GURUGUBILLI CHANDRAN NAIDU Vs. ACHANTI PYDISETTI

JUDGEMENT

(1.) The plaintiff is the appellant in this appeal. It arises out of the' final decree proceedings in a suit for accounts of the dissolved firm. This appeal has a checkered career and this is the third time the matter is brought to this court. In the first instance the suit was resisted by the defendant stating that the plaintiff never invested any capital in the firm and in fact the firm has not started business and the plaintiff has no locus standi to file the suit. The trial court on the said defence dismissed the suit on 21.1.74. On appeal to this court by the plaintiff in A.S.No.131/74 this court set aside the decree on 8.4.76 and directed there is a partnership firm and there shall be a preliminary decree for taking the accounts of the dissolved firm, to find out to what amount if any remitted to the lower court. Thereafter the trial court passed a preliminary decree on 30.11.76, directing that the suit partnership firm which came into existence in February, 1969 stood dissolved on 7.7.72 and the shares of the plaintiff and the defendant in the profits and losses of the suit partnership firm shall be in proportion to the respective amounts contributed by the plaintiff and the defendant towards capital of the suit partnership, and with other directions. Against the said judgment an appeal was filed by the defendant to this court regarding costs only. This court in judgment dated 3.10.77 set aside the decree so far it relates to the granting of costs to the plaintiff and the remaining portion of the decree was confirmed, and thereafter the present decree dated 31.1.79 was passed stating that the plaintiff is not entitled to any amount and he has not contributed any amount towards capital. Against the said judgment and decree, the present appeal is filed by the plaintiff.

(2.) Sri C.oornaiah, the learned Counsel for the appellant raised two questions before me. (1) The court below erred in reversing the finding of the commissioner that the plaintiff invested Rs.3,300/-.(2) Even assuming that he has not contributed any amount, the joint borrowings from the State Finance Corporation and the State Bank of India constitute capital investment by both the partners and they are entitled to share the assets on the basis of those borrowings.

(3.) The Commissioner found that both the partners borrowed Rs.5,000/- from the State Bank of India and as per Ex.X-3 an amount of Rs.2700/- was paid to the bank and hence it must be taken that both of them contributed Rs.1350/- each and to that extent the plaintiff must be deemed to have contributed Rs.1350/-. The court below rejected this theory on the ground that it is a borrowing made by the firm and the amount is paid back and Ex.X-3 does not show that the parties contributed or advanced the amount for the purpose of discharging the debt. The amount was paid by the plaintiff on behalf of the firm and the accounts of the firm also show that the amount was paid from the firm's funds and hence no credit can be given to the partners invidually and it is not an advance or contribution made by the partners and hence this item cannot be taken to be an investment by the plaintiff. A reading of Ex.X-3 and X-5 and the evidence of P.W.1 clearly discloses that except stating that the amount was paid under Ex.X-3. It was not stated that the plaintiff paid his half share of Rs.1350/- and hence it must not be treated as a contribution by him and hence I agree with the view of the trial court that this amount cannot be treated as an advance or a contribution by the partners but it is a debt discharged by the firm and hence no credit can be given of this item as if the plaintiff contributed the said amount.