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Wednesday, November 14, 2018 06:18:01 PM
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Rights of partners to claim property shares

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07th-Jul-2018       
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Appellate Division :
(Civil)
Surendra Kumar Sinha CJ
Syed Mahmud Hossain J
Hasan Foez Siddique J
Mirza Hussain Haider J
Md Bazlur Rahman J
Khosrur Rashid (Md) and others ………
............. Petitioners
vs
Engineer Delwar Bakhat and others ..... ......... Respondents
Judgment
August 7th, 2016
Partnership Act (IX of 1932)
Section 45
Partnership Act (IX of 1932)
Section 45
If there is any claim of the defendants from the plaintiffs, they can do so by filing a suit under Section 45 of the Act, which provides that notwithstanding dissolution of a firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debits and liabilities of the firm, and to have the surplus distributed among the partners or their  representatives according to their rights.…………(20)
Ram Singh vs Ram Chand, AIR 1924 (PC) 02 and Mujibur Rahman Sikder vs Mahbubur Rahman Sikder, 1983 BLD (AD) 164 ref.
Mahbubey Alam, Senior Advocate, instructed by Zainul Abedin. Advocate-on-Record For the Petitioners:
Mahbub Ali, Senior Advocate, instructed by Nurul  Islam Bhuiyan, Advocate-on-Record-For the Respondents.
Judgment
Syed Mahmud Hossain J: This civil petition for leave to appeal is directed against the judgment and order dated 10-12-2012 passed by the High Court Division in Civil Revision No. 2918 of 2008 discharging the Rule and affirming the judgment and decree dated 18-2-2008 passed by the learned Additional District Judge (In-charge), Third Court, Sylhet in Title Appeal No. 103 of 2005 allowing the appeal and setting aside the judgment and decree dated 11-6-2005 passed by the learned Senior Assistant Judge, Sadar, Sylhet, in Title Suit No. 354 of 2003 dismissing the suit.
2. The facts giving rise to this civil petition for leave to appeal, in short, are: Respondent Nos. 1-8 herein as the plaintiffs filed Title Suit No. 354 of 2003 in the Court of Senior Assistant Judge, Sadar, Sylhet for dissolution of partnership firm, namely, Messr's Rahim and Rahim and for getting vacant possession of the scheduled property as per clause 18 of the partnership deed dated 11-11-1966 and for compensation. Their case, in short, is that one Azima Banu, was the admitted owner of the suit land. The predecessor of the defendants, MA Rashid who was an agent of pro-forma defendant No. 9 (Jamuna Oil Company Ltd Chittagong), proposed to the predecessor of the plaintiffs to form a partnership firm. After mutual discussion, the share of late Azima Banu in the partnership firm was fixed 1/4 against value of the suit land. The partnership was initially formed with four partners with MA Rashid holding 40% share, late Azima Banu holding 25% share, Momtaj Begum holding 25% share and Jamila Khatun holding 10% share (total) 100%). Subsequently, MA Rashid bought the shares of both Momtaj Begum and Jamila Khatun and ultimately became the owner of 75% share in the partnership firm. The capital of the firm was fixed at Taka 45,000 and a partnership registered deed was executed on 11-11-1966 by the partners. A tenancy agreement was also executed on 9-11-1967 between Azima Banu and MA Rashid, which was subsequently extended from time to time. During subsistence of the partnership firm, Azima Banu died in 1983 and her son Firoz Bakth became the partner in her place. Mr MA Rashid, who was holding 75% share, died in 1984 and defendant Nos. 1-9, being his heirs, became the partners in his place, with defendant No.1 becoming the Managing partner of the firm. However, as the defendants neither paid any rent in respect of the suit land nor any profits from the partnership business to the plaintiff, there was considerable strain in the relationship of the parties. In order to settle the differences between the parties, a Memorandum of Understanding was executed on 30-4-2001, but defendant No.1 failed to comply with the terms of the settlement and· filed Rent Control Case No. 34 of 2001. During the pendency of the said case, Dr Firoz Bakth died on 28-10-2002. In order to settle the dispute between the parties, the plaintiff served a notice of arbitration on 25-3-2003. Defendant No.1, by notice dated 1-4-2003, requested the plaintiffs to become partner. However, the plaintiff, by notice dated 21-7-2003, intimated their decision for dissolution of the firm and requested the defendants to handover the vacant possession of the suit land However, since there was no response from the other side, the plaintiff was constrained to file the suit.
3. Defendant Nos. 1 and 9 contested the suit by filing written statement denying all the material statements made in the plaint of the suit.
Their case, in short, is that late Azima Banu was a partner of the firm, holding 1/4 share, while the other 3/4 share was held by Mr MA Rashid. It was contended on behalf of the defendants that the suit land had become the property of the partnership firm and there was a stipulation in the Partnership Agreement that in case of retirement of Azima Banu, the suit land was to be transferred in favour of  the firm for a consideration of Taka 35,000.
4. During the subsistence of the partnership firm and during the life-time of the original partners, certain constructions had to be made in the business interest of the firm. Since late Azima Banu did not have the requisite funds, an amount of Taka 35,000 was paid to late Azima Banu by the firm for making necessary construction on the said land. However, upon the refusal to accept rent in 2001, the same was deposited by filing Rent Control Case No. 34 of 2001.
5. The trial Court, upon hearing the parties, by the judgment and order dated 11-6-2005 dismissed the suit.
6. Against the judgment and decree passed by the trial Court, the plaintiff preferred Title Appeal No. 104 of 2005 before the learned District Judge, Sylhet. On transfer, the appeal was heard and disposed of by the learned Additional District Judge-in-Charge, Third Court, Sylhet, who, by his judgment and order dated 18-2-2008, allowed the appeal setting aside the judgment and decree passed by the Trial Court.
7. Being aggrieved by and dissatisfied with the judgment and decree passed by the Appellate Court, the defendants moved the High Court Division under Section 115 of the Code of Civil Procedure and obtained Rule in Civil Revision No. 2918 of 2008. The learned Single Judge of the High Court Division, upon hearing both the sides, by the judgment and order dated 10-12-2012 discharged the Rule affirming the judgment and decree passed by the Appellate Court.
8. Feeling aggrieved by and dissatisfied with the judgment and order passed by the High Court Division, the defendants as the leave petitioners have filed this civil petition for leave to appeal before this Division.
9. Mr Mahbubey Alam, learned Senior Advocate, appearing on behalf of the leave petitioners submits that the Appellate Court failed to appreciate that in view of the facts and circumstances of the case of the plaintiffs' suit for dissolution of partnership is not maintainable in view of the partnership deed and also the Partnership Act. He further submits that the High Court Division as well as the appellate Court failed to notice that the dispute has not been referred to any admitted arbitrator as per provision of law and, as such, the present suit was not maintainable.
10. Mr Mahbub Ali, learned Senior Advocate, appearing on behalf of the respondents, on the other hand, supports the impugned judgment delivered by the High Court Division.
11. We have considered the submissions of the learned Senior Advocates of both the sides, perused the impugned judgment and the materials on record.
12. The plaintiff-respondents filed the suit for dissolution of the partnership. There is no dispute that Azima Banu was the owner of the land, on which, Mis Rahim and Rahim Partnership Firm is situated. The trial Court found that the suit was not maintainable in its present form. The Appellate Court found that the observation made by the Trial Court was not based on any strong footing. The partnership deed dated 11-11-1996 (exhibit-2) contained clear statement as to procedure for dissolution of firm or retirement of the partners. Clause-2 of the partnership deed provides the provision as to what step is to be taken in case of death, interruption or insanity of any of the partner. The plaintiffs have steps into the shoes of their predecessor-in-interest, Azima Banu, the admitted partner of the firm and, as such, the original suit was very much maintainable. Because of irregularities in payment of monthly rent and the share of profit, there were several arrangements for coming into settlement but ultimately no lasting solution could be achieved. There was no denial from any side that the nature of partnership in M/s Rahim and Rahim Partnership Firm is a partnership at will. The High Court Division further found that Clause-2 of the partnership deed also recognised that it was a partnership at will.
13. Having considered Clauses 6, 17 and 18 or the partnership deed, the High Court Division found that Clause 6 deals with retirement from the partnership firm, Clause-18 deals with issue of dissolution of partnership firm itself.
14. In the case of Ram Singh vs Ram Chand, AIR 1924 (PC) 02, it has been held as under:
When it is a partnership at will a partner is entitled to dissolution; it is a legal right, under the Code and under the contract.
15. In the case of Mujibur Rahman Sikder vs Mahbubur Rahman Sikder reported in 1983 BLD (AD) 164, it has been held that in case of partnership at will, it is dissolved by notice. Filing of a plaint by a partner is enough to put an end to the partnership.
16. The principle expounded in the cases referred to above also applies to the case in hand.
17. The High Court Division came to a finding that M/s Rahim and Rahim Partnership Firm was lawfully dissolved by the plaintiffs.
18. The High Court Division came to the finding that the matter of monetary claim might be settled by the parties, even after, disposal of the suit amicably.
19. Mr Mahbubey Alam, learned Senior Advocate, submits that the defendants are entitled to recover an amount of money from the plaintiffs.
20. If there is any claim of the defendants from the plaintiffs, they can do so by filing a suit under Section 45 of the Partnership Act, which provides that notwithstanding dissolution of a firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debits and liabilities of the firm and to have the surplus distributed among the partners or their representatives according to their rights .
21. In view of the above provision of law, we are of the view that the defendants if so advised may file a suit for accounts in order to satisfy of their claim, if any, against the plaintiffs.
In the light of the findings made before, we do not find any substance in this civil petition. Accordingly, this petition is dismissed with the observation made in the body of this judgment.

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