CASE TITTLE:S. SHIVRAJ REDDY(DIED)THR HIS LRS. AND Anr V S. RAGHURAJ REDDY AND OTHERS
CASE NO: CIVIL APPEAL OF 2024(Arising out of SLP(Civil) No(s). 23143-23144 of 2016)
ORDER ON: May 16, 2024
QUORUM: J. B.R. GAVAI and J.SANDEEP MEHTA
FACTS OF THE CASE:
The present appeal is preferred for assailing the judgment Dated 27th March, 2014 passed by the Division Bench of High Court of Judicature of Andhra Pradesh at Hyderabad.
The facts leading to the present appeal in question is that, Respondent/plaintiff, along with defendants And deceased M. Balraj Reddyhad constituted a partnership firm, namely “M/s Shivraj Reddy & Brothers. Further Respondent/plaintiff instituted original suit, Seeking relief of dissolution of the firm and rendition of accounts,wherein, The learned II Additional Chief Judge, City Civil Court, Hyderabad, allowed the original suit filed by respondent/plaintiff and passed a decreedeclaring the firm to be Dissolved and directed defendant Nos. 2 to 4 to tender accounts of The firm from the year 1979 onwards till October, 1998 and Further, granted liberty to respondent/plaintiff to file a Separate application seeking appointment of an Advocate Commissioner for taking accounts of the firm and for other Appropriate reliefs.Being aggrieved, defendant No.1 and 2 preferred Appeal before the High Court of Judicature of Andhra Pradesh at Hyderabad.wherein, the Learned Single Judge of the High Court vide judgment Allowed Appeal on the ground that the earlier case was barred by limitation as one of the partners in Subsisting partnership firm, Shri M. Balraj Reddy expired in 1984, Therefore the firm stood dissolved immediately on the death of the Partner. Since the original suit was filed in 1996, it was barred by Limitation. Aggrieved by the decision of learned Single Judge, respondent/plaintiff preferred LPA before the learned Division Bench of the High Court, which allowed the appeal and set aside the judgment dated passed by the Learned Single Judge, observing That the plea of limitation was never raised during the pleadings in The trial Court and learned Single Judge ought not to have dealt With that issue at all. Being aggrieved, appellants have preferred The present appeal by special leave.
LEGAL PROVISIONS:
Section 42 of the Partnership Act, 1932 talks about Dissolution on the happening of certain contingencies
CONTENTIONS OF APPELLEANT:
The appellant through their counsel urged that the Suit was filed by respondent/plaintiff for dissolution of thefirm and for the rendition of accounts in the year 1996.The counsel further referred to the partnership deed dated 25th April, 1978, Whereby submitted that the firmwas constituted and urged at a partnership at will. The counsel also drew the attention Of the Court to Section 42 of the Partnership Act, 1932, Further the counsel submitted that as per Section 42(c) of the Act, the death of a partner leads to automatic dissolution of the Firm.the counsel submitted that Shri M. Balraj Reddy i.e. Partner No. 3 in The firm admittedly expired in the year 1984 and consequent to his Death, the firm stood dissolved automatically. The counsel further urged that it is settled law that it is the duty of theCourt to dismiss any suit instituted after the prescribed period of Limitation, although limitation has not been set up as a defenceAnd thus, the learned Division Bench erred in allowing LPA and interfering with the judgment passed by the learned Single Judge on the basis that the plea Of limitation was never raised during the pleadings and thus, the counsel On these grounds, urged Thatthe decree passed by the Learned trial Court to dissolve the firm and Directing the partners to tender the accounts being upheld is ex facie Illegal, and therefore, deserves to be quashed and set aside.
CONTENTIONS OF THE RESPONDENT:
The Respondent through their counsel submitted that there is documentary Evidence on record to show that the firm continued To exist and its business activities continued even after the death Of Shri M. Balraj Reddy. The counsel therefore, urged that the contentions Put forth by the learned counsel for the appellants that the firm Stood dissolved automatically on the death of Shri M. Balaraj Reddy is misconceived. The counsel further contended that the issue of limitation was never Raised before the trial Court and thus, the same could not have Been allowed to be taken at the first appellate stage. On these Grounds, the counsel sought dismissal of the appeal.
COURTS ANALYSIS AND JUDGEMENT:
The court on giving thoughtful consideration to the Submissions advancedand having gone through the Impugned judgment and the material placed on record.The court opined that theReasoning given by the learned Division Bench while dismissing LPA, that the learned Single Judge ought not to have considered the question of limitation as the defendants did Not choose to raise the plea of limitation in the trial Court is erroneous.The court further opined that Law in this regard has been settled by this Court Through a catena of decisions. Therefore, the court also referedjudicial precedents and Thus, the court observed that it is a settled law that even if the plea of limitation is Not set up as a defence, the Court has to dismiss the suit if it is Barred by limitation.The court also observed thefact that the firm was a partnership at will, is not in dispute. It Is also not disputed that one of the partners of the firm, namely,Shri M. Balraj Reddy expired in the year 1984. This event leaves No room for doubt that the partnership would stand dissolved Automatically on the death of the partner as per Section 42(c) of The Act, The court further observed that A fervent pleathat the firm continued to exist even after the death Of Shri M. Balraj Reddy, and the business activities were continued By the firm.therefore the court opined that, Even if it is assumed for the sake of argument that the Partners were carrying on the business activities after the death of Shri M. Balraj Reddy, there cannot be any doubt that the firm Stood dissolved automatically in the year 1984 as mandated under Section 42(c) of the Act unless and until there was a contract Between the remaining partners of the firm to the contrary. The court further observed that There Is of course, no such averment by the respondents, further business Activities even if carried on by the remaining partners of the firm after the death of Shri M. Balraj Reddy, would be deemed to be Carried in their individual capacity in the circumstances noted Above.The court opined that the period of limitation for filing a suit for rendition of Account is three years from the date of dissolution.Hence in the present Case, the firm dissolved in year 1984 by virtue of death of Shri M. Balraj Reddy and thus, the suit could only have been instituted Within a period of three years from that event. Indisputably, the Suit came to be filed in the year 1996 and was clearly time-barred, Therefore,the court opined that learned Single Judge was justified in accepting theAppeal and rejecting the suit as being Hopelessly barred by limitation. As a consequence, the court opined that the impugned judgment passed by the Division Bench in LPAdoes not Stand to scrutiny and the court hereby reversed and set aside, the court further allowed the appeal accordingly.
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judgement reviewed by: Sowmya.R
