# LAXMIDAS DAHYABHAI KABARWALA v. NANABHAI CHUNILAL KABARWALA - **Citation:** [1964] 2 S.C.R. 567 - **Court:** Supreme Court of India - **Decided:** 1964 - **Bench:** S. K. DA.s, A. K. Sarkar, N. RAJAGoPALA AYYANGAR - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/laxmidas-dahyabhai-kabarwala-v-nanabhai-chunilal-kabarwala-2947 - **Pages:** 33 ## Headnote Civil Procedure-Amendment of Pleading•-Buit for decree on aettled accaunts-Oounter·claim made in written statementCourt-fee paid a. on plaint-Court if can treat counter-claim a. plaint in cro8'-8uit-Amendment when to be refused or alwwed-P/,ainl in cross-suit when shouUJ, be treated "" having been filed-Liability of aurviving partner-Goodwill of a flrmExerciae of discretion by trial court, when can be interfered withConatitution of India Art. 136-Partnership Act. 1932 (9 of 1932) s. 37-0od< of Civil Procedure, 1908 (Act Ii of 1908) 0. 6, r. 17, 0. 8, r. 6 The appellant filed a suit for the enforcement of an agreement to the efl'ect that a partnership between himself and one Bai Itcha since deceased had been dissolved and that the partners had arrived at a specific amount to be paid by the appellant in full satisfaction of the share of Bai Itcha in the partnership. The respondents who were the heirs of Bai ltcha, not only denied the allegations in the plaint but also made a counter-claim in the written 1tatement for the rendition of account against the appellent and paid court fee on the counter-claim as on a plaint. At a later stage, the respondents made a prayer to treat the counterclaim a• a plaint in a cross-suit. The trial court dismissed tho 1uit oa the 11rc•uad that appellant had failed to prove the 19~3 Srilekha Bandfjee v. Commission1r of Income-Tax, Bihar & Orissa Hidayatullah J, 1963 Marintrd out that if what i• rc;,lly a plaint in a cross-suit is made a part of a written statement either by being made an annexure to it or as part and parcel thereof, though described as a counterclaim, there could be no legal ohjection to the court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of a plaint. However, the appellant was allowed to li'e a fresh written statement. The respondcn'.S were also allowed to file a fresh plaint in place of their counter-claim provided there was no substantial variation in the allegation to be made or the relief to be claimed by them. Held also, that the curcial date for the purpose of determining when the plaint in a cross-suit should be treated as having been filed was not the date on which the conversion was ordered but the date on which the written statement containing the counter-claim was filed. Held also, that save in exceptional cases, leave to amend under Or. 6, R. I 7 of the Code of Civil Procedure will ordinarily be refused when the effect of the amendment would be to take away from a party a legal right which had accrued to him by lapse of time. This rule can apply only when fresh allegations arc added or fresh reliefs arc sought by way of amendment. However, where an amcndrr.cnt iJ sought which merely clarifies an existing pleading and docs not in substance add to or alter it, it had never b ## Text _Characters 0–39,588 of 66,836. This is a partial read: ask again with offset=39588 for what follows._ 2 S.C.R. SUPREME COURT REPORTS 567 as to burden of proof governs the additional assessment. In our opinion, this appeal has no substance; it fails and is dismissed with costs. Appeal dismissed. LAXMIDAS DAHYABHAI KABARWALA v. NANABHAI CHUNILAL KABARWALA AND ORS. (S. K. DA.s, A. K. SARKAR and N. RAJAGoPALA AYYANGAR JJ.) Civil Procedure-Amendment of Pleading•-Buit for decree on aettled accaunts-Oounter·claim made in written statementCourt-fee paid a. on plaint-Court if can treat counter-claim a. plaint in cro8'-8uit-Amendment when to be refused or alwwed-P/,ainl in cross-suit when shouUJ, be treated "" having been filed-Liability of aurviving partner-Goodwill of a flrmExerciae of discretion by trial court, when can be interfered withConatitution of India Art. 136-Partnership Act. 1932 (9 of 1932) s. 37-0od< of Civil Procedure, 1908 (Act Ii of 1908) 0. 6, r. 17, 0. 8, r. 6 The appellant filed a suit for the enforcement of an agreement to the efl'ect that a partnership between himself and one Bai Itcha since deceased had been dissolved and that the partners had arrived at a specific amount to be paid by the appellant in full satisfaction of the share of Bai Itcha in the partnership. The respondents who were the heirs of Bai ltcha, not only denied the allegations in the plaint but also made a counter-claim in the written 1tatement for the rendition of account against the appellent and paid court fee on the counter-claim as on a plaint. At a later stage, the respondents made a prayer to treat the counterclaim a• a plaint in a cross-suit. The trial court dismissed tho 1uit oa the 11rc•uad that appellant had failed to prove the 19~3 Srilekha Bandfjee v. Commission1r of Income-Tax, Bihar & Orissa Hidayatullah J, 1963 Marintrd out that if what i• rc;,lly a plaint in a cross-suit is made a part of a written statement either by being made an annexure to it or as part and parcel thereof, though described as a counterclaim, there could be no legal ohjection to the court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of a plaint. However, the appellant was allowed to li'e a fresh written statement. The respondcn'.S were also allowed to file a fresh plaint in place of their counter-claim provided there was no substantial variation in the allegation to be made or the relief to be claimed by them. Held also, that the curcial date for the purpose of determining when the plaint in a cross-suit should be treated as having been filed was not the date on which the conversion was ordered but the date on which the written statement containing the counter-claim was filed. Held also, that save in exceptional cases, leave to amend under Or. 6, R. I 7 of the Code of Civil Procedure will ordinarily be refused when the effect of the amendment would be to take away from a party a legal right which had accrued to him by lapse of time. This rule can apply only when fresh allegations arc added or fresh reliefs arc sought by way of amendment. However, where an amcndrr.cnt iJ sought which merely clarifies an existing pleading and docs not in substance add to or alter it, it had never been held that the qucatioo of a bar of limitation ii one of the queation 2 s.c.R. SUPREME COURT REPORTS 569 to be considered in allowing such clarification of a matter already contained in the original pleading. The decisions holding that amendments should not ordinarily be allowed beyond the period of limitation did not apply to the present case. Section 37 of the Partnership Act lays down the substantive law realating to the liability of a surviving partner who without a settlement of account with the legal representatives of a deceased partner, untilises the assets of the partnership for continuing the business as his own. This section cannut stand in the way of conversion prayed for by the respondents. The good-will of a firm being part of the assets has to be sold just like other assets before the accounts between the partners can be settled and partnership wound up. Even if the trial court and the first appellate court exercised a discretion in refusing the respondent's prayer to treat the counter-claim as a plaint in a cross-suit, they did so on grounds not legally tenable and the High Court was justified in ignoring the exercise of their discretion. Saya Bya v. Maung Kyaw Shun (1924) I. L. R. 2, Rangoon 276, Gurrimbbhoy and Go. Ltd. v. Greet (1932) L.R. 60 I. A. 297, (Main) Pir Bux v. Mohomed Tahar A.LR. 1934 P. C. 235. Gour Chandra Goswami v. Chairman of the Nabadwip Municipality A. I. R. 1922 Cal. I and Baj Bhuri v. Rai Ambalal Ohotalal First Appeal No. 737 of 1951 (Bombay High Court), referred to. Per Sarkar J. A defendant has no right apart from a statutory provision to set up a counter-claim strictly so called that is, one to enforce a right independent of and unconnected with the claim in the plaint. Nor hr.s he any right whatever to claim that such a counter-claim made by him in his written statement be treated as a plaint in a cross-suit. A court permitting a counter-claim to be treated as a plaint in cross-suit does so merely by way of granting an indulgence. Where a counter-claim is so treated as plaint, the plaint must be deemed for the purposes of the law of limitation to have been filed on the day the court made the order permitting it to be so treated. Bai Bhuri v. Rai Ambalal Ohotalal, First Appeal No. 737 of 1951 (Bombay Hi11h Court) dissented from. Laxmidas Dohy.lbhai Kabarwala v. Nanabhai Chunilal Kabarwal• 1963 IAxmiclos l>ahyahW Eabaru:olo •• Nanaltoi Cliu•ilal KaNtu:a/4 570 SUPREME COURT REPORTS [1964] VOL. CIVIL APPELLATEJumsDICTION: Civil Appeal No. 759 of 1962. Appeal by special leave from the Judgment and order dated August 22, 23, 1961 of the Gujarat High Court, in Appeal No. 29 of 1960. S. T. Desai and A. G. Ratnaparkhi, for the appellant. M. H. Ghhatrapati, J.B. Dadaclianji, 0. G . . Mathur and Ravinder Narain for the respondents. 1963. March 27. The Judgment of Das and Ayyanger JJ. was delivered by Ayyangar J. Sarkar J. delivered a separate Judgment. AYYANGAR J.-The principal point that is raised for consideration in this appeal by special leave is as regards the legality and propriety of an order by the learned Single Judge of the High Court of Gujarat directing a counter-claim filed by the respondents to be treated as a plaint in a cross-suit and remanding the case for trial on that basis. The facts necessary to appreciate the points raised before us are briefly as follows : The plaintiff, who is the appellant before us, and one Jamnadas Ghelabhai were partners in a business commenced in October 1913 and carried on under the name and style of Bharat Medical Stores at Broach, the two partners having equal shares. During the subsistence of the partnership and from and out of the assets thereof an immovable property-a house was purchased at Broach in July 1932. Jamnadas Ghelabhai died on August 12, 1943 but the partnership business was continued thereafter by the plaintiff-appellant taking in Bai Itcha-the widow o( the deceased partner-in his place. A change was, however, made in the shares of the two partners, in that Bai Itcha was given only a lth share as against the i share enjoyed by her husband. 2 S.C.R. SUPREME COURT REPORTS 571 With this alteration the same business was carried on between the two partners. In the early part of 1950 Bai Itcha fell ill. It was the case of the plaintiff that there were negotiations between the two partners as regards the winding up of the firm and it was his further case that on July 9, 1950 two matters were the subject of a concluded agreement with her. These were ( 1) that the partnership would stand dissolved fromJuly 15, 1950 and that Bai Itcha would receive from the plaintiff a sum of Rs. 13,689/- in full satisfaction in respect of the capital contributed by her as well as for her share of the profits of the firm, (2) that the plaintiff was to take over the immovable property in Broach purchased by the firm in July 1932 for its book value and that he should on that account pay over to Bai Itcha Rs. 2,202/9/9 being a moiety of the book value. The agreement was stated to be wholly oral and was admittedly not reduced to writing. Before, however, anything was done in pursuance of the alleged arrangement, Bai Itcha died on July 31, 1950 leaving as her heirs the respondents who were the sons of a brother of Jam- . nadas Ghelabhai-Bai Itcha's husband. It was the further case of the appellant that after the death of Bai Itcha respondents 1 and 2 examined the accounts of the partnership and after satisfying themselves that Rs. 13,689/- was the proper figure of the sum due to the deceased partner agreed to receive the same in full satisfaction of the amount to · which they were entitled in respect of that item. All these allegations about the agreement with Bai Itcha and the confirmation by them of the said agreement after her death were, however, denied by the respondents who insisted upon their rights under the law as legal representatives of the deceased partner. The appellant consequently filed a suit in the Court of the Civil Judge at Broach for enforcing the agreement which he alleged and for relief on that basis. It would be necessary to set out and discuss 196J Laxmidas Daloyabt..i Ka/JMwalo v. N an11bhai Clnmil«l Eab11Twal11 • • 1963 L•miidM Dahyahhai Er.b.z1wala Y. Nanahhlli CluaaiJaJ KabarwaJa A).'1angar J. 572 SUPREME COURT REPORTS [1964] VOL. in detail the reliefs claimed in this suit as the same have a material bearing on some of the arguments addressed to us. We shall, however, revert to this after completing the narrative of the proceedings up to the stage of the appeal before us. To this suit the respondents who had been impleaded as defendants filed a Written Statement which was mainly concerned with denying the truth of the agreement with Bai I tcha and the story regarding the subsequent confirmation by themselves and they wound up the statement by a counter·claim which might usefully be extracted even at this stage. In paragragh 25 of the Written Statement they pleaded : "25. In view of the above facts the plaintiff suit may please be dismissed and the defcnfendants costs may be awarded. The defendants further pray that if the Honourable Court holds that the said partnership was dissolved upon the death of Bai Itcha on date 31-7-50, the same may be legally wound up under the supervision and directions of the Honourable Court. And necessary instructions for the purpose may please be given, the accounts upto the date of complete winding up may be lawfully taken, the claims of the parties against one another may be ascertained and the costs of the defendants may also be awarded. .'fhe defendants have filed this counter claim for this purpose." The concluding paragraph-paragraph 26 contained details of the valuation of the counter.claim and of the court fee they paid for the relief which they sought in the preceding paragraph. The plaintiff thereafter filed a r~ply to the counter-claim and of the content10ns raised in this reply it is sufficient if at this stage we notice the plea that a counter·claim was 2 S.C.R. SUPREME COURT REPORTS 573 not legally maintainable and they prayed for the dismissal of the counter·claim with costs. The Civil Judge framed the necessary issues but most of them related to the claillll made in the plaint on the basis of the alleged agreement and Issue No. 15 relating to the counter-claim and the plaintiff's objection to the maintainability thereof ran : "15. Are defendants entitled to the counter· claim made by them ?" On these pleadings and the issues as framed the parties went to trial. By judgment dated November 30, 1954 the Civil Judge recorded findings on the several issues relating to the plaintiff's claim and dismissed the plaintiff's suit on the ground that he had failed to prove the agreement. Coming to Issue No. 15 relating to the counter-claim the learned Judge considered, in the first place, a contention urged by the defendants-the respondents before us-that the suit was virtually one for dissolution and the taking of accounts on a particular basis, viz., <:'n the basis of a settled account and that when the plea of settled accounts failed the suit got reduced into a plain one for the taking of the accounts of a dissolved partnership and on that footing the defendants had a legal right to have the relief of accounting. The learned Judge negatived this contention basing himself on the allegations in the plaint and holding the real nature of the suit to be one for the specific enforcement of the agn ement set up. He next considered the question whether the counter-claim was admissible in law and after an examination of the decisions on the point reached the conclusion that in the absence of any specific provision therefor in the Civil Procedure Code and in the light of certain decisions of the Privy Council and of the High Courts a counter· claim was not a.dmissible in the Muffasil. A prayer by the defendants to treat the counter-rhim as a 1963 Laxmidas Dahyabhai Kabarwt.la v. Nonabhai Dahyabhai Kabarwola Ayyanga1 J. 1963 /Axmidos Dahyabhdi Kobarw12la •• N anabMi Chll!JiJal .Kabarwala 574 SUPREME COURT REPORTS [1964] VOL. plaint in a cross suit by them was rejected. The learned Judge therefore dismissed the counter-claim but he added that the defendants could bring a separate suit for accounts and for a share of the profits of the dissolved partnership if so advised . The plaintiff was content with the judgment '~ hich he obtained on his claim but the defendants preferred an appeal to the District Judge Broach questioning the correctness of the order dismissing the counter-claim as not maintainable. The learned District Judge examined the authorities and reach· ing the same conclusion as the trial Judge, dismissed the appeal. Thereafter the defendants brought the matter before the High Court by way of a second appeal and before the learned Single Judge who heard it an oral application was made to treat the counterclaim made in paragraph 25 of the written state· ment as the plaint in a cross-suit and that the same should be tried and disposed of as if it were such a suit. An objection was raised by the plaintiffrespondent before that Court to the granting of this prayer on various grounds, the main one being that on the date when the matter was before the High Court and when such an order was being prayed for-in August 1961, the claim for accounts was hopelessly barred by limitation. The learned Judge, however, following an unreported decision rendered by a Division Bench of the Bombay High Court in September, 1956 allowed the applica· tion and passed an order setting aside the dismissal of the counter-claim and remanding it to the trial Judge "with a direction that the counter-claim be treated as a plaint in the cross-suit and that the reply of the plaintiffs to the counter-claim be treated as a written statement to the cross-suit and that the cross-suit be tried and disposed of in accordance with law", adding that the issues arising in the c.ross-suit which also arose in the suit and which had been disposed of already should not be tried 2 S.C.R. SUPREME COURT REPORTS 575 over again and the final decisions on those issues reached in the suit and the appeal therefrom shall be binding on the parties in the cross·suit. It is the correctness of this order by the learned Single Judge that is challenged in this appeal. The first submission made by Mr. Desai, learned Counsel for the appellant was that no counter-claim was maintainable in the Muffasil. There is not much controversy before us about this point and in view of the course of the proceedings it really does not arise for consideration, though we must add that we are not to be understood as doubting the two propositions that a right to make a counter-claim is statutory and that the present case is admittedly not within O.VIII. r. 6, Civil Procedure Code. We say it does not arise because a finding adverse to its maintainability was recorded by the trial Judge and by the District Judge on appeal on a consideration of , the decisions of the Privy Council and the various High Courts and when the matter was in the High Court the learned Judge also proceeded on the basis that a counter-claim was not admissible and the respondents have not preferred any appeal therefrom and that has become final. We might there- ~ fore proceed with the point~ arising in the case on the basis that a counter-claim is not admissible in the Muffasil, and the only question is whether the Court could treat a counter-claim as the plaint in a cross-suit. Learned Counsel for the respondents however made two alternative submissions : ( l) That even without ,converting the counter.claim into the plaint in a cross suit the defendants in the present case were entitled to the taking of the accounts of the dissolved partnership on the pleadings as they stood, and (2) that in the circumstances of the case the order of the learned Judge directing the conversion was legal and was proper and justified on the merits. We J96J La~~-d~ D:inyabh.111 Kabotwala •• Narialtlt.i GhuniJ,,J Eabarwola AJJIUl.fOT J. 1963 IAxmidas LJaJryahhoi KobmwalO •• Nt1R4bhai Chunilal liabarwala 576 SUPREME COURT REPORTS [1964] VOL. consider that the first of the above submissions has no substance. The point urged was that the plaintiff's suit was in substance one for the taking of the account~ of the dissolved partnership, though in form the primary relief claimed was for a decree on the basis of a settled account. It was submitted that when that primary relief, viz., a decree on a settled account was rejected, because the facts alleged were not proved, there remained a plaint praying for an ~ccount of which the defendant was entitled to take advantage and claim the same relief. In support of this submission a number of decisions rendered on the construction of s. 69 (3) (a) of the Partnership Act were referred. In these decisions it was held that in every suit for dissolution a prayer for accounts and a relief for accounting was implicit. We consider that these authorities are of no assistance for determining the nature of the plaint before us. It was in substance one for specific performance of an agreement by which one partner agreed to convey his intere~t to his co-partner. In such a suit there could obviously be no prayer for any relief for accounting and unless there is a prayer for account· ing there is no question of a defendant claiming the benefit of that relief in the same suit. The decisions in which it has been held that in a suit for accounts between accounting parties a defendant is virtually a plaintiff have no application to cases where the relief prayed for by the plaintiff is not one for the rendition of accounts. That situation will apply only to cases where the relief sought is common to the parties, though ranged on either side. The suit in the present case filed by the plaintiff prayed for no such relief and could not in the nature of things pray for any such, and hence unless there is a claim made by the defendant for accounting and that claim is treated as a plaint the defendant is entitled to no relief. The other submission of learned Counsel for • 2 s.c.R. SUPREME COURT REPORTS 677 the respondents seeking to support the judgement of the High Court stands on quite a different footing. Mr. Desai contended that the learned Judge of the High Court had no jurisdiction to treat the counter-claim contained in paragraph 25 of the Written Statement as the plaint in a cross-suit. As we stated earlier, the learned Judge took this course because he considered there was authority for this mode of proceeding in the decision of a Division Bench of the Bombay High Court. Mr. Desai contended that this decision of the Division Bench was wrong. He pointed out that the sole authority for the adoption of such a treatment of a counterclaim was a passage in Mr. Mulla's commentary on the Civil Procedure Code (12th Edition) at page 634 where the learned author relies on a decision of a Bench of the Rangoon High Court in Saya Bya v. Maung Kyaw Shun ('). Mr. Desai pointed out that no reasons are adduced for the proposition laid down by the learned Judges of the Rangoon High Court for their conclusion that "There is nothing to prevent a Judge treating the counter-claim as a plaint in a cross suit and hearing the two together if he is so disposed and if the counter-claim as properly stamped". His fur• ther contention was that the view here expressed was contrary to two decisions of the Privy Council reported in Currimbhoy and Co. Ltd. v. Greet ('), and (Mian) Pir Bux v. Mohomed Tahar (8). It is, no doubt, true that no authority is cited in the Rangoon decision for the dictum and the learned Judges seem to proceed on the basis that in the absence of any established principle or binding precedent their conclusion was reasonable, but the further submission of Mr. Desai that their view is opposed to the decisions of the Privy· Council is not correct. Currimbhoy and Co. Ltd. v. Greet ('), is not anthority for any proposition other than that a counter-claim is not maintainable in the Muffasil (I) (1924, I.L.R. 2 Rangoon 276, 12) (1932) L.R. 60 I.A. 297. (S) A.I.R. 1934 P.C. 235. 1969 Laxmidas Dshyabluil Kabarwala v, N anabhai Ghunllal Kabarwala 1963 L=.idas D./ual!hai Ea6oruiala v. Nonabhai C/runi/al Eab111wolo • 578 SUPREME COURT REPORTS (1964] VOL. and the other case-(Mian) Pir Bu:r v. Jlfohmed Tahar ('), which is to the same effect merely affirms the law as accepted in Currimbhoy aml Co. Ltd. v. Greet ('). Neither of these two decisions, Mr. Desai admitted in terms, refrrs to the conversion into or treatment of a counter-claim as a cross-suit, nor do they in terms or even inferentially negative the legality of the adoption of such a course. For such a position, however, Mr. Desai, relied on the decision of the Calcutta High Court in GO'Ur Chandra Goswami v. Chairman of the Nabadwip Municipality ('). where the learned Judges set aside in revision an order of the Munsif allowing the defendant's additional Written Statement to be treated as a cross plaint. There is no doubt that this is some authority for the proposition contended for by Mr, Desai. It is not, however, clear from the judgment whether it proceeds upon the facl~ of the case then before them particular! y as regards the contents of the Written Statement which was treated by the District M unsif as a plaint in a cross-suit or whether the proposition of law was intended to have a wider application. The learned Judges correctly pointed out that a counter-claim is the creation of the statute and in the absence of a provision in 0. VIII of the Civil Procedure Code for a counter-claim apart from the relief specified in r. 6 thereof, a counter-claim as such was inadmissible. From this the learned Judges proceeded to equate the bar to the maintainability of a counter-claim to a bar to a counterclaim being treated as a cross-suit. It must, however, be pointed out that for effecting this equation no reasons are adduced by learned Judges nor for holding that a Court was precluded from treating an additional Written Statemer,t as a cross plaint. The question has therefore to be considered on principle as to whether there is anything in law- \1) A.J.R, 1934 P.C. 235. (2) (1932) L,R. 60 I.A. 297. (3) A.!.R. 1922 Cal. I. .. 2 S.C.R. SUPREME COURT REPORTS 579 statutory or otherwise-which precludes a court from treating a counter-claim as a plaint in a cross suit. We are unable to see any. No doubt, the Civil Procedure Code prescribes the contents of a plaint and it might very well be that a counterclaim which is to be treated as a cross-suit might not conform to all these requirements but this by itself is not sufficient to deny to the Court the power and the jurisdiction to read and construe the pleadings in a reasonable manner. If, for instance, what is really a plaint in a cross-suit is made part of a Written Statement either by being made an annexure to it or as part and parcel thereof, though described as a counter-claim, there could be no legal objection to the Court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of a plaint. Mr. Desai had to concede that in such a case the Court was not prevented from separating the Written Statement proper from what was describ· ed as a counter-claim and treating the latter as a cross-suit. If so much is conceded it would then become merely a matter of degree as to whether the counter-claim contains all the necessary requisite; sufficient to be treated as a plaint making a claim for the relief sought and if it did it would seem proper to hold that it would be open to a Court to covert or treat the counter-claim as a plaint in a cross suit. To hold otherwise would be to erect what in substance is a mere defect in the form of pleading into an instrument for denying what justice manifestly demands. We need only add that it was not suggested that there was anything in 0. VIII. r.6 or in any other provision of the Code which laid an embargo on a Court adopting such a course. Mr. Desai's next contention was that even if it was open to the Court to treat the counter-claim as a plaint in a cross suit, the action of the learned Single 1969 Laxmidas Dahysbhoi Kabarwala v. Nanabhai Chunilal Kabarwala Ayyangar J, 196J Lami/4t Dallyabluai Ka6arw~a Y, x..u1un Ghumlol KabMwola .d7JG111ar /, 580 SUPREME COURT REPORTS [1964]VOL. Judge in granting this relief was, in the circumstances of this case, illegal or, at any rate, improper. In support of this further submission he urged two points: ( l) The conversion of a counter-claim into a plaint in a cross suit was not any inherent or enforceable right of a defendant but the matter lay in the discretion of the Court to be exercised on judicial principles so as not to cause hardship to either side. In the present case he urged that the relief by way of counter-claim had been objected to by the plaintiff as not maintainable but the defendants had, till the very end, persisted in claiming this inadmissible relief. Besides, both the learned trial Judge as well as the District .Judge on appeal had considered the prayer for treating the counter-claim as the plaint in a cross suit and had, for very proper and cogent reasons and in the exercise of their discretion, rejected it. The learned Single Judge oC the High Court, however, it was submitted, had, without even considering the grounds upon which the Courts below had exercised their discretion and without assigning any reasons of his own set aside their judgments and allowed the defendants the relief for which they prayed. (2) Mr. Desai further submitted that at the worst even if the prayer of the defendants was allowed, having regard to the long interval between the date of the counter-claim and the date when the conversion was being allowed as an indulgence to the defendants the learned Judge ought to have put the defendants on terms and not have granted the relief in the absolute terms which we have extracted earlier. We shall now proceed to consider these objections in detail. When analysed they fall under three heads : ( l) The reason adduced by the trial Judge and the lst appellate Court for refusing to grant the prayer for conversion have not been considered by the High Court and if these had been taken 2 S.C.R. SUPREME COURT REPORTS 581 into account the learned Judge would have disallowed the prayer, (2) If, as it must be conceded, the trial Judge and the District Judge on appeal had a discretion to convert or not to convert the counterclaim into a plaint in a cross-suit, the learned Single Judge had no jurisdiction under the Civil Procedure Code to interfere with that discretion and, in any event, there were no sufficient reasons set out to jus· tify such interference, and (3) Having regard to the circumstances of the case _the defendants ought to have been put on terms. It was pointed out that there were three matters which were taken into account by the trial Judge for disallowing the defendants' prayer for treating the counter-claim as a cross-suit: (a) limitation, (b) s. 37 of the Partnership Act, and (c) goodwill. The point of limitation was this : The prayer in the counter-claim being one for the taking of the accounts of a dissolved partnership-on the basis that the partnership was dissolved on the death of Bai Itcha on July 31, 1950, a suit claiming the relief of accounting could under the Indian Limitation Act, be filed only within three years from the date of dissolution (Art. 106). As the Written Statement of the defen· dant was filed on October 18, 1951 no doubt if the counter-claim itself be treated as the _plaint, the . suit would be in time. But the learned trial Judge held that limitation had to be computed on the footing that the suit was filed on the date when an application was made to him in November 1954 at the stage of the arguments for treating the counter-claim as a plaint in a cross suit. If so computed obviously the cross suit would be barred by limitation and that was assigned as one of the reasons for rejecting the prayer for conversion. It was urged before us that the learned Judge of the High Court had not addressed himself to this aspect of the matter. It was also submitted that strictly speaking the correct date en which the plaint in the cross-suit should be taken 196$ LaxmitltJJ Dahyabhai Kaborwala v. Nanabhai Chunil4l Eaharwols A»""I"' J. 1963 LlxmiJJ.S f :a/a 1 tibhai K'lbmv·l/a v, N .... bhai Cluinilal Eoharwato 582 SUPREME COURT REPORTS[l964jVOL. · to have been filed, in view of the orders of the trial and 1st appellate courts rejecting this prayer was that on which the oral prayer was made before the learned Single .Judge i. e., 1961. It is obvious that the learned Judge considered that the correct date for the computation of limitation in such cases had been decided in the unreported decision of the Division Bench of the llombay High Court to which we have already made a reference. The learned Judges there took the view that the crucial date for the purpose of determining when the plaint in a cross suit should be treated as having been filed was not the date on which the conversion was ordered but the date on which the Written Statement containing the counter-claim was tiled. We considered that this decision of the Bombay High Court lays down the correct rule in cases of this kind. It is, no doubt, true that, save in exceptional cases, leave to amend under 0.6,r. l 7 of the Code will ordinarily be refused when the effect of the amendment would be to take away from a party a legal right which had accrued to him by lapse of time. llut this rule can apply only when either fresh allegations are added or fresh reliefs sought by way of amendment. Where, for instance, an amendment is sought which merely clarifies an existing pleading and does not in substance add to or alter it, it has never been held that the question of a bar of limitation is one of the questions to be considered in allowing such clarification of a matter already contained in the original pleading. The present case is a fortiori so. The defendants here were not seeking to add any allegation nor to claim any fresh relief which they had not prayed for in the pleading already filed. If on the allegations contained in that pleading the relief prayed for could not be obtained by the defendants, the plaintiff is not precluded from urging such a contention. The defendants had valued the relief sought as if it were a plaint in a cross suit and had paid the requisite court fee payable on such a plaint 2 S.C.R. SUPREME COURT REPORTS 583 and there was no dispute that either the valuation or the Court fee was incorrect. Mr. Desai sought to belittle the circum~tance about the valuation of the relief and the payment of the court fee payable thereon by the defendants by pointing out that the court fee was a comparatively small sum. If under the relevant statute the court fee payable for a particular type of relief is a small sum and a party has paid it, he has done all that the law requires, and the legal consequence of such an act cannot be discounted merely because the pecuniary burden borne by the party is not heavy. In the circumstances, there being no addition to the allegation or to the relief, it is not possible to accept the argument that by the conversion' of that pleading which was contained in the Written Statement into a plaint in a cross suit a fresh claim was made or a fresh relief which had not already been prayed for was sought which would enable the plaintiff to contend that limitation started from the date on which the conversion took place. To the facts of the present case therefore the decisions holding that amendments could not ordinarily be allowed beyond the period of limitation and the limited exceptions to that rule have no application. The learned trial Judge next referred to s. 3 7 of the Partnership Act and expn;ssed the opinion that in view of the provisions of that section the conver• sion prayed for should not be granted. He observed: "Defendants have been given special rights under s. 37 of the Indian Partnership Act. No issues have been framed in this suit regarding the matter covered by s. 37 of the Indian Partnership Act ...... the questions under s. 37 are not within the scc>pe of this suit. Such questions can be within the scope of defendant's /96J Laxmidas Dahyabhai Kabarwala •• Nanabhai Dahyabhai ' Kabarwala Ayyanga1 I. 584 SUPREME COURT REPORTS [1964] VOL. 1963 suit for an account and share of the profits of a Lumidas Dahyabhoi dissolved partnership." Ka/uJrwalo v. }{anabhai Clrunil '' Kabarwalo .1,, ... ,., J. It is, however, difficult to appreciate the import of these remarks. So long as the counter-claim 1s held to be inadmissible as the basis on which a defendant could be granted relief and so long as the conversion of it into a plaint is not granted, the questions raised by s. 37 would not be within the scope of the suit, and naturally until such a convrrsion is effected, no issues could or would be framed. But by themselves the matters set out could hardly be objectiom to the exercise of the discretion by the Court to grant the prayer for conversion. Again, what the provision in s. 37 has to do with the exercise of the discretion to permit the conversion is not also clear. That section reads : "37. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm .vithout any final settlement of the accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six per cent per annum on the amount of his share in the property of the firm : Provided that where by contract between the partners an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing 2 S.C.R. SUPREME COURT REPORTS 585 partner, and that option is duly exercised, the estate of the deceased partner, Qr the outgoing partner or his estate, as the case may be, is not entitled to any further or other share of profits ; but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof, he is liable to account ..Q_nder the forgoing provisions of this section." It would be seen that s. 37 lays down the substantive law relating to the liability of a surviving partner who without a settlement of account with the legal representatives of the deceased partner utilises the assets of the partnership for continuing the business as his own. If in the present case the plaintiff has done so he would be liable to the obligation laid by the provision and if he has not, he would not be so liable. TherefoJ""I"' J. 1963 /.AJmri4aJ DolryaJ,hai Kab111wala •• N-bllli Chtmi/oJ Kdtuwafa ~gorJ. 585 SUPREME COURT REPORTS [191>4] VOL. The third circumstance that was referred to by the learned trial Judge and which was also rrlied on by Mr. Desai was as regards goodwill. On this part of the case the trial Judge remarked : "Defendants also urge that there was a goodwill of business. Whether there was a good· will or not and what is the value of the good - will are also questions of fact for which no issues have been framed in the suit. I am not therefore disposed to hear the counter-claim as a cross-suit along with the plaint in this suit. All these questions about goodwill ......... are not within the scope of this suit". We consider that the question of goodwill has even less bearing on the exercise of the discretion by the Court than even the accounting contemplated by s. 37. Goodwill is a part of the assets of a firm and s.