ANNAMALAI CHETTI Vs. ANNAMALAI CHETTI

JUDGEMENT

(1.) The plaintiff and defend-ants Nos. 1 to 10 represent a firm which was started in Mandalay under the style of A. L. A. M. for doing money-lending business, which, for brevity may be referred to as the Mandalay firm In 1908, the 8th defendant in this suit brought a suit in the District Court of Mandalay for dissolution of the partner-ship of this firm and obtained a decree in which the proportionate shares of the partners were defined, seven in number and the plaintiff in the present suit was declared to be the owner of one share While the suit was pending and before the partnership was dissolved, a sum of Rs. 35,239 and odd was collected by one Arunachalla Chetty, who was the agent of the Mandalay firm, and this sum was deposited at interest with a firm consisting of defendants Nos. 1 to 7 and a stranger who is the 11th defendant in this suit which may be briefly referred to as the Rangoon firm. It may be seen that defendants Nos. 1 to 7 are common partners in both the Mandalay and Rangoon firms. The present suit was brought to recover 1/5th share of the money deposited with the Rangoon firm and the temporary Subordinate Judge of Sivaganga has given the plaintiff a decree accordingly. Defendants Nos. 3 and 4 appeal and they attack the correctness of the Subordinate Judge s judgment upon two points: (a) that the suit as framed is not maintainable, and (6) that it is time-barred

(2.) The grounds for saying that the suit is not maintainable are stated in full in grounds Nos. 27 to 29 of the appeal memorandum. Although in the written statement of the 1st defendant the objection was simply raised that the suit could not be maintained without giving reasons, it appears from the appeal memorandum that the reasons are that the plaintiff s only remedy was to work out the claim as an item of asset in the winding up proceedings of the Mandalay firm under the decree of the District Court, which is Exhibit IV (a), and was confirmed on appeal to the Judicial Commissioner by his judgment Exhibit IV (c), Ground No. 28 is that "the money having been advanced as a whole and there having been admittedly no division or apportionment among the several partners, it was not competent for the plaintiff to maintain a suit for the recovery of his share alone," and ground No. 29 is that "the plaintiff cannot evade the equities arising out of the state of the account between himself and his partners of the Mandalay firm as a whole." It goes on to state that either a suit should have been brought on behalf of all the partners of the Mandalay firm for recovery of the entire loan or the plaintiff should have taken proper proceedings in execution of the decree of the Mandalay Court.

(3.) Now, on this point, there is no doubt that in England an action may, in the present state of the law, be brought in some cases by one firm against another, although they may have a common partner or partners, or on behalf of a firm to recover a debt due by one of the partners of that firm. See Lindley on Partnership (8th Edition), page 323. In India, Order XXX, Rule 9, of the Civil Procedure Code recognises the maintainability of suits between firms and one or more partners of such firms and also suits between firms having one or more partners in common. But a suit does not ordinarily lie if brought by one partner to recover money lent by him to a firm of which he is a member [see Rustomji v. Purshotamdas 25 B. 606 : 3 Bom. L.R. 227], the reason being that the advance made by one partner would be only one item in the partnership account; nor can one firm sue another when the sole partners of the first firm are partners along with others in the second firm and the claim is to recover as plaintiff s share certain advances made to the second firm before it ceased to do business--see Kathinath Kedari v. Ganesh Hari Narkar 26 B. 739 : 4 Bom. L.R. 525, the reason being that, without taking a general account, it would be impossible to do justice between the parties. It was held in Karri Venkatareddi v. Kollu Narasayya 1 Ind. Cas. 384 : 32 M. 76 : 19 M.L.J. 10 : 4 M.L.T. 456 that in certain circumstances one partner can sue another for a partial account. Those circumstances are that the granting of the relief asked for by the plaintiff would not involve the taking of general accounts and would not work injustice to the other partners. In the same Volume of the I.L.R. Madras series at page 203 another case, Sadhu Narayana Aiyangar v. Ramaswami Aiyangar 3 Ind. Cas. 486 : 32 M. 266 : 4 M.L.T. 475, is reported in which it was held that a partner, who has been compelled after dissolution of the partnership to pay a debt due by the partnership, may bring a suit for contribution; but in such a suit it was laid down that the defendant must be given an opportunity of showing, if he can, that on a settlement of accounts the amount payable by him as contribution has been wiped out or reduced. In Gottipatichina Kondiah v. Gottipatinanasappa Naidu 22 Ind. Cas. 947 : 26 M.L.J. 221, to which decision I was a party, a partner was allowed to sue for his share of the collections made by another partner after dissolution of the partnership, on the condition that the defendants were given an opportunity of showing that, if a general account of the partnership transactions were taken, the plaintiff would not be entitled to the share which he claimed. But in another case decided by a different Bench to which my learned brother was a party, Lakshmanan Chetty v. Nagappa Chetty 45 Ind. Cas. 86 : 34 M.L.J. 408, where the plaintiff sued to establish a certain liability against the defendants on the basis of accounts and he did not ask for accounts to be taken, it was held that the suit was not maintainable. What are the rights of persons in a firm inter see has been clearly set out in Lindley on Partnership at page 659, 8th Edition. One of these is to have the partnership assets applied in liquidation of the partner-ship debts and to have the surplus assets divided. This result is usually obtained by the process referred to at page 614 of having a Receiver appointed. The share of a partner to which he is entitled is his proportion of the partnership assets that have been realized and converted into money after all the partnership debts and liabilities have been paid and discharged--see page 402.