- (1.)THE parties to the suit had worked a ginning and pressing factory in the year 1933-34 in partnership in which defendant X (appellant) had a four-anna share. The partnership was entered into between defendant 1 and Nandlal and Banarsilal. Nandlal is dead. He had a six-anna share in the part nership, and Banarsilal had a six-anna share. The present plaintiff is a brother of Nandlal and is the manager of the family consisting of himself and his two minor brothers and as such is the representative of Nandlal.
(2.)THE partnership was for the season of 1933-34 and as such terminated on 3lst May 1934 by efflux of time. The plaintiff stated that on the dissolution of the partnership, which took place on 81st May 1934 there was a settlement of accounts between the parties on 16th July 1934 and it was ascertained that the total loss in the partnership was Rupees 8358-9-0. The share of defendant 1, who owned a four-anna share in the partnership, was found and settled at Rs. 2089-10-3. Defendant 1 having accepted the settlement of accounts and the amount of loss payable by him agreed to pay the same by making some cash payment and by taking over hawala in respect of dues payable by Nandlal to the Municipal Committee, Pandharkavada, and to pay the rest later on. Defendant 1 as per agreement actually paid Rs. 426-4-9 on 16th July 1934 and executed a chithi (Ex. P-1) on the same date acknowledging his liability for the loss and agreeing to pay Rs. 1373-11-3 to the Municipal Committee, Pandharkavada, which was due from Nandlal. Defendant 1, however, failed to pay the dues to the municipal committee as promised and did not pay the balance either. As Nandlal, the original financing partner is dead the present plaintiff as representing Nandlal instituted this suit for recovering the amount due. After giving credit for Rs. 426-4-9, the amount due from defendant 1 is Rs. 1663-5-3. The plaintiff demanded this amount from defendant 1 several times and eventually served a notice on him (Ex. P-2) on 7th April 1937 calling on him to make the payment as per settlement arrived at between the parties within eight days from the receipt of notice failing which he informed defendant 1 that interest at 1 per cent, per mensem would be charged and legal action would be taken against him. As defendant 1 did not pay the amount due in spite of this notice of demand, the plaintiff claimed interest by way of damages at 1 per cent, per mensem from 16th July 1934 to 30th June 1937, when he instituted his suit. The total amount claimed was Rs. 2253-3-3.
The suit was thus based primarily on the accounts settled between the parties coupled with an agreement to pay the amount found due as loss by defendant 1. In the alternative the plaintiff prayed for dissolution of the partnership and settlement of partnership accounts if it be held that there was no settlement. No relief was claimed against Banarsilal, who was merely joined as a pro forma defendant for dissolution of partnership if it be held that there was no settlement of accounts. Banarsilal was ex parte throughout the proceedings and has not cared to appear even in this Court. The defendant raised several contentions in the case and urged that as the partnership terminated on 3lst May 1934 the claim for dissolution of partnership and accounts was barred by limitation, the suit having been filed on 8th July 1937, i.e., more than three years after 3lst May 1934. He denied that the accounts were settled between the parties and further stated that in any case a suit on the basis of a settled account did not lie. He admitted having made a payment of Rs. 426-4-9 towards loss and having further accepted liability to pay municipal taxes but urged that that was all done provisionally pending a settlement of accounts. He contended that even if it be held that there was a settlement of accounts with or without a promise to pay, the plaintiff had no cause of action for his suit as it was barred under the provisions of Section 69(1), Partnership Act. The last contention was that there were some fraudulent entries and errors in the account and that he was entitled to have the account reopened if it be held that there was a settlement of account.

(3.)BOTH the Courts below have held that the partnership terminated on 3lst May 1934 and that a suit for dissolution of partnership and settlement of accounts was barred by time. This finding is not challenged by any party. Both the Courts below have also held that there was a settlement of account between the parties on 16th July 1934 accompanied by a promise to pay and that the plaintiff had a cause of action on that basis. The trial Court held that defendant 1 was entitled to have the settled account reopened as there were certain errors in the same and gave a direction for a general reopening of the account. The lower appellate Court, however, held that defendant 1 was not entitled to reopen the accounts generally but only with respect to specific items which he might think fit to challenge. One of the contentions of the appellant in the Court below was that there was no agreement to pay interest on the advances made by plaintiff's brother Nandlal when he entered into the partnership. The trial Court has decided against the appellant on this point. The lower appellate Court left the question at large because the trial Court had not framed any issue regarding the plaintiff's claim to get interest by way of damages on account of the failure of the appellant to pay the amount found due; it wanted that question also to be decided by the trial Court. The result was that the lower appellate Court remanded the case to the trial Court. It set aside the preliminary decree passed by the trial Court and directed the trial to proceed in the light of the remarks made in its judgment. It is against this decision that defendant 1 has come up in second appeal and the plaintiff has filed cross-objections.