KADIYALA SESHAGIRI RAO Vs. KANNEGANTI DASAIAH

JUDGEMENT

(1.) The third defendant in the suit is the appellant in this second appeal. The suit was filed for dissolution of the first defendant-firm, for rendition of accounts by defendants 2 and 3 who are the managing partners and for payment of the amounts found to be due to the plaintiff. It is not dispute that the plaintiff and defendants 2 to 14 are the partners of the first defendant-firm. The firm was constituted in 1960. Ex. A.1 is the partnership deed dated 30-9-1960. The partnership deed shows that defendants 2 and 3 were the managing partners. The partnership was formed for the purpose of carrying on business or purchase and sale of paddy and also rice after hulling the same, to purchase ground-nut and sell groundnut oil after extracting the same and also groundnut cake, kernel etc., obtained therefrom and to deal in any other commodity as may be agreed upon by partners either on own account or on commission basis. The suit was filed on 16-11-1963 on the allegations that in spite of the plaintiff's demands to render proper accounts of the business of the done by the partnership, defendants did not pay any heed and that after a great deal of persuasion and pressure, defendants 2 and 3 showed the accounts which were being allegedly maintained by them. Then it was discovered that the accounts are not properly maintained and that great fraud was played by defendants 2 and 3 who included their private trade of turmeric also in the account books of the firm while there was no agreement between the partners that trade should be conducted in turmeric and that the first defendant-firm has nothing to do with the said business in turmeric. Defendants 2 and 3 filed separate written statement denying the several allegations made by the plaintiff and contending that though they were styled as managing partners in the partnership deed, the business was actually conducted and carried on by the plaintiff's son Mallikarjuna Rao and the 5th defendant. It was also contended by them that the business in turmeric was also carried on by the firm with the consent of all the partners. It was further contended that the accounts were being regularly maintained and they were also settled every year. The trial Court granted a preliminary decree for dissolution of the firm and for rendition of accounts by defendants 2 and 3 holding that defendants 2 and 3 were the managing partners and they, in fact, managed the business, that the accounts were not properly maintained by them and that the trade in turmeric; was not carried on with the consent of all the partners as pleaded by them. Questioning the decree of the trial Court, the third defendant filed an appeal impleading only the plaintiff and the 7th defendant as parties to the appeal. The appellate Court, concurring with the findings of the trial Court, dismissed the appeal. Hence this second appeal by the third defendant.

(2.) Sri V. S. R. Anjaneyulu, learned counsel for the appellant sought to assail the judgments of both the Courts below by contending that the Courts below committed a gross error of law in holding that defendants 2 and 3 have no authority to carry on business in turmeric in view of Clauses 4 and 9 of the Partnership deed and Sections 18 and 19 of the Indian Partnership Act. He further contended that when the accounts of the firm show that business in turmeric was actually carried on and no objection was raised by the plaintiff or any other partners at any time before the suit was filed, it must be deemed that the said business in turmeric was carried on with the consent of all the partners. In support of the said contentions, the learned counsel for the appellant placed reliance on the decisions reported in Sanganer Dal and Flour Mill v. F.C.I., AIR 1992 SC 481 and Raghavaveera Sons v. Mrs. Padmavathi, AIR 1978 Mad 81.

(3.) On the other hand, Sri V.L.N.G.K. Murthy, learned counsel appearing for the plaintiff/first respondent has raised a preliminary objection with regard to the maintainability of the Second Appeal by contending that as the decree granted was a joint and several decree against defendants 2 and 3 in favour of the plaintiff and the other partners, in the absence of any appeal against the decree by the 2nd defendant and as the 3rd defendant filed the appeal impleading only the plaintiff and the 7th defendant as respondents without impleading the remaining partners, the appeal is incompetent. As a part of the same submission, the learned counsel further contended that if this Second Appeal were to be allowed, there will be conflicting decrees and for this reason also, the Second Appeal is not maintainable. On the merits of the case, the learned counsel submitted that both the Courts below on a consideration of the evidence on record found as a fact that the business in turmeric was carred on by the defendants 2 and 3 without the consent and the authority of the other partners and that the said concurrent finding of fact is not amenable for interference in the Second Appeal. He also contended that as the specific plea put-forward by the defendants 2 and 3 that they carried on the business in turmeric with the express consent and agreement of the other partners has been disbelieved, it is not open to them to fall back on the theory of implied authority.