PRIVY COUNCIL

                Ahmed Musaji Saleji and others.

                Vs.

                Hashim Ebrahim Saleji and others.

                           P.C.A. No. 87 of 1914
(Lords Dunedin Sumner, CJ, Sir John, Edge and Mr. Ameer Ali. JJ)

                19.1.1915

                JUDGMENT

Lord Sumner J.

1. This was an action to have partnership accounts taken, and for that purpose to have
various matters decided by the Court. Three questions only were raised before their
Lordships on the present appeal.

2. The circumstances raising the first question were as follows. The membership of
the firm was in dispute. Certain persons were alleged, on one side, to have been
partners, and, on the other, to have been only employees remunerated by a share of
annual profits. The suit was begun on 30th June 1908, and on 30th August 1909 the
trial Judge, Fletcher, J., by his formal adjudication (to use a neutral term) "declared"
that the partnership in question was dissolved as from 1st July 1907, and then "ordered
and decreed" that -

       "It is referred to the Assistant Referee of this Court to take the following
       account and to make the following enquiries that is to say:-
       "(i) To enquire who were the partners who were entitled to share in the assets
       and goodwill of the said partnership business;
       "(ii) To take an account of the dealings of the parties with the assets of the said
       partnership business;" and, further, certain other matters not now material.
3. This adjudication was immediately appealable but was not appealed. The Assistant
Referee duly held the enquiries directed, and all matters were gone into at a great
expenditure of time and money. His report on enquiry No. 1 was adverse to the
appellants, and being accepted to by them was confirmed by Fletcher, J.
4. The appellants then, by memorandum of appeal dated 23rd May 1912, raised the
question whether enquiry No. 1 was rightly included in the adjudication dated 30th
August 1909, or whether it was not one which should have been made by the learned
Judge himself. This at once and for the first time raised the question, which is the first
and chief issue in the present appeal, whether the above mentioned determination of
Fletcher, J., was a "decree" or an "order" within the meaning of those terms in the
Civil Procedure Code, Act V of 1908. If it was a decree it was a preliminary decree
within section 97, and any appeal was incompetent and barred thereby; if it was an
order it was appealable still. Their Lordships would unfeigned deplore a state of
procedure which enable the appellants to take their chance of success before the
Assistant Referee at such a cost in time and money and then, after they had lost the
day, to contend that the matter never should have gone before him at all; yet it must be
so if such be the meaning of the Code.

5. The High Court, while thinking that the enquiry in dispute should not have been
directed, decided at the same time that the adjudication of Fletcher, J., which included
this direction, was itself a decree and therefore being a preliminary decree could not
under section 97 of the Code be questioned on the final appeal. Their Lordships are in
accord with the learned Judges of the High Court.

6. The adjudication itself began by declaring that the partnership was dissolved as
from a certain date, and thus in limine settled rights between the parties. This
declaration was the foundation for all subsequent accounts and proceedings, which
were merely incidental thereto and consequential thereon. It matters not whether the
instrument of partnership fixed the dissolution at a date which had passed before the
suit began, or whether the parties had agreed to a dissolution or agreed in submitting
to a dissolution by the Court, or whether the Court decreed a dissolution for cause
shown before it after a latish contestation. The declaration when so made was what the
Court's adjudication, and indeed the appellants' own case, call it, a decree. The Code
makes no provision for something which is neither a decree nor an order, nor for
anything which is both, neither does it provide that one adjudication by the Court can
be resolved into diverse elements, some of which are decrees and some orders. This
was in substance a decree: it did not cease to be such, because a subordinate part of it,
if correctly made, might have been made separately as an order. It conclusively
determined the rights of the parties in regard to certain, and those essential matters,
involved in the suit, and the expression "Matters in controversy" in section 2 (2), the
definition of "decree" cannot, in their Lordships' opinion, be pressed so as to exclude
matters which though as it happened they were common ground, must have been
actually decided, if any question had arisen and were the foundation of the whole
determination. The Code, has got rid of such doubts as were debated in Khadem
Hossein v. Emdad Hossein1 Accordingly Section 97 of the Code applies: the
appellants took their objection too late and the High Court rightly decided against
them.

7. The residue of the case may be shortly disposed of. The appellants were ordered to
bring certain money into Court to pay interest as from a certain date. The contention
on the former point, namely that the amount was excessive, was not raised below at all
and but faintly before their Lordships. In any case the amount ordered to be brought
into Court was a matter of discretion and that discretion does not appear to have been
exercised on any wrong principle. No more need be said as to this. The other point is
equally short. It is well settled that in certain cases, when on the dissolution of a firm
one of the partners retains assets of the firm in his hands without any settlement of
accounts and applies them in continuing the business for his own benefit, he may be
ordered to account for these assets with interest thereon, and this apart from fraud or
misconduct in the nature of fraud. The report of the Assistant Referee disclosed
conduct of this sort on the appellants' part falling within the decided cases, even if it
did not amount to fraud, as probably the Referee meant to find that it did. Both Courts
below adopted this report and therefore there are concurrent findings of fact against
the appellants and no question of law is raised at all.

8. Their Lordships will humbly advise Hid Majesty that this appeal be dismissed with
costs.

Appeal dismissed.

Cases Referred.

   1. (1902) 29 Cal 758 : 5 C.W.N.617.