SA/1246/2011 of Yidala Sreeramachandra Murthy Vs Balusu Satyanarayana Murthy on 30 December 2011

JUDGMENT:

The appellant herein is the plaintiff in O.S.No.772 of 2002on the file of the Court of the Principal Junior Civil Judge,Kakinada. He filed the suit for partition of plaint schedule property,mesne profits from the date of filing of suit till the delivery ofpossession, and rendition of accounts. Having been partlyunsuccessful before the trial Court as well as the appellate Courtin A.S.No.5 of 2010, he filed the instant second appeal. Byreferring the parties as they are arrayed in the suit, the brieffactual background is noticed herein below.

Yidala Ramamurthy (father of the plaintiff) and 17 otherspurchased the land admeasuring Acs.4.72 with a rice mill andmachinery under registered sale deed 29.1.1971. They formedinto partnership firm M/s.Coringa Rice Mill. The father of theplaintiff had 12/100 share. The defendants 1, 2, 18 and 20 weremanaging the rice mill. They did not disburse profits to otherpartners. After death of the father, the plaintiff succeeded tofather’s share. He issued legal notice demanding partition in vainand, therefore, he filed the suit for partition of property into 100shares and for allotment of 12 shares to him, for mesne profits and for rendition of accounts of the partnership firm.

The defendants 1 and 2 filed separate written statements. According to the first defendant, as per the partnership deed dated01.2.1971 there were 18 sharers. Another partnership deed wasexecuted on 22.2.1975 when the third defendant was admitted tothe partnership after he attained majority. The father of theplaintiff and one Batchu Anand were managing partners of the ricemill. Both of them died in 1985 as a result of which, the businessof the rice mill was stopped.

The second defendant filed separate written statementalleging that the father of the plaintiff alone managed andmaintained accounts of the firm; he was enjoying the profits andafter father’s death the plaintiff was enjoying the profits. Thereforethe plaintiff alone is answerable to the profits derived from theassets. He further alleged that all the sharers mortgaged theschedule property to Andhra Bank and obtained loan. The debt ofAndhra Bank increased over and above the value of the propertyand, therefore, all the sharers left the schedule property withoutpaying the principal or interest. He expressed no objection forpartition of the property after discharging the debt to Andhra Bank.

The defendants 3 to 16, 19 to 22 and 24 to 32 adopted thewritten statement of first defendant. The defendants 17 and 18adopted the written statement of second defendant. Thedefendants 23 and 33 to 39 remained exparte. The defendantNo.18 died during the pendency of the trial.

The trial Court framed four issues. The plaintiff deposed asP.W.1 and marked Exs.A1 to A12. P.W.2 was also examined. The defendants examined two witnesses but did not mark anydocument. On considering the oral and documentary evidence,the trial Court came to the conclusion that by selling the movableproperty of the rice mill the Bank debt was discharged. Therefore the trial Court passed preliminary decree directing division ofvacant site of schedule property into 100 shares and allotting 12shares to the plaintiff with possession. Remaining shares wereallotted to the defendants in proportion to the amounts investedand percentage of shares owned by them.

Aggrieved by the denial of mesne profits and decree foraccounts, the plaintiff filed A.S. No.5 of 2010 on the file of theCourt of the III Additional Senior Civil Judge, Kakinada. Byjudgment and decree dated 04.7.2011 the first appellate Courtdismissed the appeal confirming the judgment of the trial Court. Having noticed that the firm was not dissolved by execution of adeed, it was held that the suit for rendition of accounts cannot bedecreed and that as admitted by the plaintiff as P.W.1, the fatherdid not initiate any action for rendering accounts or for dissolutionof the firm.

In this appeal, the Counsel for the appellant/plaintiff wouldsubmit that the denial of the relief of mesne profits and decree foraccounts by the Courts below is erroneous. The Courts ought tohave directed the firm to be dissolved and grant relief for accountsand profits.

The defendants 1 and 2 alleged that after death of theplaintiff’s father the business of the rice mill was stopped andthere was no business carried on. The trial Court found thatAndhra Bank debt was discharged by selling the machinery of therice mill and what remained is vacant site forming part of theschedule property. As there was no dispute or seriouscontroversy about this aspect a decree was passed to the extentof granting division of the property into 100 shares and allotment ofthe shares to the partners proportionately. Insofar as the claim forrendition of accounts is concerned, the trial Court found that sincethe business was stopped in 1987, the claim made by the plaintiff for profits in the business in 2002 is clearly barred by limitation. This view is found favour with appellate Court as well. A plainreading of Article 5 of the Limitation Act, 1963 would show that asuit for rendition of accounts has to be made within three yearsfrom the date of its dissolution. But in this case the suit was filedbeyond the period of limitation and, therefore, though a suit forpartition would lie as it is a continuous cause of action, the claimfor rendition of accounts would not lie. The Courts below haveappreciated the facts as well as the principle applicable to thefacts and applied it correctly.

The Second Appeal is misconceived and is accordinglydismissed. In the circumstances of the case, there shall be noorder as to costs.

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(V.V.S.RAO, J)

December 30, 2011YS