Case: K. Mohammad Ziauddin Sahib Vs. Kosha Abdul Munaf Saheb and Others

the business conducted by Dadamian Sahib & Sons. The first defendant has not produced any of the accounts relating to this business though he was summoned by the plaintiff to produce them. His contention is that this business is a separate business carried on by him in partnership with other and that, therefore, the plaintiff is not entitled to any interest in it. The Commissioner has dealt with this matter at pages 9 and 10 of his report. He says that the Bowringpet business cannot be said to be a business carried on by the suit partnership because the first defendant was carrying on the business in partnership with strangers who had nothing to do with this partnership. I do not think that a sufficient ground for negativing the plaintiffs contention. The suit partnership had been carrying on some business in partnership with persons who were not partners in the suit partnership. For instance the tobacco business is said to have carried on in Vasakattu with others who were not partners of Dadamian Sahib & Sons. This is admitted by the counsel for the first defendant. Therefore the mere fact that the first defendant has been doing the Bowringpet business in partnership with other will not show that it is not on behalf of the suit partnership. As has been pointed out by the Commissioner himself, the 1st defendant had utilised the funds of the suit partnership for conducting the Bowringpet business in petrol and kerosene. There is also a ledger page in the suit partnership accounts for the Bowringpet business as stated by the Commissioner. These clearly show that the Bowringpet business is also part of the suit partnership. The High Court has held that the 1st defendant must account for the business carried on by him in his own name as well as the business formally known as Dadamian Sahib & Sons. The Bowringpet business being admittedly one of the businesses carried on by 1st defendant in his own name though along with others, it is covered by the High Courts decree and the 1st defendant must account for his share of the profits of that business also.But the 1st defendant having failed to produce the account books of this Bowringpet business in spite of the plaintiffs notice given to him, interest on the amount utilised by the 1st defendant from the suit partnership must be charged in lieu of the profits. I think that the 1st defendant is suppressing the accounts of this business because this business yielded considerable profits. This business deals in petrol and kerosene. The plaintiff claims interest at 24 per cent. per annum but I think that this is excessive. I think that 12 per cent. per annum would be a reasonable rate of interest."The High Court dealt with this item thus :"The next item is a sum of Rs. 11, 608-0-9, representing the profits got by the Bowringpet business and interest thereon. Mr. Thyagarajan contended that a sum of Rs. 5, 500 had been drawn out by the 1st defendant from the suit partnership assets for becoming a partner in the Bowringpet business, and that the 1st defendant would be liable only for this Rs. 5, 500 with interest at 6 per cent. per annum from the date of drawing as the profits were not greater. Worked out on that basis, it will come to Rs. 8, 600 and odd. So relief can be claimed only regarding the balance of Rs. 3, 000 under this head. This was one of the items objected to before the Commissioner by the plaintiff."In our view, the High Courts approach is correct and the trial court had wrongly assumed that the fact that defendant No. 1 had entered into a partnership with a stranger after withdrawing certain amounts from the partnership must be held to be a part of the main business. We do not think there is any material to justify this conclusion. The appellants challenge thus fails.14. The next item refers to petrol leakage and betel nut. The High Court has dealt with these items in these words :"The next item is a sum of Rs. 4, 074-8-0 claimed as refund of family funds for purchase of Items 6, 7, 10 and 11. In view of our finding that items 7 and 10 were actually purchased for the family, and that an adjustment has been made regarding the advance for the purchase of the other two items this item disallowed. The next item is a sum of Rs. 2, 113-12-10 claimed by the plaintiff as allowance for petrol leakage. But, in those days, it appears that the bunk system of pump petrol had not come into vogue, and no leakage seems to have been allowed for petrol as it was supplied in leak-proof 2 gallons tins. The evidence shows this. We believe the evidence and we allow this item in favour of defendant 1. Next we come to Rs. 3, 400 claimed for betal nut wastage. Some wastage was inevitable in a trade in betel nut, but more than 5 per cent. is not justifiable in the absence of proof of actual wastage above that limit. So we allow Rs. 2, 500 under this head and disallow the rest."The criticism levelled by Shri Latifi that the accounts with regard to petrol leakage were not produced is, in our opinion, unacceptable for it is normally not practicable to keep account with respect to such petrol leakage. In regard to betel nuts also as observed by the High Court some wastage is inevitable and this wastage can normally be fixed only approximately and this is precisely what the High Court had done. We do not find any cogent ground for disagreeing with the approach of the High Court and for interfering with this conclusion.15. The last objection relates to the claims of the widows. According to Shri Latifi the widow should have got only one-fourth share and the High Court should have left the question open.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]5. The only grievance the appellant seems to have in this appeal relates to his claim in the assets forming partnership business which was extensive.Shri Latifi, learned counsel for the appellant, in the first instance tried to assail the very basis of the ascertainment of shares of the various partners in that business by submitting that their rights and liabilities were governed by Mohammadan law and not by the terms of the partnership.This attempt was, however, soon given up and, in our opinion, rightly.6.The learned counsel in fact challenged the conclusion of the High Court only on certain items. The general arguments, however, was confined to the challenge to they defendant No. 1 of the accounts of partnership. It was submitted that defendant No. 1 was mainly looking after the partnership business and had in his custody all the accounts of the business. He stood in a fiduciary capacity towards the younger members of the partnership and had, therefore, to satisfy the conscience of the court that the interest of the other members of the partnership particularly of the plaintiff had not suffered and had been fully safeguarded by him. The accounts before 1925 were not produced and the explanation that they had been accidentally destroyed is unacceptable. On this reasoning Shri Latifi contended that adverse inference should have been drawn against defendant No. 1.This argument, in our opinion, ignores the concluding portion of the judgment of the High Court when passing the preliminary decree.In so far as the accounts after November 19, 1925 are concerned, they were all before the Commissioner and the courts below. The grievance that the relevant accounts were not produced is, therefore, unfounded. The plaintiffs contention raised in the trial court that the first defendant had kept two sets of accounts, one for income tax purposes and the other showing the real state of affairs was repelled by that court as unsubstantiated. This conclusion has not been shown to be in any way erroneous.8.We will now deal with the specific items canvassed by Shri Latifi. The first item to which he took objection is a sum of Rs. 23, 900 deposited with the. It is complained that this item is not entered in the accounts.This seems to us to be factually incorrect because in the trial court the objection was clearly confined only to the amount of interest having not been entered in theit may be pointed out that the respondents counsel also submitted that this objection had not specifically raised before the Commissioners. This seems to be so. It is clear that the appellants grievance has noare concerned with the date March 27, 1934 which is the date for winding up of the affairs of this partnership. Theas on that date is an asset of the partnership liable to be divided among the partners at the dissolution. Exhibit 77 is the ledger of the partnership for the yearUp to March 27, 1934 the balance stock on hand must be taken into account and their value will be ascertained. The value will be ascertained on the basis of the sale next preceding the date March 27, 1934. A separate statement will be worked out on this basis. This will be the value of the stock on hand as on March 27, 1934. This value should be treated as the assets of the partnership and will be added to the profits and divided among the partners and according to their shares as specified in Exhibit III."The High Court disposed of this objection in these wordsitem objected by Mr. Thyegarajan is a sum of Rs. 30,representing the value of the stock on hand. Mr. Thyagarajans case was that this was already taken into account by the Commissioner in working out the profits and assets. This appears to be so. That is the reason why the plaintiff never objected before the Commissioner. We allow this amount to be deducted from defendant 1s accountability as arrived at by the lower court.We are unable to find anything wrong with this reasoning. The appellants grievance regarding this item is thus clearlynothing specific was urged about the tobacco account. The conclusion of the High Court, therefore, seems to us to be unexceptionable and indeed the appellants learned counsel was unable to persuade as to disagree withour view, the High Courts approach is correct and the trial court had wrongly assumed that the fact that defendant No. 1 had entered into a partnership with a stranger after withdrawing certain amounts from the partnership must be held to be a part of the main business. We do not think there is any material to justify this conclusion. The appellants challenge thuscriticism levelled by Shri Latifi that the accounts with regard to petrol leakage were not produced is, in our opinion, unacceptable for it is normally not practicable to keep account with respect to such petrol leakage. In regard to betel nuts also as observed by the High Court some wastage is inevitable and this wastage can normally be fixed only approximately and this is precisely what the High Court had done. We do not find any cogent ground for disagreeing with the approach of the High Court and for interfering with this conclusion.15. The last objection relates to the claims of the widows. According to Shri Latifi the widow should have got onlyshare and the High Court should have left the question open.