KHAMBAMPATI PEDDA SUBBA RAO Vs. KHAMBAMPATI VENKATARATNAM

JUDGEMENT

(1.) The short question that requires consideration in this second appeal is whether S. 37 of the Indian Partnership Act can be invoked to the benefit of the appellant, herein. The facts necessary to appreciate the arguments may briefly be stated :

(2.) The main grievance of the plaintiff-appellant in this appeal is that both the courts have only allowed 6 per cent interest on the share of the plaintiff in the old partnership whereas it is the admitted case of the respondent that the share of the plaintiff was not settled and the money payable was utilised in the working of the other firm. It is urged that the court should have invoked the provisions of Sec. 37 of the Act and allowed the plaintiff a share in the firm of the defendant now operating under a new name. Unfortunately, for the plaintiff, both the courts have found, having regard to the evidence and circumstances of the case, that the first firm came to be dissolved as the result of non-co-operation on the part of the plaintiff. They also found as a matter of fact that the second firm, though it was continuing the old business was a new firm, in as much as it had got the contract renewed with the Charminar Cigarette factory under its own name and the plaintiff had not applied for renewal. The plaintiff admitted that every year they were required to take renewal of contract with the Charminar Cigarette factory, at Hyderabad, and it was in the discretion of the company to renew the contract or refuse to do so. He also conceded that he had not applied for the renewal of the contract and it was the defendant who had taken advantage of getting it renewed in their name. Thus, it is difficult to hold that the new firm was a continuation of the old firm, merely because they were carrying on the same business. This is a finding of fact which admits of no interference. In view of this finding, it cannot be stated that the provisions of Sec. 37 of the Partnership Act are available to the plaintiff, as laid down in the case of Mohana Sundaram v. Neelambal 1955 (1) MLJ 279 . It was observed in that case as under :

(3.) In the instant case, as mentioned supra, it appears that due to non-co-operation of the plaintiff, the previous firm was dissolved and the defendant taking advantage of it constituted it into a new firm and were successful in renewing the contract with the Charminar Cigarette Factory at Hyderabad. Even if they did not settle the share of the plaintiff in the earlier firm, it cannot be said that the new firm was a continuation of the old partnership. The provisions of S. 37 therefore are not available to the plaintiff. In view of the fact that there has been delay on the part of the defendants to settle the accounts, the plaintiff has been given interest at 6 per cent. I think it sufficiently compensates the plaintiff for the inconvenience and delay arising from the non-settlement of his share, though it cannot be denied that it was partly due to non-co-operation on the part of the plaintiff. However, there is no Cross-objections on behalf of the defendants.