KATTA GUNDAYYA Vs. KATTA SIDDAPPA

JUDGEMENT

(1.) This appeal arises out of a suit for partition. The first plaintiff and the other defendants are their sons and grandsons. Till 1915, the two branches constituted an undivided Hindu family which was possessed of extensive properties, movable and immovable. They had also a family business. In 1915 partition between the two branches began and the parties have gone on dividing portions of the properties, from time to time, sometimes by arrangement between themselves and sometimes through arbitrators. Some movables, some immovables and various outstandings remained undivided even at the date of the plaint in this suit which was filed in 1931. After the division began in 1915, the family trade continued to be carried on till 1922, though it appears that from 1920 the defendants began to do business on their own account as well. After 1922 it is admitted that no further business was carried on in common. On the other hand, the plaintiffs branch also began to do business on its own account from 1922. Between 1922 and the date of the institution of this suit, the outstandings due to the family were being collected by the first plaintiff or the first defendant according to convenience; such collections have sometimes been divided between them as and when they were made but on other occasions the parties seemed to have retained in their own hands the amounts respectively collected by them. This suit was accordingly instituted by the plaintiff's branch for a partition of the immovable properties still remaining undivided, for a division of the outstandings remaining uncollected and for the appointment of a commissioner to take accounts of the collections respectively made by the two branches with a view to direct one party or the other to pay the other's share of excess collected by such party. The plaint refers to the properties still remaining undivided as "coparcenary" property. This is not an accurate description; and the arguments both in the Court below and before us have proceeded on the footing that in 1915 the parties must be regarded as having become divided in status; but according to the plaintiff's case, there can be no doubt that the suit properties are properties belonging in common to a family which had become divided in status.

(2.) As regards some of the immovable properties of which partition was claimed, there was little or no dispute. As regards items 31 to 83 of the plaint schedule, the defendants contended that the properties themselves must be held to belong exclusively to the defendants branch, the plaintiffs being at best only entitled to a share of the amount due under the decree in O.S. No. 57 of 1918 in execution of which these properties were purchased by the first defendant. In answer to prayer for the division of outstandings and for the appointment of a commissioner to take an account of the collections made by each party, the defendants raised a plea of limitation, contending that after 1915 the first plaintiff and the first defendant must be deemed to have carried on the business only as partners, that the partnership was dissolved in 1922 and that any claim for the taking of the accounts thereof must therefore be deemed to be governed by Art. 106 of the Limitation Act. A further defence to the claim for the taking of accounts was raised with reference to the order passed in E.P. No. 26 of 1927 in O.S. No. 27 of 1925 on the file of the Sub-Court. A prayer made by the present defendant as decree-holders in that suit for the taking of accounts had been disallowed by the executing Court. Hence it was said that the matter must be taken to have been concluded by that order. These three pleas were overruled by the lower Court and a preliminary decree for partition and for the taking of the necessary accounts was passed; hence this appeal by the defendants.

(3.) It may be convenient to deal at the outset with the question of limitation, because in one view that plea will also bear upon the plaintiffs claim in respect of the debt which formed the subject-matter of O.S. No. 57 of 1918 which led to the purchase of items 31 to 83. Relying upon the observations of the Judicial Committee in Mst. Jatti V/s. Banwari Lal (1923) 45 M.L.J. 355 : L.R. 50 I.A. 192 : I.L.R. 4 Lah 350 (P.C.) and Babu V/s. The Official Assignee of Madras (1934) 67 M.L.J. 167 : L.R. 61 I.A. 257 : I.L.R. 57 Mad. 931 (P.C.), Mr. Krishnaswamy Aiyangar, on behalf of the appellants, contended that the Court below was not right in holding that the relationship between the parties was only that of tenants in common and that the proper view was that so far as the family business was concerned their relationship after 1915 was that of partners. As pointed out by the learned District Judge the facts of the cases before the Privy Council were different from the facts of the present case. Where all the property belonging to a joint Hindu family has formed the subject of partition, it is reasonable to presume that any further conduct of business by some or all of the members of the original joint family must be the result of a contract between them; and such contract will in law be regarded as one in the nature of a partnership. But where, as in the present case, it is clear that only some properties of the family were divided and other properties belonging to the family including the family trade were not brought into the division at all, the mere fact that even such partial division will in law amount to a division of status between the parties will not justify the view that the mutual relationship of the members to and in respect of the family business which theretofore rested upon status of birth must thereafter be treated as one resting on contract, so as to involve the notion of a partnership. Section 5 of the Partnership Act clearly recognises this antithesis. The present suit is in form and in substance one for a division of property which admittedly had not heretobefore been divided between the parties and a prayer for the taking of the account #of the assets including the outstandings due to that business is as reasonably incidental to a suit for partition as to a suit for dissolution of partnership. We would be importing an unnecessary fiction in the present case if we should hold that in 1915 the parties intended to substitute a contractual relationship between themselves in respect of the family business in place of the old relationship founded on status. That that status became one of tenancy in common in place of the old coparcenary status does not attract the further result that the status must be held to have so far changed as to give rise to a relationship by contract. There is in this case the further fact, that even in 1915, there were major sons of the 1 plaintiff and major sons of the 1 defendant who equally with the 1 defendant and the 1 plaintiff were interested in the assets of the trade as well as in the other properties belonging to the family. It is not suggested that these sons were partners in any sense known to the law; if so, their relation in respect of the trade and its assets must be only that of co-owners. There is no justification for implying that they authorised the 1 plaintiff and the 1 defendant to enter into a partnership on their behalf as well.