RAMASWAMI PILLAI Vs. VRMKMUTHUKARUPPAN CHETTY

JUDGEMENT

(1.) Plaintiffs and one Muthuvairava Pillai were partners in a business carried on in Erode and other places. The 1 defendant is father of the late Muthuvairava Pillai, defendants 2 and 3 are his sons and 4 defendant is his brother's widow. Plaintiffs have brought this suit against the defendants as legal representatives of the deceased Muthuvairava Pillai alleging that the latter and the defendants were members of a joint Hindu family. The suit is to recover certain sums of money due to the partnership firm by the deceased partner, and in the original plaint there were four such items. The first and the third are said to be sums borrowed by the deceased on his own account and repaid out of partnership money; the second item is the amount said to have been overdrawn by the deceased and therefore due to the firm; the fourth item is also an amount relating to his drawings on account of his salary less the profit which is due to him.

(2.) The accounts of the partnership, which became dissolved by the death of Muthuvairava Pillai, have never been taken and, consequently, the defendants pleaded that this suit was not maintainable, as plaintiffs were not suing for an account. Subsequently, the plaintiffs withdrew their claim to the fourth item on the ground that that item was disputed and was based on a different cause of action to the other three. Defendants again opposed this amendment and repeated their plea that the suit should be for the taking of accounts. This item which has been withdrawn would, to a certain extent, necessitate taking of an account in order to ascertain whether the amount credited to the deceased as his share of the profits was correct; but nevertheless the Subordinate Judge allowed the amendment and proceeded to trial holding that the suit is maintainable. After taking evidence on the merits of the case he has decreed plaintiffs suit in respect of the three items which still remained in the plaint. The defendants now appeal and again plead that the suit as framed is not maintainable, and this has been argued as a preliminary point without going into the merits of the case.

(3.) It was a very well-established rule in English Law that Courts would not interfere between one partner and another unless it was for the purpose of dissolving the partnership or, if it was dissolved, of finally winding up its affairs. This rule has in later years been considerably relaxed because it was found to work hardship in certain cases and in the result Courts have interfered in order to prevent a partner deriving advantage from his own misconduct and have not insisted on the other partners submitting either to continuance of the wrong or to a dissolution; but the reason for the relaxation of the rule has been explained in Lord Lindley on Partnership. 8 Edition, page 630 as follows : "The first question (namely, when can an action be maintained between partners withouttaking a general account of all the partnership dealings and transactions) can only be answered generally by saying that each case must depend upon its own circumstances and upon whether justice can really be done without taking such an account." In the present case, the defendants state that an account should have been taken in order that the amount due by, or to, Muthuvairava Pillai might be finally determined. Plaintiffs answer to this is that they are not asking for the taking of accounts because the items specified by them as being due by the deceased are moneys which were not brought into the partnership accounts but were taken by the deceased for his own purposes. So far as item 2 is concerned, this is clearly wrong, for it represents the amount of drawings by the deceased partner, drawings which he was entitled to make, for as a partner he was entitled to use as much of the partnership money as would represent his share of the profits. Similarly, as regards the other two items, I do not think that they can be treated as sums of money entirely unconnected with the partnership business. They represent two sums of Rs. 10,000 and Rs. 3,000 respectively, borrowed by the deceased in the name of the partnership, and the repayment of these loans is shown in the partnership accounts. The question whether the firm received the benefit of these two sums of money is one which has to be determined on a consideration of the evidence; and I may say here that, if really the money was not credited to the partnership at all, it is extraordinary that Muthuvairava Pillai should have shown the repayment of the money in the partnership accounts, thus clearly proving his own misappropriation. However that may be, I. think that these items cannot be treated separately from the partnership business and I do not think that the cases relied upon by the respondents are any authority to the contrary, i. e., Cross V/s. Cheshire 7 Ex R 43, Smith V/s. Barrow 100 ER 256 : 2 TR 476, Bedford V/s. Brutton 131 ER 1171 : 1 Bing NC 399 and Ex parte Younge 13 RR 135 ]. In the first of these cases [Cross V/s. Cheshire 7 Ex R 43 ] the suit was held to be maintainable because it was for an amount which had been decreed against the partnership in respect of the private debt of one of the partners; the second case [Smith V/s. Barrow 100 ER 256 : 2 TR 476 : ] is somewhat similar, for it was a suit by one partner against another to recover his own money which had by mistake been put into the partnership funds. Again in Bedford V/s. Brutton 131 ER 1171 : 1 Bing NC 399 a member of a company was allowed to sue for rent due to himself personally as against the trustees for the company. The fourth case [in Ex parte Younge (4)] does not refer to a suit but to Bankruptcy proceedings. In Smith V/s. Barrow 100 ER 256 : 2 TR 476 the suit was allowed, but with regard to the further claim for a sum of ?30 which was due to the partnership, it was held that the action could not be maintained. In Bedford V/s. Brutton 131 ER 1171 : 1 Bing NC 399 it was pointed out by Tindal, C. J., that if the action were virtually and substantially an action on covenant, brought by the assignees of one partner, who has become bankrupt, against three of his partners, to recover damages against them, to which the plaintiff himself must be contributory if he succeeds, the action would not be maintainable. And we may observe that in all these cases the principle is that, where justice requires that all the dealings of the partnership should be finally determined, the Courts will not allow a partial account to be taken but that when the basis of the claim is unconnected with the partnership business, or is only very remotely connected therewith, an action is maintainable, when no injustice is caused by dealing with this one claim separately. As instances of the former class of case I may refer to Lakshmana Chetty V/s. Nagappa Chetty (1917) 34 MLJ 408, Annamalai Chetty V/s. Annamalai Chetty (1919) 10 LW 67 and Godhanram V/s. Jaharmull Puglia (1912) ILR 40 C 335 and to Karri Venkata Reddy V/s. Kollu Nurasayya (1908) ILR 32 M 76 : 19 MLJ 10 and Sunkara Ratha Doss v. Epari Kopilo (1916) 49 IC 191 as instances of the latter. As pointed out in Lindley on Partnership, each case must depend on its own special circumstances and upon whether justice can be done without taking an account.