P N SHANMUGAM Vs. P D VADIVELU

JUDGEMENT

(1.) Defendants 1 and 2 filed this appeal agg rieved by the judgment and decree passed by the Senior Civil Judge,Puttur in O.S.No.54 of 1995 dated 16-4-1999 decreeing the suit filed for rendition of accounts in respect of firm M/s. Anand Theatre from 1-4-1993 to 1-4-1995 and for payment of 1/4th share of income from the plaint schedule properties to the plaintiff with interest at 24% per annum and costs.

(2.) Pleadings which are not in dispute and necessary for disposal of the appeal are as under: Plaintiff alleged that himself, defendants 1 to 3 are partners in the firm in which plaintiff has th share and defendants 1 to 3 also has th share each which was re-constituted undera partnership deed on 1/4/1992 and was doing business in running cinema theatre under the name and style "Anand Theatre" in Pudupet, Nagari Mandal. It has also got shopping complex in the premises apart from vacant land described in the schedule as partnership property. The partnership was registered under Section 59 of the Indian Partnership Act, 1932 (for short "the Act") as per the certificate issued by the Registrar dated 24-9-1994. According to the plaint averments the construction of the theatre was completed in June, 1978 and the firm has taken up the construction of shopping complex between 1989 and 1991 out of the income derived from the cinema theatre. Defendants 1 and 2 who are the managing partners of the firm are managing the theatre in 1992 and prior to 1992 1st defendant was managing the business and defendants 1 and 2 are cousins. The 3rd defendant is a close relative of defendants 1 and 2. All the three defendants colluded together with ulterior motive and tried to defraud the plaintiff of his plaint schedule property. For the last three years defendants 1 and 2 turned hostile and successfully evading to render the accounts and misappropriating the income derived from the business. In spite of repeated demands made by the plaintiff they are evading to render the accounts and pay his share in the income. Therefore, he got issued legal notice dated 5/12/1994 calling upon the defendants to render proper accounts of the firm from the beginning.The 1stdefendant having received the legal notice sent a reply dated 21/12/1994 with false claims stating that the plaintiff, defendants 2 and 3 are only name lenders and have no right in the property. The claim of the 1st defendant is that the plaint suit schedule property is his exclusive property. It was pleaded that an extent of Ac.1.75 cts. in Sy. No.196 was purchased in the name of 1st defendant under a registered sale deed dated 16-6-1971; the entire sale consideration was contributed by plaintiff'sfather-P. Dasappa Mudali, Kuppuswamy Mudali - father of defendant No.3 and Govindaswamy Mudali - father of defendant No.2 and by the 1st defendant; all others are illiterate except knowing to sign in Tamil and 1st defendant was only literate. The property was purchased for construction of cinema theatre. On such purchase the father of the plaintiff and respective fathers of defendants 2 and 3 have jointly mortgaged the land along with their private properties in the State Bank of India, Puttur branch and availed loan of Rs.94,000/- for construction of theatre which was commenced in the year 1972. All the above said persons jointly borrowed the amountfrom Bhagyalakshmi Finance and Jayalakshmi Finance Corporation for the purpose of construction of theatre. On completion of construction of the theatre, business was commenced by exhibiting films in the year 1978. The 1st defendant was managing the theatre and discharging the debts borrowed from the Financial Corporations from out of the income derived from the theatre. While the matter stood thus, father of the plaintiff along with other partners including the 1st defendant jointly sold a portion of the land in Sy. No.196 under 13 registered sale deeds under Exs.A-9 to A-21 and realized a sum of Rs.1,00,000/-; out of the said sale consideration, Rs.80,000/- was paid towards debts and balance Rs.20,000/- was shared by four partners Rs.5,0007- each, as each one is having 1/4th share in the property. The income derived from the theatre was paid towards the debt due to the State Bank of India, Puttur till 1985 for about 3,50,000/-. Further, the income realized till 1989 was paid towards discharge of mortgage loans due to K.G. Pandurangan, K.V. Ganapathy and K.P. Dhanapal under four mortgage deeds. The discharged mortgage deeds Exs.A-22 to A-25 are also registered in the name of four partners. The partnership firm was un-registered till 1986 and on 24-3-1986 a deed of partnership was executed among the partners and got the partnership registered under Section 59 of the Act with the Registrar of Firms showing plaintiff'sfather-DasappaMudali and fathers of defendants 2 and 3 along with 1st defendant as partners under Ex.A-2. Partnership firm deemed to have commenced from 1 -4-1986. On the death of plaintiff'sfatheron 11-10-1988 firm was dissolved and new partnership was constituted on 13-3-1989 under Ex.A-3 with the plaintiff and defendants 1 to 3 as partners, and reconstituted with the same partners on 1 -4-1992 under Ex. A-4 in which all the partners are having 1/4th share each. Being the defendants 1 and 2 are managing partners, colluded with the 3rd defendant and defrauded the plaintiff in not rendering the accounts. The plaintiff estimated that his 1/4th share comes to Rs.90,000/- per annum. Averring so the above suit has been filed.

(3.) The 1st defendant in his written statement admitted that plaintiff was partner from 1/4/1992 as per earlier deed Ex.A-3. Till 1986 there was no document or any partnership agreement showing the existence of the partnership firm and denied that the plaintiff's having th share in the registered firm, namely M/s. Anand threatre. Sri Pandurangam s/o Dasappa Mudali and brother of plaintiff looking after the affairs of the firm and submitting the returns with full knowledge and confidence of all the partners. Plaintiff by using the signed papers fabricated the alleged partnership deed dated 1/4/1992. There is no mention of the said deed in the suit notice and it is an after thought. Registration Certificate was obtained keeping the 1st defendant under dark and played fraud with the help of brother of plaintiff-Pandurangam. The Shopping complex was constructed by defendant No.1 with his own funds, plaintiff and other partners are nothing to do with the business and they are only name lenders for the purpose of income-tax. They subscribed simply as name lenders without any investment, as they are also income tax assesses and no entry could be found out on that date in their accounts submitted to the income-tax department. Plaintiff never invested any amount nor had anything to do with the theatre after the partnership deed Ex.A-3 dated 13-3-1989 lapsed and the collusion between defendants 1 to 3 has been denied. The partnership deed dated 1-4-1992 is fabricated one got up by Sri Pandurangam out of ill-will and distress and plaintiff and defendants 2 and 3 have no right either in the business of the threatre or in the shopping complex, as they are only name lenders and they have no right over the property. Since partnershi p is at will and any dispute can be resolved by clause 16 of the partnership deed, suit is not maintainable and accordingly prayed for dismissal of the suit.