K PITCHIAH CHETTIAR Vs. GSUBRAMANIAM CHETTIAR

JUDGEMENT

(1.) This appeal arises out of a partnership action. The plaintiff and the three defendants carried on the partnership. Towards the end it was working at a loss and the plaintiff filed the suit on 16 November 1931, for winding up the partnership. In the plaint the plaintiff alleged that the shares were as follows: Plaintiff, 4 annas, defendant 1, 4 annas; defendant 2, 4 annas and defendant 3, 2 1/2 annas, out of a total of 14 1/2 annas, in other words, the shares were 8/29, 8/29, 8/29 and 5/29. It is unnecessary to notice the written statement of defendant 1. Defendants 2 and 3 filed a joint written statement in which they admitted that there was a partnership of which they were members but denied that they were liable to bear any portion of the losses. At the first hearing two issues were framed : "(1) What are the terms of the partnership agreement between the plaintiff and the defendants? (2) Are defendants 2 and 3 partners, and if so are they not liable for the losses of the partnership?

(2.) On 19 April 1932, the matter was referred to the Official Referee for taking accounts. The order expressly reserved the question of whether some partners are or are not liable for losses. A preliminary decree was passed on 28 April in which it was stated that all the partners were interested in the assets and profits in equal proportions. This seems to be a mistake because neither the pleadings nor the issues nor the order of the learned Judge referring the matter to the Official Referee stated that the parties were to be interested in the assets and liabilities in equal proportions. But however, as nobody is affected by it and as everybody knew that the partnership ended in loss, nobody cared to question the correctness of this statement in the preliminary decree by an appeal. Clause 7 of the preliminary decree provided that the question whether some partners are en are not liable for losses of the said partnership be and is hereby reserved.

(3.) The Official Referee submitted his report on 24 November 1932. Objections were filed by both parties and when the case came on for disposal before our brother Stone, J., on 27th November 1933, the objections were not pressed by the learned advocate who appeared for defendants 2 and 3, viz., Mr. V.V. Srinivasa Ayyangar, and nothing more was said by him. Thereupon the learned Judge passed a decree directing that the losses also should be borne in the proportions alleged in the plaint. Defendant 2 has filed this appeal. Defendant 3 says that he is too poor to file an appeal and that he supports defendant 2. On this appeal it is argued that defendant 2 had witnesses ready and they ought to have been examined by the learned Judge. Upon this argument being put forward, we wanted to ascertain what exactly happened at the time of the final hearing. We accordingly requested Mr. Srinivasa Ayyangar to state what happened before the learned Judge. He told us that he said that he would not press the objections and nothing else. He admitted that he never offered to examine his witnesses. Mr. Radhakrishnayya who now appears for the appellant argues that even if this were so the burden of proof is on the plaintiff to prove the case set up by him in his plaint and if he does not prove his case he ought to fail even if the defendant does not examine his witnesses. The question thus, reduces itself to one of burden of proof in other words, who should fail if No. evidence is offered on either side. Section 253(2), Contract Act, lays down that all partners are entitled to share equally in the profits of the partnership business and must contribute equally towards the losses sustained by the partnership. As I read the section it lays down two presumptions with which the Court should start. The two presumptions are clubbed in one sub-section. They are (1) if no, specific contract is proved, the shares of the partners must be presumed to be equal.