Article 5:
The period of limitation for a suit for an account and a share of the profits of a dissolved partnership is three years and the time from which period begins to run is the date of the dissolution.
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Partnership relationship arises as a result of agreement between the two or more persons pertaining to a business carried on by them collectively. The Article 5 contemplates a suit between the partners inter se and does not apply to an account by a partner against a sub-partner. The Article 5 would not apply unless a partnership is dissolved.
In Veronika v. Philips, (1975 Ker.LT 182), it has been held that for applicability of Article 5 the following ingredients are necessary to be fulfilled:
(i) There should have been a partnership;
(ii) There should be proof that it has actually been dissolved; and
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(iii) The suit should be for account and a share of profits of such partnership firm.
The presumption of dissolution can be made when a final account is made out showing a complete division of partnership share.
In Harish Kumar v. Bijanlal, (AIR 1991 P&H 130), it has been held that a partnership at will stands dissolved on the date the transactions are stopped and suit for redemption of accounts after 3 years of dissolution under Art. 5 of the Limitation Act.
The Article 5 has no application to a Hindu joint family business as it is not a partnership firm.
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A suit by the heir of deceased partner against the surviving partners for an account and for the share of the deceased in the partnership assets comes under Article 5.
In Dharam Chand v. Moolchand, (AIR 1959 Raj. 94), it has been held when the plaintiff in the plaint avers that the partnership was dissolved at a date which is within three years of the date of filing of the suit, the onus is upon the defendant to aver in the written statement and to prove that the dissolution took place more than three years prior to the filing of the suit.
Under Article 5, the limitation runs from the date of dissolution of the partnership firm. In I. Singh v. J. Chandra, (AIR 1988 All. 2420), it has been held that when, on the death of partner, a partnership is dissolved, for a suit filed by the heirs and legal representatives of the deceased partner against other partners, the limitation starts from the date of death of the partner. But when the partnership continues even after the death of a partner, then only when the partnership firm is dissolved in terms of the partnership deed, the cause of action for filing a suit for accounts commences from dissolution in terms of agreement.
In Binjraj v. Kishanlal, (AIR 1933 Nag. 127), it has been held that so far as a partnership business is subsisting, the suit for accounts and share profits is not maintainable under Article 5, though a suit for partnership accounts only may be allowed under the exceptional circumstances, but to such a suit Article 113 and not the Article 5 applies.
