The Appellant/Plaintiff in the main suit had prayed for passing of a Judgment against the Respondents/Defendants in directing them to pay the Appellant/Plaintiff a sum of Rs.7,70,957.06/- along with interest at 24% p.a. on the principal sum of Rs.4,46,957.06/- from the date of plaint till the date of realisation in full with costs.

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED:    26.04.2010

CORAM

THE HONOURABLE MRS.JUSTICE R.BANUMATHI
AND
THE HONOURABLE MR.JUSTICE M.VENUGOPAL


A.S.NO.1 OF 2004


Shree Gomathy Shankar Transports,
Rep. By its Proprietor,
Mr.S.Mohan       ...   Appellant

vs.

1.The State of Karnataka,
   Rep. By its Secretary,
   Public Works Department,
   Secretariat,
   Bangalore.

2.The Executive Engineer,
   Public Works Department,
   P.W.D. Division,
   Chitradurga,
   Karnataka State.    ... Respondents

Prayer:   Appeal filed under Section 96 read with Order 41 Rule I and II C.P.C. against the Judgment and Decree of the trial Court, the VII Additional City Civil Court, Chennai dated 09.12.2002 in O.S.No.1100 of 1996.

For Appellant   :   Mr.S.Udayakumar
    For Respondents     :   Mr.V.Ravi
      Special Government Pleader (AS)




J U D G M E N T
M.VENUGOPAL,J.
The Appellant/Plaintiff has preferred this appeal as against the Judgment and Decree dated 09.12.2002 in O.S.No.1100 of 1996 passed by the learned VII Additional Judge, City Civil Court, Chennai.

2.The Appellant/Plaintiff in the main suit had prayed for passing of a Judgment against the Respondents/Defendants in directing them to pay the Appellant/Plaintiff a sum of Rs.7,70,957.06/- along with interest at 24% p.a. on the principal sum of Rs.4,46,957.06/- from the date of plaint till the date of realisation in full with costs.

3. On the basis of the pleadings, the Trial Court framed in all six issues. On the side of the Appellant/Plaintiff, witness P.W.1 was examined and Exs.A1 to A25 were marked.  On the side of the Respondents/Defendants, D.Ws.1 and 2 were examined and Exs.B1 to B3 were marked.

4. On an appreciation of oral and documentary evidence available on record, the trial Court while passing the Judgment had among other things opined that 'the Appellant/Plaintiff was not entitled to claim the transportation charges of Rs.4,46,957.06/- along with interest Rs.3,24,000/- and further that as per Ex.B1 Agreement dated 24.10.1990, the contract was only between the Appellant/Transport Company Partnership Firm and the Second Respondent/Second Defendant, the Executive Engineer  and inasmuch as there was no agreement entered into between the Appellant/Plaintiff and that of the Second Respondent/Second Defendant, the Executive Engineer, the suit filed by the Appellant/Plaintiff as Proprietary Concern, was not maintainable and resultantly dismissed the suit with costs.

5. The points that arise for consideration in this appeal are:-
(i) Whether the Appellant/Plaintiff  (a Proprietary Concern) is entitled to claim a sum of Rs.7,70,957.06/- with interest at 24 % p.a. on the principal of Rs.4,46,957.06 from the date of plaint till the date of realisation etc., from the Respondents/Defendants?
(ii) Whether there was any privity of contract between the Appellant/Plaintiff and the Second Respondent/Second Defendant?
6. According to the learned counsel for the Appellant/Plaintiff, the Trial Court had not taken note of the fact that at the time of transporting the Bitumen from Chennai to Chitradurga in Karnataka State, the Appellant/Plaintiff was a Partnership Firm, consisting of two partners and in fact as per Ex.A4, (series) Xerox copy of Bills dated 19.09.1992, etc., and Ex.A5 Xerox copy of Bills (Series) dated 21.08.1992, etc., the Goods viz., Bitumen were transported from Chennai to Chitradurga on various dates and therefore, the Appellant/Plaintiff had claimed a sum of Rs.4,46,957.06/- as Transportation charges and in this regard, the Appellant/Plaintiff made a demand on the Respondents/Defendants as per Ex.A6 Letter dated 26.05.1993, Ex.A9 Letter dated 04.10.1993, Ex.A10 Letter dated 19.11.1993 and Ex.A13 Letter dated 02.01.1995 requiring them to pay the amount and moreover, the Appellant/Plaintiff sent a Lawyer's Notice Ex.A15 dated 18.12.1993 by calling upon the Respondents/Defendants to pay the amounts due to it and the Second Respondent/Second Defendant addressed a reply Ex.A16 dated 27.01.1994.

7. The further contention on the side of the Appellant/Plaintiff is that the trial Court came to the wrong conclusion that Exs.A4 and A5 (series) were xerox copies of the Bills and the Store Keeper who received and acknowledged the goods was not authorised to receive the same and therefore, the goods were not delivered and such a finding was a perverse one in the eye of Law.

8. Continuing further, the Learned counsel for the Appellant/Plaintiff submits that as against the Appellant/Plaintiff no case was filed and indeed, the Appellant/Plaintiff could not be penalised by depriving the transportation charges due to it in regard to the Goods Delivered because of the reasons that some officials of the Respondents/Defendants committed malpractices in the collection of Bitumen and there was some investigation, etc.,

9. Also that, even though Ex.B1 Agreement dated 24.10.1990 was entered into between the Appellant/Plaintiff and the Second Respondent/Second Defendant, when  the Appellant/Plaintiff Partnership Firm was converted into a Proprietorship Concern, it could not be said that  the Appellant/Plaintiff had no right to claim the amounts due from the Respondents/Defendants in the eye of law.


10. Lastly, the learned counsel for  the Appellant/Plaintiff contends that there was absolutely no denial of receipt  of materials by the Respondents/Defendants at any point of time and as such,  the Appellant/Plaintiff was entitled to claim the suit amount and whatever may the constitution of  the Appellant/Plaintiff, as one of the partners in the former Partnership Firm and as the present Proprietary of  the Appellant/Plaintiff Concern, the suit filed by the Plaintiff is the valid one and a Decree will have to be passed in its favour.
11. The gist of the contention of the learned counsel for the Appellant/Plaintiff is that the factual and legal issues involved in the matter were not adverted to by the trial Court in a real perspective and in a pragmatic manner which had resulted in miscarriage of justice and therefore prays for allowing the appeal to sub serve the ends of Justice.
12. In support of the contention that a Partnership in Law may be dissolved by the Agreement of the partners, the learned counsel for  the Appellant/Plaintiff cites the decision KANIRAM GANPATRAI V. COMMISSIONER OF INCOME TAX, AIR 1953 PATNA 271 (VOL.40, C.N.96), wherein it is laid down as follows:-
"Under S.40, a partnership may be dissolved by the Agreement of the partners.  It is not not necessary in very case that the fact of dissolution should be evidenced by a document but the dissolution of the partnership may be inferred from the circumstances of the case and the conduct of the parties. 36 Mad 185 Re.on."

13. He also invites the attention of this Court to the decision of the Hon'ble Supreme Court ERACH F.D.MEHTA V. MINOO F.D.MEHTA, 1970 (2) SUPREME COURT CASES 724 at page 727 wherein at paragraph No.7, it is observed thus:
"We are not concerned at this stage to determine whether the agreement set up by the respondent was in fact reached between the partners on January 17, 1968; that is a matter to be decided by the arbitrators.  A dispute whether the partnership was dissolved by mutual agreement was clearly a dispute to agree with counsel for the appellant that the agreement set up by the respondent did not stipulate  dissolution of the partnership.  It is the case of the respondent which he had set up in the correspondence, that it was agreed between him and the appellant that the latter was to retire from the partnership.  When the partnership consisted of only two partners and one partner agreed to retire there can be no doubt that the agreement that one of the partners will retire amounts to dissolution of the partnership."
14. Contending contra, the Learned Special Government Pleader appearing for the Respondents 1 and 2 submits that the suit was filed by  the Appellant/Plaintiff as a Proprietary Concern and really speaking, there was no privity of contract as per Section 2 and Section 37 of the Indian Contract Act 1872, between the Appellant/Plaintiff and the Respondents/Defendants and as a matter of fact, the Respondents/Defendants had not received the stock mentioned in the Delivery Chellan, etc.,

15. Expatiating his arguments, the Learned Special Government Pleader appearing for the Respondents 1 and 2 draws the attention of this Court to Ex.A16 Reply dated 27.01.1994 issued by the Second Respondent/Second Defendant to the Appellant/Plaintiff for the Notice Ex.A15 dated 18.12.1993 in and by which, it was inter alia mentioned that 'the Appellant/Plaintiff had transported the bulk and packed Bitumen   to Holalkere Sub-Division but the materials physically were not received completely by the Sub Division and as per the verifications made, it was found that nearly 700 MT. of Bitumen was short for the period of transportations made by  the Appellant/Plaintiff, M/s.Shree Gomathi Shankar Transport Contractor, Madras and that the Vigilance Squad of P.W.D., Bangalore had seized all the connected documents and report was submitted to the First Respondent/First Defendant. Further, there was a suspicion about the involvement of the said Transport Contractor i.e., M/s. Shree Gomathi Shankar Transport Contractor, Madras' and to escape from the proposed action, the Partnership Firm was dissolved and later, a Proprietary Concern had come into existence without the knowledge and consent of the Respondents/Defendants.

16. That apart, it is the contention of the learned Special Government Pleader appearing for the Respondents 1 and 2 that the Partnership Firm viz., Shree Gomathi Shankar Transport came into existence as per Ex.A1 Partnership Deed dated 13.03.1990 (xerox copy) with two partners, S.Mohan and S.Venkatesan are possessing 50% share and later, on 24.04.1995, the Partnership was dissolved as per Ex.A2 Dissolution Deed dated 24.04.1995 and the said Deed made it clear that the Dissolution of the Firm would come into effect from 01.04.1995.  Significantly, Ex.A24 another Dissolution Deed dated 18.12.1998 of the same Partnership was entered into between the same persons, S.Mohan and S.Venkatesan.


17. At this juncture, it is to be pointed out pertinently that there was no satisfactory explanation on the side of the Appellant/Plaintiff as to why there was a second Dissolution of the Firm when admittedly it was dissolved in the year 1995.  Further more, the second Dissolution Deed Ex.A24 dated 18.12.1998 was registered as Document No.27/98 on 16.02.1999.

18. The next limb of the argument of the Learned Special Government Pleader appearing for the respondents 1 and 2 is that the actual delivery of the stocks in accordance with the Agreement was not made and that the signature shown in the Delivery Challan marked as Additional Evidence before this Court as well as before the trial Court are all false documents and in fact, the Divisional Store Keeper was not the Authorised Officer to receive the stock as mentioned in Ex.B1 Agreement dated 24.10.1990, Ex.B2 Stores Manual Book and Ex.B3, P.W.D. Code Book (vol.I).  In short, the seal of the Executive Engineer P.W.D., Chitradurga was misused and the signed person was not the Executive Engineer.

19. The substance of the stand of the Respondents/Defendants is that 734.345 Metric Tons of Bitumen was not delivered by the Partnership Firm and when 5 bills were presented bogus, Lokayuktha Enquiry was ordered and after the Lokayuktha Report, further investigation was made by the P.W.D. Department officials and Ex.B4 Investigation Report was given.

20. It is quite necessary and useful for this Court to refer to the evidence of witnesses P.W.1 (Proprietor of  the Appellant/Plaintiff), D.W.1 and D.W.2, for better appreciation of the contentions projected by respective sides.

21. It is the evidence of P.W.1 (Proprietor of  the Appellant/Plaintiff) that the Second Respondent/Second Defendant as per his letter dated 19.01.1993 had informed the M/s. Gomathi Shankar Transport Contractor, Nungambakkam, Madras to lift the Bitumen Thar through transportation and that the original bills were submitted to the Second Respondent/Second Defendant for settling the amount and the xerox copies of 11 bills and Ex.A4 (series) and Ex.A5 series (30) Acknowledgements are for the respective goods and inspite of the bills presented, the Respondents/Defendants had not effected the payment.

22. In his further evidence, P.W.1 has deposed that  the Appellant/Plaintiff was earlier a Partnership Firm and from 01.04.1995, it became a Proprietary Concern and on 31.03.1995, the Partnership Firm was dissolved and the Dissolution Deed is Ex.A23 dated 18.12.1998 and that Ex.A15  the Appellant/Plaintiff's Lawyer Notice dated 18.12.1993 was issued to the Respondents/Defendants demanding a sum of Rs.4,46,957.97/- from them and the Respondents/Defendants sent a Reply Ex.A16 dated 27.01.1994 stating that in regard to Bitumen, some malpractices were committed and that after enquiry, they would settle the amount.

23. At this stage, it is not out of place for this Court to make a relevant mention that it is the categorical evidence of P.W.1 that it was not correct to state that they had not delivered 700 Metric Tonne of Bitumen at the proper destination.

24. It is the evidence of P.W.1 in his cross-examination that in Ex.B1 Agreement dated 24.10.1990, he signed as a Partner of Shree Gomathi Shankar Transport and that the Defendants were not informed about their partnership being dissolved.

25. D.W.1 (Account Superintendent) in his evidence has deposed that Ex.B1 Agreement dated 24.10.1990 was executed at Chitradurga, Karnataka and one S.Mohan, one of the partners of Shree Gomathy Shankar Transports signed in the said Agreement and the Appellant/Plaintiff had not transported any Bitumen or any material for the Respondents/Defendants Departments and the Shree Gomathi Shankar Transport, a Partnership alone transported the Bitumen and they were so irregular and further, they had not delivered 700 M.T. of Bitumen amounting to Rs.38 lakhs and the amount involved was public money and the criminal investigation was going on in Karnataka in Lokayuktha and C.O.D. of Karnataka. The evidence of D.W.1 is also to the effect that the Divisional Store Keeper was not authorised to sign the invoices and the endorsement in Ex.A5 series were manipulated and they were not signed by the Executive Engineer or the Assistant Engineer and moreover, the Store Keeper was not authorised to sign the invoices except the Executive Engineer and the Assistant Engineer, no other person was authorised to sign in the invoices.

26. It is the evidence of D.W.1 (in cross-examination) that whenever the consignment was transported by Shree Gomathi Shankar Transport, it should be received by the Divisional Office alone or the Sub Division Office as per Clause 3 of Ex.B1 Agreement dated 24.10.1990, the load should be delivered to his Stores during the office hours and in Ex.A5 series, seal alone belonged to their office and behalf every seal in Ex.A5, there was Acknowledgement by the Store Keeper and they were authorised.

27. D.W.2 in his evidence has stated that in Ex.B2 Stores Manual Book at page 5 in paragraph 7, the powers of the Store Keepers are mentioned and also in Ex.B3 P.W.D Code Book (Vo.I) at page 201 in paragraph 317A, the powers of the Store Keepers are made mention of and Ex.A4 and Ex.A5 are fake ones and in Ex.A4 and Ex.A5  Documents, the Executive Engineer's signatures were not found.

28. In his cross-examination, D.W.2 has stated that the Appellant/Plaintiff had not supplied Bitumen to the Public Works Department and therefore, they had not returned letter to the Appellant/Plaintiff and Exs.A4 and A5 are not the documents of the Public Works Department.


29. It is not out of place for this Court to make a relevant mention that a perusal of Section 39 of the Indian Partnership Act, 1932 candidly points out that even after the dissolution of the Firm, the partners are called partners though they are partners of the dissolved firm as per decision SUNDARLAL HAVELIWALA V. SMT. BHAGWATI DEVI AND OTHERS, AIR 1967 ALLAHABAD 400 [V 54 C 119)].

30. Also, in RADHA SOAMI SATSANGH SABHA V. PAWAN ELECTRIC REFRIGERATING CO. AND ANOTHER, AIR 1967 ALLAHABAD 9 (V 54 CC3), it is held that 'transfer of running business by itself will not bring about dissolution of a Firm'.

31. Moreover, in COMMISSIONER OF INCOME TAX, WEST BENGAL-III V M/S.PIGOT CHAMPAN AND COMPANY, AIR 1982 SUPREME COURT 1085, the Hon'ble Supreme Court at page 1089 in paragraph No.9 has among other things observed as follows:-
"......It cannot be disputed that 'dissolution' and re-constitution' are two distinct legal concepts, for, a dissolution a reconstitution means the continuation of the partnership under altered circumstances but in our view in law there would be no difficulty in a dissolution of a firm being followed by the constitution of a new firm by some of the erstwhile partners who may take over the assets and liabilities of the dissolved firm.  In other words it is not possible to accept the contention of counsel for the appellant that upon a dissolution of a firm succession to the old business by another person would only arise if a solitary partner takes over assets and liabilities and carries on the business as a sole proprietor thereof or if some of the erstwhile partners along with some strangers take over the assets and liabilities of the old firm and carry on the business.  The two instances mentioned by counsel for the appellant are undoubtedly clear cases of succession to the old business by another person or entity but succession to the old business contemplated under Section 25(4) need not be and cannot be confined to the instances mentioned by counsel for the appellant.  Under Section 40 of the Partnership Act, 1932 a firm can be dissolved with the consent of all the partners or in accordance with the contract between the partners; under Section 43 a partnership at will can be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm and upon such notice being given the firm gets dissolved as from the date mentioned in the notice as the date of dissolution and if no date is so mentioned as from the date of the communication of the notice, while Section 44 contemplates dissolution of a firm by and under orders of the Court in certain contingencies mentioned therein.  It is quite conceivable that in cases of dissolution of the firm brought about by a notice under Section 43 or by an order of the Court under Section 44 some of the erstwhile partners may take over the assets and liabilities and carry on the same business by constituting a new firm and even such cases would be cases of succession to the old business within the meaning of Section 25(4) of the 1922 Act.  In our view the question whether there has been a dissolution of the firm and upon such dissolution a new firm has succeeded to the business of the old firm is a question which depends upon the intention of the parties to be gathered from the document or documents, if any, executed by and between the partners and other facts and surrounding circumstances of the case."

32. We recall the observations of the Hon'ble Supreme Court in PURUSHOTTAM AND ANOTHER V. SHIVRAJ FINE ART LITHO WORKS AND OTHERS, (2007) 1 MLJ 623 (SC), at page 624 wherein it is held as follows:-
"If a person transferred to a partnership (of which he was also a partner), all his assets and liabilities of his proprietary concern, he would have no subsisting exclusive right to enforce any liability against the defendants since such rights as he had as the proprietor vested in the partnership and he could not therefore either file a suit or claim any relief in the suit filed by the partnership, asserting his right as the erstwhile proprietor.'

33. In MULTICHANNEL (INDIA) LIMITED, REP. BY ITS DIRECTOR, MUMBAI V. KAVITALAYA PRODUCTIONS PRIVATE LIMITED AND OTHERS, 1998 (VOL.III) MLJ 708, at page 709, the Hon'ble Supreme Court has observed thus:-
"The question whether the contract was rescinded or varied with the consent of both the parties, treated as incomplete or inconclusive, depends upon the intention of the parties and the special circumstances of each particular case.  It is not proper or permissible to look at one particular point and say that there was a concluded contract.  For proper appreciation of the existence or rescission of the contract, as a matter of fact, of the intactness of the negative covenant in the agreement and its binding nature, the conduct and the correspondence as a whole has to be looked into.  In the instant case, under the Letter of Intent, dated 30.5.1997, the parties expressed their desire to participate in the production and marketing of the tele-serials, by a joint venture arrangement, which proposal was accepted by the respondents.  This is not a case where the terms are settled completely, area of operation defined under the Letter of Intent of the cash flow quantified, all these things are yet to be worked out.  The subsequent agreement is not a formal document in this context.  Several mutual duties and obligations are to be settled.  In such an event, it cannot be said that it is concluded concluded contract.  Only when the contract was concluded earlier, nothing more to be added except formal execution of a document, negative covenant has to be enforced and non-execution of a formal agreement will not take away the right conferred under the negative covenant,  Again in the instant case, where the reference to a future contract is made in such terms as to show that the parties did not intend to be bound until a formal contract is signed.  It cannot be said that it is a concluded contract."

34. In KATTA GUNDAIYA AND OTHERS V. KATTA SIDDAPPA AND OTHERS, AIR 1937 MAD 599, at page 600, this Court has held that 'the mere fact that after a particular date no further business was done will not amount to dissolution of the partnership.

35. Added further, 'Dissolution does not necessarily follow because the partners has ceased to do business for the partnership may continue for the purpose of realising the assets' as per decisions AIR 1927 PRIVY COUNCIL 70, SAHAPPA CHETTY AND OTHERS V. S.N.SUBRAHMANYAN CHETTY AND OTHERS and (1925) MAD 48 795 : AIR 1925 MAD 1249, GOKALDOSS V. PARRY AND CO.,

36. The Appellant/Plaintiff in Ex.A15, Lawyer's Notice addressed to the Second Respondent/Second Defendant had among other things mentioned that  'during the course of business, their clients had supplied bulk and packed Bitumen after adopting usual practise to various destinations under his jurisdiction in respect of which eleven Bills commencing from 28th July 1992, in all amounting to Rs.4,46,957-96/- was not paid inspite of making various personal visits besides sending reminders and the loss incurred would  be more  than Rs.3,00,000/- since the entire business became a stand still and one of the most reputed Transporters in South India, their name, goodwill and image was tarnished for no fault of theirs and therefore, demanded a sum of Rs.4,46,957.96/- along with interest at 24% p.a. till the date of realisation besides damages amounting to Rs.3,00,000/- within ten days from the date of receipt of the notice, etc., '


37. The Second Respondent/Second Defendant by his Reply Ex.A16 dated 27.01.1994 addressed to the Appellant/Plaintiff's Lawyer had inter alia stated that 'it was found that nearly 700 MT. Of Bitumen  was short for the period of transportation made by M/s.Sree Gomathi Shankar Transportation Contractor, Madras and the Vigilance Squad of P.W.D., Bangalore had seized all the connected documents and report was submitted to the Government of Karnataka and there was a suspicion about the involvement of the said Transport Contractor, etc.,'

38.  A  scrutiny of Ex.B1 Agreement dated 24.10.1990 clause 3 clearly mentioned that 'the load should be delivered to Stores during office hours only.'

39. In Ex.B2, Source Manual Chapter-1, General Rules,  Rule 2 mentioned about  the Duties and Responsibilities of the Store Manager Stores Superintendent and Store Keeper, which runs as follows:
"6.The Stores Manager or Stores Superintendent to Store Keeper will be in direct charge of all the items of Divisions, the custody and maintenance of which is entrusted to the respective Sub-Divisional Officers.  He will be personally responsible, in particular for the booked quantities of the Stores in his charges and in general for the entire Stores in his charges and in general for the entire Stores under his supervision, stock of famine tools and the tools and plants in use in the Public Works Stores.  He will be assisted by all Division Stores in his custody and in regard to the storage, handling and upkeep of heavy plant and machinery.
The Stores Manager or Stores Superintendent or Store Keeper is directly responsible to the Executive Engineer for the efficient and economical keeping of Stores in all sections and for excesses and deficits found.  He is responsible for the prompt carrying out of the current work of complying indents and replenishing of stock-for this end, he will frequently inspect the records of his section and a certain what arrears, if any exists and arrange for clearing them.  If he finds any difficulty in doing so, he will report the matter to the Executive Engineer for orders.
7. The principal duties of the Stores Managers or Stores Superintendents or the Store Keepers are :
a) To dispose of as much business as possible with the help of II Division Store Keeper.  He should bring to the notice of the Executive Engineer any important matters which cannot be disposed of by him for his order."


40. In Ex.B2, Source Manual Chapter-1 under the caption Controller, Central Stores in Rule 5,  it was stated as follows:-
"5(a) When the Stores are sufficiently extensive, a Stores Manager or Superintendent or Store Keepers will be appointed to be in charge of the Stores of the Division.  The Store Keeper will have nothing to do with the disbursement of cash or the supply of materials.  His duty will be confined of the custody, preservation and issue of the Stores under his charge keeping the required returns relating to them.  He will also arrange for the receipt and issue of Stores and materials indented for the works in the Division.  He may record the measurements for such Stores as are received by him on behalf of the Executive Engineer.
b) Except in case of petty supplies costing Rs.25 of less measurements entered by the Store Keeper should be accepted for purposes of payments unless they have been duly verified by a Sub-Divisional Officer or Executive Engineer.
c) Stores Manager, Stores Superintendents and First Division Store Keepers of Divisional Officers can make urgent payments of Stores received out of Office hours from the Sub-imprests granted to them.  For making such emergent payments Divisional Officers are authorised to grant imprests not exceeding Rs.10 to then Store Keepers."
41.In Ex.B3, P.W.D. Code Book, Volume I, Chapter VII under the head 'Stores'  in 370(a),  it was stated as follows:
"Store Keeper will have nothing to do with disbursement of cash or the supply of materials.  His duty will be confined to the custody, preservation and issue of the Stores under his charge and to keeping the required returns relating to them."

42. During the pendency of appeal, the Appellant/Plaintiff as Petitioner filed C.M.P.No.1065 of 2009 under Order 41 Rule 27 of Civil Procedure Code, seeking permission of this Court to file additional documents and if necessary to permit it to adduce evidence. Since additionals were relevant on being satisfied with the records stated for non-production of the same in the trial Court, the additional documents were ordered to be received as Exs.A6 to A44 (Series) subject to Proof and Relevancy as per order dated 10.03.2010.
43. Also, on behalf of the Respondents/Defendants, C.M.P.No.1471 of 2009 was filed before this Court under Order 41 Rule 27 of the Civil Procedure Code, praying permission of this Court to mark the documents being relevant as additional evidence and the additional documents were ordered to be received as Exs.B4 to B6 subject to Proof and Relevancy.
44. In Ex.B4, Investigation Report in Ref.No.PWD.13:1.V.C:93 dated 08.09.1993 on the complaint of alleged shortages in the Asphalt in the Stores of PWD Division, Chitradurga in paragraph No.2, it was observed as follows:-
"To begin with discussions were had with the EE, PWD Division Chitradurga Sri.C.Raghava Reddy.  The EE stated that is the misappropriation of bulk asphalt being transported to PWD Sub-Division No.4 Holakere, come to light when five transportation bills pertaining to M/s GomathiShankar Transport, Madras for having transported 56.45 MT of bulk asphalt to PWD Sub-Division Holalkere were put up to him for payment.  The EE further stated that he got doubt about misuse of asphalt since in six delivery challans in respect of two transportation bills the store keeper of the sub-division Sri.Kotrabasappa has signed as for AEE for having received the content on 2.10.1992 and the Assistant Store Keeper of the division Sri.Krishnamurthy has signed as EE, under the seal of EE.  The above quantity of bulk asphalt of 56.45 MT has been shown as transferred to the Sub-division by the Assistant Store Keeper of the division Office without bringing to the notice of the Store Keeper of the division the T.A. and the E.E. Without raising the invoice and without taking into account of the stock of the division.  The EE further stated that because of detection of the malpractice, he got prepared the year wise statement of stock balance of bulk asphalt starting from July 1987 i.e., since the PWD Sub-division Holakere came to the control of PWD Division Chitradurga from on PWD Division, Davangere., etc.,"

45. Further, in paragraph No.2.1 of Ex.B4 Investigation Report, it was stated thus:
" The EE further stated that consequent to detection of the above malpractice, the payment of the following five transportation bills of M/s Gomathishankar Transport, Madras totalling to Rs.2.05 lakhs has been withheld.
SI.NO.
BILL NO.
& DATE
QUNTY OF ASPHALT TRANSPORTED
AMOUNT OF THE BILL
1
33 Dt:30-10-1992
19.90 MT (packed)
8,262-54
2
41 Dt:04-11-1992
28.25 (Bulk)
36,918-53
3
42 Dt:04-11-1992
18.961 (packed)
37,047-87
4
44 Dt:16-11-1992
28.459 (packed)
68,069-92
5
43 Dt:16-11-1992
45.500 (Bulk)
55,686-70


                         Total
2,05,984-56
46. Added further, in paragraph No.3 of Ex.B4, the Investigation Report, it was mentioned as below:-
" Detection of Short accounting of Bulk asphalt in the stock Registers of PWD sub-division Holakere for Oct-1992:- It was seen from the correspondence file of the division that the EE had noticed malpractice in the case of following six delivery challans in the case of six tanker loads of bulk maxphalt transported by M/s.Gomathisankar transport Madras from HPC Bombay to PWD Division Chitradurga.

SI.NO.
GOODS CONSIGNMENT NOTE NO. OR DELEVERY CHALLAN NO.
G.C.Date
QUANTITY OF BULK ASPHALT (IN MT)
1
123
28-9-1992
9.600
2
124
28-9-1992
9.450
3
263
15-10-1992
9.280
4
263
15-10-1992
9.440
5
264
16-10-1992
9.460
6
265
16-10-1992                      
9.220


Total
56.450
It was also seen that out of the above six delivery challans (G.C.Note) D.C.No.123 and 124 figures in the transportation bill no 41 dated 14.11.1992 and the remaining 4 delivery challans in bill no 43 dtd 16.11.1992 referred to above.  The EE produced six delivery challans of the transport company in respect of six consignments.  It was revealed from the above that on the back  of the delivery challans, Sri S.Kotrabasappa, Second Division Assistant in charge of Stores of the sub-division has signed as for AEE with the certificate that "the contents received correctly and taken to stock account for 10/1992.  Extra km from Chitradurga to Holalkere 64km".  One more signature above the seal of the EE, PWD Chitradurga was also seen by the side of the signature of Kotrabasappa.  The EE stated that it is the signature of Sri.B.Krishnamurthy SDA store keeper of the Division who had signed as EE without his or S.K's knowledge.  The S.K. of the division during the above period was stated to be Sri.S.S.Kadathi.  The six delivery challans mentioned above are taken as Exh-II."

47. In Ex.B4, in paragraph No.4, the relevant portion was mentioned as below:-
       "Since the monthly account furnished by the sub-division is he extract of the stock register for the particular month, it is evident that there should not be any differenced in the quantity
Year
Balance Quantity as per stock Register
Balance quantity as per transportation bill
Total Shortage
Shortage for the year
1990-91
36.137
240.538
204.401
204.401
1991-92
139.791
827.34
687.549
483.148
1992-93
317.843
1043.46
725.621
38.072


                 Total
725.62
      725.621 MT
arrived from the above two sources.
and also, it was mentioned of that the shortage of bulk asphalt due to the above discrepancy had occurred since 9/90.

48. Significantly, in Ex.B4, Investigation Report paragraph No.5.1, the following were mentioned:-
"Discrepancy during 9/1990:- As per the stock receipt register of the sub-division the bulk asphalt received is nil.  It has been signed by Sri.T.Venkateshwara AEE of PWD sub-division Holalkere.  In the Division stock register also, there is no entry for having issued bulk asphalt to the sub-division during the month.  The monthly account of stock receipt of the sub-division however revealed four additional entries in the last column without the column heading, the total quantity of which is 47.305 which is state to be that of bulk asphalt.  The other columns were found to be the same as that of the stock receipt register.  The half yearly return submitted by the AEE did not reveal receipt of bulk asphalt during 9/1990.  The delivery chellan and the paid voucher of transportation bill were not made available.  It therefore appeared from the above.  That the above four entries in the last column of the monthly account is an insertion.  The handwriting of these four entries appeared to resemble the handwriting of other entries, which is stated to be that of Sri Kotrabasappa SDA of the Sub-division."
49. Added further, in Ex.B4 in paragraph No.5.10, the Discrepancy No.8/92 and 9/92 was mentioned thus:
"Discrepancy during 8/92 and 9/92: As per the stock receipt register of the sub-division, the receipt of bulk asphalt during the month of 8/92 is 67.740 MT which consists of four entries viz 15.150, 28.580, 14.440 and 9.570 MT. The consignments of 28.580 and 14.440 have been shown as received directly from the Firm and the rest from the Division Office.  It was however seen from the division stock register that 28.580 MT has also been issued from the Division Stores on 30.08.1992, consisting of three tanker loads of 9.480, 9.420 and 9.680 MT.  Further, the stock receipt register for the month of 9/93 showed the receipt of 37.893 MT of bulk asphalt consisting of two entries viz 28.580 and 9.313 both shown as received from the division Stores.  The division stoke issue register shows issue of 9.310 Mt on 23-9-1992 and 28.580 already issued on 30.08.1992.  It is therefore evident that 28.580 MT shown as receive directly from the firm during 8/92 has been again shown as received from the division Stores during 9/92.  As such there has been double accounting in respect of the consignment of 28.580 MT.  However in the monthly account for 8/92, the receipt of 39.120 MT has been shown excluding the receipt of 28.580 and the receipt of 28.580 MT has been shown in the monthly account for 9/92.  The above discrepancy shows negligence on the part of the store clerk and the AEE of the sub-division in the properly accounting the receipt of asphalt in the sub-division Stores.  The double accounting of 28.580 made in the stock register of the sub-division has however been rectified in the monthly accounts of the sub-division."

50. That apart, in Ex.B4, in paragraph Nos.5.12 and 6, the following were stated:
"5.12.As already explained in para 3 supra, malpractice in the records had been notice by the EE in respect of delivery challens of six tanker loads of asphalt received during October-1992, included in two transpiration bills of M/s. Gomathishankar Transport and these consignments are 9.600, 9.450, 9.280, 9.440, 9.460 and 9.220 totaling to 56.450 MT.  It can be seen from the details furnished in para 5.11 above that the consignments have been accounted in the stock receipt register of the sub-division as 18.680.  It is also seen from the details given above that the remaining four consignments which had not been included in the stock register, have been included in the monthly account as 19.05 (i.e. 9.600, 9.450) and 18.720 (9.280, 9.440) probably with the intention of tallying with the transportation bills of the contractor.  It was pleaded by the store clerk of the sub-division that the above four tanker loads had been issued to the executive subordinates of the sub-division.  However the invoice book of the sub-division did not reveal any invoice raise against the section officers in respect of the above during October-1992 or in the subsequent months.  The delivery challans in respect of the above consignments also did not reveal any acknowledgment of the section officers.  Further the MAS account of the Section Officer vide Exh-IX did not reveal concluded that the above quantity of 37.770 MT of bulk asphalt consisting of four tanker loads had not been accounted in the sub-division in any form.  As already explained above, though the short accounting of bulk asphalt on account of the above malpractice comes to 37.770 MT, the actual shortage is to the extent of 18.110 MT on account of double accounting of one consignment of 19.660 MT.
6. Shortage of bulk asphalt on account of manipulation of records:- As explained in the foregoing paras there has been shortage of bulk asphalt in the accounts of sub-division since Sept-1990 by not taking the bulk asphalt received in the sub-division to stock and by showing such left out consignments only in the monthly account of the sub-division as to tally them with the transpiration bills of contractors.  The month wise shortage of bulk asphalt as discussed above after taking into account double accounting of some consignments discussed earlier is as given below:

MONTH   YEAR
SHORTAGE OF BULK ASPHALTI (IN MT)
9/1990
47.305
11/1990
17.420
12/1990
49.720
2/1991
72.480
3/1991
27.320
1991-92
214.245
4/1991
45.380
5/1991
46.700
6/1991
18.630
7/1991
37.850
8/1991
56.920
9/1991
56.920
11/1991
65.230
12/1991
72.850
1/1992
19.300
2/1992
19.100
3/1992
47.250
1992-93
482.030
4/1992
19.960
10/1992
18.110

38.070

To sump up the year wise shortage of bulk asphalt comes to, as under:
1990-91
214.245 MT
                1991-92
482.03
                 1992-93
38.07

          734.345 MT
Further, as discussed in the succeeding para 10 the physical verification of the sub-division Stores revealed that the physical balance of bulk asphalt in the Stores was even less than that accounted in the stock register and as such the above quantity of bulk asphalt due to shortage counting was not physically excise in the Stores.

51. In short, Ex.B4 Investigation Report concluded that the total cost of shortage of Rs.38.02,590/- say Rs.38.026 lakhs and found that 8 officials were responsible for the full shortage/shortage relating to the period 9/1990 to 6/1991, 7/1991 to 4/1992, 9/1990 to 4/1992, 9/1991 to 4/1992 and 10/1992 and there was shortage of asphalt in the stock blance of PWD sub-division, Holalkere as mentioned hereunder:

QUANTITY
AMOUNT
Packed Asphalt
10 barrels
10,280-00
Bulk asphalt
300 MT
14,76,000-00
Total

14,86,280-00
and the Officers/Officials viz., i) S.Kotrabasappa, SDA in charge of Stores ii) T.Venkateshwar, AEE were jointly responsible for the above shortage.

52. In Ex.B5,  Recovery of Shortage amount, it was mentioned that from T.Venkateshwara, Executive Engineer (Retired), total amount of store shortage recovered was Rs.6,21,300/- and the balance amount due from the officials was mentioned as Rs.78,700/-.  Also in Ex.B5, Recovery of Shortage amount pertaining to Sri Kotrabassappa, the then S.D.A.,  it was mentioned that the store shortage recovered was Rs.2,46,612.00/- and the balance of Rs.5,39,668.00/- was recovered.

53.In Ex.B6, the Proceedings of Government of Karnataka, it was mentioned that regarding shortage of asphalt noticed in Holalkere Sub Division, Chitradurga Division Lokayuktha submitted a report to the Government and a detail enquiry was conducted and in the Enquiry Report, recommendations were made by the Hon'ble Lokyuktha for financial loss of Rs.14.86 lakhs to the Government was proved and hence the said sum was to be recovered from the Government Officials and two officials i) Sri T.Venkateshwara, the then Assistant Executive Engineer and ii) Sri S.Kotrabasappa, the then Second Division Assistant were dismissed from service as per Rule 8 (VIII) K.C.S.(C.C.A.)

54. Further, in Ex.B6 Proceedings of the Government of Karnataka, it was mentioned that '.....Sri S.Kotra Basappa was directly responsible for sub division store materials especially in bulk tar shortage and also said that sub division Head A.E.E. was responsible for shortage, since he had not maintained sub division store account properly.'

55. The Learned Special Government Pleader appearing for the respondents also brings it to the notice of this Court that the Appellant/Plaintiff represented by its Proprietor S.Mohan filed a complaint against the Second Respondent/Second Defendant on 01.03.1994 before the State Consumer Dispute Reddressal Commission and sought a relief for the payment of Rs.11,04,527.60/- with interest at 24% p.a. and the said complaint was rejected by the Commission on 28.09.1994 as not maintainable under the Consumer's Act and later only, the present suit was initiated on 20.08.1995 by the Appellant/Plaintiff.

56. A perusal of Ex.A5 series indicates that for the Executive Engineer, P.W.D Division, someone had received the bulk Tar and the Divisional Store Keeper, P.W.D. Division, Chitradurga had received on different dates.

57. As far as the present case is concerned, it is candidly clear that the Store Keeper of the Second Respondent/Second Defendant, P.W.D. Division, Chitradurga was not authorised to receive the stock as per the Procedure enjoined in Exs.B1 to B3 Documents and in fact, Ex.B4, Investigation Report clearly spelt out that instead of one S.S.Kadathi of S.K.Division one Krishnamoorthy, SDA Store Keeper had signed as the Executive Engineer without his of S.K's knowledge.  The specific case of the Respondents/Defendants is that 735.345 MT. Of Bitumen  was not delivered by Shree Gomathi Shankar Transport (Partnership Firm).  As seen from Ex.B4 Investigation Report, there was shortage in the asphalt in the Stores of P.W.D. Division, Chitradurga, Bitumen amounting to Rs.14,86,280.00/-.  Per contra, the Appellant/Plaintiff had not proved to the satisfaction of this Court that it had delivered the Bitumen in issue and therefore, it was entitled to receive the amount of Rs.4,46,957.06/- towards Transportation charges and as such, the Respondents/Defendants were liable to pay a total sum of Rs.7,70,957.06/- together with interest at the rate of 24% p.a. on the principal of Rs.4,46,957.06/-, etc.,

58. In this connection, it is not out of place for this Court to make a mention that though the Partnership Firm came into existence as per Ex.A1 Partnership Deed dated 13.03.1990 with two partners i) S.Mohan and ii) S.Venkatesan. Each possessing 50% share on13.03.1990.  Later, the Partnership came to be dissolved as per Ex.A2,  Dissolution Deed dated 24.04.1990 and significantly, Ex.A2 Dissolution Deed referred to coming into effect of the dissolution from 01.04.1995 and in short, the dissolved partnership in 1995 and again in the year 1999, were all not a favourable circumstance in favour of the Appellant/Plaintiff,  moreso, when the contention of the Learned Special Government Pleader for the Respondents/Defendants was to the effect that the Dissolution of the Firm was only to escape from the predicament in which the partners of the Transport Firm were in, in regard to the non supply of 734.345 MT.  of Bitumen.
59. Also, a perusal of Section 39 of the Indian Partnership Act, 1932 relating to Dissolution of a Firm makes it clear that even after the Dissolution, the Partners in Law are called the Partners notwithstanding the fact that they are  partners  of the dissolved Firm and moreover, a Dissolution does not necessarily follow because the Partners had ceased to do business for the partnership may continue for the purpose of realising the assets but in the instant case on hand, the Appellant/Plaintiff had not filed the suit including the partner of the dissolved Firm but filed the suit as the Appellant/Plaintiff in the capacity as Proprietary Concern and therefore, we are of the considered view that the suit filed by the Appellant/Plaintiff against the Respondents/Defendants for recovery of a sum of Rs.7,70,957.06/- with interest at 24% p.a., etc.,  as Proprietary Concern is not per se maintainable in the eye of Law and  as such, not entitled to claim the suit amount and as a matter of fact, there was no privity of contract between the Appellant/Plaintiff (as Proprietary Concern) and the Second Respondent/Second Defendant and accordingly, the two points are so answered decided against the Appellant/Plaintiff.
60. For the foregoing reasons, the Appeal filed by the Appellant/Plaintiff fails and the same is hereby dismissed.  Having regard to the facts and circumstances of the case, the parties are directed to bear their own costs.

Additional documents ordered to be received as per order dated 10.03.2010 in C.M.P.No.1064 of 2009 in A.S.No.1 of 2004 and marked as Exhibits as follows:

Exhibits & Date
Description
Remarks
Ex.A26/
20.10.1990
Requisition letter of the Contractor for Transportation
Certified copy
Ex.A27/
24.10.1990
Reply Letter sent by the Respondent
Certified copy
Ex.A28/
24.10.1990
Agreement between the Appellant and Respondent
Certified copy
Ex.A29/
13.12.1990
Reply letter sent by the Respondent
Certified copy
Ex.A30/
14.03.1991
Quotation
Certified copy
Ex.A31/
29.03.1991
Letter sent by the Appellant regarding quotation

Certified copy
Ex.A32/
24.04.1991
Reply Letter sent by the Respondent regarding
agreement for transportation work
Certified copy
Ex.A33/
26.04.1991
Agreement between the Appellant and the Respondent
Certified copy
Ex.A34/
21.12.1991
Reply letter sent by the Respondent
Certified copy
Ex.A35/
28.12.1991
Letter of Authority issued by the Respondent
to HPC
Certified copy
Ex.A36/
28.12.1991
Letter of Authority issued by Respondent to IOC
Certified copy
Ex.A37/
18.03.1992
Requisition Letter to increase the transport charges
Certified copy
Ex.A38/
01.04.1992
Letter regarding Revised rate for packed transportation
Certified copy
Ex.A39/
01.04.1992
Agreement between the Appellant and the Respondent
Certified copy
Ex.A40/
20.06.1992
Letter of Authority issued by the Respondent to HPC
Certified copy
Ex.A41/
14.09.1992

Letter of Authority issued By Respondent to HPC
Certified copy
Ex.A42/-
Letter of Authority issued By Respondent to IOC
Certified copy
Ex.A43/
28.10.1992
Letter  Regarding Transportation of Bulk Bitumen/Packed Bitumen
Certified copy
Ex.A44/-
Copies of Goods Consignment Delivery Receipts (28 numbers)
Certified copy


Additional documents ordered to be received as per order dated 10.03.2010 in C.M.P.No. 1471 of 2009 in A.S.No.1 of 2004 and marked as Exhibits as follows:

Exhibits & Date
Description
Remarks
Ex.B4/
08.09.1993
Investigation Report on the Complaint of alleged shortage in PWD Division, Chitradurga
Certified Copy
Ex.B5/
22.06.2006
Recovery of Shortage Amount
Certified copy
Ex.B6/
10.08.2009
Proceedings of Government of Karnataka
Certified copy












vri

To

1.The State of Karnataka,
   Rep. By its Secretary,
   Public Works Department,
   Secretariat,
   Bangalore.

2.The Executive Engineer,
   Public Works Department,
   P.W.D. Division,
   Chitradurga,
   Karnataka State