TMI Blog1922 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court on 26th February, 1915, when it was found that the partnership had been dissolved before the death of Narasimhachariar, namely in April, 1910, and that therefore the suit was barred by Article 106 of Schedule I of the Indian Limitation Act, 1908, which provides that a suit for accounts and a share of the profits of a dissolved partnership must be brought within three years of the date of dissolution. The Respondent did not appeal. But on 30th April of the same year he launched a second suit against the present Appellants, which is now in question before their Lordships. 3. In this suit, after setting out the proceedings in the previous suit and admitting that he had become disentitled to claim a general account and the payment to him of what might be found due and payable on the taking of a general account, he said that the sum of Es. 18,842 had been received by the Appellants in various payments on various dates from debtors to the old firm, and he claimed his quarter share in this total sum. The Appellants put in a written statement in which they denied that they had received any assets of the firm, a. said that if the accounts were to be taken the Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment that the series of cases in the Bombay and Madras High Courts, upon the authority of which judgment has been given for the Respondent, proceed. It is, therefore, important to begin the consideration of the law with a careful analysis of that case. 7. Gye was lessee of the Covent Garden Theatre and for the purpose of the concern obtained in 1853 a considerable sum of money from one Thistlethwayte on terms of partnership. Thistlethwayte died in 1854 making Knox his executor. Knox in the second bill which he filed (which was the one that came under consideration in the House of Lords) contended that thereafter he and Gye continued the partnership. In 1854 negotiations were entered into with one Hughes for the temporary use of Her Majesty's Theatre, and a sum of 5,000 was paid to Hughes in advance for this purpose. Hughes did not carry out his share of the bargain. Gye sued him for the 5,000 and recovered judgment, but not succeeding in getting the money, he ultimately accepted, in 1862, the sum of 2,500 by way of compromise. In 1856, the Covent Garden Theatre was burnt down and Gye took the Lyceum Theatre. In October, 1864, Knox filed the bill against Gye, praying f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d defence. The matter then remaining for decision was whether this was a case where equity followed the law, and consequently the relief was barred. This was so held, Lord Hatherley dissenting, and the suit was accordingly dismissed. 10. Now it will be observed that the sum of 2,500 was received within the statutory period, and its receipt was the receipt by Gye of a partnership asset. 11. The case would seem, therefore, to be in point, and (the suit having been dismissed) adverse to the present Respondent. But as the suit was one for a general account and not merely or even by way of addition to recover Knox's share of the sum received from Hughes, and as there are in the speeches of the noble and learned Lords some passages where a case like the present is put by way of hypothesis, the decision in Knox v. Gye (1871) L.R. 5 H.L. 656, need not be taken for the purposes of the present judgment as laying down a final determination of the law on this point. 12. Nevertheless the observations in that case when carefully considered do not warrant the construction which has been put upon them by some of the Courts in India, but on the contrary warrant the conclusion to which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner has paid what he has to contribute to the debts of the partnership and received his share of the profits, the mutual rights and obligations having been thus all discharged, and then it turns out afterwards that there was some item to the credit of the partnership which was either forgotten or treated as valueless by reason of the supposed insolvency of the debtor or for any other cause, which item afterwards becomes of value and falls in, it ought to be divided between the partners in proportion to their shares in the original partnership. There is no reason why one should have it more than the other. 15. The case will not often occur. If the debt is incurred to the firm and both the ex-partners are alive the debtor can only safely pay upon the receipt of both, for the agency of each for the other has ceased with the dissolution of partnership, and both receiving and being in possession each can insist upon his proper share. 16. Lord Hatherley points out the most probable occasion when it would arise, namely, when one of the partners is dead and the debt has accrued at law to the surviving partner who thus becomes solely possessed of the former partnership item; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom. 628, decided in the year 1882. That decision is no doubt in point and in favour of the Respondent; but it is to be observed that it was largely based upon the obiter dicta in the previous case. 21. The third Bombay case was Rivett-Carnac v. Goculdas Sobhanmull I.L.R. (1895) 20 Bom. 15. Candy, J., sitting as a single Judge in the first Court criticized the previous Bombay decisions, but said that he was bound by them. Accordingly he held that though a claim for a general partnership account was barred by limitation a claim for a share of moneys received by the partnership within the period of limitation was not barred; that the Plaintiff was entitled to recover Hemabai's and Gokuldas' shares of the said money; and that the second Defendant was entitled to set off against this his share of certain moneys received by the Plaintiff as part of the assets of the said partnership. The High Court in appeal held that the Respondent's claim to an account of the partnership dealings was not barred by limitation because under Section 17 of the Limitation Act (Act XV of 1877) when a person, who, if living, would have a right to sue, has died, the period of limitation is to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aying that he may have the accounts taken. But if the policy of the law be that after the period of I limitation no accounts shall be taken, for the excellent reason that materials for taking such accounts may have disappeared, it is not legitimate to say to the person sued, Either pay on the footing that accounts have been taken which we know have not been taken and on the footing that all matters have been squared up between you and your partner when we have no knowledge that there has been any such squaring up, or submit to that taking of accounts against which the legislature has protected you. Thiruvengada Mudaliar v. Sadagopa Mudaliar I.L.R (1911) Mad. 112, also referred to in the judgment of the High Court in the case now under Appeal may be taken to be to the same effect. On the other hand, the Chief Court of the Punjab has expressed its inability to follow these cases, Nehal Devi v. Kishore Chand (1910) XLV P.R., 273, 298. Their Lordships have no information as to the matter having come before the High Court of Calcutta. 24. These decisions having been thus analyzed appear to rest upon some obiter dicta which do not purport to express Indian Law, but are the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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