SHARFUDDIN AHMED,J. - (1.) The short question that requires consideration in this second appeal is whether S. 37 of the Indian Partnership Act can be invoked to the benefit of the appellant, herein. The facts necessary to appreciate the arguments may briefly be stated : The plaintiff, herein along with other defendants, was running a partnership concern after the disruption of the joint family. They had acquired agency for distribution of Charminar Cigarettes in the name of the plaintiff as the Manager of the firm. The office of the firm was located at Vijavawada and was managed by defendants 2 and 3 the fourth defendant also used to assist in the management. Sometime later, there were disputes between the members of the family and the partnership was dissolved by notice to the plaintiff on 16-2-1958. There was, however no settlement of accounts, though the plaintiff was called upon to go over to the defendant's office for that purpose. Thereafter, the defendants 1 to 3 constituted a new partnership and commenced the old business under a different name, having their office at a different place. They acquired the agency by renewing the contract with the Charminar Cigarette factory. Thereupon the plaintiff filed the suit OS No. 20 of 1961, on the file of the Subordinate Judge, Vijavawada for dissolution of partnership for rendition of accounts and for recovery of profits. The defendants contested the suit. The main contention was that it was due to the non-co-operation of the plaintiff that the partnership came to an end, that they were ready and willing to settle the accounts with the plaintiff and the business they had commenced was altogether a new one. The learned subordinate judge granted a decree in favour of the plaintiff holding that he was entitled to his share and interest at the rate of 6 per cent from the date of the dissolution of the firm till the full realisation of the amount. On appeal the Additional District Judge, Krishna at Masulipatam dismissed the appeal upholding the judgment and decree of the lower court.
(2.) The main grievance of the plaintiff-appellant in this appeal is that both the courts have only allowed 6 per cent interest on the share of the plaintiff in the old partnership whereas it is the admitted case of the respondent that the share of the plaintiff was not settled and the money payable was utilised in the working of the other firm. It is urged that the court should have invoked the provisions of Sec. 37 of the Act and allowed the plaintiff a share in the firm of the defendant now operating under a new name. Unfortunately, for the plaintiff, both the courts have found, having regard to the evidence and circumstances of the case, that the first firm came to be dissolved as the result of non-co-operation on the part of the plaintiff. They also found as a matter of fact that the second firm, though it was continuing the old business was a new firm, in as much as it had got the contract renewed with the Charminar Cigarette factory under its own name and the plaintiff had not applied for renewal. The plaintiff admitted that every year they were required to take renewal of contract with the Charminar Cigarette factory, at Hyderabad, and it was in the discretion of the company to renew the contract or refuse to do so. He also conceded that he had not applied for the renewal of the contract and it was the defendant who had taken advantage of getting it renewed in their name. Thus, it is difficult to hold that the new firm was a continuation of the old firm, merely because they were carrying on the same business. This is a finding of fact which admits of no interference. In view of this finding, it cannot be stated that the provisions of Sec. 37 of the Partnership Act are available to the plaintiff, as laid down in the case of Mohana Sundaram v. Neelambal 1955 (1) MLJ 279 . It was observed in that case as under : "A mere overdrawing made by a partner from the partnership, which overdrawing was utilised in the new business, will not ipso jure bring in S. 37 of the Partnership Act to play."
(3.) In the instant case, as mentioned supra, it appears that due to non-co-operation of the plaintiff, the previous firm was dissolved and the defendant taking advantage of it constituted it into a new firm and were successful in renewing the contract with the Charminar Cigarette Factory at Hyderabad. Even if they did not settle the share of the plaintiff in the earlier firm, it cannot be said that the new firm was a continuation of the old partnership. The provisions of S. 37 therefore are not available to the plaintiff. In view of the fact that there has been delay on the part of the defendants to settle the accounts, the plaintiff has been given interest at 6 per cent. I think it sufficiently compensates the plaintiff for the inconvenience and delay arising from the non-settlement of his share, though it cannot be denied that it was partly due to non-co-operation on the part of the plaintiff. However, there is no Cross-objections on behalf of the defendants.;