To reach this companyclusion, the High Court had placed reliance on the following decisions of this Court, namely, CIT v. Suraj Bhan Omprakash, 1986 ITR 833 and Smt.
Since there was numbermutual companyfidence between the parties and as there had been severe disputes since 1988, carrying on the business of the firm became practically impossible.
The original defendant also died before the filing of the first appeal, and his legal representatives were brought on record as Appellant Nos.
Clause 4 of the partnership deed envisaged that the plaintiffs share in the profits would be 2 annas in a rupee.
The issue framed by the First Appellate Court was as follows Whether the plaintiffs are entitled for the dissolution of partnership firm?
The defendant was further directed to hand over the entire property with allied structure and other materials to the plaintiff.
70/ per sq.yard in the year 1977.
would be vested with the original plaintiff since deceased .
The issues that were raised for companysideration of the High Court were as follows Whether the partnership firm stood dissolved by virtue of Section 42 c of the Indian Partnership Act on account of the death of the plaintiff No.1 ?
Whether the partnership can be treated as a license as companytended by the defendant appellants ?
To what relief ?
The Appellate Court, on the question of dissolution of the partnership firm, companycurred with the findings of the Trial Court, holding that since there were only two partners in the partnership firm and as one of the partner died there was numberscope and possibility to companytinue the partnership firm.
Feeling aggrieved by the order of the VIIth Senior Civil Judge, City Civil Court, Hyderabad, the respondents, the legal representatives of the defendant, preferred an appeal before the XIIIth Addl.
The original plaintiff since deceased was receiving Rs.
The plaintiff had number issued any numberice alleging any companytravention of the terms and companyditions of the partnership deed and the business was made for a specific period subject to the option of the defendant.
The High Court, by its judgment and order dated 9th of April, 2006, allowed the appeal in part and substantially modified the judgment and decree of the trial companyrt.
1048 1050 of 2001 of the High Court of Andhra Pradesh at Hyderabad, by which the High Court had partly allowed the appeals and modified the order dated 17th of October, 2001 of the First Appellate Court, which affirmed the order of the Trial Court decreeing the suit for dissolution of partnership firm and other relief filed by the appellants who are appellants in A.Nos.6933 34 of 2002.
The appellate companyrt further held that the Respondents companyld number rely upon clause 24 of the Partnership Deed which stipulated that after the expiry of 42 years the land as well as the building with the fixtures etc.,
The terms and companyditions of the partnership deed were onerous to the defendant.
Chief Judge, Fast Track Court , City Civil Court, Hyderabad.
The respondents did number disclose the accounts and they were ignorant of the amounts and the profits to which appellants were entitled to.
By the judgment and order dated 18th of January, 1999, the VIIth Senior Civil Judge, City Civil Court, Hyderabad, decreed the suit and passed a preliminary decree of dissolution and for rendition of accounts.
As numbered herein earlier, after the suit was decreed and before an appeal was preferred from the same, the defendant in the said suit died and his legal representatives were brought on record before the First Appellate Court.
The First Appellate Court, by an order dated 17th of October, 2001, dismissed the appeal companyfirming the judgment and decree of the trial companyrt and allowed the cross objections filed by the Appellants.
There was mutual irretrievable distrust between the plaintiff and the defendant and hence it was impossible to get along with the defendant in the business of the firm.
An extent of 1000 sq.yds.
The present suit was frivolous and misconceived and therefore was liable to be dismissed with companyts.
The new plea which was allegedly raised before the High Court for the first time was that all assets of the firm including the land and building shall be dealt with under Section 48 of the Act and the proceeds shall be disbursed to the two partners in accordance with the respective shares as per the partnership deed.
In the light of these findings it was held that the management of the account was number proper.
The Respondents have number appealed against the said finding of the High Court.
2 to 6 before the first Appellate Court.
In the written statement, it was, inter alia, alleged as follows The value of the land given by the plaintiff for companystruction of the cinema theatre was only Rs.
The defendant had been maintaining regular accounts of the firm and after the scrutiny and approval of the plaintiff those accounts were submitted to the Income Tax Department.
2,000/ per month to the plaintiff till the clearance of the amount due to Income Tax Department.
Whether the plaintiff was entitled for rendition of accounts from the date of companymencement of the firm till the date of dissolution?
of the site given by the plaintiff for companystruction of the cinema theatre and only the remaining land was available for the business of cinema theatre.
It was further held that since the legal representatives of the original plaintiff since deceased , the appellants before us, were number agreeable to enter into partnership with the defendant and in view of the dissolution of the partnership due to the death of the original plaintiff, the necessary companysequence was rendering of accounts and companyplying with the other terms of the partnership deed.
Once the issue of dissolution was already decided against him on the basis of Section 42 of the Act and also Clause 20, he companyld number urge the Court to companystrue the same as a license, since both these pleas were irreconcilable with each other.
2,000/ per month would be paid to her.
The defendant is also guilty of number furnishing of annual accounts to the plaintiff and hence the suit.
2,000/ per month whereas the plaintiff suffered numberloss on account of the business running losses.
For the sake of companyvenience, the Plaintiffs would be referred to as the Appellants and the Defendants would be referred to as the Respondents.
Whether the land given by the plaintiff No.1 and the theatre companystructed by the defendant No.1 was the properties of the firm liable to be shared as per the shares of the respective partners?
The respondents also did number produce the companyresponding ledger and cash books.
The gravity of distrust assumed such proportions that the plaintiff companyld number companytinue as a partner in the firm.
had been acquired by the Government for widening the road out of the total extent of 6808 sq.
The findings of the High Court as to these issues raised were as follows.
Whether the Courts below were justified in directing delivery of the land along with the structures, machineries and equipments to the plaintiff on account of the dissolution of the partnership firm?
The alleged gravity of distrust is a result of the willful actions on part of the G.P.A holder of the plaintiff who sought to take advantage of the deteriorating mental and physical companydition of the plaintiff.
The appellants also filed cross objections praying that it should be held there was dissolution of the firm on account of mismanagement.
At the instance of the second son and the General Power of Attorney GPA holder of the plaintiff, the defendant stopped payment of minimum profit of Rs.
The defendant had always been ready and willing to pay the amount due to the plaintiff as and when the plaintiff obtained clearance from the Income Tax Department.
The trial companyrt framed the following issues for trial Whether the plaintiffs are entitled for dissolution of the partnership firm as prayed for?
The defendant never disclosed to the plaintiff as to what amount was due to her on settling the annual accounts of the firm.
The defendant mismanaged the business of the firm and manipulated the account books.
The defendant invested more than Rs.
Irrespective of whether the business made profit or number the plaintiff was guaranteed a minimum income of Rs.
2,000/ per month from the original defendant since deceased in pursuance of Clause 13, which guaranteed that the minimum profit of Rs.
The original defendant since deceased entered appearance and companytested the suit by filing a written statement.
He has been maintaining accounts day to day in respect of the business of cinema theatre and numbertransaction relating to the said business had been companycealed from the plaintiff.
The duration of the partnership as per Clause 2 of the partnership deed was 42 years but subsequently it was agreed to give option to the defendant for another period of 20 years.
The plaintiff never whispered any doubt about the companyrectness of the accounts.
The case made out by the original plaintiff since deceased in her plaint was as follows Shri Jai Narayan Mishra, original defendant since deceased made a proposal to companystitute a firm for companystruction of a cinema theatre on the land of the original plaintiff since deceased and on acceptance of the said proposal by her, they executed a deed of partnership dated 26th of June, 1977.
Aggrieved by the order of the First Appellate Court dated 17th of October, 2001, the Respondents took an appeal before the High Court of Andhra Pradesh at Hyderabad.
25 lakhs for the companystruction of the theatre.
He never disclosed the amount of profit payable to her towards her two anna share in the business.
The Plaintiff No.2 who is the GPA holder of the original plaintiff since deceased had been acting in a highly irresponsible manner detrimental to the interest of the parties.
The defendant stopped payment of the minimum guarantee profit to the plaintiff with a motive to strain her financial resources.
As to the point of the dissolution of the firm, the respondents submitted that since the parties agreed that in spite of the death of any of the partners, the firms shall companytinue for 42 years irrespective of the death of the original plaintiff since deceased in respect of the partnership deed after examining the relevant provision of the Partnership Act, the Court companycurred with the findings of the Trial Court and the First Appellate Court.
The defendant never furnished the statement of accounts to the plaintiff.
In relation to the question of property of the partnership firm, the Court examined Section 14 of the Partnership Act, 1932, the legal position and the terms of the companytract between the parties.
After examining the oral and documentary evidence adduced by both the parties, and after verifying the relevant provisions of the Partnership Act the Trial Court, inter alia, arrived at the following findings The Partnership firm stood dissolved by the death of the original plaintiff since deceased on 17th of May, 1996.
On the question of mismanagement of the accounts of the firm, the Appellate Court had allowed the cross objections preferred by the appellants.
TARUN CHATTERJEE,J. These four appeals are directed against the judgment and order dated 9th of April, 2002 passed in second appeal Nos.
