Guru Nanak Industries
V.
Amar Singh
A partnership firm namely Guru Nanak Industries was established in 1978 by four individuals, among them two are brothers namely Amar Singh and Swaran Singh, and are now represented through their legal representatives. In 1981, a fresh partnership deed was executed between the two brothers, the other two already resigned from the firm. The firm was established for manufacturing and sale of print machinery for papers and polythene. Initially, the division ratio of profit and loss was 69:31. However, with effect from 1983, the sharing ratio was altered to 60:40.
In March 1989, the firm and Swaran Singh filed a civil suit against Amar Singh claiming that he had resigned and accepted the payment of share capital and further, he agreed that he won’t be entitled to any profits and losses of the firm in 1988. Subsequently, he had been given an advanced loan from the funds of the firm on the same date. He also intimated the Bank of India, the bankers of the partnership firm through a letter dated 05-10-1988 and he received an amount of Rs. 1,00,000/- and 50,000/- by way of pay orders and other Rs. 1,00,000/- in cash for which he has executed receipt dated 17-10-1988.
Amar Singh after retirement, moved further for the proprietorship namely, Guru Nanak Mechanical Industries from September 1988 and was manufacturing and selling the same machinery. Amar Singh contested the same and filed a new suit on April 1989, for the dissolution of the partnership firm and accounts rendition. In his suit, he contended that he had never resigned from the partnership firm. He also mentioned that a dispute arose between them in August and in this concern, he wrote the letter to the bank to stop the operation of the account dated 19-08-1988. Subsequently, on 24-08-1988, he wrote another letter to the bank stating that the dispute between them has been settled and now the bank may start the functioning of the bank account. He further contended that the receipt of 17-10-1988 is fabricated and has been manipulated as he had signed and given papers to Swaran Singh.
The trial court dismissed the suit filed by Amar Singh and partly allowed the suit filed by the Guru Nanak Industries and Sawaran Singh on the basis of letter dated 24-08-1988 and the bank receipt dated 17-10-1988.
On the appeal, the Appellant Authority observed that the receipt dated 17-10-1988 is manipulated. Letter dated 24 August also supports the suit filed by Amar Singh that he has not resigned as the letter discussed was signed by him as a partner. The sale tax department and the Income-tax office records also supported Amar Singh that the partnership firm does not dissolve as on 24th August 1988.
The court held that Amar Singh is entitled to partition of the moveable and immoveable assets of the partnership firm wherein 40% of the same belonged to Amar Singh and the rest 60% belonged to Swaran Singh. Also, Amar Singh is entitled to interest of 9@ per annum. During the pendency of the suit, Swaran Singh Died and his widow represented him. She also filed two appeals before the Punjab and Haryana High Court which were dismissed later on and the court upheld the decree passed by the Additional District Judge and sustained by the High Court except for the date of dissolution which would be 24th of August 1988. As for the letter dated 05-10-1988 which was written by Amar Singh stated that there were mutual understanding and agreement between them and as a result, he left the firm, therefore, he would not be responsible for any loan granted after 24th August 1988. Further, Amar Singh had to completely withdraw his share and accounts.
In addition, the court stated that as per the records, Amar Singh had already started a firm similar to the previous one, namely Guru Nanak Mechanical Industries to which Swaran Singh has not objected. The court gives final opportunities to the parties to present before the Supreme Court in Mediation and conciliation center to explore the possibility of settlement. In case, the parties don’t follow the directions within the period of three months, the same would proceed before the trial court for passing the decree.