ABDUL RAHIM Versus ABDUL AZIZ
MUHAMMAD ASADULLAH, J. ‑‑Abdur Rahim appellant and Abdul Aziz, two brothers, who are since dead and are now represented by their legal representatives, were partners in a joint business venture known as London Picture House, Nila Gumbad, Lahore. Abdul Aziz deceased filed a suit for dissolution of partnership and for rendition of accounts. A preliminary decree was passed in favour of Abdul Aziz against the appellant on 3‑6‑1965 through which the partnership business was dissolved and the appellant was held to be the accounting party. The learned trial Court appointed a Local Commissioner. His report was examined and dealt with in accordance with law and, thereafter the learned Civil Judge, 1st Class, Lahore, passed a decree for recovery of Rs.2,18,600 in favour of Abdul Aziz, deceased respondent, and against the appellant with costs throughout vide judgment dated 21‑10‑1970. This appeal has been filed to challenge the said judgment and decree. We have perused the record and have heard the arguments.
2. The learned .trial Court had based its decision for passing the final decree on the report of the Local Commissioner. The said Local Commissioner had based his report on the assessments of income tax made by the Income Tax Authorities in regard to the income of the joint business. The assessments for 1960‑61, 1961‑62 and 1962‑63 had been challenged before the Income Tax Tribunal and the Tribunal, as a result reduced the assessments after hearing the parties to that case. The appellant, therefore, made an application that he may be allowed to place on record the revised assessments for the said years. He was allowed to' do so. The details of assessments including the revised assessments for the said years from 1951‑52 to 1962‑63 were filed by the appellant alongwith Civil Miscellaneous No.4431‑C of 1972 and are .reproduced below:‑
S. No. Year Net Profit Remarks
(1) 1950/51 Rs. 482
(2) 1951/52 Rs. 610 no tax
(3) 1952/53 Rs.2,552
(4) 1953/54 Rs.3,169
(5) 1954/55 Rs.5,000
(6) 1955/56 Rs.5,000 , .
(7) 1956/57 Rs.5,000
(8) 1957/58 Rs.5,000
(9) 1958/59 Rs.5,000
(10) 1959/60 Rs.9,000
After the decision of
F.B. Tribunal Income Tax.
(11) 1960/61 Rs.29,000 Rs.15,948
(12) 1961/62 Rs.29,000 Rs.16,017
(13) 1962/63 Rs.29,000 Rs.7,423
The said figures are not 'disputed by any of the parties to the appeal. In fact the appellant and the learned counsel for the respondent have conceded before us that the said figures are correct and may be made the basis for assessment of the profits of the partnership firm and the appeal may be decided accordingly. The Local Commis sioner had taken the income at Rs.29,000 per year for calculating the income of partnership on the basis of the said assessments. However, the assessments for the years 1960‑61 to 1962‑63 have been revised as mentioned at Serial Nos.11 to 13 above (instead of Rs.29,000 per year). Therefore, the parties also agree that the revised assess ments as mentioned in the last column against the said Serial Nos.11 to 13 may be taken into consideration for assessment of the profits of the partnership firm. Even otherwise there are no separate accounts available for assessing the income and profits of the partnership firm from the beginning to‑date. The income tax returns were filed by the firm, i.e., by both the parties and they cannot deny the correctness thereof and in fact the parties do not now deny or dispute. the profits mentioned in the above account statement. Accordingly, the profits as .mentioned in the said statements, as revised, have to be taken to be the profits of the firm.
3. Before final determination of the profits a question has arisen as to whether the profits beyond 6 years before filing of the suit can .be legally allowed or not. The appellant has contended that the learned trial Court was wrong in allowing profits for more than 6 years before the filing of the suit. He contends that Article 120 of the 1st ‑Schedule to the Limitation Act, 1908 will govern the case. The contention has force because the said Article, which is residuary Article, covers the present case. One of the ideas behind the prescription of limitation is that nobody should be compelled to keep a record of the partnership for an unlimited period. The other idea is that it should be taken that beyond certain period the party concerned had obtained the relief privately and had no necessity of coming to the Court and that he came to the Court within a reasonable time when the relief through private settlement could not be obtained. Reading Article 120 ibid in this context it will be seer that it will be applicable even to the suits for rendition of accounts and specifically for recovery of share in the profits. Abdur Rahim and Abdul Aziz were brothers and had been running the business jointly without any dispute for a long period. Therefore, it cannot be taken that they were not sharing the profits among themselves during the whole of this period. Both were living persons and were running the business for their living and their living depended on their earnings through partnership in dispute. It cannot, therefore, be expected and even it cannot be assumed that they did not share the profits for the so long a period of their partnership business. Even on that account also the provisions of Article 120 ibid will have to be applied to this case. Confronted with this legal and factual position the learned counsel for the respondent concedes that profits for 6 years before the filing of the suit could only be claimed by the respondent.
4. The suit was filed on 24‑4‑1961. Therefore, profits from 24‑4‑1955 can be taken into consideration for determination of the total profits. According to the statement of accounts reproduced above) the total profits from 1955‑56 to 1962‑63 (items 6 to 13 thereof) come to Rs.68',386. It may be added that in the said figures the profits for the years 1961‑62 and 1962‑63 have also been added because the same accrued during the pendency of the suit. The shop was sealed on 29‑4‑1963, and therefore, no profit accrued thereafter. As such the total profit for which the respondent is accountable comes to Rs.68,386. This means that the profit of Abdur Rahim and Abdul Aziz was Rs.34,193 each as admittedly they were equal partners. Similarly it is admitted that the capital of the firm' was Rs.50,000 and was subscribed equally by both. The respondent is also entitled to get his capital amounting to Rs.25,000. Accordingly, the respondent is entitled to Rs.34,193 as profits and Rs.25,000 as capital, the total amounting to Rs.59,193. Both the parties agree that the decree may be modified accordingly.
5. The appeal is partly accepted. The impugned decree is modified. Instead of final decree for Rs.2,18,600 a decree for Rs.59,193 is passed in favour of the respondent and against the appellant. In these circumstances the parties shall bear their own costs throughout.
A.A./A‑325/L Appeal partly allowed.