Ponnusamy v. K.K.Subramaniam

J U D G M E N TThis appeal and cross objection have been filed againstthe judgment and decree of the trial court, namely the court of theAdditional District Judge (Fast Track Court II), Gopichettipalayamdated 19.09.2002 made in O.S.No.5/2001 on the file of the saidcourt. The defendants 1 to 3 in the original suit are theappellants herein. The suit was filed by the respondent herein fora perpetual injunction restraining the appellants/defendants fromrunning the rice and oil mill, which had been run as a partnershipbusiness, the subject matter of the suit and for settlement ofaccounts and distribution of assets of the partnership to thepartners. The suit was partly allowed in respect of the secondprayer, namely settlement of accounts and distribution of theassets of the partnership to the partners. A preliminary decree tothat effect declaring the entitlement of the respondent/plaintiffto 50% of the assets of the partnership was granted. However, thesuit was dismissed so far as the relief of permanent injunctionsought for in the plaint is concerned. As against the preliminarydecree directing settlement of accounts and payment of 50% of theassets of the partnership to the respondent/plaintiff, theappellants/defendants have preferred the appeal. As against theother part of the decree of the trial court dismissing the suit inrespect of the relief of permanent injunction, therespondent/plaintiff has preferred the Cross Objection No.35/2003.2. The case of the respondent/cross objector/plaintiff,as per the contents of the plaint, in brief, can be stated thus:-The appellants 1 and 2/defendants 1 and 2 are the sons ofthe third appellant/third defendant. The third appellant/thirddefendant was the manager of the joint family consisting of thethree appellants till a partition took place among them on06.09.1984. In 1974 itself, the third appellant/third defendant,as the joint family manager entered into an oral partnershipagreement with the respondent/plaintiff for jointly constructingand running a rice mill. The respondent/plaintiff contributed asum of Rs.1,00,000/- and the third appellant/third defendant as thekartha of the joint family contributed one lakh for theconstruction of the rice mill. The said rice mill was named as SriVijayalakshmi Rice and Oil Mill. License was obtained jointly inthe names of the respondent/plaintiff and the third appellant/thirddefendant. The income derived from the mill was shared between thepartners. After a partition took place in the family of thedefendants in 1984, the first appellant/first defendant purchasedthe shares of the other two appellants, namely appellants 2 and3/defendants 2 and 3 in the rice mill and after such purchase thefirst defendant became entitled to the half share of their familyin the rice mill and thus both the first appellant/first defendantand the respondent/plaintiff alone continued the partnership https://hcservices.ecourts.gov.in/hcservices/ business as partner. After such purchase of the shares of theother appellants/other defendants was paid by the firstappellant/first defendant, in February 1998 the firstappellant/first defendant due to misunderstanding locked the ricemill and stopped the business, pursuant to which therespondent/plaintiff had to issue a notice dated 26.03.1998dissolving the partnership with effect from 01.04.1998. The saidnotice was received by the first appellant/first defendant and thefirst appellant/first defendant issued a reply notice dated11.04.1998 questioning the respondent's/plaintiff's right todissolve the partnership and also denying his half share in thesite on which the rice mill stands. The reasons assigned in thereply notice for not running the rice mill are false. The firstappellant/first defendant, who was running the rice mill has toaccount for all the incomes received by him. Denying the title ofthe respondent/plaintiff to an undivided extent of 13 17/54 centsin the land over which the rice mill building was constructed, theappellants/defendants had filed a suit in O.S.No.119/1998 on thefile of the Sub-court, Gobichettipalayam and obtained an ex-parteorder of interim injunction on 17.06.1998 and with the strength ofthe said order, the first appellant/first defendant with the helpof the other appellants/other defendants has been running the ricemill and appropriating the entire income for himself. The firstappellant/first defendant is not entitled to run the rice millafter the partnership was dissolved by the notice issued by therespondent/plaintiff. Therefore, the first appellant/firstdefendant, who is running the rice mill, despite the objection andprotest raised by the respondent/plaintiff is also liable to renderaccounts for the income derived from the rice mill. Therespondent/plaintiff is also entitled for settlement of accountsand on such settlement, distribution of 50% of the assets of thepartnership to him. Hence the suit for the above said reliefs ofinjunction and settlement of accounts and distribution of assets.3. A written statement was filed by the first appellantand the same was adopted by the appellants 2 and 3 and all thethree appellants resisted the suit based on the averments containedin the said written statement, which in brief, are as follows:-i) The respondent/plaintiff is the son of the maternaluncle of the first appellant/first defendant and thus he is a closerelative of the appellants/defendants. When the firstappellant/first defendant wanted the respondent/plaintiff to joinas a partner in the rice mill proposed to be started, therespondent/plaintiff demanded conveyance of an immovable propertyin his favour to enable him to join as a partner in the proposedrice mill. Hence a sham and nominal sale deed was executed andregistered on 04.07.1974 in respect of an undivided extent of 1317/54 cents in old Survey No.144A and new Survey No.15/7 inIrugalur village, Gobichettipalayam Taluk in favour of therespondent/plaintiff. As the said sale was sham and nominal, noconsideration was received from him and the title and possession of https://hcservices.ecourts.gov.in/hcservices/ the property continued to rest with the appellants/defendants. Theoriginal sale deed was also not handed over to therespondent/plaintiff and the same was retained by the thirdappellant/third defendant. Patta had been issued in the name ofthe third appellant/third defendant. Since the sale was sham andnominal, the respondent/plaintiff did not take steps to get thepatta transferred in his name. However, the rice mill building,machineries and other affixtures alone were used as properties ofthe partnership firm having the appellants/defendants and therespondent/plaintiff as partners. In the rice mill alone, excludingthe land on which the rice mill has been built, therespondent/plaintiff had got a common half share, whereas theappellants/defendants were jointly entitled to the other half. Bya partition deed dated 06.09.1984, appellants/defendants dividedthe 3/6 share in the building, machineries, electricity serviceconnection and license of the rice mill alone among themselves andeach one of them was allotted 1/6 share. On 05.09.1984, theappellants 2 and 3/defendants 2 and 3 conveyed their shares in therice mill in favour of the first appellant/first defendant under aregistered sale deed and thereafter the first appellant becameentitled to the entire half share held by the family of theappellants/defendants. Thus the first appellant/first defendantand the respondent/plaintiff became equal partners in respect ofthe rice mill business excluding the land over which the rice millwas constructed. ii) It is incorrect to state that therespondent/plaintiff contributed Rs.1,00,000/-, whereas the thirdappellant/third defendant, as kartha of the family consisting ofthe appellants/defendants contributed Rs.1,00,000/- for the abovesaid business. On the other hand, there was a specificunderstanding that the respondent/plaintiff should investRs.75,000/- and third appellant representing the joint familyconsisting of the appellants should invest Rs.75,000/-. Thus, therespondent/plaintiff and the first defendant as kartha of thefamily of the appellants/defendants contributed Rs.75,000/- eachmaking the total share capital Rs.1,50,000/-. It was also theunderstanding that the profit shall be shared between therespondent/plaintiff and the appellants/defendants in the ratio of50:50. It was also a specific understanding between the partiesthat the respondent/plaintiff would not have any right in the ricemill and he would not claim any right under the sale deed dated04.07.1974. The parties also orally agreed that in case of arisalof any problem in running the rice mill or if the plaintiffexpresses his unwillingness to continue to run the rice mill, thenhe should opt out of the partnership after getting his share in themarket value of the building and machineries and retire from thepartnership. It was also the specific understanding that theplaintiff shall not claim any share in the land. The necessarybuilding for the mill was constructed and the machineries wereerected in 1976 and the mill was started functioning in 1977 afterobtaining necessary license jointly in the names of the third https://hcservices.ecourts.gov.in/hcservices/ appellant/third defendant and the respondent/ plaintiff. TillJanuary 1998, the mill was running profitably and the profit wasshared as per the above mentioned understanding. iii) While so, in or about January 1998 when theofficials of the Tamil Nadu Government wanted to construct a watertank near the rice mill, the first appellant/first defendant andthe respondent/plaintiff initially expressed no objection forputting up a water tank. However, subsequently therespondent/plaintiff raised objection and prevented the officialsfrom putting up a water tank near the rice mill. The propriety ofthe said act of the respondent/plaintiff was questioned by thefirst appellant/first defendant, pursuant to which he got a grudgeagainst the appellants/defendants and proclaimed that he would seehow the first appellant/first defendant would run the mill. In theabove said background of facts, in February 1998, when the firstappellant/first defendant was away from the mill, therespondent/plaintiff high-handedly entered into the mill premisesand started dismantling the compressor and motors. While he was inthe process of thus dismantling the machineries, the wife of thefirst appellant/first defendant intercepted and thwarted theattempt made by the respondent/plaintiff to dismantle and removethe compressors and motors. Pursuant to the said occurrence,without putting any lock, the first appellant/first defendant keptthe rice mill idle without running it. Under such circumstances,the electricity charges from January 1998 to April 1998 became due.When the respondent/plaintiff was asked to pay 50% of theelectricity consumption charges, he refused to pay the same. Hencethe production in the rice mill was stopped resulting in loss.With the intention of avoiding further loss, the firstappellant/first defendant paid a sum of Rs.15,000/- to theElectricity Board towards the arrears of electricity consumptioncharges of the mill, obtained re-connection on 18.06.1998 andthereafter started running the mill once again. The market valueof the machineries in the rice mill shall be Rs.1,00,000/-. Thebuilding, excluding the land, is worth Rs.50,000/-. Thus therespondent/plaintiff shall be entitled to get Rs.75,000/- alone ashis half share in the value of the machineries and building of therice mill. Also, according to the oral understanding between theparties, the respondent/plaintiff is legally bound to release allhis rights and interest in the rice mill after getting a sum ofRs.75,000/-. iv) The suit mill was not started as a partnershipbusiness. Therefore, the claim of the respondent/plaintiff thatthe partnership was dissolved by issuing a notice deserves to berejected as untenable. As per the oral agreement, the amountpayable to the respondent/plaintiff, namely Rs.75,000/- has beenpaid into the court on 11.08.1998 after getting the order of thecourt. On such payment, the oral agreement between therespondent/plaintiff and the appellants should be construed to havebeen brought to an end. The respondent/plaintiff cannot seek any https://hcservices.ecourts.gov.in/hcservices/ relief under the provisions of the Indian Partnership Act againstthe appellants/defendants since the business was not carried on asa partnership business incorporating the provisions of IndianPartnership Act. The respondent/plaintiff shall also be notentitled to the relief of injunction sought for in the plaint. Asthe mill is being run by the first appellant/first defendant, incase the respondent/plaintiff is held entitled to claim his rightsas a partner, he can be compensated by money for his exclusion fromthe management. The respondent/plaintiff, in his notice dated26.03.1998 has named the arbitrators of his choice. Similarly theappellants/defendants have also named the arbitrators of theirchoice. Without seeking to have the dispute resolved byarbitration, the respondent/plaintiff has approached the court withunclean hands. The suit has become infructuous pursuant to thedeposit of a sum of Rs.75,000/- by the appellants/defendants tothe credit of the suit. The suit has been filed with a malafideintention of extracting money from the appellants/defendants andhence the same is liable to be dismissed. There is no cause ofaction for the suit and the one cited in the plaint is also false.Only an extent of 30 x 37 sq.ft. of land is occupied by thebuilding and rice mill. Instead of showing the said extent aloneas the property of the partnership firm, the respondent/plaintiffhas shown the entire extent of 0.11.00 hectares comprised in SurveyNo.15/7 in the description of property. Therefore, the descriptionof the property is not proper. Even in respect of the above said30 x 37 sq.ft. of land over which the building of the mill stands,the respondent/plaintiff does not have any share as the samebelonged to the appellants/defendants and now belongs to the firstappellant/first defendant. The suit is also barred under Section69 of the Indian Partnership Act. For all the above said reasons,the suit should be dismissed with costs.4. Based on the above said pleadings, the trial courtframed the following issues:-i)Whether the sale deed dated 04.07.1974 in the name ofthe plaintif is not legally valid and hence he cannotclaim any right in the suit property based on the same?ii)Whether the prayer for the relief of permanentinjunction in respect of the suit property described asthe mill situated in the dry land comprised in SurveyNo.15/7 having an extent of 0.11.0 hectare is legallysustainable? Whether the plaintiff is entitled to therelief of permanent injunction?iii)Whether the description of property found in theplaint schedule is correct?iv)Whether the suit of the plaintiff is notmaintainable for want of a prayer for declaration inrespect of the suit property and whether the suitshould be dismissed in-limini on the said ground? https://hcservices.ecourts.gov.in/hcservices/ v)Whether the plaintiff is not entitled to seek anyrelief in the suit under Indian Partnership Act?vi)Whether the suit is liable to be dismissed on theground that the plaintiff has not chosen to state inthe plaint that the issues were agreed to be resolvedby resorting to arbitration?vii)Is it correct to state that there is no cause ofaction for the suit?viii)To what relief the plaintiff is entitled?5. One witness was examined as P.W.1 and 29 documentswere marked as Exs.A1 to A29 on the side of the respondent/crossobjector/plaintiff. Two witnesses were examined as D.Ws.1 and 2and four documents were marked as Exs.B1 to B4 on the side of theappellants/defendants. The learned trial judge, after hearing thearguments advanced on either side considered the pleadings made bythe parties and the evidence, both oral and documentary, adduced oneither side. Upon such consideration, the learned trial judgedecreed the suit in part and granted a preliminary decree forsettlement of accounts and distribution of the assets of SriVijayalakshmi Rice and Oil Mill described as the suit property inthe plaint schedule and dismissed the suit so far as the prayer forinjunction restraining the appellants/ defendants from running therice mill. As against the preliminary decree for settlement ofaccounts and distribution of assets of the mill, theappellants/defendants 1 to 3 have come forward with A.S.No.749/2002on various grounds set out in the memorandum of appeal. Therespondent/cross objector/plaintiff has filed Cross ObjectionNo.35/2003 questioning the correctness of that part of the decreepassed by the trial court dismissing the suit in respect of theprayer for injunction restraining the defendants from running arice mill on various grounds set out in the memorandum of crossobjection.6. The arguments advanced by Mr.R.T.Doraisamy, learnedcounsel for the appellants and by Mr.T.Murugamanickam, learnedcounsel for the respondent/cross objector were heard. The entirematerials available on record were also perused.7. The following are the points that arise fordetermination in the appeal and the cross objection:-i)Whether the respondent/cross objector/plaintiff doesnot have any share in the land over which the rice andoil mill has been put up?ii)Whether the description of property furnished in theplaint is not correct? https://hcservices.ecourts.gov.in/hcservices/ iii)Whether the suit is barred by section 69 of theIndian Partnership Act, 1932?iv)Whether the respondent/cross objector/plaintiff isentitled to the relief of rendition of accounts anddistribution of the assets of the partnership firm?v)Whether the respondent/cross objector/plaintiff isentitled to the relief of injunction restraining theappellants/defendants from running the rice mill in thename of the partnership firm before winding up of thesame is completed?vi)To what relief the parties are entitled?8. The defendants 1 to 3 in the suit are the appellantsherein. The sole plaintiff in the suit is the respondent in theappeal and the cross objector in the Cross Objection. The suit wasfiled seeking a relief of injunction restraining theappellants/defendants from running the rice mill described as suitproperty in the plaint schedule and for the relief of settlement ofaccounts and distribution of the assets of the said rice mill. Thesaid prayers have been made based on the plaint averments that therice mill business was started and run as a partnership business inthe building constructed and machineries erected using the sharecapital raised by the contribution of Rs.1,00,000/- by therespondent/plaintiff and Rs.1,00,000/- by the third appellant asthe kartha of the family consisting of the appellants 1 to 3 makingthe total share capital of the money invested by them toRs.2,00,000/-; that the mill was constructed and run on a land, ofwhich the respondent/plaintiff and the appellants were the co-owners; that the respondent/plaintiff was entitled to a common halfshare in the land comprised in new survey No.15/7 having an extentof 0.11.0 hectare over which the mill stands and that as per theagreement between the parties, he was entitled to a share of 50%not only in the profit and loss but also in the assets ofpartnership business. The prayer for the reliefs of injunction andsettlement of accounts and distribution of the assets of thepartnership concerned, has been made on the strength of the pleathat the partnership was at will and the same was dissolved by therespondent/plaintiff by exercising his option to dissolve the samewith effect from 01.04.1998 by serving a notice dated 26.03.1998 onthe appellants/defendants. The appellants/defendants would admitthe fact that the rice mill business was run jointly by therespondent/plaintiff and the third appellant/third defendant onbehalf of the jointly family of which he was the kartha, both ofthem contributing equal amount towards the share capital; that theprofit earned in the business was agreed to be shared between themin the ratio of 50:50 and that after 1984 when there was apartition in the family of the appellants/defendants and the sharesof appellants 2 and 3 / defendants 2 and 3 were purchased by thefirst appellant/first defendant the first appellant became entitled https://hcservices.ecourts.gov.in/hcservices/ to half share in the rice mill and the other half share remainedwith the respondent/plaintiff. However, they have come forwardwith a novel plea that there was neither a partnership agreementand nor a partnership business and that hence the suit filed by therespondent/plaintiff is not maintainable. It is their furthercontention that though the respondent/plaintiff has got a commonhalf share in the building, machineries and electric connection ofthe suit rice mill, he does not have any share in the land overwhich the mill situates. 9. The respondent/plaintiff claims to be a joint owner,entitled to half share in the land comprised in survey No.15/7having an extent of 0.11.0 hectare by virtue of a sale deed dated04.07.1974. Admittedly, a larger extent comprised in old surveyNo.144A in Irugalur village, Gobichettipalayam Taluk belonged tothe appellants/defendants as their joint family property andsubsequently, 0.11.0 hecares out of the same was assigned separatenew survey No.15/7 and that a sale deed dated 04.07.1974 purportingto convey an undivided 13 17/54 cents was executed in favour of therespondent/plaintiff. The appellants/defendants have admitted theexecution of the said sale deed by the first appellant/firstdefendant and by the third appellant/third defendant for himselfand as guardian of the second appellant/second defendant, who was aminor on the date of the execution of the said sale deed. But theyhave come forward with a plea that the said sale was not a genuineone and on the other hand, the same was executed as a sham andnominal deed, without any intention of effecting a transfer oftitle under the said document. The land also has been shown to bethe part and parcel of the suit property as per the plaintschedule. Point No.iii10. It is also the contention of theappellants/defendants that since there was no written partnershipdeed and since the partnership was not a registered one, the suitby the respondent/plaintiff claiming to be a partner of thepartnership business shall not be maintainable, as the same isbarred by section 69 of the Indian Partnership Act. Therefore, thefirst and foremost question that arises for determination in thiscase is "whether the suit filed by the respondent/plaintiff forinjunction and for settlement of accounts and distribution ofassets of the partnership business on the strength of his pleadingthat the partnership was dissolved by issuing a notice is barred bysection 69 of the Indian Partnership Act?". 11. For a better appreciation Section 69 of the IndianPartnership Act, 1932, dealing with the fact of non-registration,is reproduced here under.69.Effect of non-registration – (1) No suit toenforce a right arising from a contract or conferred https://hcservices.ecourts.gov.in/hcservices/ by this Act shall be instituted in any Court by oron behalf of any person suing as a partner in a firmagainst the firm or any person alleged to be or tohave been a partner in the firm unless the firm isregistered and the person suing is or has been shownin the Register of Firms as a partner in the firm.(2) No suit to enforce a right arising from acontract shall be instituted in any Court by or onbehalf of a firm against any third party unless thefirm is registered and the persons suing are or havebeen shown in the Register of Firms as partners inthe firm.(3) The provisions of sub-sections (1) and (2)shall apply also to a claim of set-off or otherproceeding to enforce a right arising from acontract, but shall not affect,-(a) the enforcement of any right to sue for thedissolution of a firm or for accounts of a dissolvedfirm, or any right or power to realise the propertyof a dissolved firm, or(b) the powers of an official assignee,receiver or Court under the Presidency-townsInsolvency Act, 1909, or the Provincial InsolvencyAct, 1920, to realise the property of an insolventpartner.(4) This section shall not apply,-(a) to firms or to partners in firms which haveno place or business in the territories to whichthis Act extends, or whose places of business in thesaid territories, are situated in areas to which, bynotification under section 56, this Chapter does notapply, or(b) to any suit or claim of set-off notexceeding one hundred rupees in value which, in thePresidency-towns, is not of a kind specified insection 19 of the Presidency Small Cause Courts Act,1882, or outside the Presidency-towns, is not a kindspecified in the Second Schedule to the ProvincialSmall Cause Courts Act, 1887, or to any proceedingin execution or other proceeding incidental to orarising from any such suit or claim.12. Though there is a general bar for filing a suit toenforce a right arising from a contract or conferred by the Act,such a bar is applicable only when the suit is filed against the https://hcservices.ecourts.gov.in/hcservices/ firm or when the suit is filed by or on behalf of the firm againstany third party unless such firm is registered and the personssuing are shown in the Register of Firms as partners in the firm.However, sub-clause (3)(a) exempts a suit from the bar providedunder the sub-clause (1) and (2) of Section 69 of the IndianPartnership Act, 1932 when such a suit is filed for the enforcementof any right to sue for the dissolution of a firm or for accountsof a dissolved firm or any right or power to realise the propertyof a dissolved firm. Though the firm might not have beenregistered, the following suits are not barred under Section 69 ofthe Indian Partnership Act, 1932.i)Suit for enforcement of any right to dissolution of anunregistered firmii)Suit for accounts of a dissolved firm andiii)Suit for enforcement of any right or power to realisethe property of a dissolved firm.13. In this case, though the rice mill business was runjointly by the respondent/plaintiff and the third appellant/thirddefendant representing the joint family of which he was the karthaat the initial stage and subsequently jointly by therespondent/plaintiff and the first appellant/first defendant, it isan admitted fact that there was no registered partnership deed andthe business concern was also not registered as a partnership firmwith the Registrar of Firms. But, it is not a suit by therespondent/plaintiff against the firm having therespondent/plaintiff and the first appellant/first defendant as itspartners. It is also not a suit on behalf of the partnership firmcalled "Sri Vijayalakshmi Rice and Oil Mill". The present suit hasbeen filed by the respondent/plaintiff only for settlement ofaccounts and distribution of the assets of the partnership businessand for an injunction restraining the appellants/defendants fromrunning the mill before the completion of such settlement anddistribution of assets. Based on the plea of therespondent/plaintiff that the partnership was one that could bedissolved at will and that and the same was dissolved with effectfrom 01.04.1998 by serving a notice dated 26.03.1998 on the firstappellant/first defendant, it has been contended onbehalf of therespondent/plaintiff that the suit squarely falls under the secondand third categories of cases listed in sub-clause (3)(a) ofSection 69 of the Indian Partnership Act. Even in a case where apartner shall not have a right to dissolve the firm without theintervention of the court, such a partner shall not be debarredfrom filing a suit for dissolution of an unregistered firm andother consequential reliefs. As such a suit comes under thecategory of cases exempted under sub-clause (3)(a) of Section 69 ofthe Indian Partnership Act, 1932. As such there is no substance inthe contention of the appellants/defendants that the suit is barredunder Section 69 of the Indian Partnership Act, 1932. The learnedtrial judge has rightly held that the suit is not barred underSection 69 of the Indian Partnership Act, 1932. The said finding https://hcservices.ecourts.gov.in/hcservices/ does not deserve any interference and on the other hand deserves tobe confirmed.Point Nos.i and ii14. The next question that arises for consideration is"whether the suit is not maintainable as the suit property has beenincorrectly described?" The contention of theappellants/defendants in this regard is two fold. Firstly, it isthe contention of the appellants/defendants that the mill occupiesan area of 30 x 37 sq.ft. alone whereas the entire extent of 2634/54 cents has been shown to be forming part of the assets of thepartnership business, namely "Sri Vijayalakshmi Rice and Oil Mill"and that hence the plaintiff should be non-suited for the relief onthe ground that an incorrect description of the property has beenprovided in the plaint schedule. Secondly, it is the contention ofthe appellants/defendants that even in respect of the property overwhich the mill stands, the respondent/plaintiff does not have ashare and the entire extent belonged to the defendants and nowbelongs absolutely to the first appellant/first defendant. 15. Let us now consider the tenability of the above saidcontentions raised by the appellants/defendants. Admittedly, themain building of the mill occupies an area of 30 x 37 sq.ft. Theplaintiff, while deposing as P.W.1, has admitted that the mainbuilding of the rice mill has been constructed over an area about990 Sq.ft. It is also the admitted case of the parties that theresidential house of the appellants/defendants is situated on thesouth-west of the mill premises. It is also an admission that inbetween main building of the mill and the residential house of theappellants/defendants, there is a vacant space. According to therespondent/plaintiff, the said space was used as a drying yardattached to the mill. The appellants/defendants, who have comeforward with a plea that the mill occupies only an extent of 990sq.ft. and the rest of the vacant site was annexed to theresidential house as its front yard, have not come forward with anyclear evidence, either oral or documentary to show the title,extent initially available with the family and the area occupied bythe residential house and the area of vacant site available inbetween the mill building and the residential house. On the otherhand, the first appellant/first defendant while deposing as D.W.1,has made a clear admission that there is a concrete drying floorsituated on the west of the mill building. However, he would statethat he was not aware of the extent of such concrete drying yard.It is also an admitted fact that in the property described as suitproperty, there are bath-room and latrine. But theappellants/defendants would contend that the said bath-room andlatrine were intended for the exclusive use of the family membersof the appellants/defendants and that the same was annexed to theresidential house making the area over which the same wereconstructed and the open space in between the house and the latrineand bath-room as the land appurtenant to the residential house and https://hcservices.ecourts.gov.in/hcservices/ not the land attached to the mill. However, the firstappellant/first defendant, while deposing as D.W.1, has admittedthat no lincense for running the rice and oil mill will be issued,if bath-room and latrine are not provided in the mill premises. Hehas pleaded ignorance as to whether the bath-room and latrine wereshown to be the part of the mill premises in the blue print. Hehas also admitted that they have not shown the bath-room andlatrine in the plan submitted to the Panchayat for approval forbuilding the residential house. In the light of the said evidence,the failure to produce the blue print and the approved plan for theconstruction of the mill will give rise to an adverse inferenceagainst the appellants/defendants in this regard. 16. The other witness, namely D.W.2, examined on the sideof the appellants/defendants, has not deposed anything regardingthe above said aspect. However, the learned counsel for theappellants would contend that there is an admission on the part ofP.W.1 that the mill was used only for hulling rice and extractingoil for others on a charge to be collected and that the partiesnever used it for hulling the paddy purchased by them to sell therice after hulling and that in the light of the said admission, itshould be presumed that there was no necessity to have a concretedrying yard. The said contention of the learned counsel for theappellants cannot be countenanced. There cannot be any inferencethat the mill does not have a drying yard since it was used onlyfor hulling for others on a charge to be collected. Clear evidencehas been adduced by P.W.1 that there is a drying yard made ofconcrete floor annexed to the mill building. The same was alsoadmitted by the first appellant/first defendant while deposing asD.W.1. He has clearly admitted that the drying yard was made ofconcrete and that the same is situated on the west of the rice millbuilding. Therefore, the contention raised on behalf of theappellants/defendants that the mill did not have a drying hardattached to it as the same was used for hulling paddy for others ona charge to be collected does not have any substance in it and thesame deserves to be discountenanced. The learned trial judge hasrightly held that the drying yard also forms part of the millpremises and that hence the objection to the maintainability of thesuit on the ground that a larger extent than 30 x 37 sq.ft. of landover which the main building of the mill stands has been shown tobe the land attached to the mill premises, deserves to be rejectedas untenable. There is no ground, whatsoever, for interfering withthe said finding of the court below and hence the same isconfirmed.17. The further contention of the appellants/defendantsis that though a sale deed was executed conveying a common halfshare (undivided extent of 13 17/54 cents) out of an extent of0.11.00 hectare of land comprised in Re.Survey No.15/7, IrugalurVillage, Gobichettipalayam shown in the plaint schedule in favourof the respondent/plaintiff on 04.07.1974, the said sale was a shamand nominal one and hence the respondent/plaintiff did not derive https://hcservices.ecourts.gov.in/hcservices/ any title to the said property. As the sale deed is admitted bythe appellants/defendants and they claim that the sale deed wasexecuted as a sham and nominal deed, the onus to prove the samerests heavily on them. In this regard, except the ipse dixit ofthe first appellant/first defendant as D.W.1, there is no evidenceof any independent witness to prove the contention of theappellants/defendants that the sale deed dated 04.07.1974 was asham and nominal one. It is an admitted fact that an extent of0.11.00 hectare (equal to 26 34/54 cents of land) within specifiedboundaries comprised in old Survey No.144A and new Survey No.15/7in Irugalur Village, Gobichettipalayam Taluk, originally belongedto the appellants/defendants as their ancestral joint familyproperties. It is also not in dispute that out of the above saidextent of 26 34/54 cents, an undivided half share measuring 1317/54 cents was purported to be sold under the sale deed dated04.07.1974 to the respondent/plaintiff. The said sale deed wasregistered on the file of the Sub-Registrar, Nambiyur as documentNo.887/1974. It is true that the original sale deed was notproduced from the custody of the respondent/plaintiff and the samewas produced from the custody of the appellants/defendants as adocument not in this case but in the connected case, namelyO.S.No.1/2001 filed by the appellants/defendants, which was triedsimultaneously by the trial court along with this case. Not even acertified copy of the same has been produced by the appellants inthis case. However, it is not in dispute that the said sale deedwas executed by the first appellant and the third appellant forhimself and on behalf of the second appellant as his naturalguardian since the second appellant was then a minor. Of course,it is true that no transfer of title shall take place under a shamand nominal deed, as it is non-est in the eye of law. But aperson, who admits execution of a deed, but claims it to be a shamand nominal deed and that hence no legal transfer of title tookplace under the said deed, is bound to prove the same by reliableevidence. Such a burden heavily lies on the person alleging thetransaction to be a sham and nominal one. 18. In this case, admittedly the sale deed dated04.07.1974 was executed and registered in favour of therespondent/plaintiff. Therefore, the burden of proving it to be asham and nominal deed heavily lies on the appellants. In supportof their contention that the said sale deed dated 04.07.1974 is asham and nominal one, the appellants have contended that even afterthe execution of the said deed, the same was not handed over to therespondent/plaintiff. It is also their contention that right fromthe date of execution of the sale deed, the respondent/plaintiffdid not exercise any right as the owner of the property sought tobe conveyed under the said sale deed; that the revenue recordscontinued to stand in the names of the appellants and that the saidsale deed was executed as a sham and nominal deed on the insistenceof the respondent/plaintiff as a condition for becoming a partnerof the rice and oil mill business proposed to be started with aspecific understanding that no right would be claimed by the https://hcservices.ecourts.gov.in/hcservices/ respondent/plaintiff under the said document.19. In this regard, the appellants/defendants also relyon the documents produced as Exs.B1 to B4. Ex.B4 is a documentprojected to be an agreement in writing between the appellants andthe respondent dated 20.01.1974. The signature of therespondent/plaintiff found in the said document has been marked asEx.B4. The other two documents, namely Ex.B2 and B3 arerespectively the partition deed dated 06.09.1984 and sale deeddated 05.09.1984. The execution of Ex.B4-agreement has beenspecifically and stoutly denied by the respondent/plaintiff. Eventhe signature found in Ex.B4-agreement was not admitted by P.W.1.When it was put to him specifically during cross-examination, hewould simply state that the signature found in the said documentresembles that of his (plaintiff's). However, the court below haschosen to mark that signature alone as Ex.B1. A close scrutiny ofthe evidence adduced on both sides will go to show that neither thedocument Ex.B4 nor the signature of the plaintiff found therein hasbeen proved by satisfactory evidence. 20. The said document Ex.B4 is projected to be anagreement in writing under which the respondent/plaintiff agreednot to claim any share in the land based on the sale deed, whichthe appellants/defendants now claim to be sham and nominal and alsoto get a sum of Rs.75,000/- alone as his share in the building andmachineries of the mill and retire from the mill business. Inaddition to the ipse dixit of the first defendant as D.W.1, onePongiannan, has also been examined as D.W.2 in order to prove Ex.B4agreement. In this regard, the evidence of D.W.1 goes contra tothe pleading made in the written statement. In the writtenstatement it was specifically pleaded that there was no writtenagreement regarding the conduct of the business jointly by theplaintiff and the defendant; that only by an oral agreement theyhad agreed for dividing the profits between the plaintiff on theone hand and the defendants on the other hand at the ratio of 50:50and that when the plaintiff would elect to withdraw from business,he would get a sum of Rs.75,000/- alone as his share in thebuilding and machineries of the mill and that he would not have anyclaim in respect of the land. This specific plea that the abovesaid terms were only orally agreed and were not reduced to writingas per the averments found in the written statement, has been givena go-bye and an attempt was made during trial to project Ex.B4 tobe a written agreement executed by the parties incorporating theabove said conditions. One Pongiannan examined as D.W.2, isadmittedly a close relative of the third appellant (AvinasiGounder). He calls him as his junior father-in-law. Though hewould not have contended in the chief examination that a writtendeed was executed to the effect that all the defendants shouldinvest Rs.75,000/- and the plaintiff should invest a sum ofRs.75,000/- and they would share the profit equally and that incase of his unwillingness to run the mill, the plaintiff shouldretire after getting a sum of Rs.75,000/-. During cross- https://hcservices.ecourts.gov.in/hcservices/ examination he has pleaded ignorance as to how much was invested byeach one of them. A new contention came to be raised by D.W.2 thateither the sum mentioned in Ex.B4, namely Rs.75,000/- or half ofthe market value of the building of the mill and machineriestherein, whichever is higher, should be received by the plaintifffor his retirement from the partnership. There are contradictionsbetween the evidence of D.W.1 and D.W.2 besides glimpses ofimprobabilities. The appellants/defendants have also chosen to leadevidence contrary to the specific pleading made by them in thewritten statement that no written agreement was made between theparties. Therefore, this court has to necessarily come to theconclusion that Ex.B4 is not a genuine one and the same has beencreated for the purpose of the case. The learned trial judge alsoanalysed the matter in this regard with a clear vision and onproper appreciation of pleadings and evidence arrived at a correctconclusion that Ex.B4 was not proved to be a genuine document. 21. Though the appellants might have chosen to producecertain documents like certified copies of RSR in the connectedsuit O.S.No.1/2001 to show that the entire extent of 0.11.0 hectarecomprised in survey No.15/7 was in the name of the third appellantand that mutation of name was effected subsequently in the names ofappellants 1 and 2, such documents have not been produced in thiscase. There are a number of documents produced by therespondent/plaintiff and marked as Exs.A1 to A26, which evidencethe fact that the mill was run by the plaintiff and the thirdappellant initially and from 1984 by the plaintiff and the firstappellant as a partnership business. However, there is anadmission on the part of the respondent/plaintiff that patta wasnot changed in his name, pursuant to the purchase made by him underthe sale deed dated 04.07.1974. From the said evidence, it can beinferred that the revenue records continued to be in the name ofAvinasi Gounder, which later on came to be transferred in the namesof appellants 1 and 2/defendants 1 and 2 and that no mutation ofname in the revenue records was effected pursuant to the executionof the sale deed dated 04.07.1974. But, whether the mere fact thatmutation of the name was not effected in the revenue recordspursuant to the sale deed dated 04.07.1974 and the further factthat patta continued to stand in the name of the third appellantand then in the names of the first and second appellant, shall beenough to hold that the sale deed dated 04.07.1974 is sham andnominal? The answer shall be in the negative. Unless theappellants/defendants are able to prove that such document was notgiven effect to and was not acted upon and that the document wasexecuted as a sham and nominal one without intending to effect atransfer of title, the appellants/defendants shall not succeed indischarging the burden cast upon them. 22. In this regard even though the appellants/defendantswould have stated that no consideration did pass for the purportedtransfer of title under the sale deed dated 04.07.1974, there islack of reliable evidence adduced on the side of the https://hcservices.ecourts.gov.in/hcservices/ appellants/defendants. D.W.1 is none other than firstappellant/first defendant. As such interested testimony of D.W.1shall be approached with caution. Though the case of theappellants is that the sale deed dated 04.07.1974 is a sham andnominal one and D.W.1 would venture to state that the saidtransaction under the said sale deed was a sham and nominal one,during cross-examination he admitted that he did not know themeaning of a sham and nominal transaction "epg fpiuak; vd;why;vdf;F mh;j;jk; bjhpahJ". D.W.1 was one of the executants of thesaid sale deed and hence was a signatory to the sale deed. Theabove said admission made by him that he did not know the meaningof a sham and nominal deed coupled with the further fact that hehas chosen to state that all the three appellants signed the saidsale deed, which is incorrect, will greatly impair the reliabilityof the evidence of D.W.1. The document was signed by the firstappellant (D.W.1) and Avinashi Gounder (third appellant) forhimself and as the guardian of the second appellant. As againstthe said fact, D.W.1 has chosen to state that all the three havesigned the document. Furthermore, the third appellant AvinashiGounder did not enter the witness box to give evidence in supportof the contention of the appellants that the said sale deed was asham and nominal one. None of the witnesses, who attested thedocument, has been examined on the side of the appellants. On theother hand, one pongiannan, who claims to have knowledge of thecircumstances under which the sale deed was executed has deposedas D.W.2. He would state in the chief examination that the saledeed was executed as a sham and nominal deed. He has alsocommitted the very same mistake committed by D.W.1 by stating thatall the three appellants affixed their signatures in the sale deed.Though D.W.2 would have stated in the chief examination that thesale deed was executed as a sham and nominal deed, during cross-examination he has admitted that he did not know whether the thirdappellant Avinashi Gounder received the sale consideration quotedin the sale deed either at the time of execution of the deed orprior to the execution of the said sale deed. Therefore, theevidence of D.W.2 also shall not lend any support to the case ofthe appellants that Ex.A1-sale deed was a sham and nominal one. 23. Apart from the oral evidence, the appellants alsoseem to have relied on the fact that the property was dealt with bythe appellants among themselves, as if they alone were the ownersof the entire extent of 0.11.0 hectare comprised in new surveyNo.15/7, Irugalur village, Gobichettipalayam Taluk. Thosetransactions are a partition deed dated 06.09.1984 (Ex.B2) and asale deed dated 05.09.1984 (Ex.B3). An attempt has been made bythe appellants to show that under the partition deed, marked asEx.B2, the land was not divided and the building, machinery,electricity connection and the license of Sri Vijayalakshmi Riceand Oil Mill alone were divided among the appellants. Admittedly,the said business, namely rice and oil mill business was run as apartnership business, in which the respondent/plaintiff did have50% share and the appellants 1 to 3/defendants 1 to 3 jointly owned https://hcservices.ecourts.gov.in/hcservices/ the other 50% share. It is also admitted that the profit earnedfrom the business was shared in the above said ratio. It is also anadmitted fact that the respondent/plaintiff contributed an amountequal to the amount contributed by all the appellants together, ashis share capital in the business. When that is so, if at all theland over which the building was constructed and the mill was runentirely belonged to the appellants alone, either the share of theappellants/defendants in the profit would have been fixed at ahigher rate than 50% or else there could have been an understandingthat a fixed amount shall be paid to the appellants as rent for theland over which the mill is situated. No such arrangement has beenmade. The said factor will be a point against the appellants, whohave claimed that the entire land belonged to them. Even thosedocuments under which the appellants claimed to have dealt with theentire extent of 0.11.0 hectares to be one belonging to theappellants alone, do not support the above said case of theappellants/defendants. 24. The appellants made an unsuccessful attempt to showthat at the first instance, there was a partition and thereafterthe shares allotted to the appellants 2 and 3 were sold to thefirst appellant/first defendant. But, it is pertinent to note thatthe partition deed is dated 06.09.1984, whereas the sale deed isdated 05.09.1984. Of course it is obvious from the said documentsthat the partition deed was registered earlier and the sale deedwas registered subsequently. It is pertinent to note that not onlythe mill premises, but also the house property was sought to bedivided among the appellants under Ex.B2 - partition deed. In allthose other properties, each one of the appellants was allotted 1/3share, which will go to show that the other properties, which werethe subject matter of partition excepting the mill premises, wereowned by the appellants 1 to 3 to the exclusion of others and thatis why all the three got 1/3 share each. But, so far as the millpremises was concerned, each one of the appellants was allotted acommon 1/6 share alone. The shares allotted to all the threeappellants put together make only half of the mill premises. Thiswas so because the other half had already been sold to therespondent/plaintiff under the sale deed dated 04.07.1974. Whatwas divided under the original of Ex.B2 was the share of theappellants not only in the building, but also in the land overwhich the mill is situated. Mill includes the drying yard also.That is the reason why each one of the appellants was allotted 1/6share alone in the mill premises, whereas in respect of the houseproperties, each one was allotted 1/3 share. Similar is theposition of the recitals found in the sale deed dated 05.09.1984,marked as Ex.B3. Under Ex.B3, the appellants 2 and 3 havepurported to sell their 2/3 share in all other properties and their2/6 share in the rice and oil mill to the first appellant. Thesame will go to show that the sale under sale deed dated 04.07.1974was not only genuine, but also was the one recognised, acted uponand given effect to by the appellants themselves. https://hcservices.ecourts.gov.in/hcservices/

25. For the production of the original sale deed in theconnected suit from the custody of the appellants, therespondent/plaintiff has come forward with a clear explanation thatthe said document had been kept in the mill premises for inspectionby the officials, who might come to the mill for checking and thatwhen the first appellant locked the mill and barred the entry ofthe respondent/defendant into the mill took away the document fromthe mill premises. The said contention of the respondent/plaintiffhas been substantiated by the evidence of D.W.1, therespondent/plaintiff himself. Since the appellants have comeforward with a plea that the sale deed dated 04.07.1974 was a shamand nominal one they are bound to prove it by reliable evidence.As pointed out supra, the burden of proof is heavy on theappellants.26. In Vimal Chand Ghevarchand Jain & Others vs. RamakantEknath Jajoo reported in 2009 (2) CTC 858, the Hon'ble SupremeCourt has made the following observations:-"The deed of sale being aregistered one and apparently containingstipulations of transfer of right, title andinterest by the vendor in favour of thevendee, the onus of proof was upon thedefendant to show that the said deed was, infact, not executed or otherwise does notreflect the true nature of transaction."Relying on earlier decisions of the Hon'ble Supreme Courtin i) R.Janakiraman v. State, rep. by Inspector of Police, CBI,SPE, Madras reported in 2006 (1) SCC 697, ii) Roop Kumar v. MohanThedani reported in 2003 (6) SCC 595 and iii) State Bank of India &Anr. v. Mula Sahakari Sakhar Karkhana Ltd., reported in 2006 (6)SCC 293 to the effect that when a character of the document isquestioned, extrinsic evidence by way of oral evidence isadmissible, the Hon'ble Supreme Court in the above cited case,namely Vimal Chand Ghevarchand Jain & Others vs. Ramakant EknathJajoo reported in 2009 (2) CTC 858, made the followingobservations."A heavy burden of proof lay upon the defendantto show that the transaction was a sham one. Itwas not a case where the parties did not intendto enter into any transaction at all.Admittedly, a transaction had taken place. Onlythe nature of transaction was in issue. Adistinction must be borne in mind in regard tothe nominal nature of a transaction which is notransaction in the eye of law at all and thenature and character of a transaction asreflected in a deed of conveyance. Theconstruction of the deed clearly shows that it https://hcservices.ecourts.gov.in/hcservices/ was a deed of sale. The stipulation with regardto payment of compensation in the eventappellants are dispossessed was by way of anindemnity and did not affect the real nature oftransaction."27. In this case, admittedly the property was used forrunning a rice and oil mill in the name of Sri Vijayalakshmi Riceand Oil Mill as a partnership business. It is also not in disputethat the building for the mill was constructed and the machinerieswere purchased using the capital raised for which therespondent/defendant contributed 50%. It is also an admitted factthat the respondent/defendant was receiving 50% of the profit ashis share. It is quite obvious that the property described in thesuit was used by the partnership concern for running the rice andoil mill. Therefore, merely because patta had not been transferredand it was allowed to remain in the name of one of the appellants,it cannot be assumed that the respondent/defendant did not takepossession and was out of possession. The possession by the thirdappellant and subsequently by the first appellant shall be relatedto their position as a partner and as a co-owner. Therefore, thecontention of the appellants that the respondent/plaintiff did notget possession as per the sale deed dated 04.07.1974 and that thesaid document was not acted upon, cannot be countenanced. Thiscourt comes to the conclusion that the appellants/defendants havemiserably failed to substantiate their contention by properevidence that the sale deed dated 04.07.1974 executed in favour ofthe respondent/plaintiff was a sham and nominal one and that on theother hand, it has been proved by the respondent/ plaintiff thatthe sale was a genuine one and the same was acted upon. The courtbelow has also arrived at a correct conclusion in this regard.28. In the foregoing paragraphs, it has been held thatthe sale deed dated 04.07.1974 was a genuine one and the same wasnot proved to be a sham and nominal one. An extent of 26 34/54cents, equivalent to 0.11.00 hectare comprised in re-surveyNo.15/7, Irugalur village, Gobichettipalayam was admittedly aportion of the old survey No.144A, Irugalur village,Gobichettipalayam. The first appellant/first defendant as D.W.1,would admit that totally 40 cents of land originally belonged totheir family and out of that 40 cents of land, a portion has beenused for the mill and a portion has been used for locating theirresidential house. In the re-survey, 26 34/54 cents equivalent to0.11.00 hectares, was assigned a separate re-survey number as 15/7.A common half share in the same was the subject matter of the saledeed dated 04.07.1974 executed in favour of therespondent/plaintiff. In the partition effected among theappellants under Ex.B2-Partition deed, the half share (3/6 share)in the entire extent of 26 34/54 cents comprised in re-surveyNo.15/7 shown to be the area over which the mill has beenconstructed was divided equally among the appellants by allotting1/6 share to each one of the appellants 1 to 3. Under Ex.B3-Saledeed appellants 2 and 3 sold their 2/6 shares (1/6 of second https://hcservices.ecourts.gov.in/hcservices/ appellant and 1/6 of third appellant) to the first appellant/firstdefendant. It was also specifically mentioned in the documentthat, after such sale, the title of appellants 2 and 3 in respectof the above said entire extent of 26 34/54 would come to an end,thereafter they would not have any share in it. Therefore, it isquite obvious that the mill was run in the entire extent of 0.11.00hectare (26 34/54 cents) which consists of the mill building anddrying yard (fsk;). The same has been correctly described in theplaint schedule by the respondent/plaintiff. Therefore, thecontention of the appellants that the suit property had not beenproperly described in the plaint schedule and that the plaintschedule includes the land over which the respondent/plaintiff doesnot have a share, also deserves to be rejected as untenable. Point Nos.iv and v29. The learned trial judge has rightly come to theconclusion that the mill premises includes the entire land 0.11.00hectares comprised in survey No.15/7, the buildings and machineriesof the rice and oil mill; that as a person having purchased anundivided half share in the land the plaintiff had given it to beused along with other half share of the appellants for running therice and oil mill in the name of Sri Vijayalakshmi Rice and OilMill in partnership with the respondent/plaintiff and that therespondent/plaintiff shall be entitled to half share not only inthe building and machineries of the mill, but also in the landextending 0.11.00 hectare comprised in survey No.15/7. The learnedtrial judge having found that the respondent/ plaintiff wasentitled to half share in the business of Sri Vijayalakshmi Riceand Oil Mill described as the suit property in the plaint schedule,has also arrived at a conclusion that the respondent/plaintiff wasnot allowed to take part in running the rice and oil mill business;that from 01.02.1998 the first appellant alone was running the saidbusiness excluding the respondent/plaintiff and that hence he wasliable to render accounts for the income derived from the saidbusiness from 01.02.1998. For arriving at the said conclusion, thelearned trial judge relied on the admission made by D.W.1 that itwas he (the first appellant), who was running the rice and oil millbusiness without the participation of the respondent/plaintiff andthat respondent/plaintiff was entitled to 50% of the net incomearrived at after deducting the expenses from the gross income. Thefinding of the trial court that the first appellant/first defendantwas liable to render accounts for the income derived from the riceand oil mill business from 01.02.1998, does not suffer from anyinfirmity and the same deserves to be confirmed. 30. However, the learned trial judge while correctlycoming to the conclusion that the respondent/plaintiff shall beentitled to half share in the assets of the rice mill, whichincludes the land, building and machineries, has gone further andheld that the respondent/plaintiff shall be entitled to receive 50%of the value of the buildings and machineries, which value has to https://hcservices.ecourts.gov.in/hcservices/ be ascertained by a Commissioner to be appointed by the court. Inmaking such an observation, the learned trial judge has totallyforgotten the fact that the mill had been constructed over a landjointly belonging to the first appellant/first defendant and therespondent/plaintiff and that each one of them is entitled to halfshare in the land also. The learned trial judge, perhaps, due toinadvertence, has omitted to consider the same. Further havingdisbelieved Ex.B4-agreement, the learned trial judge ought not havearrived at a conclusion that the first appellant alone shall beentitled to retain the buildings and machineries and therespondent/plaintiff should be content with the money equivalent tohalf of the market value of the buildings and machineries; sincethe buildings and machineries were the properties belonging to thepartnership, each one of the partners shall have equal right inrespect of the same. Similar is the position in respect of theland. 31. Section 46 of the Indian Partnership Act, 1932 is tothe effect that, on the dissolution of a firm every partner or hisrepresentative shall be entitled as against all the other partnersor their representatives, to have the property of the firm appliedin payment of the debts and liabilities of the firm, and to havethe surplus distributed among the partners or their representativesaccording to their rights. The said provision shall not beexcluded from having application in this case. As it was alreadypointed out, the suit for rendition of accounts of a dissolved firmis not one barred under section 69 of the Indian Partnership Act,1932. The manner of settlement of accounts of a firm afterdissolution is provided under Section 48 of the Indian PartnershipAct, 1932. Section 53 gives a right to a partner of a dissolvedfirm or his representative, in the absence of any contract betweenthe partners to the contrary, a right to restrain any other partneror his representative from carrying on a similar business in thename of the firm or from using any of the property of the firm forhis own benefit until the affairs of the firm have been completelywound up. The exception is provided in the proviso which says thatany partner or his representative who has bought the goodwill ofthe firm shall have the right to use the firm name. Therefore, asrightly contended by the learned counsel for the respondent/cross-objector/plaintiff, that the part of the decree of the trial courtwhich simply directs that the value of the properties of the firmshould be valued by a Commissioner to be appointed by the court andthat the right of the respondent/cross-objector/plaintiff shall beconfined to getting half of such value without considering theprinciples of settlement of accounts of the partnership firm, whoseproperty includes movables and immovables, requires interference.In such cases, either they should be divided according to the shareratio or in case it is found that the properties left after meetingthe liabilities of the firm are not divisible or that it would notbe profitable to divide it, then each partner shall have a right tomake an offer for the purchase of the others' share. Which partnershall take the property and pay the money of the value of the https://hcservices.ecourts.gov.in/hcservices/ shares to the other appellants, shall be decided by a limitedauction among them or by drawing lot, if there is consensus to thateffect. In case, none of the partners comes forward to purchasethe shares of others in such immovable properties of the firm,which are impartible or cannot be partitioned without causingdiminution of its value, then the same can be sold to thirdparties, either by auction or otherwise and the sale proceeds canbe divided among the partners according to their share ratio. 32. Therefore, while coming to the conclusion that thedecree of the trial court deserves to be confirmed so far as itdirects the first appellant/first defendant to render accounts from01.02.1998 and this court holds that the other part of thepreliminary decree to the effect that the value of the buildingsand machineries and the income shall be ascertained by aCommissioner to be appointed by the court and that therespondent/plaintiff should get half of such value fixed by theCommissioner, deserves to be reversed and modified as the same isinfirm and defective. 33. Similarly, the other part of the decree of the trialcourt dismissing the suit in respect of the relief of injunction isconcerned, as rightly contended by the learned counsel for therespondent/cross objector, cannot be sustained in law. As pointedout supra, Section 53 gives a right to every partner or hisrepresentative of a dissolved firm, in the absence of a contractbetween the partners to the contrary, restrain any other partner orhis representative from carrying on a similar business in the nameof the firm or from using any of the property of the firm for hisown benefit, until the affairs of the firm have been completelywound up. When such is the clear statutory provision, the findingof the trial court that the respondent/plaintiff shall not beentitled to injunction solely on the ground that the firstappellant/first defendant is in possession of the properties of thepartnership firm and it is, he who runs the business even after thedissolution of the firm by the issue of a notice by therespondent/plaintiff, cannot be sustained and the same deserves tobe set aside and reversed. As pointed out supra till thepartnership firm is completely wound up, the respondent/plaintiffshall be entitled to restrain the appellants from running SriVijayalakshmi Rice and Oil Mill. This is so in view of the findingthat the oral agreement pleaded in the written statement and theagreement in writing under Ex.B4 contrary to the said rightsconferred under Section 53 has been disbelieved. Therefore, thedecree of the trial court dismissing the suit so far as the reliefof injunction is concerned deserves to be reversed holding that therespondent/ plaintiff shall be entitled to the injunction as prayedfor.Point No.vi34. For all the reasons stated above, A.S.No.749/2002 isdismissed. Cross Objection No.35/2003 is allowed. Consequently, https://hcservices.ecourts.gov.in/hcservices/ the preliminary decree passed by the trial court in O.S.No.5/2001shall stand modified as follows:-There shall be a preliminary decreei)for settlement of accounts for the profits earned by thefirst appellant/first defendant from 01.02.1998.ii)for settlement of accounts and distribution of the assetsbetween the respondent/plaintiff and the firstappellant/first defendant in the ratio 50:50.iii)There shall be an injunction against theappellants/defendants from running the rice mill tillsettlement of accountsiv)If no consensus is arrived at regarding the mode ofsettlement of accounts and division of assets within threemonths, either of the parties may move for passing of a finaldecree.v)The appellants shall pay the cost of respondent/cross-objector/ plaintiff besides bearing there own cost.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarasrTo1.The Additional District Judge (Fast Track Court II), Gopichettipalayam2.The Section Officer,VR Section, High Court,Madras.+1cc to Mr.T.Murugamanickam,Advocate Sr 44386+1cc to Mr.R.T.Doraisamy, Advo SR 44306GV(CO)km/24.8. A.S.No.749 of 2002