Case: M.V. Karunakaran Vs. Krishnan(Dead) By L.Rs

2. Three brothers, Madhavan, Bahuleyan and Karunakaran, were owners of the property. Madhavan and Bahuleyan started a partnership under the name and style of "The Trustful Daily Banking Company". Madhavan died on 26.10.1960, leaving behind Defendant Nos. 3 to 5 as his legal heirs and representatives. The partnership firm stood dissolved with his death. The legal heirs and representatives of Madhavan by reason of a registered deed of sale dated 28.05.1963 transferred the property in question in favour of Krishnan (since deceased) being predecessors in interest of the respondents herein. A money suit for recovery of a sum of Rs.312.20 was filed against the said partnership firm by a third party. The said suit was marked as O.S. No. 523 of 1964. It was decreed.3. The respondent admittedly was not a party to the said suit. The property in question was auction sold in execution of the said decree. Appellant purchased the same for a sum of Rs.5050/- being the highest bid. The said sale was confirmed. The Auction Purchaser prayed for delivery of possession. Respondent obstructed thereto. An application for removal of obstruction was filed by the appellant. The Executing Court by a judgment and order dated 09.10.1979 dismissed the said application, directing the respondent to deposit a sum of Rs.590.07 , inter alia, on the premise that on the death of Madhavan, the partnership became dissolved and keeping in view the fact that the other partner was also dealing with certain items of the partnership assets, the legal heirs and representatives of Madhavan could sell the property. The respondent, therefore, was the lawful owner thereof.4. The appellate court, however, while dismissing the appeal also opined that the respondent being a co-owner of the property along with the auction purchaser, the trial court was not correct in directing the respondent to deposit a sum of Rs.590.07. In the second appeal preferred by the appellant, the High Court having not found any error in the said judgment, dismissed the same. It was opined that the partnership having been dissolved, the dissolved firm cannot have status of partnership subsequently.

Court's reasoning:
11. Herein we have to consider the case from altogether a different angle. It is not a case where the partners of the firm were not the owners of the property. It is also not a case where the property was owned by the partnership firm. The partners as pre-existing co-owners had a definite share of the property. They merely applied their own property for running a business in partnership. On dissolution of the partnership, their right in the property revived. Using of a premises for business purpose would not automatically lead to the conclusion that the premises belonged to the partnership firm.12. The terms and conditions of the partnership agreement, in any event, are not known. It is also not the case where the partners ceased to be co-owners. If they continued to have undivided share in the property even during subsistence of partnership, question of their ceasing to have any interest therein on its automatic dissolution would not arise.13. Respondents were found to be in possession of the property. They were found to have some interest therein. In that view of the matter, we do not find any legal infirmity in the impugned judgment.