1988 (7) TMI 416 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the plaintiff's suit was barred by time.
2. Whether the plaintiff was entitled to accounts of the firm M/s. Shah Vaktaji Dalichand and Company.
3. Whether the defendants committed fraud on the plaintiff preventing her from filing the suit within the limitation period.

Issue-wise Detailed Analysis:

1. Whether the plaintiff's suit was barred by time:
The primary issue revolves around the timeliness of the plaintiff's suit. The courts below held that the suit was filed within the limitation period, relying on Section 47 of the Limitation Act. They concluded that the cause of action arose when the plaintiff discovered the fraud by the defendants, which prevented her from approaching the court earlier. The plaintiff learned in 1963 that she was not made a partner in the firm despite assurances from the defendants, and she filed the suit in 1964. However, the High Court found that the suit was barred by time. Under Article 5 of the Limitation Act, the period for filing a suit for accounts of a dissolved firm is three years from the date of dissolution. Since the firm dissolved on 5-11-1960 upon the death of the plaintiff's husband, the suit should have been filed by 5-11-1963. The High Court concluded that the suit filed in February 1964 was beyond the limitation period.

2. Whether the plaintiff was entitled to accounts of the firm M/s. Shah Vaktaji Dalichand and Company:
The plaintiff sought a decree for the rendition of accounts of the firm, claiming her husband's share. The trial court held that although the plaintiff was not entitled to a share in the new firm, she was entitled to accounts of the quondam firm. The High Court, however, disagreed, stating that the plaintiff's right to claim accounts was barred by time. The court emphasized that the firm automatically dissolved upon the death of the plaintiff's husband, and the limitation period for seeking accounts began from that date.

3. Whether the defendants committed fraud on the plaintiff preventing her from filing the suit within the limitation period:
The defendants allegedly assured the plaintiff that she was made a partner in the firm, which prevented her from seeking legal redress earlier. The trial court found that the defendants' fraudulent assurances prevented the plaintiff from filing the suit within the limitation period. However, the High Court held that the plaintiff was not prevented from knowing her right to file the suit. The court cited precedents, including Ramalagu Servai v. Solai Servai and Re Marappa Goundar, to support the principle that subsequent fraud does not stop the running of time once the cause of action has arisen. The High Court concluded that the plaintiff's reliance on Section 17 of the Limitation Act was misplaced, as there was no concealment of her right to seek accounts.

Conclusion:
The High Court allowed the appeal, setting aside the decrees of the lower courts. It held that the plaintiff's suit was barred by time and dismissed the suit in O.S. No. 11/64. The court emphasized that the plaintiff was not entitled to any relief regarding the accounts or dissolution of the new firm, and parties were directed to bear their own costs throughout.