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Time Barred Suit To Be Dismissed Even If Limitation Not Specifically Pleaded

Raya Banerjee ,
  30 May 2024       Share Bookmark

Court :
Supreme Court of India
Brief :

Citation :
SLP(Civil) No. 4237 of 2015 SLP(Civil) Nos. 23143- 23144 of 2016

CASE TITLE:

S. Shivraj Reddy(died) THR HIS LRS & Anr vs. S. Raghuraj Reddy & Ors

DATE OF ORDER:

May 16, 2024

BENCH:

Hon’ble Mr. Justice B. R. Gavai

Hon’ble Mr. Justice Sandeep Mehta 

PARTIES:

Appellant: S. Shivraj Reddy 

Respondent: S. Raghuraj Reddy 

SUBJECT: 

The case involved disagreements over partnership businesses and their dissolution, account rendition, and the applicability of statutes of limitations. The case concerned several parties, each with a different role within the partnership firms, and it centred on interpreting pertinent laws and court decisions.

IMPORTANT PROVISIONS:

The Partnership Act, 1932:

  • Section 42: It deals with changes in partnership.
  • Section 42(c): It specifically addresses the liability of incoming partners for pre-existing debts.

The Limitations Act:

  • Section 3: It establishes timeframe for filing legal actions after the occurrence of a cause of action.

OVERVIEW:

  • The case concerned Civil Appeals , SLP (Civil) No. 4237 of 2015 and SLP (Civil) Os. 23143-23144 of 2016.
  • It concerned disagreements about accounting and partnership business separation.
  • A ruling of the Hyderabad Division Bench of the High Court of Andhra Pradesh was contested by SLP (Civil) No. 4237 of 2015.
  • The disagreement stemmed from the requirement to provide accounts and the dissolution of a partnership firm.
  • The appellants contended that the case was limited by statute of limitations as the partnership firm dissolves automatically when one of its partners passes away.
  • Similar concerns about the dissolution of partnership firms and the rendering of accounts were brought up in Civil Appeal SLP (Civil) Nos. 23143-23144 of 2016.

ISSUE RAISED:

What was the primary issue raised in the case regarding the suits seeking dissolution of partnership firms and rendition of accounts?

ARGUMENTS ADVANCED BY THE APPELLANT:

  • The appellant contended that the respondent’s 1996 case for dissolution and rendition of accounts was filed in conjunction with the death of one of the partners in 1984, which caused the firm to dissolve automatically under Section 42(c) of the Partnership act.
  • The appellant argued that the learned Single Judge erred in taking into consideration the plea of limitation because it had not been brought up during the trial court’s proceedings.
  • It was established law that, regardless of whether the defence of limitation was asserted, courts had to dismiss any complaint filed after the allotted amount of time.
  • As a partnership at will, the appellant emphasised, the death of a partner had resulted in the automatic dissolution of the company.
  • The appellant claimed that the issue filed in 1996 was limited by statute of limitations due to the firm’s demise in 1984.
  • The appellant contended that the contested ruling, which supported the firm’s dissolution and ordered the rendition of accounts, was unlawful and ought to have been overturned.

ARGUMENTS ADVANCED BY THE RESPONDENT:

  • The respondent contended that the claim that the company automatically disbanded when one of its partners passed away was not true.
  • They cited records that demonstrated how the company carried on with its operations following the partner’s passing.
  • Respondent further argued that the question of limitation should not have been considered at the appellant stage because it was not brought up by the trial court.

JUDGEMENT ANALYSIS:

SLP(CIVIL) No. 4237 of 2015:

  • Leave was granted by the Supreme Court .
  • It overturned the judgement rendered by the Division Bench, which had approved LPA No. 47 of 2002. 
  • The court decided that the case was time-barred and upheld the ruling of the single judge.

 SLP (Civil) Nos. 23143-23144 of 2016:

  • The Supreme Court granted the leave.
  • The Division Bench’s decision to reject LPA No. 37 of 2002 and approve LPA No. 48 of 2002 was upheld by the court, dismissing the appeals against it.
  • It upheld the ruling made by the High Court about the firm’s dissolution and account rendering.

CONCLUSION:

In conclusion, the appeals contesting partnership firm’s dissolution were dismissed, the court decided. Nothing about the rulings and decisions made by the lower courts bothered them. The lower court’s concurrent judgements on the facts precluded the need for the appeals. The court thus rejected the appeals and maintained the rulings of the lower courts.

 
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