JUDGEMENT
B.R.GAVAI,J. -
(1.) Leave granted.
(2.) The present appeal challenges the judgment and order passed by the Division Bench of the High Court of
Karnataka at Bengaluru dated 27.2.2015, thereby,
dismissing the first appeal being R.F.A. No.1111 of 2008,
filed by the appellants and confirming the judgment and
decree passed by the XXXIII Additional City Civil & Sessions
Judge, Bangalore city dated 18.8.2008, vide which the suit
being O.S. No.5622 of 2004 (hereinafter referred to as "the
said suit ") filed by the appellants/plaintiffs came to be
partly decreed.
(3.) The facts, in brief, giving rise to the present appeal are as under.
The parties hereinafter will be referred to as per
their status in the said suit.
A partnership firm, namely, M/s Selwel Combines (hereinafter referred to as "the partnership firm ") came to be constituted in the year 1986. Vide Partnership Deed dated 30.10.1992 (hereinafter referred to as "the 1992 Deed "), the partnership firm was reconstituted and the plaintiff No.1 (Appellant No.1 herein) was inducted as a partner along with original partners, i.e., defendant Nos. 1 to 5. As per the 1992 Deed, the plaintiff No.1 was to have 50% share in the profits and losses of the partnership firm. It was however provided in the 1992 Deed, that if the plaintiff No.1 fails to bring in an amount of Rs.50,00,000/ (Rupees Fifty lakh) as his capital contribution to the partnership firm on or before 31.3.1993, his share in the profits and losses of the partnership firm would be only to the extent of 10%.
On 2.11.1992, the partnership firm obtained a property on lease for 99 years and constructed a commercial building thereon. The building was leased out, which fetched a monthly rent of Rs.22,05,532/ approximately.
Vide the Deed of Amendment of Partnership dated 18.8.1995 (hereinafter referred to as "the 1995 Deed "), the partnership firm was again reconstituted, whereby the plaintiff No.2, son of the plaintiff No.1, and defendant Nos. 6 to 11 were inducted as partners and defendant Nos. 12 to 16 were admitted to the benefit of the partnership firm. As per the 1995 Deed, the share of the plaintiff Nos. 1 and 2 in the profits and losses of the partnership firm was to be 25% each.
It is the contention of the plaintiffs that vide another Deed of Amendment of Partnership dated 22.05.1996, the partnership firm was reconstituted, whereby the defendant No.12 was inducted as a partner and the defendant Nos. 13 to 16 were continued to be entitled for the benefits of the partnership firm. However, this fact is disputed by the contesting respondents.
It appears that in the year 2004, differences arose between the plaintiffs and the defendants with regard to the affairs of the partnership firm. On 8.5.2004, the plaintiffs issued a legal notice to the defendants/partners, demanding accounts right from the inception of the partnership firm and their share of profits.
Defendant No.1 replied to the plaintiffs ' notice dated 8.5.2004 by communication dated 12.5.2004. It was stated in the said reply that the plaintiffs together were entitled only to 10% share in the profits and losses of the partnership firm and that mentioning of 25% share each in the 1995 Deed was only a mistake of record.
In turn, a show cause notice was issued by the defendants/partners to the plaintiffs on 8.6.2004 with regard to the acts and omissions on the part of the plaintiffs being contrary to the interests of the partnership firm and other partners.
Thereafter, again, there was exchange of communication between the plaintiffs and the defendants. According to the plaintiffs, in the meeting of the partners, held on 18.6.2004, it was resolved to expel the defendant No.1 from the partnership firm. However, as per the defendants, a resolution was passed on the same day, i.e., 18.6.2004, resolving expulsion of the plaintiffs from the partnership firm.
In this background, the said suit came to be filed by the plaintiffs for rendition of accounts with effect from 30.10.1992 and for releasing a sum of Rs.5,48,06,729/ being their 50% share in the profits of the partnership firm. The claim of the plaintiffs was resisted by the defendant No.1 by filing a written statement dated 9.9.2005; defendant Nos. 2, 3, 7 to 12 by filing their joint written statement dated 21.10.2005; and defendant No. 5 by filing written statement dated 29.10.2007.
The XXXIII Additional City Civil and Sessions Judge, Bangalore, framed the following issues and answered them as such.
"17. On the above pleadings of the parties, the following issues have been framed for consideration:
1. Whether the suit of plaintiffs is bad for nonjoinder of necessary party that is M/s Selwel Combines?
2. Whether the suit of plaintiffs is bad for misjoinder namely defendant No. 17 to 19?
3. Whether the suit of plaintiffs is barred by limitation?
4. Whether the plaintiffs prove that they have got 25% share each in the M/s Selwel Combines?
5. Whether the plaintiffs are entitled to the relief of Rs.5,48,06,729/?
6. Whether the defendant No. 1, 2 and 5 proves that the expelled plaintiffs have no locusstandi to seek accounts of the said firm?
7. What order or decree?
19. My findings on the above issues are as under:
Issue No.1: In the negative.
Issue No.2: In the negative, Issue No.3: In the negative
Issue No.4: In the negative, the plaintiffs have got 10% share together in M/s Selwel Combines.
Issue No.5: See order below
Issue No.6: Plaintiff No. 1 and 2 were expelled from the date 18/6/2004 and can seek for accounts.
Issue No.7 As per final order. "
While partly decreeing the suit, holding that the plaintiffs together are entitled to 10% share in the profits and losses of the partnership firm till 18.6.2004, and that from 18.6.2004, they were expelled partners of the partnership firm, the trial court vide the judgment and order dated 18.8.2008 directed that the partnership firm had to be made as party in the final decree proceedings.
The other defendantspartners were also granted liberty to apply to the Court during final decree proceedings for their declaration of profit and loss share by paying necessary court fee. The trial court further directed the partnership firm and the defendant No.1 to produce all the accounts, balance sheets, returns filed before Income Tax authorities and the bank documents and such other documents for the period from 30.10.1992 till 18.6.2004, before an independent and impartial auditor for drawing the final decree.
Being aggrieved thereby, the plaintiffs preferred an appeal being R.F.A. No.1111 of 2008 before the High Court of Karnataka at Bengaluru. The Division Bench of the Karnataka High Court, by the impugned judgment and order dated 27.2.2015, dismissed the said appeal. Being aggrieved thereby, the plaintiffs have approached this Court by way of present appeal by special leave. ;