Satheerthyan s/o Kundani Narayanan v. Thankamma @ Sathyavathy and others

RFA.No.58 OF 2004 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE SHIRCY V.** **FRIDAY, THE 20TH DAY OF DECEMBER 2019 / 29TH AGRAHAYANA, 1941** ## **RFA.No.58 OF 2004** **AGAINST THE ORDER IN OS 228/1998 DATED 08-07-2003 OF ADDITIONAL SUB COURT, IRINJALAKUDA** ## **APPELLANT/SECOND DEFENDANT :** **SATHEERTHYAN S/O.KUNDANI NARAYANAN,, NANDIPULAM VILLAGE,, MUKUNDAPURAM.** **BY ADV. SRI.M.NARENDRA KUMAR** ## **RESPONDENTS/PLAINTIFF AND DEFENDANTS 3 TO 6:** - **1 THANKAMMA @ SATHYAVATHY D/O.KUNDANI NARAYANAN,, W/O.VAIKKATTIL JAYACHANDRAN,, VADANAPPILLY DESOM,, CHAVAKKAD TALUK.** - **(DIED) LRS OF R1 ARE IMPLEADED** - **2 SHAJI S/O.ANDEZHATH VIJAYARAGHAVAN,, RESIDING AT MAYOORA APPARTMENT,, AYYANTHOLE, THRISSUR TALUK.** - **3 SHANAVAS S/O.ANDEZHATH VIJAYARAGHAVAN,KOORKANCHERY DESOM,,THRISSUR TALUK.** - **4 SANDHA ,W/O.LATE MOHANAN RESIDING AT PLOT NO.4 A ENARK APPARTMENT,, MARAR ROAD, THRISSUR.** - **5 ARCHANA, D/O.LATE MOHANAN RESIDING AT PLOT NO.4 A ENARK APPARTMENT, MARAR ROAD, THRISSUR - REPRESENTED BY HER MOTHER SANDHA AND W/O.LATE MOHANAN.** **ADDITIONAL R6 TO R11 IMPLEADED** RFA.No.58 OF 2004 2 - **6 V.J.NARAYANAN** **AGED 56 YEARS, RESIDING AT VAIKKATTIL HOUSE, VADANAPPALLY POST, THRISSUR, PIN 680 614.** - **7 JAYA SHANKARAN** - **61 YEARS, RESIDING AT KARANAYIL HOUSE, POONKUNNAM POST, THRISSUR PIN 680002.** - **8 REKHA PRABHAKARAN,** **AGED 63 YEARS, RESIDING AT THOTTUPURA HOUSE, NATTIKA POST, THRISSUR, PIN 680 566.** - **9 LATHIKA UNNIKRISHNAN, AGED 52 YEARS, W/O.UNNIKRISHNAN, RESIDING AT, VAIKKATTIL HOUSE, VADANAPPALLY POST, THRISSUR, PIN 680 614.** - **10 RESHMA UNNIKRISHNAN AGED 29 YEARS, D/O.UNNIKRISHNAN, RESIDING AT, VAIKKATTIL HOUSE, VADANAPPALLY POST, THRISSUR, PIN 680 614.** - **11 BHAVYA UNNIKRISHNAN** **AGED 26 YEARS, D/O.UNNIKRISHNAN, VAIKKATTIL HOUSE, VADANAPPALLY POST, THRISSUR, PIN 680 614.** **LEGAL HEIRS OF RESPONDENT NO.1 ARE IMPLEADED AS ADDL.RESPONDENTS 6 TO 11 ARE IMPLEADED AS ADDL.RESPONDENTS 6 TO 11 VIDE ORDER DAED 23.10.2019 IN I.A. NO.1/2019** **R1 BY ADV. P.JACOB VARGESEMEDIATOR R1 BY ADV. SRI.E.I.DEVASSY R1 BY ADV. SMT.P.A.ANITHA R1 BY ADV. SRI.RENJITH THAMPAN R4-5 BY ADV. SRI.K.S.BHARATHAN R4-5 BY ADV. SRI.K.JAYAKUMAR SR.** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 0411-2019, THE COURT ON 20-12-2019 DELIVERED THE FOLLOWING:** RFA.No.58 OF 2004 3 ## **JUDGMENT** The 2[nd] defendant in a suit for partition is challenging the preliminary decree dated 8[th] July, 2003 in O.S. No. 228 of 1998 on the file of the Additional Sub Court, Irinjalakuda. 2. For the sake of convenience, the parties are referred to as per their original status before the trial court. 3. The suit for partition was filed by the plaintiff/1[st] respondent claiming 1/5[th] share over the plaint A to D schedule properties as the legal heirs of one Narayanan. The court below passed the preliminary decree allotting shares to the plaintiff and the defendants. The dispute in this appeal is with respect to item No. 2 property in C schedule. In C schedule two items are included. The disputed property, i.e., item No. 2 is having an extent of 1.48 acres where a tile factory, namely, Ajantha Tile works and its machineries are situated. The court below found that item No. 2 in C schedule is not liable to be partitioned along with the other items of properties. The finding that item No.2 in C Schedule is not available for partition, alone is under RFA.No.58 OF 2004 4 challenge in this appeal. 4. The brief facts necessary for disposal of this appeal are as follows: The plaintiff (Sathyavathi), defendants 1 and 2 (Mohanan and Satheerthyan), Sarojini and Sukumaran are the children of one Narayanan and Janaki. Narayanan was in possession of so many items of properties and on his death, Sukumaran was managing the entire properties. Sarojini, the daughter of Narayanan expired before the death of Narayanan in the year 1959 and the defendants 3 and 4 are the children of Sarojini. The 1[st] defendant died during the pendency of the suit and his legal heirs are the defendants 5 and 6. Narayanan had executed a partition deed in the year 1959 by retaining A schedule property in his name and his wife Janaki and the remaining properties were divided among his children. Sukumaran was unmarried and issue less. He expired in the year 1996 and on his death, his property devolved upon his brothers and sisters. The suit was decreed by allotting shares as claimed. But item No. 2 in C schedule alone is in dispute in this appeal. 5. It is contended by the 2[nd] defendant/appellant in RFA.No.58 OF 2004 5 this appeal that deceased Narayanan had purchased item No. 2 in C schedule property on 14.12.1959 and there is no positive proof to show that it was thrown into the stock of Ajantha tiles and therefore, the said property is not the asset of the firm and it is liable to be partitioned among the legal heirs of Narayanan. 6. The defendants 5 and 6 contended that item No. 2 in C schedule was originally purchased by late Narayanan as per document No. 1883/59 dated 14.12.1959 and had thrown into the stock of the firm and it is the property of the firm Ajantha tiles, which is not liable to be partitioned. 7. So the only question to be looked into is whether the said property is also available for partition among the parties and if so, whether the 2[nd] defendant is entitled to get any share in the property as alleged ?. 8. Heard Adv. Narendrakumar, the learned counsel for the appellant/2[nd] defendant and Adv. Renjith Thampan, the learned counsel for the first respondent and Adv. K. Jayakumar, learned Senior Counsel for the respondents 4 and 5. 9. Admittedly, Ext.A10 is the certified copy of the assignment deed dated 14.12.1959 in favour of late Narayanan. As per this document, it is seen that Narayanan had purchased RFA.No.58 OF 2004 6 the property by paying valid consideration as early as on 14.12.1959. Admittedly, the tile factory is being functioning in the said property and in the plaint schedule this factory is also included as item No. 2 in C schedule. Whether it is also available for partition has to be considered on the basis of the pleadings and the evidence available on record. At the outset, it is to be noted that no appeal has been preferred by the plaintiff, who filed the suit for partition challenging the preliminary decree. It is significant to note that in paragraph No. 5 of the plaint, it was specifically pleaded by the plaintiff that item No.2 in C schedule includes the factory, land and machineries. 10. In para 5 of the written statement, the 1[st] defendant had contended that the tile factory was functioning as a partnership business from 1.4.1964 and the factory is located in the property purchased by his father and thereafter the partnership firm was registered. After the death of his father, the partnership continued with late Sukumaran, himself and the 2[nd] defendant as partners. Later, the 2[nd] defendant retired from the partnership and thereafter he along with late Sukumaran was running the partnership. On the death of Sukumaran, he continued the partnership with his wife and hence the RFA.No.58 OF 2004 7 partnership business and the goodwill of the partnership business are not liable to be partitioned and the plaintiff is not entitled to claim any share as claimed by him. 11. The 2[nd] defendant also raised similar contention in the written statement filed by him and further contended that the property was with him (2[nd] defendant), the 1[st] defendant and Sukumaran in partnership and after the death of their father on 24.9.1969, the business was run by Sukumaran, himself and the 1[st] defendant as their own business and the plaintiff has no right over the property. But further contended that after the death of Sukumaran, the plaintiff may have right over the 1/3[rd] share of Sukumaran. When this defendant was examined as DW1, it was sworn to by him in the chief affidavit that the tile factory was jointly run by him along with Sukumaran and the 1[st] defendant and the 1[st] defendant's right over the factory was relinquished in their favour and after the death of Sukumaran, his share over the property alone is liable to be partitioned. So the 1[st] defendant relinquished his right in the tile factory is the evidence adduced by him before the court below. It is an undisputed fact that the tile factory was run by Narayanan along with Sukumaran, the 2[nd] defendant and Mohanan (the 1[st] RFA.No.58 OF 2004 8 defendant). Ext. B12 are certain documents of the partnership firm by name Ajantha tile works which includes the balance sheet as on 1-1-1969. The assets of the partnership business includes land, building, machineries, furniture etc as revealed by Ext.B12. When the partnership business started in the year 1964, all the three sons of Narayanan were partners of the business. So the first partnership business was started by Narayanan with his 3 sons as partners. The copy of the application for registration of partnership is in Ext.B12. In clause No. 6 of the partnership deed forwarded along with the application it has been mentioned that the assets and liabilities of the business done individually by party No.1 till the constitution of the firm, will be carried over to the firm's account as the capital and loans of party No.1. Party No.1 is none other than Narayanan, the father of the other 3 partners. As referred above, by Ext.A10 the property where the partnership business is going on was purchased by Narayanan as early as on 14.12.1959. Ext. B10 is the reconstituted partnership deed on retirement of the 2[nd] defendant. So after the retirement of the 2[nd] defendant the partners of the business were Sukumaran and the 1[st] defendant. The land is shown as the asset of the firm and RFA.No.58 OF 2004 9 the contention of the 1[st] defendant is that the property was thrown to the asset of the partnership stands proved by the balance sheet of the year 1.1.1969. So, this property is included as the asset of the business at the inception itself. 12. Considering the nature of the contentions put forth by the parties, for the sake of convenience Section 14 of the Partnership Act (for short 'the Act') is reiterated which reads as under: “ **S.14 The Property of the Firm** .- Subject to contract between the parties, the property of the firm includes all properties and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise by or for the firm, or for the purposes, and in the course of the business of the firm, and includes all the goodwill of the business. Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm, are deemed to have been acquired for the firm.” 13. Apparently, Ext.B12 the balance sheet of the firm would show that the disputed property was brought into the stock of the firm at the very inception of the firm and that is reflected in the balance sheet as on 1-1-1969. The learned RFA.No.58 OF 2004 10 counsel for the 2[nd] defendant relying on the decision of the Apex Court in **Arjun Kanoji Tankar** v. **Santaram Kanoji Tankar** ((1969 (3) SCC 555) would argue that since there is no agreement between the partners of the firm that the property in question is the property of the partnership firm, it is liable to be partitioned. In the said decision, it was observed in para no.13 as follows: “............Property belonging to a person, in the absence of an agreement to the contrary, does not, on the person entering into a partnership with others, become the property of the partnership merely because it is used for the business of the partnership. It will become property of the partnership only if there is an agreement express or implied at the property was, under the agreement of partnership, to be treated as the property of the partnership.............” 14. The learned counsel for the 2[nd] defendant contends that only if the property was originally brought into the stock of the firm or purchased or otherwise for the firm, it can be treated as the goodwill of the business. A Division Bench of this court in **Heather Luiz** v. **Nirene Dennis Luiz** (ILR 2018 (2) Kerala 653) has held that no registered document is required to RFA.No.58 OF 2004 11 show that the property was brought to the stock of the firm, but there must be evidence to prove that it was thrown to the stock of the firm and mere use of it for business of the partnership is not sufficient . Either express or implied agreement must be there to prove that the property is the property of the partnership or at least the books of account of the firm should disclose that the immovable property had been taken on stock as firm's property. 15. Here, there is of course no express agreement which would show that the property belongs to the partnership business. But, from the first partnership deed itself , which has been executed in the year 1969 it is clear that this property was thrown into the assets of the partnership by the original owner who started the business and that had already been included in the balance sheet of 1969. So, that itself would indicate that the said property had been taken on the stock as the firm's property and that was admitted by the first defendant and to a certain extent by the 2[nd] defendant who is the appellant in this appeal and the pleadings clearly indicate the same. So, there is evidence to show that this property has become the property of this partnership business though there RFA.No.58 OF 2004 12 is no express agreement regarding the same. It could be gathered from the evidence available on record that this particular land was shown as an asset of the partnership business and it was brought into the stock of the firm and it was treated as the asset of the firm by all the parties to the litigation . A reading of Section 14 of the Partnership Act makes it clear that when partners relinquish their interest in the assets of the partnership, registration of the same is not required and so, when the 2[nd] defendant retired from the partnership, it was not required to have a registration with respect to the assets of the firm on reconstitution. The evidence available on record would clearly prove that item No.2 of C schedule property is the asset of the firm and that be so, the parties to the litigation are not entitled to get the said property partitioned among them and the 2[nd] defendant cannot claim any share in the plaint schedule property as a co-owner of the said land. The evidence on record establish that the property is the property of the partnership firm when it started and later reconstituted and by virtue of Section 14 of the Act it becomes the property of the partnership and thus it is not liable to be partitioned as a property inherited by Sukumaran as the legal heir of his father Narayan. The court RFA.No.58 OF 2004 13 below has rightly appreciated the said fact and concluded that the property is not liable to be partitioned as prayed for, I find no reason to interfere with the finding of the court below for the limited prayer sought for by the 2[nd] defendant. As the findings of the learned Sub Judge do not suffer from any error of law or facts or lack of appreciation of evidence, the appeal is dismissed. Parties are directed to suffer their respective costs. Sd/- **SHIRCY V JUDGE** 20.12.2019. ## **sb**