Summary
The Court recognised the two plaintiffs’ combined 50% partnership share under the admitted 1995 reconstitution deed, rejecting the claim that its express shares were recorded by mistake. The party alleging mistake bore the burden of proving it; the later deed omitted the earlier capital-contribution contingency and its allocation reflected a coherent negotiated arrangement. The plaintiffs’ expulsion from 18 June 2004 was nevertheless upheld under an earlier contractual clause that remained operative. The accounting directions were otherwise maintained.
Issues
- Whether the admitted reconstitution deed established a combined 50% share despite an asserted mistake and disputed earlier capital contribution.
- Whether the later deed displaced the earlier contractual power of expulsion.
Provisions considered
- Sections 17, 91 and 92, including proviso (1), Indian Evidence Act, 1872Admissions established execution of the later deed; its written terms governed unless a permissible challenge, such as mistake, was established by the party asserting it. (¶¶ 19, 20, 21, 22, 23, 24, 25, 26, 37, 38, 39)
Held
- Execution of the 1995 deed and its express allocation of 25% to each plaintiff were admitted. Once defendants asserted that this allocation resulted from mistake, the burden of establishing that contention lay on them. Section 92’s exceptions remained available in principle; the writing was not immune from a proved challenge. (¶¶ 15, 16, 17, 18, 19, 20, 24, 25)
- The 1995 deed followed negotiations, admitted new partners and beneficiaries, and omitted the earlier contingency reducing the share for failure to contribute Rs.50 lakh. Its coherent profit-and-loss allocation and absence of rectification over the intervening years undermined the asserted mistake. The lower courts wrongly displaced those terms merely for lack of separate proof of the earlier capital payment. (¶¶ 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39)
- The earlier deed’s expulsion clause was not inconsistent with the later deed and had not been superseded. The trial court had supplied sound reasons for upholding the plaintiffs’ expulsion, so that part of the decree remained. (¶¶ 40, 41)
- The combined share was declared to be 50% until 18 June 2004. Expulsion from that date and the remaining operative accounting directions were maintained; no fixed monetary recovery of the sum claimed in the plaint was directly decreed. (¶¶ 42, 43, 44, 45)
Result
Appeal partly allowed without costs. Decree modified to declare plaintiffs’ combined 50% profit-and-loss share until 18 June 2004; expulsion from that date and remaining trial-court directions maintained. Pending applications disposed of.