HARISH KUMAR Vs. BACHAN LAL

JUDGEMENT

(1.) THIS appeal has been filed by the defendant against whom the suit for rendition of accounts was dismissed by the trial Court but was decreed in appeal by the learned sigle Judge.

(2.) THE facts, in brief, are that the parties entered into a partnership business at Barnala under the name M/s. Mehar Chand Bachan Lal and a regular partnership deed was executed between them on 30-3-1954. The business was carried on by them in equal shares in the assets and it was a partnership at will and any party could retire from it on giving one month's notice in writing and on the retirement of any of the parties, the partnership would be deemed to have dissolved. Both the parties were liable in respect of the liabilities and entitled to the assets of the partnership in accordance with their shares. It is the common case of the parties that firm worked up to 18-7-1971 and after that it did not do any business. According to the plaintiff, the firm was maintaining regular books of accounts and it was alleged that the defendant was in possession of the same. Since the partnership was at will and it was not carrying on any business, the plaintiff deemed it proper not to continue the partnership and served a notice dated 7-4-1974 under registered A. D. cover on the defendant for dissolution of the firm, informing that he did not want to continue the said firm and that he be deemed to be not partner w. e. f. 10-7-1974 and firm be treated as dissolved from that date. He further requested the defendant to settle all the accounts of the firm and whatever amount is found due to him after rendition of accounts, he is entitled to interest thereon at the rate of 12% per annum. This suit for rendition of accounts was filed on 23rd August, 1974.

(3.) IN the written statement filed on behalf of the defendant, it was pleaded that suit was barred by time. The partnership between the parties was admitted but was alleged that since the partnership was at will and it was not carrying on any business since 18-7-1971, it was ultimately dissolved on that date. It was denied that the parties were entitled to interest on the amount due to them from the partnership at the rate of 12% per annum. It was maintained that books have been taken away by the plaintiff along with the cash of the firm. The plaintiff started his own business from 18-7-1971 in the name of M/s. Bachan lal Anand Kumar in separate premises and on the same day, the defendant also started his new business in the name of M/s. Mehar Chand Om Parkash. Both the parties started new accounts books for their respective firms. The plaintiff also got a new telephone connection. With the dissolution of the firm on 18-7-1971, the plaintiff ceased to take any interest in the same. He further pleaded that the firm was assessed to income-tax for the business up to 18-7-1971 and both the parties paid income-tax equally from their separate accounts, which shows that partnership business was dissolved on 18-7-1971. After framing issues and allowing the parties to lead. evidence, the trial Court found that the plaintiff was entitled to interest at the rate of 12% per annum on the amount, if any, due to him on rendition of accounts. It was also held that books of accounts of the firm were with the defendant and his allegation that the plaintiff had taken away the same was without any basis. It was, therefore, concluded that primarily the defendant is accounting party but in the case of rendition of accounts of the partnership, every partner is an accounting party. Most material issues Nos. 3 and 3-A were decided in favour of defendant and against the plaintiff. It was held thereunder that conduct of the parties shows that the partnership between them stood dissolved on 18-7-1971 and dissolution of the partnership on 10-7-1974 by notice issued by the plaintiff was of no consequence. Since partnership was held to have been dissolved on 18-7-1971, suit filed on 23-8-1974 was held to be barred by time under Article 5 of the Indian Limitation Act. Consequently, plaintiffs suit for rendition of accounts was dismissed. In appeal learned single Judge reversed the finding of the trial Court on Material issues Nos. 3 and 3-A and came to the conclusion that partnership was dissolved on 10-7-1974 and therefore, the suit was within time. According to the learned single Judge, neither any occasion nor any event occurred for dissolution of the partnership prior to 10th July, 1974 by any of the modes provided in the Indian Partnership Act. As a result of this finding, plaintiff's suit was decreed and a preliminary decree was passed in favour of the plaintiff and against the defendant for rendition of accounts.