2007 (5) TMI 630 - SC - Indian Laws

Appeal against a judgment and decree passed by a Division Bench of the High Court - Entitlement to the share - Partition claiming 2/3rd share in the property - business of joint venture - suit barred by limitation - HELD THAT - There is no document in writing to prove partnership. Accounts had not been demanded by the plaintiffs or the defendant no. 3 for a long time. Even an oral partnership had not been proved. What was the subject-matter of the partnership had also not been considered by the High Court. A share in a joint venture, in absence of any document in writing, must be determined having regard to the conduct of the parties. The High Court proceeded on the basis that the plaintiffs and defendant No.1 had share in the property in terms of Section 45 of the Transfer of Property Act. If the said immovable property formed assets of the joint venture, the same would be an india to determine the shares held by the parties thereto. Ordinarily, the extent of an involvement made shall be the criteria for determining the share of the co-entrepreneurs. In absence of terms and conditions of the joint venture having not been reduced to writing, conduct of the parties how they dealt with affairs of the business would be relevant. If the contents of Ex. B-8 were accepted, it was not for the High Court to consider the consequences flowing therefrom, and, thus, but the fact whether the figure(s) contained therein could be verified from the books of account might not be very relevant. Whether, it would be in consonance with the pleadings of Appellants was again of not much significance if it can be used for demolishing the case of Plaintiffs and Defendant No.1 If the figures contained in Ex. B-8 were accepted, it was for Defendant No. 1 to explain the same and not for Appellants. The High Court, in our opinion, thus, committed a manifest error in not taking into consideration the contents of Ex. B-8 in its proper perspective. It was for the High Court to frame appropriate points for its determination in the light of the submissions made on behalf of Appellants in terms of Order 41 Rule 31 of the Code of Civil Procedure. The High Court failed to address itself on the said issue. Thus, apart from Issues Nos. 2 and 4, other points which for its consideration including the extent of the share of Plaintiffs and Defendant No. 1 were required to be specifically gone into particularly in view of the fact that such a contention had been considered by the learned Trial Judge. Issue Nos. 2 and 4, in our opinion, therefore, require fresh consideration at the hands of the High Court. Hence, it may also be necessary for the High Court to consider the applicability of the relevant articles of the Limitation Act. We, therefore, are of the opinion that the impugned judgment to the extent aforementioned cannot be sustained. It is set aside accordingly in part and the matter is remitted to the High Court for consideration of the matter afresh on the said issues, interalia, in the light of the observations made here in before. The High Court shall also formulate appropriate points for its consideration in terms of Order 41 Rule 31 of the Code of Civil Procedure and proceed to hear the appeal on merits on the relevant issues apart from Issue Nos.2 and 4. This appeal is allowed.

Summary

Issues Involved:
1. Whether the poultry business carried on by the appellants is a joint venture?
2. Whether there was a settlement of account under Ex. B-8?
3. Whether the respondents are entitled to the share of Defendant No. 4?
4. Whether the suit is barred by limitation?

Issue-wise Detailed Analysis:

1. Whether the poultry business carried on by the appellants is a joint venture?

The Supreme Court found that the business was indeed a joint venture and not the sole proprietary concern of Appellant No. 1. The Court noted the concession made before the High Court that Narasimha Murthy had a half share in the immovable property as per Section 45 of the Transfer of Property Act, 1894. This concession was not contested, thus affirming the joint venture nature of the business.

2. Whether there was a settlement of account under Ex. B-8?

The Court critiqued the High Court's handling of Ex. B-8, emphasizing that the document should be considered seriously, especially since Defendant No. 1 admitted its contents. The Court highlighted that, under Section 58 of the Indian Evidence Act, 1872, an admitted fact need not be proved. The High Court erred by dismissing Ex. B-8 solely because it lacked signatures, ignoring the admission by Defendant No. 1. The Court stated that such an admission by the Karta of a Hindu undivided family is significant and should be considered in determining whether a full and final settlement of accounts was reached, which also impacts the limitation issue.

3. Whether the respondents are entitled to the share of Defendant No. 4?

The High Court noted that the respondents could not claim Defendant No. 4's share as her relinquishment was not evidenced by a registered document, except for Ex. B-9, which was not registered. Therefore, the respondents were not entitled to her share.

4. Whether the suit is barred by limitation?

The Court emphasized that the limitation issue is jurisdictional and must be determined by the court regardless of whether it was pleaded. The High Court failed to properly consider Ex. B-8 in this context. The Court noted that the High Court did not adequately address the arguments regarding the settlement of accounts and the impact on the limitation period. The Court pointed out that the High Court should have framed appropriate points for determination under Order 41 Rule 31 of the Code of Civil Procedure, particularly focusing on the extent of the plaintiffs' and Defendant No. 1's shares.

Conclusion:

The Supreme Court set aside the High Court's judgment in part, remitting the matter for fresh consideration on Issues Nos. 2 and 4. The High Court was directed to formulate appropriate points for consideration and hear the appeal on merits regarding these issues, ensuring compliance with Order 41 Rule 31 of the Code of Civil Procedure. The appeal was allowed to the extent mentioned, with no order as to costs.