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Hirabai Gendalal Vs. Bhagirath Ramchandra and Company - Court Judgment

LegalCrystal Citation
SubjectCivil;Company
CourtMumbai
Decided On
Reported inAIR1946Bom174
AppellantHirabai Gendalal
RespondentBhagirath Ramchandra and Company
Excerpt:
- - ), could act present the plaint without filing the plaintiff's vakalatnama, but as he be lieved in good faith that no vakalatnama was required, the defect was allowed to be cured by its subsequent production, on the analogy of the principle contained in section 99, civil p. the rule appears in the book which is described 'as rules and forms of the high court of judicature at bombay on the original side in its several jurisdictions,'and they are, therefore, prima facie, intended only to apply to that side of the high court, though some of the rules like rules 46 and 47 deal with advocates (a. clauses 9 and 10 of the letters patent deal with the powers of the high court to admit advocates, vakils and attorneys and authorize them to appear for the suitors of the high court and also to.....lokur, j.1. the suit out of which this appeal arises was filed by the mamlatdar, taluka jalgaon, representing the court of wards, on behalf of messrs. bhagirath ramchandra & co., of which the present owner and vahiwatdar is shivnarayan bhagirath shet. in 1927 the plaintiff company was appointed the managing agents of the bhagirath spinning, weaving and ., jalgaon, hereinafter referred to in this judgment as the mills company. the mills company having fallen into financial difficulties, a scheme for its reconstruction was submitted to and sanctioned by the high court on 11th january 1932. in accordance with that scheme, the plaintiff company surrendered its managing agency to the defendant company for a period of fifteen years on condition that it should be paid a quarter of the commission.....
Judgment:

Lokur, J.

1. The suit out of which this appeal arises was filed by the Mamlatdar, taluka Jalgaon, representing the Court of Wards, on behalf of Messrs. Bhagirath Ramchandra & Co., of which the present owner and vahiwatdar is Shivnarayan Bhagirath Shet. In 1927 the plaintiff company was appointed the managing agents of the Bhagirath Spinning, Weaving and ., Jalgaon, hereinafter referred to in this judgment as the Mills company. The Mills company having fallen into financial difficulties, a scheme for its reconstruction was submitted to and sanctioned by the High Court on 11th January 1932. In accordance with that scheme, the plaintiff company surrendered its managing agency to the defendant company for a period of fifteen years on condition that it should be paid a quarter of the commission earned by the defendant company from the managing agency. The Mills company went into liquidation in February 1935 and during that interval the defendant company is said to have earned a commission of Rs. 89,958-5-4. This suit was filed by the plaintiff to recover Rs. 11,584 due for a quarter of the commission and interest thereon. The defendant company resisted the claim on various grounds, but none of them was found tenable and the plaintiff was given a decree for the full amount claimed.

2. The first contention of the defendant company is that the suit is not properly instituted and that the lower Court should have refused to proceed with it. The plaint was duly signed by the Mamlatdar as representing the Court of Wards and was presented in Court by his counsel Mr. V.N. Patil, Bar-at-Law, who is enrolled as an advocate (O.S.) of this High Court, but he did not file a vakalatnama or any document signed by the Mamlatdar appointing him to act for him in Court, as required by Order 3, Rule 4 (2), Civil P.C., 1908. It is, therefore, contended that there was no proper presentation of the plaint to the Court as required by Order 4, Rule 1, of the Code. The question whether an advocate (O.S.) can act on behalf of his client in a Court in the mofussil without a vakalatnama is not free from doubt, and, in view of the importance of the question notices were issued to Government, to the Bar Council and to the Bar Association to enable them to have 4heir say in the matter. The Government Pleader urges on behalf of Government that a vakalatnama is necessary, while Mr. Mehta urges on behalf of the Bar Council that an advocate (O.S.) can appear, act or plead on for half of his client both in the High Court and in the mofussil Courts without filing a vakalatnama. But he claims this privilege only for advocates (O.S.) and not for advocates (A.S.). The lower Court held that Mr. Patil, though an advocate (O.S.), could act present the plaint without filing the plaintiff's vakalatnama, but as he be lieved in good faith that no vakalatnama was required, the defect was allowed to be cured by its subsequent production, on the analogy of the principle contained in Section 99, Civil P.C., and in the ruling in Wali Muhammad Khan v. Ishaq Ali Khan ('3l) A.I.R. 1931 All. 507.

3. The question whether an advocate (O.S.), that is to say an advocate enrolled on the Original Side of the High Court, is required to file a document authorizing him to act of behalf of his client in a Court in the mofussil was considered by a Division Bench of this Court in Ambedas Kashibhai v. Vadilal Chaganlal : AIR1940Bom272 and Beaumont C.J. and Sen J. expressed the opinion that he is not so required. That opinion, however, is obiter as the question did not directly arise in that case. There an advocate (O.S.) was engaged by a party only for the purpose of pleading for him in the Court of the Small Cause Judge at Thana, and though he had put in a memorandum signed by himself in accordance with Order 3, Rule 4 (5), the learned Judge refused to accept it and allow the advocate to argue the case. On his application to this Court it was held that the memorandum was sufficient and 4he advocate could not be required to file a vakalatnama for the mere purpose of. pleading. This was sufficient for the disposal of that case, but as the wider question regarding the privileges of an advocate (O.S.) appearing in a mofussil Court had been argued, Beaumont C.J. thought it proper to express his opinion on the point. The question has now directly arisen in the present case, and after hearing it fully argued on behalf of all the interested parties, we have, with the utmost respect, to differ from the view expressed by Beaumont, C.J. Although the decision is that of a Division Bench, as the question did not arise directly in that case and as the opinion expressed there is obiter, we have not thought it necessary to refer this case to a larger Bench. Order 4, Rule 1 (1), Civil P.C., requires that every suit shall be instituted by presenting a plaint to the Court or such officer as it appoints in this behalf. Under Order 8, Rule 1, such presentation must be made by the party in person, or by his recognized agent, or by a pleader acting on his behalf. Order 3, Rule 4 (1), provides that no pleader shall act for any person in any Court, unless he has been appointed for the purpose by such person by a document in writing by such person or by his recognized agent or by some other person duly authorized by or under a power of attorney to make such appointment. The word 'pleader,' according to its definition in Section 2(15) of the Code, includes an advocate, a vakil and an attorney of a High Court. Thus it is used in a much wider sense than its ordinary signification, and advocates enrolled on the Original Side of the High Court, that is to say, advocates (O.S.), also are included in it, and Under Order 8, Rule 4(1), they too cannot act for any person in any Court unless appointed by him by a document in writing. But Order 3, Rule l, does recognise exceptions where it is 'otherwise expressly provided by any law for the time being in force,' and such an exception is to be found in Rule 40 in Chap. 2, part l, Bombay High Court Rules (on the Original side), 1936), It says:

No Advocate (O.S.) shall be required to present any document empowering him to act in any appeal or proceeding, civil or criminal.

5. In Ambedas Kashibhai v. Vadilal Chaganlal : AIR1940Bom272 . Beaumont C.J. held that this rule was intended to apply to all Courts in the Presidency, and not to the High Court alone. The plain words of the rule show that it is not meant to be confined to the advocates (O.S.) appearing in the High Court. As pointed out by Beaumont C.J., Rule 45 in the same chapter expressly refers to 'all Courts in the Bombay Presidency.' But that rule refers only to the precedence amongst advocates enrolled by the High Court, and stands on a different footing. No other rule purports to deal with the procedure to be, followed in the mofussil Courts. The rule appears in the book which is described 'as Rules and Forms of the High Court of Judicature at Bombay on the Original Side in its several jurisdictions,' and they are, therefore, prima facie, intended only to apply to that side of the High Court, though some of the rules like Rules 46 and 47 deal with advocates (A.S.). Part 1 in this book deals with 'legal practitioners,' and as the same subject is dealt with also in Part 2 of the Rules of the High Court of Bombay, Appellate side, 1986, some of the rules in the two books necessarily overlap each other. It is, therefore, safer to interpret these rules by referring to the powers of the High Court to make them.

6. The High Court possesses wide powers to frame rules for both the sides of the High Court and all the Courts subordinate to it. Rules relating to pleaders can be made by the High Court Under Sections 122 and 129, Civil P.C., Section 224, Government of India Act, 1935, Clauses 9, 10 and 37, Letters Patent, the Bar Councils Act and the Bombay Pleaders Act. Section 122, Civil P.C., empowers the High Courts to make rules regulating their own procedure and the procedure of the civil Courts subject to their superintendence, and by such rules to amend, alter or add to all or any of the rules in Schedule 1 of the Code. This is a new rule inserted in the Code of 1908. Under the former Code, the High Court had no power to alter the provisions of the Code, however urgent such alteration might be in view of the peculiar local conditions. To remedy this defect, the Code was divided into sections and rules, and the High Courts were empowered to alter the rules to adopt them to local conditions. But as observed in Kishan Singh v. Bachan Singh A.I.R. 1942 Lah. 201 this delegated power of legislation conferred on the High Courts is limited to annuling, altering or adding to the rules in Schedule l of the Code. It cannot be suggested that Rule 40 in Part 1 of the Rules of the High Court (on the original side), 1936, with which we are concerned, and which virtually alters Order 3, Rule 4, Sub-rules (1) and (2), is made Under Section 122. that rule was framed before the Code of 1908 was enacted. Prior to 1926, Order 3, Rule 4, had a Sub-rule (3), which provided that no advocate of any High Court established under the Indian High Courts Act, 1861, or of any Chief Court and no advocate of any other High Court who was a barrister was required to present any document empowering him to act. But that sub-rule was deleted when the present Rule 4 was substituted for the old one by Act XXII of 1926. Hence the present Rule 4 makes no exception in the case of advocates (O.S.), and Sub-rules (1) and (2) apply to them equally. The said Rule 40 is an independent rule and does not purport to have been made Under Section 122 for altering those sub-rules. As observed in Ramdeo Singh v. Mukhan Singh A.I.R. 1921 Pat. 509 the rules Under Section 122, in order to have the effect of varying the rules in Schedule 1 of the Code, must first have been considered and submitted by a rule committee appointed Under Section 123, and Section 124 says that before making any rules Under Section 122 the High-Court shall take such report into consideration. No such procedure was followed when the Rules of the Bombay High Court (O.S.) were made, and the said Rule 40 cannot be-treated as made Under Section 122, Civil P.C.

7. Section 129 empowers a chartered High Court to make rules to regulate its own, procedure in the exercise of its original civil jurisdiction, and if Rule 40 is made under that section, it does not dispense with the necessity of the production of a vakalatnama by an advocate (O.S.) in the mofussil Courts. Section 224, Government of India Act, 1935, (which corresponds to Section 15, High Courts Act, 1861, and Section 107, Government of India Act, 1915), confers upon every High Court superintendence over all Courts subject to its appellate jurisdiction, and empowers it to make and issue general rules and prescribes form for regulating the practice and procedure of such Courts, provided that they shall not be inconsistent with the provisions of any law for the time being in. force. Hence Rule 40 of the Rules of the Bombay High Court (O.S.), 1936, could not have been framed under the Government of India Act as it is inconsistent with Order 8, Rule 4, Sub-rules (1) and (2), Civil P.C. There is no provision in the Bar Councils Act, 1926,. enabling the High Court or the Bar Council to make rules in this behalf, and the Bombay Pleaders Act does not relate to advocates, either O. S. or A. S. Clauses 9 and 10 of the Letters Patent deal with the powers of the High Court to admit advocates, vakils and attorneys and authorize them to appear for the suitors of the High Court and also to make rules with regard to their qualifications and admission as well as their removal or suspension. Both these clauses refer only to 'suitors of the High. Court,' and have nothing to do with mofussil Courts.

8. After eliminating all these provisions, we are left only with clause 37 of the Letters Patent, and it is in fact conceded before us that the rules of the High Court (both Order Section and A.S.) have been made under it. That clause empowers the High Court, from time to time, 'to make rules and orders for the purpose of regulating all proceedings in civil cases which may be brought before the said High Court, including proceedings in its Admiralty, Vice Admiralty, Testamentary and Matrimonial Jurisdictions, respectively.' The proviso to the clause says that in making such rules and orders the High Court shall always be guided as far as possible by the provisions of the Code of Civil Procedure. This restriction on the powers of the High Court is only directory and not mandatory, so that it can, if necessary, make rules inconsistent with the rules in Schedule l, Civil P.C.: Umeshchandra Banerji v. Kunjalal Biswas : AIR1930Cal685 , Ashutosh Basu v. Sudhangshubhusban Mukherji : AIR1931Cal688 and Kajkumar Pal v. Janabali Mia : AIR1932Cal1 . Hence although Order 3, Rule 4, Sub-rules (1) and (2), Civil P.C., be not themselves altered under the provisions of Section 122, yet they have been validly superseded by Rule 40 of the Rules of the Bombay High Court, (O.S.) framed Under Clause 87, Letters Patent. But the words in that clause 'in civil cases which may be brought before the said High Court' do not make it altogether clear whether they refer to the original jurisdiction only of the High Court or also to its appellate jurisdiction, and whether they extend also to proceedings in cases coming before the civil Courts in mofussil. The opinion prevailing in the Calcutta High Court appears to be that the power Under Clause 37 is restricted to the making of rules for operation on the Original Side of the High Court only (Or. mond's Rules of the High Court of Judicature at Fort William in Bengal, 1914, Edn. 4, Introduction, p. 88). There the words 'may be brought' are interpreted to mean 'may be originally instituted,' and not to include cases brought up before the High Court from subordinate Courts. I do not think it right to restrict the rule-making powers of the High Court to such an extent. The word 'bring' is capable of meaning 'file,' whether as an original case or as ah appeal or an application in revision. A case 'may be brought' before the High Court either in its original jurisdiction, if it is an original case, or in its appellate jurisdiction if it is an appeal or an application in revision. It may be pointed out that there are some cases like transfer applications, which are originally brought before the High Court in its appellate jurisdiction. Mr. Mehta, the learned counsel for the Bar Council, goes further and contends that even cases filed in the mofussil Courts are included, since they too 'may be brought,' that is to say, 'are capable of being brought' before the High Court either in appeal or for revision. But it is not that case itself which conges before the High Court, but what is 'brought,' that is to say 'filed,' in the High Court is in appeal or revision application concerning that case. 'Bringing' such an appeal or revision application before the High Court is different from bringing the case itself before the High Court. There is, therefore, no doubt that Clause 37, Letters Patent, does not empower the High Court to make rules and orders for the purpose of regulating proceedings in civil cases in the Courts subordinate to it. For that purpose the High Court must resort to Section 122, Civil P.C., or Section 224(1)(b), Government of India Act, 1935. Hence if it is intended that advocates (O.S.) should be allowed to act on behalf of parties in Courts other then the High Court, Order 3, Rule 4, must be suitably altered Under Section 122, since no rule inconsistent with it can be made by the High Court Under Section 224, Government of India Act, 1935. It follows, therefore, that in this case the presentation of the plaint by Mr. Patil without a vakalatnama of the plaintiff was not proper.

9. The reason of the rule is obvious. Rule 41 of the Rules of the Bombay High Court (O.S.) requires that advocates (O.S.) appearing and pleading for suitors on any side of the High Court and in the Insolvency Court must be instructed by an attorney or (on the appellate side of the High Court) by an advocate (except when appearing or pleading for an insolvent in the Insolvency Court or for a prisoner, in the criminal Court). Thus, there is either an attorney or an advocate (A.S.) before the Court to represent the party and he can be held responsible for the conduct of the case. But there is no rule prohibiting an advocate (O.S.) from appearing in the mofussil Court without being instructed by a pleader or an advocate (A.S.). To remove this lacuna Rule 8A has been recently made by the High Court requiring those who apply to be admitted as an advocate (O.S.) to give an undertaking that, if admitted, they would not appear or plead in any Court subordinate to the High Court unless instructed by an attorney or an advocate (A.S.) or a pleader as the case may be. But this rule does not apply to persons who have been called to the bar or have passed the advocates (O.S.) examination before 1st October 1943, so that in their case at least, the difficulty pointed out above still exists. Hence if Order 8, Rule 4, is to be amended, so as to exempt advocates (O.S.) from being required to put in vakalatnamas in Courts subordinate to the High Court, they should be required not to appear or plead unless instructed by an attorney, an advocate (A.S.) or a pleader.

10. It may also be pointed out that there is a distinction between 'acting,' 'appearing' and 'pleading.' Order 3, Rule 4, Sub-rules (1) and (2), require a vakalatnama only from a pleader who wants to 'act' for a party. If lie wants only 'to plead' for him, a memorandum of appearance Under Sub-rule (5) would be enough. It is a well-recognized rule of etiquette that an advocate (O.S.) does not 'act' for a party in the High Court; that is to say he does not himself do ministerial acts like presenting a plaint or a memorandum of appeal. He is always instructed by an attorney or an advocate (A.S.), who does that work. Hence both in Rule 41 and in the new Rule 8A of the Rules of the Bombay High Court (O.S.), the words 'appear' and 'plead' only are used. But it has now come to notice that in the mofussil Courts advocates (O.S.), even 'act' for parties. Hence at least Rule 8A requires to be amended by the addition of the word 'act' before the words 'appear or plead.'

11. There is not the slightest doubt that when Mr. Patil presented the plaint in the lower Court, he believed in good faith that he could act for the plaintiff without his vakalatnama, and he has stated so on oath. In Ambedas Kashibhai v. Vadilal Chaganlal ('40) 27 : AIR1940Bom272 judicial notice was taken of the fact that Rule 40 in Part I of the High Court (O.S.) Rules had always been construed as intended to apply to all Courts in the Presidency and that advocates (O.S.) were never in practice 'required to file any document authorizing them to appear in a mofussil Court. In this case another duly authorized pleader appeared for the plaintiff at a later stage and put in Mr. Patil's vakalatnama duly signed by the plaintiff. The presentation of the plaint by Mr. Patil without a vakalatnama has caused no prejudice to the defendant, and has not affected the merits of the case or the jurisdiction of the Court. If the omission is only an error, defect or irregularity in the proceeding then according to the provision of Section 99, Civil P.C., the decree is not liable to be reversed in appeal. Mr. Shah for the appellant contends that the omission is not such an error, defect or irregularity as is contemplated by Section 99, but is an illegality which vitiated all subsequent proceedings, that the plaint must be deemed to have been presented only when the vakalatnama was produced and that as by that time the claim was time-barred, the omission does affect the merits of the case; He referred us to the recent decision in Chunilal Bhagwanji v. Kanmal Lalchand : AIR1944Bom201 . There the plaint in a minor's suit was signed and verified by, and the vakalatnama of the pleader who presented the plaint to the Court was also signed by & person who held a general power-of-attorney from the minor plaintiff's next friend on her own account. It was held that as the attorney had no authority to present the plaint or sign it; it was not a valid plaint and the suit was not validly commenced and that the defect could not be cured by amendment of the plaint. The facts of that case are easily distinguishable. There the plaint itself was signed and verified by an unauthorized person and Beaumont C.J. (sitting alone) held that it was not a valid plaint. In the present case there was no defect in the plaint, but it was presented by a person who had no written authority from the plaintiff to do so. Moreover, with all respect, the view taken by Beaumont C.J. is contrary to that taken by a Division Bench of this Court in Ganapati Nana v Jivanabai A.I.R. 1923 Bom 44 in which the plaint was signed and verified by the plaintiff's mukhtyar, who had only a special power-of-attorney and not a general power-of-attorney as required by the High Court rule amending Order 3, Rule 2, Clause (a), Civil P.C., and it was held that as it was an error, defect or irregularity in the proceedings in the suit not affecting the merits of the case or the jurisdiction of the Court, it was covered by Section 99 of the Code. This decision was followed in Ephrayim v. Turner, Morrison & Co. A.I.R 1930 Bom. 511 and Baker J. got a similar defect cured in the appellate Court by allowing the plaintiff to amend the plaint by signing it himself. In Nanjibhai v. Popatlal A.I.R. 1932 Bom. 367 Mirza J. allowed a similar amendment even after the plaintiff's claim was time-barred, on the ground that the defect was only 'a technical irregularity.'

12. Another case, which is relied upon by Mr. Shah, is that in Anange Bhima Deo v. Modono Mohono Deo A.I.R. 1937 Mad. 239. In that case a darkhast was presented by a pleader without any documentary authority in his favour from the decree-holder, and it was held that the pleader having no capacity or power to act, the application had no effect, as it had not been made in accordance with law. The question which actually arose in that case was whether a darkhast so presented was a step in aid of execution and could save the succeeding darkhast from the bar of limitation. The defect in the darkhast was never cured by a subsequent amendment, and there was no occasion to consider whether Section 99, Civil P.C., was applicable as there was no appeal against the order passed on that defective darkhast. That case, therefore, is of no avail to the appellant. On the other hand in Jagadeesh Chandra Dhabal Deb v. Satya Kinkar Shahana 63 Cal. 733 where a darkhast was filed without a vakalatnama and the defect was, with the leave of the Court, subsequently removed by the production of a vakalatnama, the darkhast application was held to have been duly presented.

13. In Shanmuga v. Narayana Avyar A.I.R. 1918 Mad. 916 where the plaint was signed, verified and presented by one purporting to act as the next friend of the plaintiff who was by a bona fide mistake described as a minor, though he was really of age, the mistake was permitted to be corrected and the plaintiff was allowed to sign the plaint himself, and the plaint was regarded as duly filed on the day on which it was originally presented. The same view was taken by a Special Bench of the Allahabad High Court in Wali Muhammad Khan v. Ishaq Ali Khan A.I.R. 1931 All. 507 by the Calcutta High Court in Taqui Jan v. Obaidulla 21 Cal. 866 and by the Lahore High Court in Amritsaria v. Gamun A.I.R. 1926 Lah. 82 where the defect was allowed to be remedied after the plaintiff's claim was time-barred. There are some cases like All India Barai Mahasabha v. Jangi Lal A.I.R. 1941 Oud 169 where a different view was taken, but 'the preponderance of judicial opinion, with which we fully agree, establishes that failure to comply with the provisions regarding presentation of a plaint is a mere irregularity, go that if the person presenting it is not properly authorized to do so, the presentation would be irregular, but does not oust the jurisdiction of the Court. In such a case the Court would have a discretion to permit the irregularity to be cured, and if the plaintiff has acted in good faith and without gross negligence, the Court would allow it to be cured The suit must then be deemed to have been filed when it was first instituted, and Under Section 99. Civil P.C., the decree passed in favour of the plaintiff will not be reversed in appeal on the ground of the said irregularity. On merits, it is contended that the plaintiff company cannot maintain this suit as it is a partner of the defendant company and the partnership is not registered as required by Section 69, Partnership Act, 1932. The question whether a transaction amounts to a partnership or not must be decided on the terms of the agreement itself and all the relevant facts. Under Section 4 of the Act, 'partnership' is defined as the relation between persona who have agreed to share the profits of a business carried on by all or any of them acting for all. Then Section 6 provides that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the partners, as shown by all relevant facts taken together. The agreement in the present case is Ex. 64. Its terms are that the plaintiff company should transfer its managing agency of the Mills company to the defendant company for fifteen years, that during that period the defendant company should enjoy all the rights possessed by the plaintiff company as the managing agents of the Mills company, receive for its commission twelve per cent, of the net profits made by the Mills company or Rs. 15,000 a year, whichever is more, and pay to the plaintiff company a four annas share in the commission so earned. With regard to this share in the commission, the agreement says 'it is to be paid to the plaintiff company in the capacity of a sleeping partner.' Mr. Shah relies upon this description in the agreement itself and upon the terms set out above, as proving the partnership between the plaintiff and the defendant. As pointed out by Beaumont C.J. in Chimanram Motilal v. Jayantilal Chhaganlal A.I.R. 1939 Bom 410 the words 'acting, for all' were inserted in the definition of 'partnership' to emphasize that partners are agents and not merely principals, lift plaintiff company was to get a share in the agency commission on account of its ownership of the managing agency, which was temporarily transferred to the defendant company and was to be restored to the plaintiff company at the end of fifteen years. Explanation. 2 to Section 6 of the Act says:

The receipt by a person of a share of the profits of a business or of a payment contingent upon the earning of profits does not itself make him a partner with the persons carrying on the business, and in particular the receipt of 'such share or payment. by a previous-owner or part-owner of the business, as consideration for the sale (or transfer) of the good-will or share thereof does not of itself make the receiver a partner with the persons carrying on the business.

14. Thus although the right to participate in the profits of a business is a strong test of a partnership, yet whether that relationship does or does not exist must depend on the real intention and contract of the parties. The true test is whether such a participation of profits constitutes the relationship of principal and agent between the person taking the profits and those actually carrying on the business. In the present case there is nothing in the agreement to suggest that the defendant company was to carry on the business of the Mills company on behalf of itself and the plaintiff company. The responsibility of the management of the business was completely taken over by the defendant company. Surajmal, who was examined on behalf of the defendant company clearly admitted that the plaintiff company was not authorized to do any business of the Mills company on behalf of the defendant company. Thus one of the essential elements of partnership is lacking in the present case. The mere fact that in the agreement, itself the plaintiff company was described as 'a sleeping partner' cannot alter the real nature of the transaction. As observed by Marten Order J. in Raghunandan Nanu v. Hormasjee Bezonjee ('27) 14 A.I.R. 1927 Bom. 187 p. 846:

.a mere statement that the parties are to be partners will not necessarily constitute them partners in law. although two persons may hold themselves out to be partners and be liable to third parties accordingly, yet it does not necessarily follow that they would be partners inter se.

15. On the terms of the agreement there was no partnership between the plaintiff company and the defendant company, and the description of the former .as 'a sleeping, partner' was a misnomer. Hence the appellant's contention that the suit is barred Under Section 69, Sub-section (2), Partnership Act, 1932, must fail. It is next contended that the plaintiff company is not entitled to enforce the agreement as it did not fulfill two of the obligations imposed upon it by the terms of the agreement, namely the transfer of 501 shares of the Mills company to the defendant company, and the election of Hiralal Patani and Ratanlal Patani as directors of the Mills company.

16. It is admitted that only 255 shares were transferred to the persons named by the defendant company and the remaining 246 shares agreed to be transferred were not transferred by the plaintiff company. But that omission was not due to any default of the plaintiff company. The purpose of the transfer, as stated in the agreement itself, was to enable the defendant company to have five of its nominees elected on its behalf as directors of the Mills company. The minimum qualification of a director being that he should hold 51 shares of the Mills company, the defendant company bad 255 shares transferred to its five nominees, 51 to each of them. No more shares were required to serve the purpose of the transfer. Shivnarayan, the owner and manager of the plaintiff company, says that those five nominees were duly elected as directors. After all, the shares were to be re-transferred to the plaintiff company after 15 years, and hence there was no desire on the part of the defendant company to pay for the remaining 246 shares and get them transferred. Shivnarayan says that the defendant never demanded the transfer of those shares and Surajmal for the defendant company admits that the plaintiff was never unwilling to transfer them. The plaintiff company cannot, therefore, be accused of having committed a breach of the condition regarding the transfer of 501 shares.

17. Regarding the election of Hiralal Patani and Ratanlal Patani, Clause (4) of the agreement says that Shivnarayan should try his utmost to get them elected as directors at the general meeting or the extraordinary meeting, and arrange to get them elected so that they would permanently remain directors for 15 years under the scheme, that such election should take place within eight months, and that otherwise the plaintiff would not be entitled to get a fourth share in the agency commission. The Board of Directors did elect both Hiralal and Ratanlal as directors, and their election had to be placed for confirmation before the general meeting. This was the duty of Gendalal, the proprietor of the defendant company, but he did not do so. Shivnarayan says that there were general meetings held, but the subject of making Ratanlal and Hiralal permanent directors was not considered. Gendalal himself did not enter the witness box, and his son Surajmal says:

It was possible to appoint permanent directors according to rules.. The plaintiff applied to the Board of Directors that Hiralal and Ratanlal should be elected permanent directors. They were not elected as the application was postponed to another meeting. The matter came up before the Board's meeting twice or thrice and I voted in favour of the election of Hiralal and Ratanlal. The plaintiff also voted in their favour.

18. Thus the plaintiff company did everything in its power to get them elected as permanent directors, but the defendant company seems to have purposely frustrated its efforts in order to be able to enforce the penal clause in the agreement and refuse to pay the stipulated one-fourth share in the agency commission. We, therefore, hold that the plaintiff company is not proved to have failed to carry out any of the terms of the difrement. It is alleged in the plaint that the defendant company received from the Mills company Rs. 8,083-5-4 in December 1932, Rs. 15,000 in December 1933, Rs. 15,000 in December 1934, and Rs. 1,875 in February 1935, when the Mills company went into liquidation. The plaintiff has claimed a quarter of these four amount with interest thereon at twelve per cent, per annum. The lower Court has decreed this claim in full. The defendant company has admitted the receipt of the first three amounts but denied having received Rs. 1875 in February 1935. Although this denial was specifically made in the written statement and in the purshis, EX. 57, and an issue was framed throwing on the plaintiff the burden of proving the receipt of Rs. 1875 by the defendant company, the plaintiff led no evidence on the point, and Shivnarayan did not say a word about it in his evidence. On the other hand, Surajmal stated on oath that Rs. 1875 had not been received in January or February 1935. In his purshis, Ex. 58, the plaintiff's pleader stated that he did not want to lead any evidence on that point, but wanted the defendant company to show its accounts. It appears from Ex. 61 that the defendant was asked to produce accounts and on the next date of hearing the plaintiff's pleader asked for an adjournment in order to inspect the defendant's accounts. His request was granted but no further steps were thereafter taken to put in any extract from the accounts nor was Surajmal cross-examined when he stated that Sections 1875 had not been received. The plaintiff's claim in respect of his amount must, therefore, be disallowed. The plaintiff's one-fourth share in the amounts admittedly comes to Rs. 9520-13-3. Lastly, it is urged that the plaintiff company is not entitled to interest on its share in the amounts received by the defendant company. As held by the Privy Council in Bengal Nagpur Ry. Co. v. Ruttonji Ramji interest for a period prior to, the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to recover interest, as for instance, Section 80, Negotiable Instruments Act. There is in the present case neither usage nor any contract express or implied to justify the award of interest, nor is interest payable by virtue of any law governing the case. The amount claimed not being a sum certain, interest cannot be claimed under the provisions of the Interest Act, 1839. As observed by Beaumont C.J. in Ahmedabad Municipality v. Vadilal ('44) 31 A.I.R. 1944 Bom. 233 in a case which does not fall within the Interest Act, 1839, interest cannot be allowed by way of damages. It is urged for the plaintiff that interest should be awarded at least from 7th August 1935, when a notice of the claim was given to the defendant. Though it is mentioned in the plaint that a notice was given to the defendant on that day, neither the notice nor its copy has been placed on record, and it cannot be known whether interest was claimed in it. In these circumstances interest will be allowed at six per cent, per annum from the date of, suit only. The appeal is partially allowed, and in modification of the decree of the lower Court, it is ordered that the plaintiff company do recover from the defendant company Rs. 9520-13-3 with interest thereon at six per cent, per annum from the date of suit till realization, and its proportionate costs in both the Courts. We are grateful to Mr. M.J. Mehta, the Secretary of the Bar Council, for the assistance he gave us by his useful arguments.

Divatia, J.

20. I concur and desire to add a few observations on the point of defective presentation of the plaint. In absence of any prosion of law to the contrary, the matter is governed by Order 3, Rule 4 (1), Civil P.C., which requires every pleader, including an advocate, to file a document of his appointment as such by his client. But the plaintiff's case is that Rule 40 in Chap. 2 Part I about legal practitioners in the Rules and Forms of the Bombay High Court on the 6riginal Side is such a provision of the law to the contrary. It says that an advocate (O.S.) shall not be required to present any document empowering him to act in any appeal or proceeding, civil or criminal. The question then is whether it supersedes Rule 4 (1) of Order 3. So far as concerns the alteration of the rule for procedure in Subordinate Courts, the relevant provision is Section 122, Civil P.C., under which the alteration can be made subject to the sanction of the Government Under Section 126 and after complying with the procedure laid down in Sections 123 and 124. There is nothing to show that Rule 40 was enacted in this manner and it has been conceded before us that it was not so enacted. If the rule was framed Under Section 129, it does not help the plaintiff because it applies only to procedure on the Original Side of the High Court.

21. The only other provision in the Civil Procedure Code is in Section 119 which preserves any other power of a Chartered High Court to make rules concerning advocates, vakils and attorneys. Such power relating to Subordinate Courts is given in the High Courts Act, Government of India Act and in the Letters 'Patent. Section 15, High Courts Act, is similar to Section 224, Government of India Act 1935, (same as Section 107, Government of India Act, 1915) under which rules can be framed for regulating practice and procedure of the Subordinate Courts after obtaining previous sanction of the Governor-in-Council. There is nothing to show that such previous sanction was obtained for Rule 40. The provisions about rules in the Letters Patent are Clauses 9, 10 and 37. Clauses 9 and 10 relate to admission of advocates and their appearance for suitors in the High Court. Clause 37 empowers the High Court to frame rules for regulating all proceedings in civil cases which may be brought before the said High Court. There proceedings are obviously those which may be instituted in the High Court and do not include proceedings filed in the Subordinate Courts. The words 'including proceedings in its Admiralty, Vice-Admiralty, Intestate and Matrimonial jurisdiction, respectively,' after the words 'which may b& brought before the said High Court' support the view that the proceedings are those which are originally instituted in the High Court and not brought in appeal or revision. If it had been the intention to include therein proceedings started in Subordinate Courts, it would have been expressed in clear language such as 'and proceedings of the Civil Courts subject to their superintendence.' In my opinion, therefore, Clause 87, Letters Patent, applies only to proceedings instituted in the High Courts and not in Subordinate Courts. As a result Rule 40 must be deemed to have, been framed under Clause 87 and does not apply to procedure in the mofussil Courts.

22. Under the old Rule 4 of Order 3, as it was before 1926, no advocate of a Chartered-High Court was required to present any document empowering him to act. That was also the provision of Section 39 of the Code of 1882, After 1926, the Civil Procedure Code required every pleader (which term includes an advocate) to file a vakalatnama to empower him to act. Under Rule 40 in chap. 2 of Part 1 relating to legal practitioners in the compilation 'Rules and Forms of the Bombay High Court (on the Original Side) in its several jurisdictions' of 1936 no advocate (O.S.) is required to present any document empowering him to act in any appeal or proceeding, civil or criminal. This rule is the same as Rule 34 in the similar compilation of 1901. No rule to that effect appears before 1901. One material point of difference between the two compilations of 1901 and 1936 is that while the former was about the Rules and Forms of the Bombay High Court in its several jurisdictions, the latter was a compilation of the Rules and Forms of the High Court in its several jurisdictions on the Original Side. The former is published1 under the signature of the Prothonotary a well as the Registrar of the Appellate Side, and the latter is published only under the signature of the Prothonotary. The reason is that a separate compilation of the Rules of the Appellate Side of the High Court was published in 1909. In that compilation there is Part 2 relating to legal practitioners. In the last compilation of 1936 there are several rules which are common to the original and appellate sides, Rule g., Rules 41 and 44 to 50 in. the chapter on legal practitioners in the Rules for the Original Side are the same as Rules 5 to 12 of the Part relating to legal practitioners in the Appellate Side Rules. It is significant that Rule 40, with which we are concerned, is not reproduced in the Appellate Side Rules. If that rule was meant to apply to advocates appearing on both sides of the High Court, it would have been reproduced in the Appellate Side Rules also but its absence there shows that Rule 40 was meant only for the original side In any case, it does not apply to Subordinate Courts. Therefore, so far as they are concerned, the provisions of the Civil Procedure Code would apply to them and all pleaders, including advocates, who can act, have to file a vakalatnama.

23. It was therefore necessary for the plaintiff's counsel, Mr. Patil, to file his vakalatnama along with the plaint. However, such a presentation without a vakalatnama does not make all subsequent proceedings invalid, and as it has not caused any prejudice to the defendant, the defect cannot, in my opinion, affect the merits of the case at thisDecree modified.


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