TMI Blog1970 (8) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... . A-1 mortgage executed on the same date i.e., 4-1-1952 by the 1st defendant for himself and on behalf of his minor sons, defendants 2 and 3. Though the defendants are different in each of the two suits, the plaintiff (1st respondent in these appeals) is common to both the suits. As the defenses raised by the contesting defendants in each of the two suits were substantially the same, the two suits were tried together with the consent of parties and the evidence recorded in O.S. No. 54 of 1964 was treated as evidence in both the suits. 3. The case of the plaintiff as narrated by her, in O.S. No.53 of 1964 is that the 1st defendant, in partnership with others as partners, established a rice mill called Veera Venkata Satyanarayana Rice Mill at Someswaran. For the purpose of the partnership business, he borrowed moneys from the plaintiff's husband and executed promissory notes on 5-6-1950. He also borrowed moneys from the second son of the plaintiff under another promissory note dated 16-5-1950. As the 1st defendant was unable to discharge the debts due under the promissory note, he borrowed ₹ 12,658/- from plaintiff and executed the mortgage bond (Ex. A-2) dated 4-1-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the suits is that a mortgagee cannot claim any interest in the properties of the firm in specie and follow the properties in the hands of an auction-purchaser as, according to the contesting defendant (2nd defendant) the remedy, if any, is only to file a suit for account of the dissolved partnership and ask for a share in the assets within three years form the date of dissolution, and even that remedy is barred by limitation. The other contesting defendants in O.S. No. 54 of 1964 also disputed the claim of the plaintiff for recovering the amounts. 6. On the principal issues settled in the two suits, the trial court held that the two mortgage bonds in question are true and supported by consideration, and that the plaintiff is entitled to recover the amounts in terms of the decrees passed in both the suits. It also held that the suit is not barred by limitation. 7. Mr. K.B. Krishnaamurty, learned counsel appearing for the appellants in these appeals, relying upon a decision of the Supreme Court in Narayanappa v. Bhaskara Krishnappa [1966]3SCR400 mainly contended that a mortgagor, who is a partner of the firm, cannot claim or exercise any exclusive right over any property of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond part of it gives the boundaries of the land referred to in the first part; and in addition, specifically refers to the mill located thereon as also the other buildings, engine pulleys, trees, easementary rights and all other machinery. 10. According to Mr. Subbarayan, what is mortgaged is only in interest in the partnership to the extent of the share of the mortgagors viz., one Anna and not the property of the partnership. We are unable to agree with Mr. Subbrayan that what is mortgaged is the undivided interest of one anna's share of the mortgagors and not the property of the partnership. Under Section 15 of the Partnership Act, the property of the firm subject to any contract between the parties, shall be held and used by the partners exclusively for the purpose of the business. Therefore, no partner can say or treat any item of the property so long as the partnership subsists. In other words, as held by a Full Bench of the Lahore High Court in Ajudhia Pershad Ram Pershad v. Sham Sunder AIR 1947 Lah 13 while a partnership is in existence, no partner can point to any part of the assets of the partnership as belonging to him alone. It should be borne in mind that not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mill and enjoyment of all the profits arising therefrom. The question that arose in that case was whether under the terms of the will , the petitioner in the revision petition was entitled to be treated as the legal representative of the deceased appellant for continuing the appeal. The application made by the petitioner when the appeal was pending in the Court of the District Judge was dismissed on the ground that what was assigned to the original appellant was only a mere right to sue, and that a mere right to sue cannot be transferred, It is against the decision of the District Judge that the revision was filed and a single Judge of High Court held that what was transferred under the will was not a mere right to sue, but the tangible interest in the property and as such, the transfer was not hit by Section 6(e) of the Transfer of Property Act. So. it is obvious that the was no transfer of partnership property in that case, but only interest in that property. 12. As has already been noticed, the question in these appeals is whether what was mortgaged under Exs. A-1 and A-2 is a share in the partnership of the rice mill or certain items of the partnership property detailed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the partners. It is manifest that, not until the dissolution of the firm, the transferee will be entitled as against the remaining partners to receive a share of the assets to the extent the transferring partner was entitled to' and for that purpose an account as from the date of dissolution will have be taken. 15. In the two mortgage bonds in question, what was transferred by the mortgagors was not interest or the right to the partnership business, but certain items of the partnership property were mortgaged. A transfer of partnership property, either by mortgage or by sale or otherwise, is not permissible under the all that a partnership Act; and all that a partner can transfer is his interest in the partnership business to the extent of his share as provided in Section 29(1) of the Partnership Act. On a true construction of the documents we have reached the conclusion that the transfer under the two mortgage deeds (Exs. A-1 and A-2) is not the extent of their share or interest in the partnership business but the property of the firm. The fact that in the deeds the mortgagors mentioned that they have one Anna's share in the property shown in the schedules ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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