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Vadilal Lallubhai Vs. Shah Khushal Dalpatram and anr. - Court Judgment

LegalCrystal Citation
SubjectFamily;Property
CourtMumbai
Decided On
Judge
Reported in(1904)ILR27Bom102
AppellantVadilal Lallubhai
RespondentShah Khushal Dalpatram and anr.
Excerpt:
.....evidence of the existence of a partnership, but it is one of the circumstances and a very strong one, which are to be taken into consideration for the purpose of seeing whether or not a partnership exists, that is to bay, whether there was a joint business, or putting it in another way, whether the parties were carrying on the business as principals and agents for one another whether it is a joint business or the business of one only......who ought to have been added as co-plaintiffs. this finding is based upon the fact found by the joint judge that the plaintiff's father and minor brother are joint with him, by which we understand the judge to mean that they are members of a joint hindu family. but from the mere fact that certain persons are members of a joint family it does not necessarily follow that they are partners in a firm which only one of them says is his, unless it was set up with the help of family funds. there is nothing in the judgment of the joint judge to show that the firm was so set up except the statement of the father, which is accepted by the joint judge. but, according to the statement, the father lent money to the plaintiff. that would make him a creditor of the firm, not a partner.2. whether the.....
Judgment:

Chandavarkar, J.

1. The Joint Judge, differing from the Subordinate Judge, has rejected the suit on the ground that the plaintiff is not the only partner in the firm of Chamanlal Vadilal, but that his father and his minor brother also are partners who ought to have been added as co-plaintiffs. This finding is based upon the fact found by the Joint Judge that the plaintiff's father and minor brother are joint with him, by which we understand the Judge to mean that they are members of a joint Hindu family. But from the mere fact that certain persons are members of a joint family it does not necessarily follow that they are partners in a firm which only one of them says is his, unless it was set up with the help of family funds. There is nothing in the judgment of the Joint Judge to show that the firm was so set up except the statement of the father, which is accepted by the Joint Judge. But, according to the statement, the father lent money to the plaintiff. That would make him a creditor of the firm, not a partner.

2. Whether the relation of partners exists among two or more persons is a question to be determined with reference to the relation between those actually carrying on the shop business. In the present case the Joint Judge does not hold, nor does he point to any evidence showing that the persona who he finds are partners with the plaintiff agreed with the latter to combine their property, labour, or skill in the business and to share the profits or losses thereof, or what their relations were. All the Joint Judge finds is that) those persons and the plaintiff are members of a joint family. In our opinion it is too broad a proposition of law to lay down that because a person carrying on business is a coparcener in a joint family, therefore all his coparceners are his partners in that business, entitled with him. to its right and responsible with him for its liabilities. 'Partnership' is defined in Section 239 of the Indian Contract Act, and we may further refer the Joint Judge to the observations of Jessel, Master of the Rolls, in Pooley v. Driver (1876) 5 Ch. D. 458 where he says a partnership ' is a contract of some kind undoubtedly-a contract like all contracts, involving the mutual consent of the parties.' Participation in the profits of a business is one of the tests for determining whether a person is a partner. It is, as some of the decided cases show see Ex parte Tenant; In re Howard (1877) 6 Ch. D. 303, 'very cogent evidence,' but, in the words of James, L.J., in the case just cited (page 309), that 'evidence is capable of being controlled by the surrounding circumstances.' In the same case, Cotton, L.J., puts it thus (page 315): 'I take it the law is this, that participation in profits is not now conclusive evidence of the existence of a partnership, but it is one of the circumstances and a very strong one, which are to be taken into consideration for the purpose of seeing whether or not a partnership exists, that is to Bay, whether there was a joint business, or putting it in another way, whether the parties were carrying on the business as principals and agents for one another whether it is a joint business or the business of one only.' The law is very tersely summed up in one sentence by James, L.J., in Ex parte Delhasse; In re Megevand (1878) 7 Ch. D. 511 where he says that the right to control the property, the right to receive profits, and the liability to share in lcases are the elements of partnership. These are all merely indicia which may help the Joint Judge in finding whether a partnership, as defined in the Indian Contract Act, exists. In the present case there is nothing in the judgment of the Joint Judge from which we can gather that these elements existed. He does not deal with the question as to the participation of profits, nor is there any mention of surrounding circumstances. We are left to presume them from the mere fact that the plaintiff is joint with his father and his brother; but just as there is no presumption that a loan contracted by a manager of a Hindu family is for a family purpose as held in Soiru Padmanabh v. Narayanrao (1898) 18 Bom. 520 so there can be no presumption that a business carried on by a coparcener is a family business.

3. The case must go back, therefore, for a fresh finding on the issue whether there are any other partners in the firm on whose behalf the plaintiff has brought the suit. If at this fresh hearing the District Judge comes to the conclusion that there are other partners, we think that he ought to allow them to be brought on the record. There is no substantial difference between this case and that in Kasturchand v. Sagarmal (1892) 17 Bom. 413. There, too, as here, She plaintiff alleged that he was the Bole partner, and the Court found he was not. And yet this Court held that the plaint ought to be allowed to be amended. It is true that in that case the plaintiff described himself as the manager of the firm suing, whereas the plaintiff in the present case describes himself as its owner. But that, in our opinion, is not material, for the word 'owner' would be a mere surplusage if the suit was intended to be brought, as we have no doubt it was, on behalf and in the interests of the firm. Under Section 27 of the Civil Procedure Code the plaintiff is entitled to an amendment.

4. We, therefore, reverse the decree and remand the appeal to the District Judge for a fresh decision, having regard to the above remarks. Costs to abide the result.


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