Decided on January 07,2003

P.M. Davis Appellant
V.I. Kuruvilla Respondents


M.R.HARIHARAN NAIR, J. - (1.) The challenge in the appeal by defendants 2 to 6 (sic) regard to the final decree passed in O.S. No. 120 of 1991, which was a suit for (sic) solution of partnership firm and for settlement of accounts. The St. Syriac Tile Works was owned by a firm consisting of four partners, who were all children born to one and the same parents. Of the partners, plaintiff and defendants 1 and 2 were alive and defendants 3 onwards are the children of the deceased partner by name Baby. Preliminary decree dissolving the firm w.e.f. 31-01-1991 which was the date of suit was passed on 08-02-1995 and a Receiver was appointed to take stock of the assets and liabilities of the erstwhile firm. Based on the report so filed, final decree was passed on 16-01-1998. In the meantime, there was an application filed for appointment of a Receiver for running the factory and the order passed by this Court in C.M.A. No. 8 of 1992 was taken up before the Apex Court, which made an additional provision as follows while disposing of SLP No. 6827 of 1992 on 06-11-1992. It is clarified that the respondent who has been appointed as receiver will deposit a sum of Rs. 20,000/- in Court every month. If he fails to do that, he may be removed as the receiver by the Court concerned. Apart from this, the terms and conditions laid down by the High Court will continue to be operative. It is stated that pursuant to this order the second defendant, who was appointed as receiver for running the factory, had been depositing amounts at the rate of Rs. 20,000/ - p.m. right from January, 1991 till July, 2001. According to the learned counsel for the appellants, the Court, while passing the final decree, has misread and misinterpreted the scope of submissions made based on a statement filed by defendants 2 to 6 before Court on 13-01-1998. According to him, when the Commissioner's report regarding demarcation of shares came up for consideration it was submitted by the plaintiff that he was prepared to take the site of the factory etc. at a valuation 40% in excess of that fixed by the commissioner for allotment of the same to defendants 2 to 6. It was then submitted by the counsel for defendants 2 to 6 that those defendants will have no objection in the plaintiff and the first defendant taking the entire assets viz. the land, factory and machinery, provided, half of the total value of the assets as enhanced by 40% was paid by the plaintiff and first defendant to defendants 2 to 6 in cash i.e. without factory or any land being allotted to defendants 2 to 6. This was reiterated in a statement filed before this Court on 13-01-1998. Allotment of the factory building to the plaintiff and the first defendant jointly and allotting 1 acre and 84.5 cents of land alone to defendants 2 to 6 is improper. No request was even made by defendants 2 to 6 for grant of 1.84 Acres.
(2.) Yet another submission is that the judgment under appeal has failed to take into account the liability incurred on various heads which were not actually included in the accounts filed by the Advocate Receiver. In this regard it is pointed out that there was arrears of income tax payable for the period from 1989-90 as also arrears of sales tax due from 1995-96. There (sic) also liability towards gratuity, E.S.I. contribution etc. in respect of the employees of the factory. It is argued that these liabilities should be fastened on the group of plaintiff and first defendant, to whom the factory as such is allotted under the decree.
(3.) The appellants also contend that out of the amounts deposited by the second defendant pursuant to the order of the Apex Court, some amounts have already been paid to the Santhi Kuries (P) Ltd. Trichur, who is a creditor, as also to the Sale Tax department towards sales tax for the year 1993-94. Yet another submission is that provision has to be made for payment of dues to the creditors of the factory as revealed by the balance sheet for the period ending 31-12-1997, viz. Rs. 8,74,425.90.;

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