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Radhey Shiyam Vs. Mewa Lal and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Reported inAIR1928All210
AppellantRadhey Shiyam
RespondentMewa Lal and anr.
Excerpt:
- .....for accounts instituted by mewa lal and radhey lal, the two sons of lala bharathji against babu radhey shiam. the defendant held a liquor contract from the government for a period from 1st april 1922 to 31st march 1923. the license was issued solely and exclusively to radhey shiam. the plaintiff came into court with the allegation that radhey shiam, the defendant, had taken bharathji into partnership with him, in the matter of profits and losses relating to the liquor shop, that a profit of about rs. 2,000 had been made in the said business in which the share of bharathji came to half, and that bharathji had received only rs. 850 on account of his share. the suit was for the recovery of the amount due to bharathji during the continuance of the contract.2. a variety of pleas were taken.....
Judgment:

1. This is a defendant's appeal in a suit for accounts instituted by Mewa Lal and Radhey Lal, the two sons of Lala Bharathji against Babu Radhey Shiam. The defendant held a liquor contract from the Government for a period from 1st April 1922 to 31st March 1923. The license was issued solely and exclusively to Radhey Shiam. The plaintiff came into Court with the allegation that Radhey Shiam, the defendant, had taken Bharathji into partnership with him, in the matter of profits and losses relating to the liquor shop, that a profit of about Rs. 2,000 had been made in the said business in which the share of Bharathji came to half, and that Bharathji had received only Rs. 850 on account of his share. The suit was for the recovery of the amount due to Bharathji during the continuance of the contract.

2. A variety of pleas were taken in defence; but we are concerned only with one of them. It was pleaded that the contract entered into between Radhey Shiam and the plaintiff's father contravened the provisions of Section 23, Contract Act, and that no claim under the said contract was enforceable by the sons of Bharathji. It is contended that the partnership with Bharathji amounted to a transfer or a sub-lease of the license and, as the license was purely personal to the grantee, the transferee or the sub-lessee or his legal representatives could not enforce a claim for the recovery of any benefit under such an agreement. Reliance was placed upon a certain number of rules contained in the Excise Manual of the United Provinces. These rules were manifestly made in accordance with the provisions of Sections 40 and 41, United Provinces Excise Act (Act No. 4 of 1910) which have the force of law. It does not appear to us, however, that in admitting the plaintiff's father into the benefits or into the obligations relating to the profits and losses of the business, the defendant in any way transgressed against Rr. Nos. 80, 82 and 86, Excise Manual. These rules provide that the licenses issued to liquor contractors are personal and that transfers and sub-leases of these contracts are not permitted except with the sanction of the Collector. Where an agreement is entered into between the licensee and a third person in consideration of money, contributed by the latter, and the former agrees to give him certain benefits in the share of the profits arising from the business and the latter also takes upon himself the liability arising from losses accruing from the said business, it cannot be said that the transaction amounts to a transfer or sub-lease of the liquor contract.

3. It has been held in Shiam Behari Lal v. Malhi [1916] 39 All. 107, that where a plaintiff in lieu of a pecuniary consideration enters into a contract with the defendant who had obtained a license relating to sale of contracts and if there was profit, the plaintiff was to get a certain percentage out of it and, in case of loss he was to share the liability with the licensee, the contract did not constitute a transfer or a sub-lease by the licensee and was not illegal as being in violation of Rule 82 made under the Excise Act. We are entirely in accord with this view, and we do not think that the agreement which is sought to be enforced by the present suit contravenes the provisions of Section 23, Contract Act.

4. A penal law has to be strictly construed, and should be interpreted generously in favour of the subject.

5. Reliance is placed upon the case of Hormesji Mota Bhai v. Pestanji Dhanji Bhai [1888] 12 Bom. 422. This was a decision with reference to Section 45 of the Act 5 of 1879, under the Bombay Abkari Act. It has not been shown that the provision of the United Provinces Excise Act is pari passu with Section 45, Bombay Abkari Act. Moreover we have not been shown that the restrictions placed under the Bombay Act have been adopted in the license issued under the United Provinces Excise Act. We consider that this appeal is without force. We dismiss it with costs.


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