Gulamali Walji Hirji v. Mrs. Sherbanu Walji and Others, H.C. Civ. Case 97-DSM-71; 3/11/72.

Gulamali Walji Hirji v. Mrs. Sherbanu Walji and Others, H.C. Civ. Case 97-DSM-71; 3/11/72.

Held:   (1) The law gives each and every partner of a partnership firm the right to have a true and full account of the partnership.

           (2) A governmental act nationalizing all of the properties of a partnership formed to operate three distinct businesses brings about the dissolution of the partnership.

          (3) The period of limitation for a suit for an account of a dissolved partnership begins to run on the date of the final transaction connected with the account of the dissolve company, s. 6(a), Law of Limitation Act, 1971.

            (4) “Transaction” as used in the Act means any act, doing, negotiation, dealing or business.

            MWAKASENDO, AG. J. – This ruling relates to two matters both raised by Mr. Raithatha learned Counsel for the Defendants. The first of such matters concerns the question whether or not, as Counsel for the defendant put it, the plaint discloses a cause of action with regard to plaintiff’s claim to have the accounts of the Partnership firm “Walji Hirji & Co.” re-opened. And the second point is whether or not the suit is barred by limitation.

            To begin with the first point, Counsel for the defendants argued not quite persuasively I am afraid, that the plaint filed by the plaintiff did not disclose any cause of action with regard to plaintiff’s claim to have the accounts of the Partnership firm re-opened. In support, he cited number of authorities ranging from the rules of Civil Procedure to cases decided in England. I have carefully considered these authorities but I cannot see how they support defendant’s contention. All the cases cited by the counsel for the defendants are cases dealing with settled accounts which the plaintiff in this case does not allege the instant case to be. And although the language used in the particulars of the plaint is in many places inelegant and imprecise, it is quite clear from the ‘Prayer’ that the relief sought by the plaintiff is to have a true and full account oft the partnership firm throughout the period of its existence. There would appear to be no question but that the law gives each and every partner of a partnership firm the right to have a true and full account of the partnership firm – vide section 192 of the Law of Contract Ordinance, Chapter 433 of the laws. On this point therefore, I have to find against the defendant and I accordingly reject the first preliminary point. 

            The second point is more intricate. In answering the question raised by defendant’s Counsel in his second preliminary point, it is essential first that I should deal with the issue of dissolution of the Partnership firm. The defendants contend that the Partnership firm was dissolved by the act of confiscation of the Partnership firm was dissolved by the act of confiscation of the Partnership business in Zanzibar, on 2^nd April 1965. The Plaintiff, on the other hand, contends that the dissolution of the firm did not take place until the death of the Senior Partner, Walji Hirji, in 1969. The Law of Contract Ordinance describes in what circumstances a partnership is to be regarded as dissolved \. The provision which I think fits our present case is paragraph (b) of sub-section (1) of Section 212 of the Ordinance, which reads: - “212 – (1) Subject to any agreement, between the partners, a partnership is dissolved ……. (b) If entered into for a single adventure or undertaking by the termination of that venture of undertaking.” In this case the ‘Walji Hirji & Co.’ was formed to operate three distinct businesses, i.e. the Diamond Coir factory, piece goods and produce business and the Shamshir factory. The act of confiscation of all the firm’s properties by the Zanzibar Revolutionary Government brought to an end all the firm’s trading activities in Zanzibar. It would seem to me therefore, that the question of when the partnership firm was dissolved is answered and it is, as I find it, the second day of April, 1965.

            However, on the dissolution of the Partnership as foretasted, the rights and obligations of the partners continued in all things necessary for winding up the business of the partnership and to complete transactions begun but unfinished at the time of the dissolution. On the evidence given by Hassanali Walji Hirji, the second defendant, his father continued, after the dissolution of the partnership, to receive moneys on behalf of the dissolved partnership and to pay out moneys so received to the plaintiff by his father at the end of 1966. on these facts it is contended on behalf of the defendant that as the dissolution of the Partnership took place on 2^nd April, 1965 and the suit was instituted on 15^th day of July, 1971, the suit is barred by limitation, vide section 3 and Part 1 item 12 of the Law of Limitation Act, 1971. Mr. Lakha, learned counsel for the Plaintiff, has countered this contention by citing the provisions of Section 6(a) of the law of Limitation Act, 1971, which reads: - “6. For the purpose of this Act – (a) in the case of a suit for an account, the right of action shall be deemed to have accrued on the date on which the last transaction relating to the matter in respect of which the account is claimed took place.” The word “transaction” as here used, has not any extraordinary or technical meaning but is used in its ordinary sense of “act, doing, negotiation or dealing business: that which is done, and affair”, as defined in the common English dictionaries. In the instant case, what was the last transaction relating to the accounts of the dissolved partnership? The second defendant Hassanali Walji Hirji, told the Court that right up to the end of 1966 his father was receiving and paying out moneys connected with the affairs of the dissolved firm. He himself in April that year had entered into an agreement with Ludolph Struto & Co. G.M.B.H. The agreement related to a claim which the foreign company had against the dissolved partnership and the second defendant was, on his own admission, acting on behalf of all the partners of the dissolved firm. It would appear to me, therefore, that although the partnership firm was dissolved in 1965, dealings or transactions partnership firm was dissolved in 1965, dealings or transactions relating to the partnership asset and liabilities continued to be carried out until the end of 1966. All these transactions, no doubt, are matters which must be taken into account in the making of true and full accounts of the partnership, before the partnership is finally wound up.

            On consideration of the matter, I have come to the conclusion that as the final transaction connected with the account of the company took place at the end of 1966, time for the purpose of limitation began to run then. It follows, therefore, that as the suit was filed on 15^th day of July, 1971, it was not barred by the Law of Limitation Act, 1971. Accordingly, defendant’s objections based on this ground also fail.