Vs. Krishan  Insc 967 (15 December 2006)
Sinha & Markandey Katju S.B. Sinha, J :
purchaser is the appellant before us being aggrieved by and dissatisfied with a
judgment and order dated 10.10.1988 passed by the High Court of Kerala
dismissing an appeal preferred by the appellant herein.
brothers, Madhavan, Bahuleyan and Karunakaran, were owners of the property. Madhavan
and Bahuleyan started a partnership under the name and style of "The
Trustful Daily Banking Company". Madhavan died on 26.10.1960, leaving
behind Defendant Nos. 3 to 5 as his legal heirs and representatives. The
partnership firm stood dissolved with his death. The legal heirs and
representatives of Madhavan by reason of a registered deed of sale dated
28.05.1963 transferred the property in question in favour of Krishnan (since
deceased) being predecessors in interest of the respondents herein. A money
suit for recovery of a sum of Rs.312.20 was filed against the said partnership
firm by a third party. The said suit was marked as O.S. No. 523 of 1964. It was
respondent admittedly was not a party to the said suit. The property in
question was auction sold in execution of the said decree.
purchased the same for a sum of Rs.5050/- being the highest bid.
said sale was confirmed. The Auction Purchaser prayed for delivery of
possession. Respondent obstructed thereto. An application for removal of
obstruction was filed by the appellant. The Executing Court by a judgment and
order dated 09.10.1979 dismissed the said application, directing the respondent
to deposit a sum of Rs.590.07 , inter alia, on the premise that on the death of
Madhavan, the partnership became dissolved and keeping in view the fact that
the other partner was also dealing with certain items of the partnership
assets, the legal heirs and representatives of Madhavan could sell the
property. The respondent, therefore, was the lawful owner thereof.
appellate court, however, while dismissing the appeal also opined that the
respondent being a co-owner of the property along with the auction purchaser,
the trial court was not correct in directing the respondent to deposit a sum of
Rs.590.07. In the second appeal preferred by the appellant, the High Court
having not found any error in the said judgment, dismissed the same. It was
opined that the partnership having been dissolved, the dissolved firm cannot
have status of partnership subsequently.
of Appellant is that Respondents are not the legal heirs of the dissolved firm
and they have not derived any share. Therefore, the respondents had no right to
not in dispute that the partnership stood dissolved on the death of Madhavan.
The heirs and legal representatives, therefore, could transfer the property at
least to the extent of their own share.
distinction exists between the right of a partner to sell a property during
subsistence of the partnership and the right of an erstwhile partner to sell
the property of the firm after it stood dissolved.
been found as of fact by all the three courts that after purchasing the
property from the heirs and legal representatives of Madhavan, the respondent
herein had been put in possession and they had been residing therein when the
auction sale was effected. He had caused some improvements and a new building
had also been constructed by him. As a suit was filed after the deed of sale
was executed and registered, the respondent was a necessary party. He was not
arrayed as a party in the suit.
having been found to be in possession of the property as on the date when the
delivery of possession of the property was sought to be effected; a 'fortiori
he had a right to obstruct thereto. Once the title in respect of the property
in question is found to be existing in the obstructionist, an application for
removal of the obstruction as envisaged under Order 21 Rule 97 of the Code of
Civil Procedure has rightly been determined in favour of the appellant.
could be sold in the auction was the right, title and interest of the
judgment-debtor in the property. The right of the auction purchaser, if any,
keeping in view of the facts and circumstances of the case, could not have been
determined in such a proceeding. Section 29 of the Indian Partnership Act, 1932
states as to what would be the interest of transferee of a partner. Sub-section
(2) thereof determines the right of a transferee if the firm is dissolved or if
the transferring partner ceases to be a partner thereof.
right the respective purchaser from the erstwhile partner of dissolved
partnership, therefore, was required to be worked out in an independent
Narayanappa and Another v. Bhaskara Krishnappa (dead) and thereafter his heirs
and others [AIR 1966 SC 1300], this Court opined :
whole concept of partnership is to embark upon a joint venture and for that
purchase to bring in as capital money or even property including immovable
that is done whatever is brought in would cease to be the exclusive property of
the person who brought it in.
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
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 is to get his share of
profits from time to time as maybe 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 solution or
retirement after a deduction of liabilities and prior charges" Herein we
have to consider the case from altogether a different angle.
not a case where the partners of the firm were not the owners of the property.
It is also not a case where the property was owned by the partnership firm. The
partners as pre-existing co-owners had a definite share of the property. They
merely applied their own property for running a business in partnership. On
dissolution of the partnership, their right in the property revived. Using of a
premises for business purpose would not automatically lead to the conclusion
that the premises belonged to the partnership firm.
terms and conditions of the partnership agreement, in any event, are not known.
It is also not the case where the partners ceased to be co- owners. If they
continued to have undivided share in the property even during subsistence of
partnership, question of their ceasing to have any interest therein on its
automatic dissolution would not arise.
were found to be in possession of the property. They were found to have some
interest therein. In that view of the matter, we do not find any legal
infirmity in the impugned judgment.
the reasons aforementioned, we do not find any ground to interfere with the
impugned judgment. The appeal is dismissed accordingly.