TARA CHAND Vs. UDHEY CHAND

JUDGEMENT

(1.) THIS is an application in revision against the order of City Judge, Jammu, whereby he has rejected an application made -by the plaintiff for, leave to amend the plaint. The suit was for settlement of accounts based on partnership, the plaintiff alleging -that he was a sub -partner entitled to share the profit and loss with the defendant in a building contract which was obtained by the defendant in combination with one, Taramani, from the Public Works Department of the State, each of them having one half share in the contract. The defendant resisted the suit mainly on the plea that it was barred by limitation, it being suggested that the building work was completed in the year 1965 which contemporaneously dissolved the partnership between the plaintiff and defendant, while the present suit was brought more than three years thereafter in the year 1969. On 25 -10 -1972 the appellant moved an application for amendment of the plaint with the object of adding a prayer for dissolution of the partnership. The application was opposed by the defendant on the ground that the relief sought to be added was time -barred. The learned City Judge rejected the application observing: - "Amendment of the plaint is sought to the effect that prayer for dissolution of firm also be allowed to be added. Towards this it may be stated that admittedly the event for which partnership came into existence was completed in 1962 and the firm cannot be said to be in existence by now. If the sought amendment is allowed that would amount to entertain a time barred relief, as such the application cannot be allowed. File to come up for final arguments on merits of the present suit on 11 -12 -1972." I must say without a moments hesitation that order made by the learned City Judge is hasty, ill -conceived, ill -considered and perfunctory. The order of rejection is based on the ground that the relief sought to be added is time -barred. The reason given by the learned City Judge is that the partnership stood dissolved with the completion of the event meaning thereby the building work in the year 1962. This reasoning is not compatible with the ground taken for rejection. If the partnership stood dissolved in the year 1962, the relief for dissolution could not be said to be available to the plaintiff either on the date of the suit or on the date of the application for amendment. That being so, the question of the relief for dissolution having been available to the plaintiff on the date of the suit and to the same having become barred by lapse of time on the date of the application, implied in his assertion that the relief for dissolution is barred by limitation, could not arise. In his anxiety to give a short shift to the matter the learned City Judge has failed to appreciate the incongruity much less the fallacy permeating through the arguments employed by him to support the order. In fact he does not seem to have at all applied his mind to the matter. He has acted in undue haste and not even cared to be precise about the facts which too he has missed to state correctly. He says that "admittedly the event for which the partnership came into existence was completed in 1962" implying that the building work to which the partnership related was completed in the year 1962. The statement is palpably incorrect. According to the written statement it was completed in the year 1965 and not in the year 1962. The plaintiff has chosen to remain uncommitted about the year of completion in his plaint. Then where from the admission has been inferred by the learned City Judge, I fail to see.

(2.) UNDER section 42(b) of the Partnership Act, a partnership entered into for a single adventure or undertaking shall last till the completion of such adventure or undertaking. There is nothing in the Act to show when an adventure or undertaking may be said to be complete. It is a question of fact depending primarily on the nature of partnership in each case. In Samuel Nadar V. Thangayya Nadar (A.I.R. 1942 Mad., 104) it was held: "When two persons form themselves into a partnership for the purpose of carrying on a chit transaction for 50 months, the chit may come to an end on the expiry of the 50th month, but as between the two persons who are joint stakeholders the adventure or undertaking does not come to an end immediately. All the moneys due to the partnership have to be collected and the liabilities have to be discharged and it is only then that the business can be said to come to an end. As between the two the relationship of partners continues until the termination of the business of the partnership, i.e. until all the assets of the partnership are realised and the liabilities paid." On this principle in a case like the present where two persons namely the plaintiff and the defendant have entered into partnership for the purpose of carrying out a building contract, the building work covered by the contract may have been executed, but as between the two persons the adventure or undertaking does not come to an end immediately, for the moneys due to the partnership under the contract have to be collected and the liabilities paid off and the contract closed and it is only then that the business can be said to have come to an end. In other words as between the two, the partnership continues till the contract is closed in the sense that the assets due thereunder art -realised and the liabilities paid. This is a question of fact to be determined on consideration of the evidence of the parties. As such merely because the building work covered by the contract was completed before the institution of the suit it is not reasonable to contend that the relief for dissolution was unavailable to the plaintiff or barred by limitation either on the date of suit or on the date when the application for amendment was made. If such contention is accepted, it will amount to prejudging the case. No justifiable ground can, therefore, be found in this contention to reject the proposed amendment. The contrary view expressed by the learned City Judge is clearly not tenable and must be rejected.

(3.) ASSUMING , however, that the relief for dissolution was barred by limitation on the date of application for amendment, as the learned City Judge seems to think, the question is whether in the circumstances of the case the amendment should be refused on that account. In Charan Dass and others V. Amir Khan and others (A.I.R. 1921 P.C. 50) it was laid down that: - "That there was full power to make the amendment cannot be disputed, and though such a power should not as a rule be exercised where its effect is to take away from a defendant a legal right which has accrued to him by lapse of time, yet there are cases where such considerations are outweighed by the special circumstances of the case." In this case the plaintiffs sued for declaration of their right of pre -emption over certain land. Having regard to the proviso to section 42 of the Specific Relief Act the suit was not maintainable in this form. The plaintiffs sought to amend the plaint with a view to claiming possession on pre -emption. The trial court and the first appellate court refused to allow the amendment on the ground that the time for bringing the suit to enforce the right of pre -emption had expired. Upon second appeal the Judicial Commissioner allowed the amendment to be made on the ground that the proposed amendment did not alter the nature of the relief sought and there was no reason to suspect that the plaintiffs had not acted in good faith. On further appeal the Privy Council upheld the order and made the observations quoted above. In L. J. Leach and Co Ltd. and another Vs. Messrs Jardine Skinner and Co., (A.I.R. 1957 S. C. 357) the Supreme Court allowed an amendment of the plaint in appeal and observed: - "It is no doubt true that courts would, as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limitation on the date of the application. But that is a factor to be taken into account in exercise of the discretion as to whether amendment should be ordered, and does not affect the power of the court to order it, if that is required in the interests of Justice". It was a case in which damages were originally claimed on the footing of conversion of goods. On evidence the High Court and the Supreme Court held that the claim for damages on the footing of conversion was not tenable. The plaintiffs applied to the Supreme Court for amendment of the plaint by raising in the alternative a claim for damages for breach of contract for non -delivery of the goods. The other side resisted the application on the ground that the period of limitation had expired. The court allowed the amendment and made the observations noted above while also quoted with approval the observations made in the Privy Council case noticed above In Pirgonda Hongonda Patil V. Kalgonda Shidgonda Patil and others (A.l.R: 1957 S.C. 363) the Supreme Court quoted with approval the following observations made in 33 Bom. 6441: "All amendments ought to be allowed which satisfy the two conditions (a) of not working injustice to the other side, and (b) of being necessary for the purpose of determining the real questions in controversy between the parties......but I refrain from citing further authorities, has in my opinion they all lay down precisely the same doctrine. That doctrine, as I understand it, is that amendment should be refuged only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him in injury which could not be compensated in costs. It is merely a particular case of this; general rule that where a -plaintiff seeks to amend "by setting up a fresh claim in respect of a cause of action which since the institution of the suit had become barred by limitation, the amendment must be refused to allow it would be to cause the defendant an - injury which could not be compensated in costs by depriving him of a good defence to the claim. The ultimate test therefore still remains the same: can the amendment be allowed without injustice to the other side, or can it not - These observations were made by Batchelor J in a case where the claim was for dissolution of partnership and accounts, the plaintiffs alleging that in pursuance of a partnership agreement they had delivered Rs. 4001/ - worth to cloth to the defendants. The trial court found that the plaintiffs did deliver the cloth but came to the conclusion that ho partnership was created. At the appellate stage the -plaintiffs abandoned the plea of partnership "and prayed for relief to amend by adding for the recovery of Rs. 4001/ -. On that date the claim for the money was barred by limitation. It was held that the amendment was rightly allowed as the claim was not a new claim. On these principles the Supreme Court, allowed the amendment of the plaint in the case before them mentioned above while also following its own earlier decision in L.J. Leach and Co., V. Messrs Jardine Skinner and Co., (A.l.R. 1957 S.C. 357) and -so also that of the Privy Council in Charan Dass Vs. Amir Khan (A. 1. R. 1921 P.C. 50). The case before the Supreme Court was one in which the plaintiff made an application for permission to give further and better particulars of the claim made in the plaint after the expiry of the period of limitation. The amendment was rejected by the trial court but allowed in appeal by the High Court. It was contended before the Supreme Court that the High Court should not have allowed the amendment as the period of limitation for the suit had already expired before; the date on which the application for amendment was made. The Supreme Court repelled the contention holding that the amendment did not introduce a new case nor did the defendant have to meet a new claim set up for the first time after .the expiry of the period of limitation. In the present case the plaintiff seeks to add a relief for dissolution of partnership without seeking any alteration in the allegations already, made in the plaint when it was first presented. There can be no question, therefore, that the plaintiff is putting forward a new case by way of amendment or that he is springing surprise on the defendant. Applying the principles, of the above mentioned cases, the proposed amendment must be allowed even if it were assumed that the relief sought to be added was time barred on the date of the application. The learned City Judge seems to think that in no case can an amendment be allowed after the expiry of the period of limitation. In this he is clearly mistaken and the mistake appears to be more due to his aversion for study than to anything else. In the view expressed above the amendment should appropriately be allowed, of course, on payment of reasonable costs to the other side for the delay occasioned thereby.