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

2. The suit was instituted in March, 1934. It is unnecessary to refer to the chequered career of the suit. Suffice it to say that the trial court passed the preliminary decree in December, 1939. This decree directed, inter alia, that the accounts be taken of the assets and liabilities of the business of Dada Mian & Sons carried on by the plaintiff and the defendants from November, 1925 till the date of the suit, i.e. March 27, 1934. Broadly, the form of this order had in fact been settled with consent of the parties before the appellate court and the case had been remanded to the trial court for partition and division of the property and for delivery of possession. The trial court, however, made a detailed decree specifying the shares of the parties, to which it is unnecessary to refer for the purposes of the present appeal.3. Defendant No. 1 took the matter on appeal to the Madras High Court. That appeal was disposed of in December, 1942. The High Court disagreed with the trial court on certain matters. Apart from the conclusions and directions given by the High Court with respect to the other properties with which we are not concerned in this appeal, the High Court saidwill also follow that in calculating the sums due to the various partners in Exhibit II, which sums were all carried forward to the new partnership with the exception of what was taken away by D.W. 1, Rs. 16, 350 will have to be excluded. The sums then ascertained as due to the various partners will be deemed to be the capital contributed by them in the new partnership of 1925.............We do not however find any reason for thinking that the entitle "Dadamian & Sons" in other words the family was the ejaman in the new partnership. The word "ejaman" was prefixed only to Dadamian, whose name still found a place in the new accounts, even though he was dead and to Abdul Ali, who had ceased to be a partner. Moreover, we think that a ejaman partnership is inconsistent with the terms of the contract entered into by the parties in Exhibit III. If we read Exhibit III with Exhibit II and examine the accounts it becomes clear that the various parties to Exhibit III contracted to conduct a new business, sharing as partners in the ordinary way with certain definedThe learned Subordinate Judge has left open the question as to what were the assets of the business subsequent to 1925; and we feel that as the suit proceeded in the lower court on the basis that the details as to the division of the property and the ascertainment of the rights in individual items acquired after 1925 should be left to the final decree stage, it is desirable that the accounts already filed should be looked into and other evidence permitted to show from what sources this property was acquired. The accounts may show that the purchase price of a particular item of property has been debited to a particular partner. If so, then the property would probably be his. It might appear that property as acquired out of money belonging to Dadamian, in which case it would be the property of the family. It might, alternatively have been acquired out of profits, in which case in would belong to all the partners. Another possibility is that it was acquired out of money belonging partly to Dadamians family and partly to the partners as such, in which case it would have to be divided amongst the heirs of Dadamian and the partners in proportion to the amounts taken from the two sources. We therefore express no opinion at all as to the ownership of Items 6, 7, 10 and 14 of the Schedule C properties, represented by Exhibits T, U, Z and CC. We need hardly add that in examining the accounts of the new partnership, the possibility that transactions appearing in the name of the first defendant may have been for the benefit of the partnership or of the family should not be lost sight of.Pursuant to the preliminary decree, after failure of two commissioners to discharge their duty satisfactorily a third commissioner was appointed to take account to the partnership business and to ascertain shares of the parties in the profits and losses and to divide Items 6, 7, 10 and 14 of the plaint (Schedule C). He submitted his report to the trial court which, after considering the same and the objections raised thereto by the parties, passed the final decree on February 27, 1954. Defendant No. 1 preferred an appeal to the High Court against that decree. The High Court modified the trial courts decree in certain respects. It is in these circumstances that the present appeal by the plaintiff has been presented to this Court.

Court's reasoning:
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.