Defendant's Father blended his personal property to partnership firm - Property once blended into Partnership business does not automatically revert on dissolution of Partnership - Subsequent dispute between Partners will not affect nature of Agreement and arrangement during existence of Partnership Firm - Defendant's father estopped from taking different stand later - Sale deed executed by father not valid.

Citation 

2017 (6) CTC 337 (Mad)

I IN THE HIGH COURT OF MADRAS

N. Sathish Kumar, J. A.S. No.92 of 2010 & M.P. No. 1 of 2010.

March 21, 2017

A. Abdul Rahim                                        ...Appellant

...Vs....

Dr. Francis Pinto                                        ...Respondent

Partnership Act, 1932 (9 of 1932), Section 14 Firm Property Proof of Suit property contributed by Defendant's father as capital of Partnership business - Parties agreed excess of net assets passed on to Firm shall be treated as Loan to Firm Clause indicates intention of Defendant's father to throw his other individual assets into Firm and excess be treated as Loan payable by Firm Property shown as Firm's property in Income-tax Returns filed between 1973-1986 Same were signed by Defendant's father - Partnership dissolved through Deed of Dissolution in 1986 In said Deed, Defendant's father agreed to relinquish his share of interest in Capital Asset of Firm for due compensation paid in installments Conduct of parties in treating property is significant Held, intention of Partners to treat Suit property as Partnership Firm property, established Suit property is Firm property.

Partnership Act, 1932 (9 of 1932), Section 14 Evidence Act, 1872 (1 of 1872), Section 115 Dissolution of Partnership Status of Partnership property Estoppel-Suit property contributed by Defendant's father as capital of Partnership Firm Parties agreed and treated Suit property as Partnership Firm's property from 1973-1986 During said period, Defendant's father signed IT Returns showing property as Firm's property Partnership dissolved through Deed of Dissolution in 1986 In said Deed, Defendant's father agreed to relinquish his share of interest in Capital Asset of Firm for due compensation Subsequent disputes between Defendant and his father Father claimed property was never Partnership property Held, property once blended into Partnership business does not automatically revert on dissolution of Partnership Subsequent dispute between Partners will not affect nature of Agreement and arrangement during existence of Partnership Firm Defendant's father estopped from taking different stand later.

Partnership Act, 1932 (9 of 1932), Section 14 Evidence Act 1872 (1 of 1872), Section 8 Partnership Property Proof of Relevance of subsequent events/conduct Defendant's father incurred heavy debts since 1989 Evidence of PW1 shows heavy debts incurred and Sale Deed executed to dear such debts Said events happened after dissolution of Firm and after Defendant's father retired from Partnership Held, dispute between Partners at that stage not ground to hold that property never treated as