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PETITIONER: ADDANKI NARAYANAPPA & ANR.

       Vs.

RESPONDENT: BHASKARA KRISHTAPPA AND 13 ORS.

DATE OF JUDGMENT: 21/01/1966

BENCH: MUDHOLKAR, J.R. BENCH: MUDHOLKAR, J.R. SARKAR, A.K. WANCHOO, K.N.

CITATION:  1966 AIR 1300            1966 SCR  (3) 400  CITATOR INFO :  F          1967 SC 401  (9)  RF         1968 SC 676  (6)  D          1974 SC1066  (4,5)  R          1977 SC 489  (16)  C          1980 SC 176  (17)  R          1986 SC 368  (11)  RF         1986 SC1821  (29)  RF         1991 SC1806  (8)  R          1992 SC  65  (10)  RF         1992 SC 197  (10)

ACT: Registration  Act  (16 of 1908),  s.  17(1)  (c)-Partnership assets  consisting of immovable  property-Relinquishment  by one partner of his share-Deed of relinquishment if should be registered.

HEADNOTE: The  members  of two Joint Hindu  families  (Appellants  and Respondents)  entered  into  partnership  for  carrying   on business.   The members of one family filed a suit  in  1949 for  dissolution  of  the  partnership  and  the  taking  of accounts.   The  members  of the second  family  raised  the defence that the partnership was dissolved even in 1936  and that  accounts were then settled between the  two  families. In  support  of that plea they relied upon  an  unregistered document,  which showed that the partnership had come to  an end.   It was contended by the  appellants-plaintiffs,  that since the partnership assets included immovable property and the  document recorded the relinquishment by the members  6f the  plaintifffamily of their interest in those assets,  the document was compulsorily registerable under s. 17(1)(c)  of the  Registration  Act,  1908;  and  that  as  it  was   not registered,  it  was inadmissible in evidence to  prove  the dissolution as well as the settlement of accounts. HELD  :  The  document  only  records  the  fact  that   the partnership had come to an end.  It cannot be said to convey any immovable property by a partner to another, expressly or by necessary implication, nor is there any express reference to any immovable property, except a recital of a fact  which had  taken place earlier.  Therefore, the unregistered  deed

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of release by one family of its share in the partnership was admissible  in evidence, even though the  partnership  owned immovable property. [410 D. E] The  interest of a partner in partnership assets  comprising of  movable as well as immovable property should be  treated only  as movable property.  His right during the  insistence of the partnership is to get his share of the profits  from time to time, as may be agreed upon among the partners,  and his right after the dissolution of the partnership, or  with his  retirement from, the partnership, is only to receive  e the  money value of his share in the net partnership  assets as  on  the  date  of dissolution  or  retirement,  after  a deduction of Liabilities and prior charges. [406 E; 407 F-G) Case law reviewed.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 299 of 1961. Appeal  by special leave from the judgment and decree  dated December 8, 1958 of the Andhra Pradesh High Court in  Second Appeal No. 845 of 1953. Alladi Kuppuswami and R. Gopalakrishnan, for the appellants. N.   C.  Chatterjee,  S.G. Patwardhan, S.  Balakrishnan,  R. Thiagarajan for N.S. Mani, for respondents Nos. 4, 7 and 8. 401 The Judgment of the Court was delivered by Mudholkar,  J. In this appeal by special leave from a  judg- ment of the High Court of Andhra Pradesh the question  which arises  for  consideration  is whether  the  interest  of  a partner in partnership assets comprising of movable as  well as  immovable  property  should be  treated  as  movable  or immovable  property  for  the purposes of s.  17(1)  of  the Registration  ’Act, 1908.  The question arises in this  way. Members of two joint Hindu families, to whom we would  refer for  convenience  as ’the Addanki family  and  the  Bhaskara family, entered into partnership for the purpose of carrying on  business of hulling rice, decorticating groundnuts  etc. Each family had half share in that business.  The capital of the partnership consisted, among other things, of some lands belonging  to  the  families.   During  the  course  of  the business of the partnership some more lands were acquired by the partnership.  The plaintiffs who are two members of  the Addanki family instituted a suit in the court of Subordinate Judge, Chittoor on March 4, 1949 for the following reliefs                "(a)   for  a  declaration  that   the   suit               properties   belong  to  the  plaintiffs   and               defendants  IO  to 14 and defendants  1  to  9               equally  for a division of the same into  four               equal shares, one share to be delivered to the               plaintiffs or for a division of the same  into               two  equal  shares  to  be  delivered  to  the               plaintiffs   and  the  defendants  10  to   14               jointly;               (b)   or  in  the alternative  dissolving  the               partnership   between   the   plaintiffs   and               defendants  10  to  14 on  the  one  hand  and               defendants 1 to 9 on the other hand  directing               accounts to be taken;               (c)   directing  the  defendants  1  to  9  to               render  accounts  of the income  of  the  suit               properties;               (d)   directing  the defendants 1 to 9 to  pay               the costs of the suit to the plaintiffs;               (e)   and  pass such further relief as may  be

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             deemed fit in the circumstances of the case. It  may be mentioned that in their suit the plaintiffs  made all  the  members of the Bhaskara family as  defendants  and also joined    those  members of the Addanki family who  had not joined as  plaintiffs.  We are concerned here only  with the defence of the   members   of   the   Bhaskara   family. According to them the partnership was dissolved in the  year 1936 and accounts were settled between the two families.  In support of this plea they have relied upon a karar  executed in favour of Bhaskara Gurappa 402 Setty, who was presumably the karta of the Bhaskara  family, by  five  members  of the  Addanki  family,  who  presumably represented   all  the  members  of  the   Addanki   family. Therefore,   according  to  the  Bhaskara  defendants;   the plaintiffs  had  no  cause of  action.   Alternatively  they contended  that  the suit was barred by time’  In  the  view which  we  take it would not be necessary  to  consider  the second defence raised by the Addanki family.               The relevant portion of the karar reads thus :               "As   disputes  have  arisen  in  our   family               regarding  partition,  it is not  possible  to               carry on the business or to make investment in               future.     Moreover,   you   yourself    have               undertaken  to  discharge some  of  the  debts               payable   by  us  in  the  coastal  parts   in               connection   with   our   private    business.               Therefore,  from  this  day  onwards  we  have               closed the joint business.  So, from this  day               onwards,  we have given up (our) share in  the               machine etc., and in the business, and we have               made over the same to you alone completely  by               way  of adjustment.  You yourself shall  carry               on  the  business  without  ourselves   having               anything to do with the profit and loss.  Here               for,  you  have given up to  us  the  property               forming our Venkatasubbayya’s share which  you               have purchased and delivered possession of the               same to us even previously.  In case you  want               to  execute and deliver a proper  document  in               respect of the share which we have given up to               you, we shall at your own expense, execute and               deliver a document registered." This  document  on  its  face  shows  that  the  partnership business had come to an end and that the Addanki family  had given up their share in the "machine etc., in the  business" and  had  made  it over to the  Bhaskara  family.   It  also recites  the  fact  that  the  Addanki  family  had  already received  certain  property  which  was  purchased  by   the partnership  presumably  as  that  family’s  share  in   the partnership  assets.   The argument advanced by  Mr.  Alladi Kuppuswami  is that since the partnership  assets.  included immovable  property and the document records  relinquishment by  the members of the Addanki family of their  interest  in those  assets, this document was  compulsorily  registerable under s. 17(1)(c) of the Registration Act and that as it was not  registered it is inadmissible in evidence to prove  the dissolution of the partnership as well as the settlement  of accounts. Direct cases upon this point of the courts in India are  few but  before we examine them it would be desirable to  advert to  the provisions of the Partnership Act itself bearing  oh the  interest of partners in partnership property.   Section 14  provides that subject to contract between  the  partners the  property of the firm includes all  property  originally

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brought into the stock of the firm or acquired. 403 by  the  firm  for the purposes and in  the  course  of  the business  of  the  firm.   Section  15  provides  that  such property  shall ordinarily be held and used by the  partners exclusively  for the purposes of the business of  the  firm. Though  that is so a firm has no legal ,existence under  the Act and the partnership property will, therefore, be  deemed to  he  held by the partners for the business of  the  part- nership.   Section 29 deals with the rights of a  transferee of a partner’s interest and sub-s. (1) provides that such  a transferee  will not have the same rights as the  transferor partner  but  he would be entitled to receive the  share  of profits  of  his  transferor and that he will  be  bound  to accept  the  account of profits agreed to by  the  partners. Sub-section  (2) provides that upon dissolution of the  firm or  upon  a transferor-partner ceasing to be a  partner  the transferee  would  be  entitled  as  against  the  remaining partners  to receive the share of the assets of the firm  to which his transferor was entitled and will also be entitled to  an account as from the date of dissolution.  Section  30 deals  with the case of a minor admitted to the benefits  of partnerships.   Such minor is given a right to his share  of the property of the firm and also a right to a share in  the profits  of the firm as may be agreed upon.  But  his  share will be liable for the acts of the firm though he would  not be  personally  liable for them.  Sub-section  (4)  however, debars  a minor from suing the partners for accounts or  for his  share of the property or profits of the firm save  when severing  his  connection with the firm.  It  also  provides that  when he is severing his connection with the  firm  the court shall make a valuation of his share in the property of the firm.  Sections 31 to 38 deal with incoming and outgoing partners.   Some  of  the consequences of  retirement  of  a partner are dealt with in sub-ss. (2) and (3) of s. 32 while some  others are dealt with in ss. 36 and 37.  Under  s.  37 the outgoing partner or the estate of a deceased partner, in the  absence  of  a  contract to  the  contrary,  would  be, entitled to at the option of himself or his  representatives to  such  share  of profits made since he  ceased  to  be  a partner  as may be attributable to the property of the  firm or to interest at the rate of six per cent. per annum on the amount  of  his  share in the property  of  the  firm.   The subject  of dissolution of a firm and the  consequences  are dealt  with in chapter VI, ss. 39 to 55.  of these  the  one which  is relevant for this discussion is s. 48  which  runs thus :               "In  settling  the accounts of  a  firm  after               dissolution the following rules shall, subject               to agreement by the partners, be observed :               (a)   Losses,   including   deficiencies    of               capital,  shall be paid first out of  profits,               next out of capital and, lastly, if necessary,               by   the   partners   individually   in    the               proportions  in  which they were  entitled  to                             share profits.                404               (b)   The  assets of the firm,  including  any               sums  contributed by the partners to  make  up               deficiencies  of capital, shall be applied  in               the following manner and order :-               (i)   in paying the debts of the firm to third               parties:               (ii)  in paying to each partner rateably  what               is due to

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             him   from   the   firm   for   advances    as               distinguished from capital;               (iii) in paying to each partner rateable  what               is due to him on account of capital; and               (iv)  the  residue, if any, shall  be  divided               among the partners in the proportions in which               they were entitled to share profits." From  a perusal of these provisions it would  be  abundantly clear  that  whatever may be the character of  the  property which is brought in by the partners when the partnership  is formed  or  which  may  be acquired in  the  course  of  the business  of the partnership it becomes the property of  the firm  and  what  a partner is entitled to is  his  share  of profits,  if  any,  accruing, to the  partnership  from  the realisation  of this property, and upon dissolution  of  the partnership  to a share in the money representing the  value of  the  property.   No doubt, since a  firm  has  no  legal existence,  the  partnership property will vest in  all  the partners and in that sense every partner has an interest  in the property of the partnership.  During the subsistence  of the  partnership,  however,  no partner can  deal  with  any portion  of the property as his own.  Nor can he assign  his interest  in a specific item of the partnership property  to anyone.   His  right is to obtain such profits, if  any,  as fall to his share from time to time and upon the dissolution of  the  firm  to a share in the assets of  the  firm  which remain  after satisfying the liabilities set out in cl.  (a) and sub-cls.. (i), (ii) and (iii) of cl.(b) of s. 48. It has been stated in Lindley on Partnership, 12th ed.   at p. 375                "What is meant by the  share of a partner  is               his proportion of the partnership assets after               they have been  ill  realised  and   converted               into money, and all the partner-ship debts and               liabilities  have’ been paid  and  discharged.               This  it is, and this only which on the  death               of a partner passes to his representatives, or               to  a  legatee of his  share  ..........   and               which   on  his,  bankruptcy  passes  to   his               trustee." This statement of law is based upon a number of decisions of the  English  courts.  One of these is Rodriguez  v.  Speyer Bros.(1) H where at p. 68 it has been observed (1)  [1919] A.C. 59. 405                "  When  a debt due to a firm is  got  in  no               partner, has any definite share or interest in               that  debt;  his right is merely to  have  the               money  so received applied, together with  the               other  assets, in discharging the  liabilities               of  the firm, and to receive his share of  any               surplus there may be when the liquidation  has               been completed." No  doubt this decision was subsequent to the  enactment  of the  English  Partnership  Act of  1890.   Even  in  several earlier cases, as for instance, Darby v. Darby(1) the , same view has been expressed.  That was a case where two  Persons purchased  lands  on a joint speculation  with  their  joint monies  for  the purpose of converting  them  into  building plots  and reselling them at a profit or loss.  It was  held by  Kindersley  V.C.  that there was  a  conversion  of  the property purchased out and out and upon the death of one  of the partners his share in the part of the unrealised  estate passed to his personal representatives.  After examining the earlier cases the learned Vice-Chancellor observed at p. 995               "The  result  then of the authorities  may  be

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             thus stated :-Lord Thurlow was of opinion that               a  special contract was necessary  to  convert               the  land into personalty : and Sir  W.  Grant               followed  that decision.  Lord Eldon  on  more               than   one  occasion  strongly  "pressed   his               opinion  that  Lord  Thurlow’s  decision   was               wrong.  Sir J. Leach clearly decided in  three               cases that there was conversion out and out  :               and  Sir L. Shadwell, in the last case  before               him, clearly decided in the same way.  That is               the state of the authorities.               Now  it  appears to me that,  irrespective  of               authority,  and  looking at  the  matter  with               reference  to principles well  established  in               this  Court, if partners purchase land  merely               for the purpose of their trade, and pay for it               out   of   the  partnership   property,   that               transaction makes the property personalty, and               effects a conversion out and out."               He then observed               " This principle is clearly laid down by  Lord               Eldon in Crawshav v. CollinS(2) and by Sir  W.               Grant  in Featherstonhaugh v.  Fenwick(3)  and               the right of each partner to insist on a  sale               of all the partnership property, which  arises               from  what  is  implied  in  the  contract  of               partnership,  is just as stringent  a  special               contract would be.  If then this rule  applies               to ordinary stock-in-trade, why should it.               (1) 61 E.R. 992.             (2) 15 V6s. 218.               (3)   17 Ves. 298.               406               not apply to all kinds of partnership property               ? suppose that partners, for the    purpose of               carrying  on their business,    purchase,  out               of  the  funds of the  partnership,  leasehold               estate,  or take a lease of land,  paying  the               rent  out of the partnership funds, can it  be               doubted  that the same rule which  applies  to               ordinary   chattels-  would  apply   to   such               leasehold  property  ? I do not think  it  was               ever  questioned that, on a  dissolution,  the               right of each partner to have the  partnership               effects  sold  applies to  leasehold  property               belonging to the partnership as much as to any               other  stock-in-trade.   No  one  partner  can               insist  on  retaining his share  unsold.   Nor               would it make any difference in whom the legal               estate  was  vested,  whether in  one  of  the               partners or in all; this Court would  regulate               the matter according to the equities.  And Sir               W.  Grant  so decided in  Featherstonhaugh  v.               Fenwick.( )" We have quoted extensively from this decision because of the argument that the decision in Rodriguez’s case(2) would have been otherwise but for s. 22 of the English Act.   Adverting to this Lindley has said :               "From the principle that a share of a  partner               is  nothing  more than his proportion  of  the               partnership assets after they have been turned               into  money and applied in liquidation of  the               partnership, whether its property consists  of               land  or  not, must, as between the  real  and               personal   representatives   of   a   deceased               partner, be deemed to be personal and not real

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             estate,  unless  indeed  such  conversion   is               inconsistent  with the agreement  between  the               parties.   Although  the decisions  upon  this               point were conflicting, the authorities which               were  in  favour of the  foregoing  conclusion               certainly  preponderated over the others,  and               all  doubt upon the point has been removed  by               the Partnership Act, 1890, which contains  the               following section :               22.   Where  land  or any  heritable  interest               therein  has become partnership,  property  it               shall, unless the contrary intention  appears,               be treated as between the. partners (including               the representative of a deceased partner), and               also  as  between  the  heirs  of  a  deceased               partner  and his executors or  administrators,               as  personal  or  movable  and  not  real   or               heritable estate." Even  in  a still earlier case Foster v.  Hale(3)  a  person :attempted to obtain an account of the profits of a colliery on  the ground that it was partnership property and  it  was objected that (1) 17 ves. 298. (3) 5 Ves. 308. (2) [1919] A.C. 59. 407 there  was no signed writing, such as the Statute of  Frauds required. Dealing with it the Lord Chancellor observed :               "That  was not the question : it  was  whether               there was a partnership.  The subject being an               agreement  for  land,  the  question  then  is               whether  there was a resulting trust for  that               partnership by operation of law.  The question               of partnership must be tried as a facte and as               if  there was an issue upon it.  If  by  facts               and circumstances it is established as a  fact               that  these persons were partners in the  col-               liery, in which land was necessary to carry on               the trade, the lease goes as an incident.  The               partnership being established by evidence upon               which a partnership may be found, the premises               necessary for the purposes of that partnership               are by operation of law hold for the  purposes               of that partnership." It is pointed out by Lindley that this principle is  carried to  its extreme limit by Vice-Chancellor Wigram in  Dale  v. Hamilton  (1).  Even so, it is pointed out that it  must  be treated  as  a  binding  authority in  the  absence  of  any decision of the Court of Appeal to the contrary. It seems to us that looldng to the scheme of the Indian  Act no other view can reasonably be taken.  The whole concept of partnership  is to embark upon a joint venture and for  that purpose  to  bring  in as capital  money  or  even  property including  immovable property.  Once that is done   whatever is  b rought in would cease to be the trading asset  of  the person who brought it in.  It would be the trading asset  of the  partnership  in  which  all  the  partners  would  have interest  in proportion to their share in the joint  venture of  the business of partnership.  The person who brought  it in  would, therefore, not be able to claim or  exercise  any exclusive  right over any property which he has brought  in, much less over any other partnership property.  He would not be  able  to exercise his right even to the  extent  of  his share  in  the  business of  the  partnership.   As  already stated, his right during the subsistence of the  partnership

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is  to get his share of profits from time to time as may  be agreed upon among the partners and after the dissolution  of the  partnership or with his retirement from partnership  of the  value of his share in the’: net, partnership assets  as on  the date of dissolution or retirement after a  deduction of  liabilities  and prior charges.  It is  true  that  even during  the  subsistence of the partnership  a  partner  may assign his share to another.  In that case what the assignee would get would be only that which is permitted by s. 29(1), that is to say, the right to receive the share of profits of the assignor and accept the account of profits agreed to  by the  partners.   There are not many decisions  of  the  High Courts  on  the  point.  in  the  few  that  there  are  the preponderating view is (1) 5 Ha. 369 on appeal 2 Ph. 266. M10Sup./Cl/66-13 408 in  support  of  the  position which  we  have  stated.   In Joharmal  v. Tejrani Jagrup(1) which was decided by  Jardine and  Telang  JJ.,  the latter took the view  that  though  a partner’s  share does not include any specific part  of  any specific  item  of  partnership property,  still  where  the partnership  is entitled to immovable property,  such  share does  include an interest in immovable property and,  there- fore,  every  instrument operating to create or  transfer  a right  to  such share requires to be  registered  under  the Registration  Act.  In coming to this conclusion  he  mainly purported to rely upon an observation contained in the fifth edition   of  Lindley  on  Partnership  at  p.  347.    This observation  is  not to be found in the present  edition  of Lindley’s Partnership nor in the 9th or 10th editions  which were  brought to our notice.  The 5th edition,  however,  is not  available.  The learned Judge after quoting an  earlier statement which is that the "doctrine merely amounts to this that on the death of a partner his share in the  partnership property  is  to be treated as money, not as  land"  says  : "This  obviously would not affect matters either during  the lifetime of a partner-Lindley, L.J.", says in so many  words that it has no practical operation till his’ death (p. 348)- or  as against parties strangers to the partnership,’  e.g., the  firm’s debtors." While it is true that the position  so far as third persons are concerned would be different it may be pointed out that in Forbes v. Steven(2) James V.C.,  has, as quoted by the learned Judge, said : "It has long been the settled  law  of  this  Court that  real  estate  bought  or acquired  by a partnership for partnership purposes (in  the absence  of some controlling agreement or direction  to  the contrary),  is, as between the partners and as  between  the real  and  personal representatives of  a  partner  deceased personal  property,  and devolves and is  distributable  and applicable  as personal estate and as legal assets."  Telang J.,  seems  to  have overlooked, and we say  so  with  great respect,  the words "as between the partners" which  precede the   words   "and  as  between  the   real   and   personal representative of the partner deceased" and to have confined his  attention solely to the’ latter.  We have not found  in any  of  the editions of Lindley’s  Partnership  an  adverse criticism  of the view of the Vice-Chancellor, But,  on  the contrary,  as already stated, the view expressed is in  full accord  with these observations.  Jardine J., has  discussed the English authorities at length and after referring to the documents  upon which reliance was placed on behalf  of  the defendant stated his opinion thus                "To  lay  down  that  the  three  letters  in               question,   which  deal  generally  with   the

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             assets,   movable   and   immovable,   without               specifying  any particular mortgage  or  other               interest    in    real    property     require               registration, would,  incline to think, in the               present state of the authorities, go,  (1)I.L.R 17 Bom. 235.  (2) L.R. 10 Eq, 178 409               too  fit.  It way be argued that such  letters               are  not  ’instruments  of-gift  of  immovable               property’ but ’rather disposals of a share  in               a’ partnership of which the business, is money               lending,  and the mortgage securities  merely               incidental thereto." The view, of Telang J., was not accepted by the Madras High- Court. in Chitturi Venkataratnam v. Siram Subba Rao(1)., The learns  Judges there discussed all the English decisions  as also  the  decisions in Sudarsanam  Maistri  v.  Narasimhulu Maistri(2) and Gopala Chetty v. Vijayaraghavachariar(-3) and the  opinion of Jardine J  in Joharmal’s case(4) held  that, an unregistered deed of release by a: partner of his  share in the, partnership business is admissible in evidence, even where the partnership owns immovable property.  The  learned Judges  pointed out that though a partner may be a  co-owner in  the partnership property he has no lights to ask for  a’ share  in  the  property  but;  only  that  the  partnership business  should be wound up including, therein the sale  of immovable  property  and  to  ask  for-  his  share  in  the resulting  assets.   This.  decisions was  not  accepted  as laying down the correct law by a Division Bench of the  same High  Court  in  Samuvier v.  Ramasubbier(5).   The  learned Judges there relied upon the decision in Ashworth  v.Munn(6) in addition to the opinion of Telang J., I and also referred to the decision Gray v. Smith(7) in coming’ to a  conclusion contrary to the one in the earlier case.  It may be  pointed out  that the learned Judges have made no reference  to  the decision  of  the Privy Council in  Gopla  Chetty’s  case(3) though:  that  was:  one  of the  decision  relied  upon  by Phillips  J., in the earlier case.  In so far as  Ashworth’s case(6)  is  concerned that was a case which turned  on  the provisions  of the Mortmain Acts and is not quite  pertinent for  the  decision on the point which was  before  them  and Which  is now before us.  In Gray. v. Smith(7) Kakewich  J., held that an agreement by one of the partners to retire  and to assign his share in the partnership assets including, im- movable  property, is an agreement to assign an interest  in land,  and falls within the statute of Frauds.  The view  of Kekewich  J. seems to have received the approval  of  Cotton L.J.,  one of the  Judges of the court of  Appeal,Though  no argument  was raised before it challenging its  correctness. It may, however, be observed that even according to Kekewich j.,  the  authorities  (Foster  v.  Hale  (8)  and  dale  v. Hamilton(9)  establish  that one may have  an  agreement  of partnership  by parol, notwithstanding that the  partnership is to deal with land.  He, however, went on to observe: (1) I. L.R. 49 Mad. 738.     (2) I.L.R. 1925 Mad. 149. (3) I.L.R. 45 Mad. 378 (P.,C.) [1922] A.C.1 (4) I.L.R. 17 Bom. 235. (5)  I.L.R. 55 Mad. 72. (6) (1880) 15 Ch.  D. 363. (7) 43 Ch.  D. 208. (8)15 Ves. 308. (9)  5 Ha. 369 on appeal 2 Ph. 266 410               "But it does not seem to me to follow that  an

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             agreement  for  the  dissolution  of  such   a               partnership need not be expressed in  writing,               or rather than there need not be a  memorandum               of  the agreement for dissolution when one  of               the  terms of the agreement, either  expressly               or by necessary implication, is that the party               sought to be charged must part with and assign               to others an interest in land.  That seems  to               me  to give rise to entirely different  consi-               derations.   In  the one case  you  prove  the               partnership  by parol; you prove  the  object,               the terms of the partnership, and so on.   But               in  the other case it is one of the  essential               terms  of the agreement that the party  to  be               charged shall convey an interest in land,  and               that  seems therefore to bring it  necessarily               within  the  4th  section of  the  Statute  of               Frauds". In  the  case  before, us also  in  Samuvier’s  case(1)  the document cannot be said to convey any immovable property  by a partner to another expressly or by necessary  implication. If  we  may  recall, the document executed  by  the  Addanki partners in favour of the Bhaskara partners records the fact that  the partnership business has come to an end  and  that the  latter have given up their share in "the machine  etc., and  in the business" and that they have "made over same  to you  alone  completely by way of adjustment.   There  is  no express  reference  to any immovable  property  herein.   No doubt,  the document does recite the fact that the  Bhaskara family  has  given to the Addanki family  certain  property. however, is merely a recital of a fact which had taken place ,earlier.   To  cases  of  this  type  the  observations  of Kekewich  J,  which we have quoted do not apply.   The  view taken  in  Samuvier’s case (1) seemed to commend  itself  to Varadachariar  J.,  in Thirumalappa v. Ramappa  but  he  was reversed in Ramappa v. Thirumalappa.(2)  We  may  also  refer to the decision of  a  Full  Bench  in Ajudhia  Pershad  Ram Pershad v. Sham Sunder  &  Ors.(3)  in which  Cornelius J., has discussed most of the decisions  we have earlier referred to in addition to several others a  id reached  the  conclusion  that while  a  partnership  is  in existence no partner can point to any ,part of the assets of the partnership as belonging to him alone.  After  examining the  relevant  provisions  of the  Act,  the  learned  judge observed               "These  sections  require that the  debts  and               liabilities  should  first be met out  of  the               firm property and there.               (1) I.L.R. 55 Mad. 72.        (2)  A.I.R. 1939               Mad. 884.               (3)   A.I.R. 1947 Lah. 13.                                    411               after the assets should be applied in rateable               payment to each partner of what is due to  him               firstly    on   account   of    advances    as               distinguished  from capital and,  secondly  on               amount of capital, the residue, if any,  being               divided  rateably among all the partners.   It               is obvious that the Act contemplates  complete               liquidation  of the assets of the  partnership               as a preliminary to the settlement of accounts               between partners upon dissolution of the  firm               and  it  will, therefore, be  correct  to  say               that,   for   the  purposes  of   the   Indian               Partnership  Act,  and  irrespective  of   any

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             mutual  agreement  between the  partners,  the               share  of  each partner is, in  the  words  of               Lindley  : "his proportion of the  partnership               assets  after they have been all realised  and               converted into money, and all the  partnership               debts  and  liabilities  have  been  paid  and               discharged. This indeed is the view which has commended itself to us. Mr. Kuppuswamy then referred us to two decisions of  English courts  in In re Fuller’s Contract(1) and Burdett-Coutts  v. Inland  Revenue Commissioners(2) and on the passage  at  pp. 394 and 395 in Lindley’s Partnership under the head "Form of Transfer’ in support of his argument.  Both the cases relied upon  deal  with contracts with third parties and  not  with agreements  between partners inter se concerning  retirement or dissolution.  The passage from Lindley deals with a  case where there is an actual transfer of immovable property  and is, therefore, not in point. Mr. Chatterjee brought to our notice some English  decisions in  addition to those we have adverted to in support,  which agree  with  the  view taken in those cases.   He  has  also referred  to the decisions in Prem Raj Brahmin v. Bhani  Ram Brahmin(3)  and Firm Ram Sahay v. Bishwanath(4).  We do  not think  it necessary to discuss them because they do not  add to what we have already said in support of our view. For these reasons we uphold the decree of the High Court and dismiss the appeal with costs. Appeal dismissed. (1)  [1933] Ch.  D. 652. (2)  [1960] 1 W.L.R. 1027. (3)  I.L.R. E [1946] 1 Cal. 191. (4)  A.I.R. 1963 Patna 221. 412