RAMBALA MULASWAMI Vs. G SREERAMAMURTI

JUDGEMENT

(1.) 1. The two plaintiffs constituted a firm of which the 1st plaintiff, Golakoti Sreeramamurty, was the managing partner. They carried on trade in paddy, rice etc. from 1-1-1949 till the end of that year in the Jayalakshmi Jayarama Rica Mill, which they took on lease for a rent of Rs. 4,000.00 from the 1st defendant, Rambala Mulaswami. Defendants 2 to 6 were the undivided sons of the 1st defendant, who was the manager of their joint family. The family owned extensive lands besides the aforesaid rice mill and sold quantities of paddy to the plaintiffs, receiving payments from time to time. The suit was brought to recover, with subsequent interest and costs, an amount of Rs. 5927-5-9, claimed as due in respect of these transactions, on what was alleged by the plaintiffs to be a mutual, open and current account kept between them and the defendants in the regular course of business. The amount claimed was made up of a principal sum of Rs. 5,212-6-6, being the balance due up to 19-10-1949 as per the account memo filed along with the plaint and interest Rs. 714-15-3 thereon from 19-10-1949 to 16-4-1952, the date of the plaint. The learned Subordinate Judge found that there was no agreement for the payment of interest! and therefore disallowed interest for the period from 19-10-1949 to 1-4-1952, the date of the plaintiffs notice of demand before the suit. No question arises as to the correctness of this portion of his Judgment. He also disallowed two items of Rs. 1,000 and Rs. 230 respectively which were debited to the defendants in the plaint account and decreed the suit for a principal sum of Rs. 3,982-6-0 With interest thereon from 1-4-1952. The defendants have preferred the appeal on the ground that credit ought to have been given to them in the plaint account, for the rent of Rs. 4,000.00 due from the plaintiffs. The plaintiffs have filed Memorandum of cross-objections, claiming the Rs. 1,230.00disallowed by the court below. 2. With regard to the defendants claim for the rent, the plaintiffs case which prevailed with the learned Subordinate Judge was that it had been adjusted separately on 13-3-1950 and did not remain due to the defendants. Sri B.V. Subrahmanyam, the learned Counsel for the appellants, assails the correctness of this finding on the merits of their claim. The learned Subordinate Judge also appears to have assumed that the claim for rent was not maintainable by way of a defence, because it was not put forward as a counter-claim or as a set off. This view of the legal position is attacked by Sri B.V. Subrahmanyam as being erroneous. 3. In order to understand the controversy about the alleged adjustment of the rent, it is necessary to refer to some more facts. It is common ground that prior to 1-1-1949, the 1st plaintiff had carried on trade in the same mill in partnership with the 1st defendant. The 1st defendant was the financing partner and the 1st plaintiff was the managing partner. While the defendants version was that the 1st defendant invested over Rs. 70,000 in that venture, the 1st plaintiff was prepared to concede that the 1st defendant invested only Rs. 30,000 to Rs. 35,000 by borrowing from others. Admittedly, that partnership (which may be called the first partnership) came to an end on 31-12-1948. The defendants began to be exercised (sic) even in December 1948 over the accounts thereof maintained by the 1st plaintiff, because no returns materialized. The 1st plaintiff seems to have kept them in hope of profits, by giving out that there were secret accounts for blackmarketing transactions. They made various attempts to settle the accounts and even locked up the mill for a few days, in or about April, 1949 during the currency of the lease obtained by the 1st plaintiff on behalf of the partnership with the 2nd plaintiff (which may be called the second partnership). The quarrels between the parties became bitter. A cyclone damaged the mill on 27-10-1949 and the 1st plaintiff issued a notice to the 1st defendant to effect necessary repairs. The 1st defendant replied declining to effect any repairs and demanding payment of the rent of Rs. 4,000 and giving the 1st plaintiff the option of handing back the mill. The business of the second partnership had to be stopped as the mill was not repaired. But the 1st plaintiff did not surrender the mill nor pay the rent, although he admits at one stage in the course of his evidence that ha owed the Rs. 4.000 for rent on the date of the 1st defendants reply. Finally on 13-3-1950, there was a mediation by the 1st plaintiffs brother, Golakoti Satyanarayanamurti and the defendants relation, Ryali Satyanarayanamurti (D.W. 5), On the side of the defendants, who had only oral accounts, Various claims were made at the time. But the 1st plaintiffs brother advised them that it would not be possible to recover anything from the 1st plaintiff. The 1st plaintiff and the 1st defendant exchanged letters embodying the settlement which was reached. Ex. B. 1 is the letter executed in favour of the 1st defendant by the 1st plaintiff and reads thus :