S K PARTHASARATHY NAIDU Vs. K RAMA NAIDU

JUDGEMENT

(1.) The plaintiffs in the two suits have filed the second appeals. O.S. No.1125/91 was filed by one Benedict, the appellant in S.A. No.1311/2000 for injunction restraining the first respondent Rama Naidu from alienating the suit property and for other reliefs. The suit was dismissed and so was the appeal A.S. No.108/99 and, therefore, the second appeal has been filed. One S.K.Parthasarathy Naidu filed O.S. No.5006/96 for a decree that the partnership of the plaintiff and the defendants to carry on the business of laying out and selling the property may be dissolved as and from the date of the suit, for accounts and other reliefs. The defendant was the same Rama Naidu referred to above. Benedict was the second defendant in this suit. The suit was dismissed. Against this, both S.K.Parthasarathy Naidu and Benedict jointly filed A.S. No.109/99. This was dismissed. Therefore, S.A. No.499/2000 has been filed. O.S. No.5006/96 is the comprehensive suit. So reference to parties will be based on their array in S.A. No.499/2000. The main contest is amongst the aforesaid three persons Benedict, Parthasarathy Naidu and Rama Naidu. It is the case of the two appellants that there was partnership business amongst the three of them and the appellants had each contributed Rs. 1.00 lakh. According to them, the business was real estate business, the partnership agreement was oral and pursuant to the oral agreement, there were two documents, one is Ex. A1 dated 28-9-1987 and the other is Ex. A4 dated 16-4-1988 wherein the respondent Rama Naidu had agreed to give a fixed share in the profits and had also acknowledged receipt of the contribution of Rs. 1.00 lakh. According to the appellants, they expected the respondent to develop the suit property by plotting it into a layout and upon sale of the several plots, share the profits with them. Contrary to the arrangement between the parties, the respondent had sold several plots without sharing the profit and, therefore, the appellant in S.A. No.1421/2000 was constrained to file the suit for bare injunction instantly to prevent further alienation of the suit property and thereafter, the other suit out of which S.A. No.499/2000 arises was filed by S.K.Parthasarathy Naidu for dissolution of the partnership and for accounts. The respondent denied that there was an oral agreement of partnership and resisted the two suits. He also stated that the payment of Rs. 1.00 lakh was nothing but a loan and that the appellants herein are only money lenders who are entitled to a certain share in the profit and that there was no partnership business at all.

(2.) Mr. G. Subramanian, learned Senior Counsel for the 2nd appellant who is the sole appellant in S.A. No.1311/2000 submitted that the main question that comes up for consideration in this second appeal is the nature of the relationship between the parties, whether they are partners or borrowers and lenders. According to the learned Senior Counsel, the pleadings establish that there was an idea of joint business. The contribution by the parties is proved by Exs. A1 and A4. It was a single venture partnership which is not unknown to law. He referred to the counter-affidavit filed by the respondent herein in April, 1991 in the Interlocutory Application in O.S. No.1125/ 91 and in the Interlocutory Application in Civil Suit No.597/91 which was later renumbered as O.S. No. 5006/96 in which the case that is now set up in the written statement was not at all pleaded. According to the learned Senior Counsel, this was the earliest instance, when the correct relationship could have been stated and it was not done. This would show that the relationship was only that of a partnership. He referred to the cross-examination of DW3 wherein it is stated as follows :This, according to the learned Senior Counsel would support the case of the plaintiffs since in O.S. No.5006/96, the pleadings are as follows :

(3.) Mr. T.R. Rajagopalan, learned Additional Advocate General appearing for the first appellant in S.A. No.499/2000 submitted that the pleadings and the evidence show that there was a reference to a business transaction. He again referred to Exs. A1 and A4 to support his case. According to him, neither in the pleadings, nor in the evidence, has any explanation been given as to how Exs. A1 and A4 came into being. According to the learned Additional Advocate General, the law does not militate against the existence of oral partnership. The receipt of Rs. 1.00 lakh is not denied. The business understanding is not denied by the respondent and in spite of this, the courts below have failed to construe what could be the nature of the relationship between the parties in these circumstances. There was an understanding between the parties which was evident from the recitals in Ex. A1. The understanding spoke of the appellants handing over to the first respondent Rs. 1.00 lakh each with intention to do some business in real estate and also with the intention to share the profits. Therefore, the document's 'Exs. A1 and A4 showed that there was an agreement amongst the three persons. The agreement was to share profits and the intention was to carry on business of real estate by the first respondent herein on behalf of the other-two. When these three elements are present, the partnership comes into existence as per Section 4 of the Partnership Act. There is also no law that forbids a single venture partnership. So, even if the case of the appellant that there were intermittent partnership ventures between the three persons is not believed, Exs. A1 and A4 at least show that in respect of the suit property, the parties intended to deploy capital, generate profit and share the same. According to the learned Additional Advocate General, the plea in the written statement that the amount borrowed was only a loan is an afterthought since at the earliest juncture, there was no pleading that the amount borrowed was a loan transaction. He referred to the decisions reported in (2000) 7 SCC 60 : (AIR 2000 SC 3009) to support the proposition that interpretation of a document would be a substantial question of law and, therefore, inasmuch as in this case, Exs. A1 and A4 have not been properly construed, the interference under Section 100, C.P.C.is justified. He also referred to the judgment reported in (2000) 1 Mad LJ 29 (A.V. Abdul Lateef and Co. v. Thotakara Devamma), where this Court had held that when the lower Appellate Court as a final Court of fact had come to accept the case of the defendants on practically no evidence, the erroneous approach would compel the High Court to interfere under Section 100, C.P.C.