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CASE NO.: Appeal (civil)  7318 of 2000

PETITIONER: Gannmani Anasuya & Ors

RESPONDENT: Parvatini Amarendra Chowdhary & Ors

DATE OF JUDGMENT: 17/05/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

S.B. SINHA , J :

1.      This appeal is directed against a judgment and decree dated  29.10.1999 passed by a Division Bench of the High Court of Judicature at  Andhra Pradesh at Hyderabad whereby and whereunder an appeal preferred  by Appellants herein, who were Defendant Nos. 2, 3 and 5 to 7 in the suit,  from a judgment and decree dated 23.04.1993 in O.S. No. 55 of 1985 passed  by the Subordinate Judge, Ramchandrapuram, was dismissed.

2.      Plaintiffs (Respondent Nos. 1 and 2 herein) filed a suit purported to be  one for partition claiming 2/3rd  share in the property described in Schedule  ’A’ appended to the plaint, claiming 4/9th  share in the property described in  Schedule ’B’ appended thereto, as also for a decree directing the Defendants  1 to 3 to render fair and proper accounts in respect of the poultry business  which was being run in the Schedule ’B’ property from the year 1968  onwards as also for future profits thereupon.   

3.      Plaintiffs are sons of Defendant No.1  (Respondent No.3 herein).  One  Narasimha Murthy was the father of Defendant No.1.  Appellants herein  admittedly are related to the respondents.  Appellant No. 1 is niece of late  Narasimha Murthy.  Her parents died when she was very young and  unmarried.  She was brought up by the said Narasimha Murthy and married  to Appellant No.2 herein.  Appellant Nos. 1 and 2 allegedly were close to the  said Narasimha Murthy. At the time of marriage, Appellant No. 2 was a  student of Veterinary Science at Madras.  After securing B.V. Sc. Degree, he  got an appointment in the veterinary department and later on became a  B.D.O., and subsequently a Project Officer in the Urban Community  Development of the Hyderabad Municipal Corporation.  They allegedly  approached Defendant No. 1 and late Narasimha Murthy to invest money in  poultry business at Hyderabad; pursuant whereto investments were made.   Allegedly, an arrangement was entered into by and between the parties that  profits of the said business can be shared by late Narasimha Murthy, on the  one hand, and Defendant No. 1 and Defendant No.2, on the other, equally  after giving due credit to the expenditure and interest to investments made @  15% p.a.  7 acres and 14 guntas of land was purchased with the moneys  advanced by late Narasimha Murthy and  Defendant No.1 at Attapur near  Hyderabad in the name of late Narasimha Murthy and the Defendant No.2.   Poultry business was, thus, started.   

4.      Narasimha Murthy died in the year 1971.  With the profits from the  said business going up, a tube manufacturing plant was also installed.   According to the plaintiffs on the death of the said Narasimha Murthy, they  inherited 2/3rd undivided interest of the said poultry and tubes manufacturing   business and Appellant No.2 had the remaining 1/3rd share.  The joint family  and Respondent No.3 herein had no interest in the said business concern.

5.      Allegedly, a notice dated 27.08.1985 was served asking the appellants

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herein to render accounts in respect of the said businesses, but no reply  thereto was given.  A suit was thereafter filed on 12.09.1985.  The father of  the Plaintiffs-Respondents Nos.1 and 2, namely, Respondent No.3 herein in  his written statement for all intent and purport supported the case of the  plaintiffs alleging that there had been no settlement of accounts in respect of  the said businesses and after the death of Narasimha Murthy, he was entitled  to the share to which his father was entitled to from the said business.  It was  alleged that further amounts were also advanced after the death of his father  by way of advance as well as interest accrued on principal amounts  advanced.  It was further alleged that the infrastructures and the buildings  referred to in Schedule ’B’ appended to the plaint including the residential  house bearing D. No. 7/26 were constructed with the profit earned from the  business.  It was, therefore, contended that they were entitled to 2/3rd share  in the business besides the amounts advanced together with interest at the  rate of 15% p.a. and also to a half share in the properties described in  Schedule ’B’ appended to the plaint together with income thereof.   

6.      With his written statement, Defendant No.1 filed a document as an   annexure thereof showing that a sum of Rs.1,55,535.00 had been advanced  during the period 23.08.1968 to 29.05.1971.   

7.      In her written statement, Defendant No. 3 (Appellant No. 2 herein)  accepted that during the life time of late Narasimha Murthy, Defendant No.  1 partitioned the joint family properties under a registered deed of partition  of the year 1961.  But according to him, only landed properties were  partitioned keeping the family house and vacant sites  at Pulagurtha joint.   The allegation to the effect that Appellants herein approached the Defendant  No.1 and late Narasimha Murthy for investment of money in the poultry  business or that they invested any amount on the premise that the profits  arising out of the said business can be shared by late Narasimha Murthy and  Defendant No. 1 and the Defendant No.2  equally after giving due credit to  the expenditure and interest to investments made at 15% p.a.  was denied.   The other allegations made in the plaint were also disputed.  A plea  that the  suit was barred by limitation was also taken.

8.      There is no document to show that any partnership came into being by  and between the parties and/or their predecessors in interest.  

9.      It is, however, not in dispute that after the suit was filed, an Advocate  Commissioner was appointed for making an inventory of the poultry farm.   It was stated that late Narasimha Murthy merely advanced a sum of Rs.  5,000/- and as a good gesture of goodwill, his name was included as one of  the vendees along with Defendant No. 2 in the purchase of the property by  reason of the said deed of sale  dated 02.12.1970. According to Appellants,  Narasimha Murthy had never shown any interest in the said property as a  result whereof the business became exclusively theirs and the same was  accepted by late Narasimha Murthy.  Even if the said allegations are correct,  Narasimha Murthy would only have = share in the land covered by the said  sale deed.

10.     M/s Anasuya Poultry Farm or M/s Anasuya Plastics were the business  concerns started by the Defendant No.2 (Appellant No. 1 herein) with her  own money and late Narasimha Murthy or Respondent No.3 had no interest  therein.  It was furthermore  contended that for carrying out the poultry  business, a shed had been constructed by Defendant No.2 by obtaining loans  from the State Bank of India and neither Narasimha Murthy nor the  Defendant No.1 even objected thereto.  The business, therefore, was a  proprietary concern of the Appellant No.1 herein.  Although separate written  statements were filed by the Defendant No.4 and Defendant Nos. 5 to 7, it  may not be necessary to consider the same.  Defendant No. 4 in her written  statement relinquished her share.

11.     A large number of issues were framed by the learned Trial Judge.  The  learned Trial Judge by reason of his judgment dated 23.04.1993 passed a  preliminary decree directing partition of the properties described in Schedule

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’A’ appended to the plaint into three equal shares by metes and bounds  and  allotted  two shares to the plaintiffs and furthermore directed partition of the  properties described in Schedule ’B’ appended to the plaint into nine equal  shares by metes and bounds and allotted four shares  to the plaintiffs.   Appellant Nos. 1 and 2 herein as also Respondent No. 3 herein were also  directed to render fair and proper accounts in respect of poultry business  from 1968 onwards.   

12.     Appellants herein (Defendant Nos. 2, 3, 5 to 7) preferred an appeal  thereagainst before the High Court, which has been dismissed by reason of  the impugned judgment.

13.     The High Court having regard to the contentions raised by parties  formulated the following questions for its consideration :

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

2.      Whether there was a settlement of account under          Ex. B8?

3.      Whether the respondents are entitled to the share          of defendant No. 47?; and

4.      Whether the suit is barred by limitation."

14.     Mr. A. Subba Rao, the learned counsel appearing on behalf of the  appellants, would submit that the learned Trial Judge as also the High Court  committed a serious error insofar as they failed to take into consideration the  effect of Ex.B-8, which categorically goes to show that the accounts had  been settled by and between the parties on 30.05.1979.  The learned counsel  urged that it may be true that no averment was made in the written statement  in regard to the said document, but in view of the fact that Defendant No. 1  (Respondent No. 3 herein) having admitted the execution thereof, the same  should have been taken into consideration for the purpose of determining the  issue of limitation, if not for other purposes.   

15.     The learned counsel would submit that the High Court has also not  bestowed any consideration in respect of the execution of deed of  partnership dated 06.03.1978 entered into by and between the appellants  with her daughter wherein Defendant No.1 (Respondent No.3) is a witness.

16.     In any event, the learned counsel argued,  there is nothing on record to  show as to how the High Court came to a conclusion that the plaintiffs and  Defendant No.1 had 2/3rd share in the business venture.  The learned counsel  submitted that the fact that Defendant No.1 (Respondent No.3) was himself  an Engineering Graduate, there was absolutely no reason as to why he had  not asked for an account annually and having regard to the fact that the  partnership was allegedly entered into in the year 1978, the suit was ex facie  barred by limitation.

17.     Mr. T.L.V. Viswanatha Iyer, the learned counsel appearing on behalf  of the plaintiffs (Respondent Nos. 1 and 2), on the other hand, submitted that  although the question in regard to the extent of share had been raised before  the learned Trial Judge, the same was not done before the High Court and,  thus, the same should not be permitted to be raised before us. According to  the learned counsSel as the appellants herein were not in a position to make  any investment and a total sum of Rs.1,55,535/- was advanced by Defendant  No.1, towards the joint venture, a suit for rendition of accounts was  maintainable. The judgment of the trial court, according to the learned  counsel, was unassailable, in regard to the question of limitation.  The  learned counsel would contend that Ex.B-8 upon which reliance has been  placed, does not contain any signature of any party nor any amount has been  paid pursuant thereto in full and final settlement of the accounts wherefor

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the same was drawn up.  It was pointed out that Defendant No. 1 was only a  manager of the Hindu undivided family and the business concerns were  being run the appellants herein.  In view of the fact that profits were being  reinvested into the partnership business, it is idle to contend that the  accounts were settled particularly when the business was found to be a  running one by the learned Trial Judge.  Even the notice issued by the  plaintiffs, it was pointed out,  had  not been replied by the defendants.  The  learned counsel would contend that Article 5 of the Limitation Act, 1963  would not be applicable in a case of this nature as the same refers to a  dissolution of partnership and as in this case, the provisions of the Indian  Partnership Act, 1932 are not attracted, only Article 113 thereof  would  apply.

18.     Dr. K.P. Kaylash Nath Pillai, the learned counsel appearing on behalf  of  Defendant No. 1 (Respondent No.3), would submit that the question as to  whether the business was a joint venture or not being a question of fact, this  Court should not exercise its discretionary jurisdiction under Article 136 of  the Constitution of India.     

19.     So far as issue No. 1 is concerned, we are satisfied that the business  was a joint venture and not the sole proprietary concern of the Appellant No.  1, as urged by Mr. Subba  Rao.   

20.     We may furthermore notice that a concession was made before the  High Court that so far as the immovable property is concerned, having  regard to the provisions contained in Section 45 of the Transfer of Property  Act, 1894, Narasimha Murthy had = share therein.  It is, thus, not necessary  for us to go into the said question as correctness or otherwise of the said  concession is not in question before us.             21.     However, it is difficult for us to accept the reasonings of the High  Court in regard to Ex. B-8.  Plaintiffs (Respondent Nos. 1 and 2) were  claiming the property as members of the Hindu undivided family.   Admittedly, the interest of the Hindu undivided family was being looked  after by Narasimha Murthy and after his death by Defendant No.1  (Respondent No.3). Correspondences were exchanged by and between  Appellant Nos. 1 and 2 only with Narasimha Murthy and Defendant No. 1  (Respondent No.3).  Yet again admittedly, Defendant No. 1 (Respondent  No.3) was the manager of the Hindu undivided family.  His dealing with the  appellant in regard to the affairs of the business will have a direct bearing  in  the matter of determination of the issues raised before us.

22.     An admission  made by a party can be used against him.  When such  admission is made by a Karta of the Hindu undivided family, who is  managing the family property as well as family business affairs, the same  would be a relevant fact.  When a claim was made by the plaintiffs for  rendition of accounts in the lis, issuance of a document purported to have  been authored by one of the parties, in our opinion, was required to be taken  into consideration.

23.     In terms of Section 58 of the Indian Evidence Act, 1872, a thing  admitted need not be proved. [See Shreedhar Govind Kamerkar v.  Yesahwant Govind  Kamerkar & Anr. \026 2006 (14) SCALE 174] 24.     It is also a trite law that when in cross-examination a witness accepts  the correctness of a document, the same would be  relevant.  A pleading in  regard to existence of a document may be necessary for advancing the case  of a party, but when a witness admits a document to be in his own  handwriting without anything more, the effect thereof may have to be  considered having regard to the provisions contained in Section 145 of the  Indian Evidence Act in terms whereof the only requirement would be that  his attention is drawn before a writing can be proved.  These relevant facts  have not been considered by the High Court. The High Court merely  proceeded on the basis that Ex. B-8 did not contain anybody’s signature.  If  the Defendant No. 1 accepted the contents of the said document, which,  according to him, were noted by him from the books of accounts,

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authenticity thereof is not in question, and, thus, even in  absence of books  of accounts, relevant pages whereof were found to have been torn,  the High  Court ought to have taken the same into consideration as well as the  admission on the part of the Defendant No. 1 and the effect thereof.  Such an  admission could be taken into consideration both for the purpose of arriving  at a finding in regard to the fact as to whether a full and final settlement of  accounts had been arrived at, which was a relevant fact as also for  determining the question of limitation. 25.     There is no document in writing to prove partnership.  Accounts had  not been demanded by the plaintiffs or the defendant no. 3 for a long time.    Even an oral partnership had not been proved.  What was the subject-matter  of the partnership had also not been considered by the High Court.  A share  in a joint venture, in absence of any document in writing, must be  determined having regard to the conduct of the parties.  The High Court  proceeded on the basis that the plaintiffs and defendant No.1 had = share in  the property in terms of Section 45 of the Transfer of Property Act.  If the  said immovable property formed assets of the joint venture, the same would  be an indicia  to determine the shares held by the parties thereto.  Ordinarily,  the extent of an involvement made shall be the criteria for determining the  share of the co-entrepreneurs.  In absence of terms and conditions of the  joint venture having not been reduced to writing, conduct  of the parties how  they dealt with affairs of the business would be relevant.     

26.     The High Court does not say that the concession made by the learned  counsel appearing on behalf of Appellants was incorrect.  In a situation of  this nature, particularly when the limitation issue required determination, Ex.  B-8, in our opinion, should have received serious consideration at the hands  of the courts below.  

27.      In terms of Section 3 of the Limitation Act, it is for the court to  determine the question as to whether the suit is barred by limitation or not  irrespective of the fact that as to whether such a plea  has been raised by the  parties.  Such a jurisdictional fact need not, thus, be pleaded.  In any event,  the said evidence was admissible for the purpose of contradicting a witness,  which being a relevant fact should have been considered in its proper  perspective.  If the contents of Ex. B-8 were accepted, it was not for the  High Court to consider the consequences flowing therefrom, and, thus, but   the fact whether the figure(s) contained therein could be verified from the  books of account might not be very relevant.  Whether, it would be in  consonance with the pleadings of  Appellants was again of not much  significance if it can be used for demolishing the case of  Plaintiffs and  Defendant No.1  If the figures contained in Ex. B-8 were accepted, it was for  Defendant No. 1 to explain the same and not for Appellants.  The High  Court, in our opinion, thus, committed a manifest error in not taking into  consideration the contents of Ex. B-8 in its proper perspective.

28.     At the cost of repetition, we may state that the effect of the said  document at least should have received serious consideration at the hands of  the High Court.  We cannot accept the contention of Mr. Iyer that such a  question had not been raised.  From the impugned judgment of the High  Court, it appears that the said such question had specifically been raised. The  High Court noticed the arguments of the learned Advocate in the following  terms :

"\005Therefore, they have no objection for giving the half  share in the property in spire of 1st respondent expressing  his intention to relinquish his right in the half share of  landed property admeasuring Ac. 7-14 guntas in Atapur  covered by Ex. B-15.  After the settlement of accounts  under Ex. B-8 the appellants obtained loans from various  banks for the purpose of reviving the poultry business  and also setting up of business in plastics.  In all the loan  transactions, the 1st respondent signed the loan  documents as a guarantor.  If really he is interested in the  business, he would have been one of the principal debtors

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and not a guarantor.  That indicates that the respondents  have no interest in the poultry business carried on by the  1st appellant.  Further the 1st respondent got himself  examined on commission as he does not want to face the  Court since his case is false.

       As regards the share of the 4th defendant who is the  daughter of late Narasimha Murthy is concerned, the  respondents are not entitled to her share as relinquishment  of her share in the property is not evidenced by any  document except Ex.B9 which is not a registered  document.  Therefore, the respondents cannot claim the  share of the 4th respondent.  Since neither late Narasimha  Murthy nor respondent No. 1 obstructed the 1st appellant  from carrying on the business in the half share of Ac.7.14  guntas of land, the appellants are not liable to account for  profits earned by them by their own labour.  If really the  case of the respondents is that the poultry business carried  on by the appellants is not the exclusive business of the 1st  appellant, at the time of Ex. B8 they would have demanded  for accounting of the profits.  As regards the building  constructed in the site, it is constructed with the money  belonging to the 1st appellant and therefore, the  respondents are not entitled for a share in the said building.   At the most the value of the site on which the building is  constructed may be awarded to the member of the joint  family on which the corners constructs a building.  The  suit for accounts is barred by limitation as the business was  closed in 1973.  At the most the respondents are entitled  for profits 3 years prior to the filing of the suit\005"  

29.     It was for the High Court to frame appropriate points for its  determination in the light of the submissions made on behalf of Appellants  in terms of Order 41 Rule 31 of the Code of Civil Procedure.  The High  Court failed to address itself on the said issue.  Thus, apart from Issues Nos.  2 and 4, other points which for its consideration including the extent of the  share of Plaintiffs and Defendant No. 1 were required to be specifically gone  into particularly in view of the fact that such a contention had been  considered by the learned Trial Judge.  Issue Nos. 2 and 4, in our opinion,  therefore, require fresh consideration at the hands of the High Court.  

30.     For the aforementioned purpose, it may also be necessary for the High  Court to consider the applicability of the relevant articles of the Limitation  Act.  We, therefore, are of the opinion that the impugned judgment to the  extent aforementioned cannot be sustained.  It is set aside accordingly in part  and the matter is remitted to the High Court for consideration of the matter  afresh on the said issues, inter alia, in the light of the observations made  hereinbefore.  The High Court shall also formulate appropriate points for its  consideration in terms of Order 41 Rule 31 of the Code of Civil Procedure  and proceed to hear the appeal on merits on the relevant issues apart from  Issue Nos.2 and 4.  This appeal is allowed to the aforementioned extent.  In  the peculiar facts and circumstances of the case, there shall be no order as to  costs.