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TMI Blog1993 (3) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... nd he was entrusted with the Management of the firm and all its affairs. Clauses 9 and 10 of the partnership deed deal with the manner of maintaining the accounts and rendering of such accounts. They run as follows:-- 9. Proper books of account shall be kept by the Managing Partner and entries made therein of all such matters, transactions and things that are usually entered in the books of account kept by persons engaged in concerns of a similar nature and the same shall be kept posted up to the date under the personal superintendence of the Managing Partner. Such books of account shall be kept at the office of the partnership and each partner shall at all reasonable times have free access to them either by himself or by his agent, to examine and copy the same. 10. On the 31st day of December every year, a general account shall be taken of all assets and liabilities of the partnership and of all dealings and transactions of the partnership during the preceding year and the first of such accounts shall be closed on 31st December, 1957. A profit and loss account and a balance sheet shall be prepared and entered on a separate page and shall be signed by each partner. Such stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the real position of the firm or allowed the partners to peruse the accounts of the firm. As already stated, the plaintiffs were allowed inspection of the accounts relating to advances made by them, interest credited and amounts repayable to them. They however were not allowed to peruse the firm's accounts. The 10th defendant is the brother-in-law of the 1st defendant. The 7th defendant is the mother-in-law of the 10th defendant and the 8th defendant is her son. Defendants 12 to 14 are mere name lenders to the 1st defendant and are his associates, in all his activities. Their interests are identical with and are centred round the 1st defendant. The aforesaid persons are brought in as partners without their contributing any capital themselves but the contributions were provided only by the 1st defendant to give the 1st defendant predominant voice in the management of the affairs of the firm. The plaintiffs learnt that the 1st defendant, with a view to enrich himself, created bogus documents said to be debts payable to certain Multanies of Madras (1) Seth Chandulu Thikam Dass (2) Govindan Chataram (3) Paramanand Kishandass, (4) Lalchand Lakshmandass, (5) Kishandass Sadharam, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1960. Assuming that the Hundi liability of the partnership firm is real, the plaintiffs state that white large cash balances were available for repayment during the years 1960 to 1963, the Hundi loan position remained constant and undischarged during all the period. The plaintiffs learnt that the 1st defendant out of the heavy withdrawals made during the years 1960 to 1963, had made various investments by way of real property purchases and of starting of new businesses in brick kiln in one of the properties purchased, in the name of the 1st defendant, his son, his wife and his nominee. The bulk of the consideration for the aforesaid purchases and commencement of brick kiln business came from the partnership funds and the 1st defendant has been freely using the partnership funds as and when necessary. The 1st defendant has been purchasing the following properties in the name of himself, his brother, his wife and his nominees such as Guruviah: (1) Sale deed dated 6-7-1960 in respect of Kodarnbakkam lands for ₹ 75,000/- of the extent of 29 acres; (2) Sale deed dated 7-11-1960 in respect of 4.68 acres near Saidapet bridge for ₹ 42,800/-; (3) In connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;. There was high class starring and nearly 50% of shooting was done out-door and the production took nearly four years for competition. The heroine became pregnant in the course of the production and some of the bulls which participated in the production died and the firm had to procure new and similar bulls at a great cost and expense and train them for the picture. There were 19 partners and the plaintiffs contribution is only ₹ 20,000/- out of the total capital of ₹ 2,20,000/-. At the stage of negative, the picture costed about ten lakh of rupees. This defendant and his friends advanced ₹ 4 lakhs and so far as this defendant was concerned he charged only 9% interest on his advances, while the other partners and creditors were paid 15% interest on their advances. This was the first picture of its kind produced without obtaining any financial assistance from the distributors. After the production, the picture was released at various centres and the exploitation is now practically over. The picture is now running in lean houses in Andhra Pradesh, some centres in Tamil Nadu, Mysore and Kerala. It is true that the picture was selected for participation in the Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary expenditure in that connection are incurred. As there is no provision for the automatic continuance of the partnership on the death of one partner in the document, this defendant took steps to find out the intention and desire of the existing partners and the legal representatives of the deceased partner for reconstitution of the firm and its continuance. For this purpose, this defendant was holding consultative meetings amongst the obiter partners and others for arriving at an agreed decision so that effective steps could be taken for the reconstitution of the partnership. Actually a meeting of the partners was called on 29-11-1964 and the meeting of the partners was called on 29-11-1964 and the meeting could not be held in view of the non co-operation of plaintiffs herein. The first plaintiff wrote to say "That the meeting is invalid". This defendant therefore submits that whatever he did after 29-6-1964 was only to realise the just dues of the firm and incurring the necessary expenditure in relation thereto. It is not correct to state that the first defendants was carrying on any business contrary to the interests of other partners. The other allegations that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fendant spent his own funds. The fiat car referred to in para 11 was purchased by this defendant out of his own funds and it belongs to him only and the firm has no concern in this. All the advances have been duly repaid and there is no question of return of any advances to any parties at this stage. All the account books are duly and properly maintained by him in usual course of business and there is no neeci or occasion for tampering with the account books. Further all the account books and other vouchers and documents maintained by this defendant in relation to the firm's business have been duly filed into Court as per the directions of this Hon'ble court. There is no justification whatever either for the appointment of a Commissioner or for a Receiver for managing the affairs of the firm. There is now no new production of any picture of incurring any major item of expenditure. It is only the exploitation of the picture and as already stated the picture is having the lean days. There are the distribution accounts and the picture is being exploited by well known persons in the field. All the moneys realised are being deposited into Bank and there is therefore no question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already submitted no objection for a Commissioner being appointed for taking final accounts and determine the rights of all partners interest from 1-1-1963. This defendant also states that so far as the further exploitation of the picture is concerned that right may be given to highest bidder, amongst all the partners and the legal representatives of the deceased partners on his depositing the amount, for which he is willing to take the distribution rights into this Honourable Court. 7. The pleadings in the plaint, more particularly, paras 8-A to 8-F which were introduced by amendment by the plaintiffs were denied on various grounds including bar of limitation and change in the cause of action, etc. A preliminary decree, it appears, was passed almost without contest and the objections in the plaint thus enured in the final decree proceedings. Defendants 7, 8, 10 and 19 filed their statement adopting all objections raised in the plaint and reiterating that the first defendant had drawn large sums of money, created bogus hundis and purchased properties out of the partnership funds and making a specific allegation as follows:-- In the ledger page a sum of ₹ 7.935.00 was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and all the parties have satisfied themselves about the correctness of the amounts till December 31st 1962 and the partners have filed their Income Tax returns accepting the correctness of the amounts and it is not now open to them or to any persons claiming under them to question all the transactions or any particular entries made in the amounts which were maintained in the regular course of business and in respect of which all the partners had at all materials had access and inspection" and the cost of production for each picture cannot be compared with any other picture produced by another director or even by the same director. The expenses vary and there is a wide margin in the cost of production. Further there is more than 50% out-door picture Nammina Bantu and Pattatiyin Vertri produced by Sambhu Films. Considering the then position and the market value and the cost of production in the production cost of two pictures as disclosed in the Banks was very fair and normal. 10. What, however, stood concluded by the preliminary decree was that the partnership firm called Sambhu Films stood dissolved as on 29-6-1963 and that the first defendant/appellant was/is required to ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contesting defendants produced Exhibits C-1 to C-102. In the proceedings, more and more documents have been marked which have been referred to in the impugned judgment as well as in the course of the hearing by the learned counsel for the parties Exhibits D-l to D-36. The Commissioner recorded his opinion and on objections on his report, the suit came up before Mohan, J. as he then was for passing of a final decree. He, on the basis of the evidence collected by the Commissioner, ordered as follows:-- (1) There has been no settlement of account of the partnership as pleaded by the first defendant and that the contesting defendants would be entitled to have the account of the partnership taken from 5-11-1956. (2) The first defendant is not entitled to any remuneration for services. (3) There is no evidence to hold that that the plaintiff has taken away the Minutes Book excepting the oral evidence of the defendants. (4) The first defendant utilised his position as managing partner for the purchases of properties and for making investments between 1960 to 1964. (5) The contesting defendants would be entitled to their respective shares not only over the amount available for di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the business has not been precisely found. But straightway the learned Judge thought that the sum of ₹ 30,234,16 should be deducted. But still in the context of the learned Judge's acceptance that the firm incurred a loss, it is difficult to appreciate how by deduction of ₹ 30,234.16 out of the sum of ₹ 4,61,822-25 p would make the firm's business a profitable one, so that a decree can be given in favour of the erstwhile partners for a proportionate share thereof. All that we see from the concluding part of the judgment of the learned Judge is that without going into the records, accounts and other documents, statements from the Bar on either side seem to have taken the place of evidence and formed the basis of conclusions drawn by him. This, in our opinion, has vitiated the entire judgment. 14. After holding as above that the judgment of Mohan, J as he then was, was vitiated, there are certain observations in the Bench judgment in the appeals to the effect that the suit being one for dissolution and for accounts, a proper and accurate picture of the entire capital structure, borrowings, expenditure and receipts from all sources alone can be a safe basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formal hearing and submission of the report by the Master. It may not be necessary that it should be done by the Master himself. Both the parties represented by the counsel request that the matter may be straightway argued before the court so that the time taken for one round of argument before the Master and the preparation of the report by the Master may be avoided. In view of the consent and request expressed by both the counsel, I direct the matter may be posted for arguments on 18-9-78. The matter thus came before the learned Judge who proceeded to hear the parties on various issues. 16. In sum, one can say thus that a proceeding that would have ended with the judgment of Mohan, J as he then was, got revived for a rehearing for the reason of the aforementioned order in the appeal and since a need of further evidence was emphasised for which the Master of the Court was found to be the appropriate Court, it remained before the master for about one year to have the evidence of one witness that is to say the first defendant (P.W. 1) and thus to bring on the record of the proceedings besides the pleadings of the first defendant and the evidence on which Mohan, J. as he then was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective shares of 1/22, 3/22, and 1/88. 18. In spite of the above efforts, on specific findings as above recorded by the learned single Judge, it remained to be ascertained as to what may be the total amount realised from the two pictures by the first defendant and what would be the rate of interest that the Court should allow on the outstanding amount due to the contesting defendants/ respondents. The learned trial Judge has accepted the statement given on behalf of the contesting defendants on the total realisation of the pictures as reflected in Exhibits C-62 and C-63 and on the interest permitted a statement on outstanding amounts due with effect from 29-6-1963 at the rate of 12% with yearly rests till the date of the judgment and thereafter at the rate of 6% per annum till the date of realisation. 19. It is this part of the judgment that has given to the learned counsel for the respondents a preliminary objection as to the maintainability of the appeal, which objection, we propose to dispose of first. 20. We have seen from the facts and of the adjudications that have been made in the process of preparation of the final decree including the impugned order under which all iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It seems to us that the word "Judgment" undoubtedly a concept of finality in a broader and not a narrower sense. Thereafter, the court has stated that there can be judgments of three kinds; a final judgment, a preliminary judgment and an intermediary or Interlocutory judgment, the later being such orders which contain the quality of finality such as orders specified in clauses (1) to (w) of Order 43 Rule 1 of the Code of Civil Procedure, which are judgments within the meaning of the Letters Patent as well, and therefore appealable and added, There may also be interlocutory orders which are not covered by Order 43. Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote. The second of the types of judgment enlisted in the judgment of the Supreme Court are of two forms : (1) Where the trial judge by an order dismisses the suit without going into the merits of the suit but o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied that the impugned judgment is almost a final judgment, which has decided every objection, leaving certain clerical calculations to be done later. Apart from certain ancillary contentions, the main contentions on behalf of the appellants are that a serious mistake of law has been committed by the trial court in treating all the entries in the account books submitted by the first defendant/appellant/disputed for the reason of objections to one or two entries only and in the proceedings after remand, no care has been bestowed to the directions of the court in appeal in which it was categorically said that the suit being one for dissolution and for accounts, a proper and accurate picture of the entire capital structure, borrowings, expenditure and receipts from all sources alone can be a safe basis for arriving at the net result of the firm's business and to take some entries here and there from the accounts and connect them with purchases made by the Managing Partner would not give the court an exact position and such truncated consideration might possibly lead to distorted result that is to say the trial court by not proceeding in the manner directed by the Division Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he capital subscribed by him, such interest shall be payable only out of profits; (d) a partner making, for the purposes of the business, any payment or advance beyond' the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent per annum; (e) the firm shall indemnify a partner in respect of payments made and liabilities incurred by him:-- (i) in the ordinary and proper conduct of the business; and (ii) in doing such act, in an emergency, for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances; and (f) a partner shall indemnify the firm for any loss caused to it by his wilful neglect in the conduct of the business of the firm. The property of the firm subject to contract between the partners, the property of the firm includes all property originally brought into the stock of the firm, or acquired by purchase or otherwise, by or for the firm, or for the purpose and in the course of the business of the firm, and includes also the goodwill of the business. Unless the contrary intention appears, property and rights and interest in pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t because the valuer has recorded that the books contained certain irregularities and certain mistakes, therefore, the valuation effected on the basis of the same books is bound to be wrong. 32. We have, however, the indications of the law which this Court has always followed and which we are convinced, is the correct approach that the court shall not reopen the settled account, but when account hooks are shown to be erroneous to a considerable extent both amount and in the number of items or where a fiduciary relation exists and a less considerable extent of error is shown or where a fiduciary relation exists and one or more fraudulent errors or omissions are shown, the Court will reopen even a settled account. 33. In the case of Ramaswami lyer v. Ghanamani Nachtar 31 MLJ 851 : (AIR 1917 Mad 14 a Bench of this Court considered a case in which a claim of the power of attorney based on accounts was impeached as false and fraudulent. The plaintiff stated that he rendered the accounts to the Zamindar/ defendant, but the defendant contended that the plaintiff never rendered accounts and the defendant never looked into any accounts; that the accounts relied on contained fraudulent omi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rors are caused by mistake or errors caused by fraud, the court has a right to open the accounts. But when the account is between persons in a fiduciary relation and the person who occupies the position of accounting party that is, the trustee or agent, is the defendant, it is easier to open accounts that it is in cases where persons do not occupy that position, that is to say, that a less amount of error will justify the court in opening the account ..... "every case must depend on its own circumstances." The same view was held by the Privy Council in Mckellar v. Wallace, (1853) 5 Moo Ind App 372. 35. We have, however, a judgment of the Privy Council reported in Moung Tha Huyin v. Mah Thein Myah, ILR(1901) Cal 53. It was a case where pursuant to a dissolution decree, a direction was given to the managing partner to furnish accounts. Although we do not have any statement, as we have noticed in the cases cited above as to the principles of law, it is possible to deduce the ratio from the facts and the procedure of accounting approved by the Privy Council in the case. Upon the issue of dissolution by mutual consent, the Privy Council found that the lower Courts had decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partnership, the Court must order to reopen and/or reject the accounts submitted by such accounting partner. 38. In a later judgment of this Court, when a learned single Judge has stated in the case of Krishnamurthy Ayyar v. Vijaya-raghavachariar (1961) 1 MLJ 358 that books of accounts of the suit partnership produced in the Court constitute prima facie evidence amongst the partners for them all and against them all and that there is a presumption in favour of the genuineness of the account books of the firm, and added. The presumption in favour of the genuineness of the account books of the firm is certainly a rebuttable presumption as it will be always open to the person challenging the account-books to show that they are not genuine or to show that particular entries in the account-books are fictitious and not genuine or to show that particular entries in the account-books are fictitious and not genuine and thus destroy the prima facie evidentiary value afforded by the books of accounts. he has not stated anything different from what we have gathered as the principles to be pleaded in the case of a book of accounts. 39. The relationship of a partner qua another partner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The accounting partner receives money on behalf of not only his partner but on his own behalf both constituting the firm and partners are joint tenants of debts due to the partnership under the English Common Law and in equity they are as between themselves treated as tenants in common of such debts. If a partner, however, is made the Managing Partner, because of some special trust which is reposed in him by the other partners, then he may come to hold a position of fiduciary relationship and if he betrays that trust he may be held accountable as a fiduciary; if the other partners have acted upon his advice because of his special qualifications, and disinterested advice is not given and the advising partner gains thereby a personal advantage, then although as a partner, he is also a co-owner he would be liable on the basis of fiduciary relationship and must given to the partnership such gain. Likewise, if such a partner made a secret profit utilising his position then also his profit would be the profit of the partnership because in such a case he would be clearly in a fiduciary relationship. In our view it would have to be shown in each case in regard to the claim made against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such functions as that of the Managing Director or Managing Partner by which he alone acts for and on behalf of the other partners, a bond of a fiduciary character is created, the Managing Director/Managing Partner is bound in a fiduciary character to protect the interest of other partners and in such a fiduciary relationship, he is obliged torender account to other partners. He will be accountable for what he has received on his own behalf as well as on behalf of other partners and what he has spent on his own behalf as well as on behalf of other partners. The other partners will be entitled to challenge the account book as in such a case, they shall not be joint tenants of debts due to the partnership as under the English common law and in equity. In a case like this, the Court may order reopening of the whole account and reject the accounts submitted by the Managing/Accounting partner instead of disallowing one or the other entry in the books of account. The presumption as to the genuineness of the account books of the firm will certainly not be available to the accounting partner and he cannot deny to the other partners the right to ask for a full and correct disclosure of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jendra Shah v. Shanker Bux AIR 1935 Oudh 16, where the learned Judges are reported to have observed: The account books seem no doubt genuine and have been made use of by both parties as it suited their convenience but as they have not been duly proved as required by law, we have thought it proper to rule them out as inadmissible. This the learned Judges did, because the person who wrote the accounts were alive and had not been examined by the plaintiff. The passage occurs in the penultimate part of the judgment and appears to be more or less an obiter because in spite of their decision to exclude the accounts from consideration, the learned Judges upheld that decision of the court below in favour of the plaintiff. As a matter of experience, the above observations may be justified on the facts of the case before them, but we are unable to subscribe to the view that in every case where the scribe of the entries though alive is not examined, the books of account must be held inadmissible, even though there is other reliable evidence to show that the entries were made in due course of business by the scribes whose writing could be duly identified. It depends entirely upon the compet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e genuineness of the books of account or contend that they were not kept in the regular course of business, but questioned the individual entries only. We have given our anxious consideration to this argument only to find that the instances that are cited in the objections are illustrations of such entries which demonstrated that the books of account were not valid and genuine documents. In any case, as we have already noticed, when contents of the books are not conclusive evidence and as required by Section 34 of the Evidence Act, when defendants 7, 8, 10 and 19 objected to it, it was necessary for the first defendant/appellant to produce such evidence which was available to substantiate the entries and thus show that the entries were genuine. There is an interesting story revealed in the pleadings as to the vouchers supporting expenditure. It is said, that they were brought in three bags full and produced in the Court. They are later reported to have been lost and these vouchers according to the first defendant/appellant were relevant to corroborate the entries of expenditure in the books of accounts. Such vital document produced in the Court, has been lost; who has been responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f is hearsay and inadmissible in evidence. His case is that there was a settlement of account and the details of the settlement were minuted in the minutes book. His case that there has been a settlement of account as on 31-12-1962 would have been easily proved by the production of the minutes book and if that book available, by proving its existence as well as its contents by secondary evidence. He has instead relied upon the so-called settlement of account and the return submitted on behalf of the firm to the Income Tax Department about which we have two orders, one is a penalty proceeding under Section 271(1)(e) of the 1963-64 on a reference from the VIII Income Tax Officer, Madras and another is the assessment order of the year 1962-63. In the first, Ex. C-5, it is said, The sum and substance of the contentions of the above partners concerning the penalty issue is that Shri Venkanna Chowdry, the Managing Partner alone was in charge of the accounts and the business of the firm, that they were kept by him in the dark, that they had no knowledge of either the accounts or the hundi appearing therein that as they could see there was overflow of collections and hence no need for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concealed the particulars of their income and furnished inaccurate particulars of their income and furnished inaccurate particulars thereof. 51. The Assistant Commissioner's order concluded the penalty proceedings but not the dispute as to the genuineness of the entries in the account books that is to say the hundies, which continued to be repeated in all subsequent years of the book and the dispute between the contesting defendants/respondents and the 1st defendant/appellant as to the accuracy and genuineness of the accounts furnished by the 1st defendant/appellant remained undecided. 52. The second is the assessment order of the II Income Tax Officer, City Circle V, Madras on a total cost of the picture of ₹ 13,30,616/-. The computation of the total cost of the picture, however, has been on the basis of so-called trial balance as on 31-12-1962, which contains debit entries in the name of the 1st defendant/appellant as well as several other persons. They, it is said, had advanced monies which formed the basis for a revised computation. This document, however, gives a list of names of persons who, it is said advanced monies and included names of persons, who admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the firm to other partners including the contesting defendants. The books of account that the 1st defendant has produced in court are vitiated by entries which are not genuine. This has destroyed even the prima facie evidentiary value of the books of accounts. He has not been able to give any credible supporting evidence of his claim of receiving loans from others as well as loans advanced by him and his brothers, the 11st defendant. He has also failed to give any satisfactory evidence of the accounts of expenditure on the production of the film. 54. It is on record in the form of oral evidence as well as documentary evidence, which have the support of circumstances that the 1st defendant had withdrawn monies on several dates from the account of the firm and besides such withdrawal, he had shown as withdrawn from the account of the firm amounts allegedly paid to the friends, who had advanced monies allegedly on some occasions, but entries were made in the names of Multanies or advances to the firm by him as well as his brother, the 11th defendant. These withdrawals, are not justifiable and must therefore be found in the hands of the 1st defendant/appellant but belongin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available with him. That being the position, in the absence of any evidence to the contrary and in the light of the evidence that a sum of ₹ 3,86,000/- of the partnership funds were available with the first defendant the only conclusion trial is possible is that the entire money for the acquisition came from the partnership. I therefore hold that the entire property forms part of the partnership. It is admitted by the first defendant that a major portion of this property was sold for ₹ 2 lakhs. The profit that has accrued by the sale of this property will be ₹ 1,54,000,/-. Mr. Raghavan claimed that the first defendant has paid tax in respect of the property to the tune of ₹ 64,598/-. There is absolutely no evidence for the same. Subsequently an extent of 4 grounds was acquired by the State under the Land Acquisition and compensation of ₹ 9,000/- had been received. Therefore, the total profit from this property is ₹ 1,63,000/-. The first defendant has to account for the same. The next item is known as Valarasaravakkam Panthulu's property. The total extent of this property is 40.50 acres. The property has been purchased under four documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounted for by the first defendant, I adopt the valuation as given in Ex. A711 which is approximately ₹ 20,000/- per acre and on that basis the first defendant will have to account for ₹ 80,000/-. Thus the total amount to be accounted for by the first defendant for this property is ₹ 4,14,477/-. The next item of property is what is known as Ganesan's land. This property has been purchased in the name of the first defendant's wife Rajamma and one D. Chowdary. The total consideration is ₹ 72,600/-. The property has been purchased under Ex. C20. The total extent of the property has been 16.30 acres. Chowdary is the son of the 10th defendant. He filed C. S. 208/71 for a declaration that he was entitled to a half share in the property. Though in the trial court he succeeded, in OSA. 76/74 the claim was negatived and it was held that the 10th defendant's son has not paid any part of the consideration for the acquisition of these properties. Out of the sale consideration of ₹ 72,600/- admittedly a sum of ₹ 22,740/-had come from the partnership funds. Mr. Raghavan contended that the balance of consideration after deducting the sum of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t defendant has stated that no portion of this property has been sold and the property is in litigation. The first defendant disclaims that he is in possession of the property. The first defendant has not placed any materials regarding the litigation connected with the property. In the absence of any such evidence it has to be presumed that he got possession of the property as per the terms of the sale deed. Therefore, the entire extent of 56 grounds has to be accounted for by the first defendant. Mr. V. S. Subrarnaniam claims ₹ 20,000/- per ground. There is no concrete evidence for this. However, taking into account the escalation in the prices of lands, I fix the value of one ground at ₹ 10,000/-. Thus the first defendant will have to account for ₹ 5,60,000/- for the 56 grounds. The next item is what is called Gulabi property. This was purchased on 12-4-61 under Ex. C15 in the name of the first defendant and one A. V. Raghava Rao for a sum of ₹ 4 lakhs in the ratio of 2/3 and 1/3. The 2/3 share of the first defendant comes to 140 grounds. The consideration for the 2/3 share paid by the first defendant comes to ₹ 2,60,000/-.Out of this, there is evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext item is Pithapuram Kodambakkam Property. This property is of an extent of 25.77 acres. It was purchased under Ex. C14 in the name of the first defendant for a consideration of ₹ 75,000/-. The stamp duty and registration expenses came to ₹ 5,600/-. Therefore the total cost of acquisition comes to ₹ 80,600/-. It is not in dispute that a sum of ₹ 50,000/- was paid out of the withdrawal from the partnership firm. Of course Mr. Raghavan would contend that the withdrawals were from the advances made by the first defendant to the firm. I have already negatived the case of advances by defendants 1 and 11 to the firm. As regards the balance there is no evidence as to where from the first defendant got moneys. There is evidence to show that large funds of the partnership were with the first defendant at the relevant time having been withdrawn from the partnership account. I have therefore, no hesitation in holding that these properties are partnership properties. These properties have been disposed of as follows:-- 8.45 acres had been sold to AVM Charities for ₹ 1,13,400/- 3.41 acres have been sold to AVM House Building Society for ₹ 41,500/- 1.95 acr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acquisition of the above mentioned properties as monies belonging to the firm. Learned single Judge has referred to the authorities such as the judgments in the case of Ghumammal v. Papurbai, 30 Ind Cas 24 : AIR 1915 Sind 10, Ahmed Musaji Saleji v. Hashim Ebrahim Saleji, ILR Cal 914 : AIR 1915 PC 116, Gokul Krishna Das v. Shashi Mukhi Dasi 13 Ind Cas 23, Sudarsanam Maistri v. Naras Imhulu Maistri, ILR(1902) Mad 149 , Amir Chand v. Jawahir Mal, 32 Ind Cas 853 : AIR 1916 Lahore 410, Debi Prasad v. Jai Ram Dass, C.R.R. Gowder v. C. P. Nanjappa, AIR 1973 Mad 179 and Ulhasibari Jcthmal Bagman v. S. Bhagchand, ILR (1959) Bom 680 and several other cases and has deduced correctly the law that in the absence of any allegation and proof to the contrary, the properties bought in the name of one partner and paid for by the firm out of the profits of the partnership business, are prima facie partnership properties. There is clear evidence on record that the first defendant in his capacity as managing partner directly issued cheques; in some cases withdrew sums from the partner-ship account and credited to YVC account and then issued cheques on the YVC account for payment of consideration for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and for the reason of a complete failure on the part of the first defendant/appellant to account for, the trial court has accepted the comparable expenditure as the basis for determining the cost incurred by the firm in the production of the film. It may not be a very sound basis, but one who alone has knowledge that is to say the first defendant/appellant of the actual expenses, has chosen to withhold and or to give incorrect accounts. In such a situation, we cannot but agree with the findings of the learned single Judge in this behalf. 59. There has been no serious objection before us as to the interest etc., except that as we have noticed earlier, a serious objection has been raised on behalf of the appellant as to the appeal being maintainable for the reason that the court in the impugned order has directed the contesting defendants to file a memo of calculation. A memo of calculation shall do nothing except that it shall complete the process of computation of the amounts that the first defendant/appellant shall be liable to make available to the firm for distribution amongst the partners and upon which partners shall have a claim to the extent of their respective shares. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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