUGHAM

JUDGEMENT

(1.) Plaintiff is the revision petitioner and the matter arises from final decree proceedings. Defendants 1 and 2 are the brother and sister of plaintiff's deceased husband. The suit is one for dissolution of a partnership business in plastic goods conducted in a shop at Tellicherry and for settlement of accounts. Though plaintiff claimed that herself and defendants 1 and 2 are the partners, both defendants denied the partnership. First defendant claimed the business to be exclusively his. Second defendant denied having anything to do with the business except advancing a loan of Rs. 5,000/- to the first defendant. Trial Court accepted plaintiff's case and passed a preliminary decree for dissolution and held that each is entitled to 1/3 share in the capital and profits of the business. In the final decree proceedings, on the application of the defendants, the Trial Court ordered the tenancy right in the shop building, in which the business is conducted, also to be sold by the receiver as a capital asset of the business. Revision is directed against that order.

(2.) The first contention of the revision petitioner was that the Trial Court exceeded its powers and went against the provisions of the preliminary decree. O.20, R.15 of the Civil P. C. provides for passing of a preliminary decree in a suit for dissolution of partnership of taking of partnership accounts. The preliminary decree has to declare the proportionate snares of the parties and direct accounts to be taken and other acts to be done, as it thinks fit. Passing of a preliminary decree is only discretionary. That means a preliminary decree need be passed only in cases when it is necessary. When there is no dispute to be gone into and decided in a final decree, the decree in the first instance could be a final decree. Anyhow that contingency has not arisen here and the decree passed is a preliminary decree. So far as matters decided in the preliminary decree are concerned, it is final and conclusive between the parties subject to the result of appeal, if any. In that respect there cannot be any dispute. The principle evolved in the doctrine of res judicata S.11 of the Code could be applied not only in independent cases but also between different stages of some litigation. Otherwise there cannot be finalities to decisions which are binding on parties. When a dispute is finally settled by the preliminary decree, the final decree cannot amend or go behind the preliminary decree in that respect. It can decide only such other matters directed to be decided by the preliminary decree accepting the findings in the preliminary decree as the basis. If at all any authority is required for this position, it could be had from M. Ayyana v. M. Jaggarao, AIR 1977 SC 292 .

(3.) But the question is whether such a contention is available in this case. The preliminary decree only said that plaintiff and defendants 1 and 2 are entitled to 1/3 in the capital as well as profits of the business. What is the 'capital' that has to be divided in the process of settlement of accounts is not decided by the preliminary decree. Now the contention is that the tenancy right of the shop room in which the business is conducted is also a capital asset of the partnership. That is not an aspect on which the preliminary decree has rendered a verdict. Therefore it is well within the competence of the court to decide in the final decree proceedings as to what all items will constitute the capital assets to be taken into account in rendering accounts. Otherwise it may not be possible to pass an effective final decree in terms of the preliminary decree. Items constituting the capital assets of the business was not a matter in controversy between the parties in the preliminary decree proceedings. The fact that in the judgment dismissing the appeal against the preliminary decree it was stated that the building belongs to the plaintiff under possessory mortgage cannot be taken as a finding that the tenancy right in the building does not belong to the partnership. In the preliminary decree proceedings the only-dispute between the parties was whether the business is a partnership of the individual concern of the first defendant. That atone was solved by the preliminary decree. Therefore it cannot be said that the court went against the preliminary decree.