VEGI VENKATESWARA RAO Vs. VEGI VENKATARAMA RAO

JUDGEMENT

(1.) This is an appeal by the 1st defendant, namely, Vegi Venkateswara Rao in O.S. No. 60 of 1981 on the file of the II Additional Subordinate Judge, Visakhapatnam against the judgment and decree dated 26-7-1988, directing him to pay a sum of Rs. 8,43,885.00 and interest thereon at 12% per annum from the date of the suit i.e., 2-3-1981 till 26-7-1988 i.e., the date of decree and thereafter at 6% till the date of realisation to the 1st respondent herein, namely, Vegi Venkata-ramarao, alias Rajababu, the plaintiff in the suit. As the parties hereto are brothers and the subject-matter for consideration is the dispute relating to dissolution of partnership firm of which they were partners, we adjourned the hearing of the appeal for about a month as envisaged under Order 32-A of Code of Civil Procedure, suggesting the learned counsel on either side to try for settlement of the subject-matter of dispute herein and other matters said to be pending between the parties hereto before various Courts either through mediators or arbitrators. But, both of them reported that their efforts to persuade the parties hereto settle their disputes as suggested above failed. Therefore, there is no alternative for us except to dispose of the matter on merits.

(2.) For the sake of convenience the parties hereto will be referred to as arrayed in the suit. The case of the plaintiff as culled out from the plaint and the evidence adduced on his behalf is as follows :- The plaintiff and the five defendants are brothers. Late Sri Veerinaidu is their father. The 1st defendant is the eldest and the plaintiff is the second among them. Defendant Nos. 2 to 5 are their younger brothers. In the year 1953 late Sri Veerinaidu being unable to carry-on business due to old age effected partition of the properties through a registered deed of partition among his sons and other members of his family. Then, in the year 1956 the plaintiff and the defendants started varieties of business, including contracts in the name and style of M/s. Veerinaidu and Sons, a partnership firm and acquired considerable movable as well as immovable properties. In the year 1960, they floated another firm in the name and style of M/s. Vegi Venkateswara Rao and Bothers. The 1st defendant and the plaintiff were its managing partners. Defendant Nos. 4 and 5 were minors till 1966 and during the minority they were represented by their father. Since the inception, the firm : viz., M/s. Vegi Venkateswara Rao and Brothers was doing business in exhibition of cine films. In course of time, it constructed two cinema theatres called Sri Ramakrishna Picture Palace and Jagadamba 70 M.M. A/C at Visakhapatnam. Also, it constructed a commercial complex called Jagadamba Commercial Complex at Visakhapatnam. A sum of Rs. 40,00,000.00 was borrowed for the above said purposes. Their father died in January, 1978. Then, defendant Nos. 4 and 5 insisted upon for dissolution of the firm viz., M/s. Vegi Venkateshwara Rao and Brothers and division of its properties among its partners. Therefore, they were given full opportunity to go through all the records, including the books of accounts etc. and after thorough scrutiny and on legal advice, it was decided that the firm should be dissolved. Initially, it started with the retirement of the plaintiff from the firm under a deed, dated 16-11-1978 (Ex. A-1). It was stipulated thereunder that the firm and the remaining five partners should pay him a sum of Rs. 8,00,000.00. Thereafter, the firm was dissolved under a deed of dissolution, dated 19-11-1978 (Ex. A-2). As per the said deed of dissolution, Jagadamba Commercial Complex and the the liability to pay Rs. 8,00,000.00 to the plaintiff under Ex. A-1 fell to the share of defendant Nos. 4 and 5. Accordingly, they executed an agreement dated 19-11-1978 (Ex. A-3) undertaking to pay the plaintiff a sum Rs. 8,00,000.00. Again, on legal advice, the firm viz., M/s. Vegi Venkateswara Rao and Brothers was revived with the defendants as five partners by a deed, dated 31-8-1979 (Ex. A-4). However, it was dissolved under a deed of dissolution, dated 4-9-1979 (Ex. A-5). As per the said deed Jagadamba Commercial Complex which fell to the share of defendant Nos. 4 and 5 together with the liability to pay Rs. 8,00,000.00 to the plaintiff under Ex. A-2 was allotted to the share of the 1st defendant. The first defedant accepted the liability to pay a sum of Rs. 8,00,000.00 to the plaintiff and in fact paid a sum of Rs. 34,500.00 towards principal and a further sum of Rs. 57,000.00 towards interest, during the period from 13-11-1979 to 31-1-1981. Thereafter, he failed to pay the balance amount due to the plaintiff. Hence the suit.

(3.) The 1st defendant filed a detailed written statement denying the plaint averments in general and his liability to pay Rs. 8,00,000/- in particular. He resisted the suit claim mainly on three grounds set out in paragraphs 8 and 24. They are :