S.K. Mal Lodha, J.
1. This is a plaintiff's second appeal against the Judgment and decree dated Oct. 21, 1967 passed by the learned District Judge, Partabgarh by which he maintained the dismissal of the suit for dissolution of partnership and rendition of accounts.
2. The plaintiff has alleged in the plaint dated July 17, 1963 that defendants Nos. 1 to 4 are sons of defendant No. 5, who died during the pendency of the suit and in his place, defendants Nos. 5/5 and 5/5 were impleaded as parties to the suit; that the defendants and the plaintiff jointly purchased truck No. RJY 1497 on May 23, 1962 for Rs. 6011/- from one Baldevsingh son of Govindsingh, resident of Kankroli and that it was agreed to ply this truck jointly (in partnership) and the following terms wore orally agreed, -
1. That the aforesaid truck will be jointly owned by the plaintiff and the defendants and 1/2 of its costs will be paid by the plaintiff and the other 1/2 by the defendants.
2. That as the defendants did not have sufficient amount, the plaintiff will invest more amount but the defendants will be liable to pay interest @ 2% per mensem to the plaintiff on that amount.
3. That the plaintiff and the defendants will share profits and loss in this business half and half.
4. That on behalf of the defendants, the business will be carried on in the name of defendant No. 1 Gheesukhan but all the defendants will be liable to receive and pay profits and loss.
5. That the parties will be free to put an end to the business, and after accounts, the party against whom any amount is found due, will pay the same to the other party.
The case of the plaintiff further is that towards the price of the truck, the plaintiff paid Rs. 4,000/- and the defendants paid Rs. 2,000/- and that as the plaintiff has paid Rs. 1,000/- in excess of his share, the defendants are liable to pay interest to the plaintiff on this amount. After the purchase of the truck, the plaintiff and defendant No. 1 went to the office of the Regional Transport Authority with the vendor Baldevsingh for transferring of the registration; that, there they came to know that the transfer cannot be effected in favour of two persons and, therefore, the truck was transferred and registered in the name of Gheesukhan but the truck remained in partnership of the plaintiff and the defendants on the terms mentioned above. In para 5 of the plaint, it was stated that whatever income was received from plying the truck up to Feb. 10, 1963, was spent on it; that its account is with the plaintiff and that that account was shownto defendants Nos. 1, 2 and 3 from time to time on behalf of all the defendants. It was also stated by the plaintiff from Feb. 11, 1963, the aforesaid truck remained in possession of the defendants and they have not shown or supplied the account of income and expenditure; as it was not possible to ply the truck jointly, the plaintiff served a notice dated July 8, 1963 on the defendants for winding up the partnership business, This notice was wrongly replied by defendant No. 1. The plaintiff has stated that according to the account up to Feb. 10, 1963, he invested Rs. 6135/11/3 and defendants had incurred an expenditure of Rs. 1658/4/-on the truck and that after Feb. 10, 1963, the account is with the defendants and that the account of the partnership can only be settled when the defendants submit the account to him. In these circumstances, the plaintiff brought the suit for dissolution of partnership and rendition of accounts praying for the following reliefs, --
1. That a decree may be passed declaring the dissolution of the partnership from July 10, 1963 or from any other date which the Court may think proper.
2. That a preliminary decree may be passed for taking accounts between the parties regarding the truck and thereafter, a decree for the amount that may be found due to the plaintiff may also be passed.
3. That the truck in question may be taken in possession of the Court or a receiver may be appointed who may take its possession. The truck may be sold and profits and loss of the partnership may be determined and whatever amount has been invested by the plaintiff may be paid to him and in case the entire amount is not paid, a decree for the balance of the amount may be passed against the defendants.
4. That the costs and damages of the suit be awarded to the plaintiff.
2A. The defendant No. 1 submitted his written statement on Sept. 25, 1963 which was subsequently amended. Defendants Nos. 2 to 5 filed a joint written statement on the same date. The defendants denied the plaintiff's allegations. They denied that the truck in question was purchased jointly (in partnership) by the parties. Their defence was that the truck was purchased by defendants Gheesukhan and Peeru, The partnership on the basis of the terms mentioned above by the plaintiff was also denied.In para 14 of the written statement of defendant No. 1, it was pleaded that the registration certificate was issued in favour of defendant No. 1 Gheesukhan alone and not in favour of Mangilal and Gheesukhan jointly and that permit under Section 42 of the Motor Vehicles Act (No. IV of 1939) (for short, 'the Act' hereafter) was also issued in his favour personally and that, therefore, the partnership as alleged by the plaintiff is illegal and the plaintiff is not entitled to bring the suit on its basis. The following issues were framed, which, when translated into English, read as under,--
1. Whether the Truck No. RJY 1497 was purchased by the plaintiff and the defendants jointly from Baldevsingh?
2. Whether it was decided to ply the truck jointly as alleged in para 2 of the plaint?
3. Whether in the purchase of this truck, the plaintiff had invested Rs. 4,000/- while the defendants invested Rs. 2,000/- and, therefore, the plaintiff is entitled to Rs, 1,000/- which he contributed in excess of his share and whether the plaintiff is entitled to interest thereon?
4. Whether, for the reasons mentioned in para 14 of Gheesukhan's written statement, the partnership is void and illegal and unenforceable
The learned Civil Judge, after trial, recorded the following findings,--
1. That it was proved that the plaintiff and the defendant Gheesukhan purchased the truck in suit in partnership and that the partnership of the defendants Nos. 2 to 5 has not been proved by the plaintiff.
2. That it was decided to ply the truck in question in partnership in which the (plaintiff and the defendant had half share each, that any partner who invested amount in excess of his share was entitled to interest @ 2% per mensem and that the business of this partnership was to be carried in the name of Gheesukhan.
3. That it is proved that the plaintiff invested Rs. 4,000/- in the purchase of the truck.
4. That partnership was forbidden by law and, therefore, the plaintiff is not entitled for dissolution of the partnership and rendition of accounts.
3. It may be mentioned here that the learned Civil Judge, while deciding issue No. 4, has inadvertently mentioned that issue No. 1 is decided in favour of the plaintiff. In view of the finding arrived atby him in respect of issue No. 4, he dismissed the plaintiff's suit with costs by his judgment dated Aug. 12, 1966.
4. Feeling aggrieved by the judgment and decree, the plaintiff went in appeal and the learned District Judge, Partab-garh by his judgment dated Oct. 21, 1967 dismissed the appeal. In the appeal before the learned District Judge, finding on issue No. 4 was challenged on behalf of the appellant. On behalf of the defendants, during the course of arguments findings recorded in respect of issues Nos. 1, 2 and 3 were not assailed. The learned District Judge recorded the following findings:--
'It is thus clear that the permit was granted to Gheesukhan personally and not in favour of the partnership. The partnership therefore, could not have carried on the business of plying the truck on hire without obtaining a permit under section 42 Motor Vehicles Act The suit has to be dismissed in such a case not because it is to help the defendant but because violation of law cannot be condoned by court.'
The learned District Judge further observed,--
'It has not been shown in the case before me that Mangilal and Gheesukhan had brought full facts to the notice of Regional Transport Authority to the effect that although one permit was to be issued in the name of Gheesukhan alone the truck was to be actually plied by the partnership firm. I am therefore of the opinion that the plaintiff cannot be given the aid of the court in realising the amount which he thinks it is due from the defendants.'
Appearing for the appellant, Mr H. C. Bhandari submitted that the above quoted finding of the learned District Judge, by which he decided issue No. 4 against the plaintiff and in favour of the defendants, is erroneous in law particularly in view of the findings of the trial Court namely,
1. that the truck in question was jointly purchased in partnership by the plaintiff Mangilal and defendant Gheesukhan, and
2. that the business will be carried in the name of Gheesukhan. He submitted that the truck was purchased on May 23, 1962 and partnership was entered between the plaintiff and defendant No. 1 as found by the learned Civil Judge, and that thereafter, the permit was obtained on Feb. 6, 1963, Thus,partnership preceded and thereafter permit was obtained. In these circumstances, there was no contravention of Section 42 of the Act. According to the learned counsel, there was neither any transfer of permit nor any agreement to transfer it, After permit, there was no transfer as partnership was entered into prior to obtaining the permit. On the basis of these premises, learned counsel contended that it cannot be said that the partnership was forbidden by law under Section 23 of the Contract Act. In support of his arguments learned counsel placed reliance on Champsey Dossa v. Gordhandas Kessowji, AIR 1917 Bom 250 Gordhandas Kessowji, v, Champsey Dossa, AIR 1921 PC 137 Mt. Manbharibai v. Bajrang Rice Mill, Warasheoni, AIR 1956 Nag 225 M/s. Dayabhai and Co. Barwani v. Commr. of Income-tax M. P. Nagpur and Bhandara, : 59ITR364(MP) , K. M. Viswa-natha Pillai v. Shanmugham, : 2SCR896 and Umacharan Shaw and Bros. v. Commr. of Income-tax, West Bengal : 37ITR271(SC) .
5. Mr. G. S. Mehta learned counsel for the respondents after referring to the provisions of Sections 2(19), Section 2(20), Section 22, Section 31 and Section 42 of the Act, contended that the truck could not be plied without permit and the permit was not obtained in the name of the partnership firm and as such, there was violation of Section 42 of the Act, He, therefore, supported the order under appeal. He invited my attention to Commr. of I. T. Mysore v. Union Tobacco Co., Emakulam, : 41ITR115(Ker) . Varadara-Julu Naidu v. Thavasi Nadar, : AIR1963Mad413 . D. Satyanarayana v. K. Appa Rao' : AIR1966AP209 Inderjitsingh v. Sundersingh, 1969 Raj LW 377 and Brij-mohan v. N. V. Vakharia, 1965 Raj LW 254.
6. Section 2 of the Act deals with definitions. Section 2 (19) defines 'owner' and Section 2 (20) defines 'permit' as a document authorising the use of a transport vehicle as a contract carriage or a stage carriage or a private carrier or a public carrier. Section 22 provides for registration. It inter alia lays down that no person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit a motor vehicle to be driven unless the vehicle is registered in accordance with Chap. III of the Act. Section 31 provides for transfer of ownership of the motor vehicle, Section 42 is an important section which deserves notice. Material portion of Section 42, necessary for the present purpose, reads as under,--
'Section 42. Necessity for permits.-- (1) No owner of a transport vehicle shall use/or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used:
Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage:
Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods vehicle either when carrying passengers or not:
Provided further that a public carrier's permit shall subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.
Section 59 deals with general conditions attaching to all permits. Sub-section (1) of Section 59 is as under,--
'Section 59. General conditions attaching to all permits.-- (1) Save as provided in Section 61, a permit shall not -be transferable from one person to another except with the permission of the Transport Authority which granted the permit and shall not without such permission operate to confer on any person to whom a vehicle covered by the permit is transferred any right to use that vehicle in the manner authorised by the permit.' It is clear from Sub-section (1) of Section 59 that a permit granted under the provisions of the Act is not transferable except with the permission of the Transport Authority which granted the permit.
7. Section 4 of the Partnership Act (No. IX of 1932) defines 'partnership', 'partner' firm' and 'firm name'. Section 5 lays down that the relation of partnership arises from contract and not from status. Section 6 thereof provides for mode of determining existence of partnership. Section 7 lays down that where no provision is made in the contract for determination of the partnership, the partnership is at will. Section 8 deals with particular partnership.
8. It is, therefore, clear from the various provisions of the Act that it doesnot prohibit carrying on the business of plying a truck in partnership and such a term in a partnership is not per so illegal.
9. It will be relevant here to refer to Section 23 of the Contract Act. It inter alia, provides that consideration or object of an agreement is lawful unless it is forbidden by law and in such a case, object or consideration of an agreement is said to be unlawful and that every agreement, of which the object or consideration is unlawful, is void. A learned single Judge of the Bombay High Court in Champsey Dossa's case held that where a licensee under Section 11, Bombay Salt Act, is prohibited by the terms of the licence from sub-letting the whole or a part of the privilege, admits some member of his family and others as partners in the business to share the profits, the partners however not having any part in the manufacture of salt, the arrangement does not infringe the provisions either of the licence or of Section 11 of that Act. This Bombay decision was affirmed in Gordhandas Kessowji's case. A Division Bench of the Madhya Pradesh High Court in M/s. Dayabhai and Co.'s case, after examining the provisions of Section 31 and Section 59 (2) of the Act and Section 23 of the Contract Act, observed as under,--
'It follows from the above propositions that partnership business in transport, can be carried on on the strength of a permit obtained by a partner and with a vehicle belonging to him. It can also be carried on with vehicles belonging to the partnership firm on the basis of permits obtained by a partner in respect of those vehicles, as a partner though not owner of those vehicles is clearly as a partner in possession of those vehicles. In the absence of any provision in the Motor Vehicles Act laying down that transport business in partnership can only be done on permits issued and obtained by the firm itself and with vehicles of which the firm is the owner, it cannot be held that Sections 31, 42 and 59 of the Motor Vehicles Act are transgressed when transport business is carried on with vehicles belonging to a partner or to the firm on the authorisation of permits held by a partner. In the partnership business done by partner with vehicles belonging to him or to the partnership firm on permits obtained and held by him, there is no transfer of vehicles or transfer of permits. There being thus no violation of any provisions of theMotor Vehicles Act, a partnership firm constituted for carrying on transport business cannot be regarded as illegal merely because the partnership business is carried on by a partner on the strength of permits obtained and held by him and with vehicles belonging to him or to the partnership firm.
Such a partnership agreement cannot also be held to be void as against public policy. It does not fall under the well-settled classes of contracts which have been ruled by authority as contrary to public policy and it cannot be declared to be a contract opposed to public policy by inventing a new head of public policy.'
In support of their view, the learned Judges relied on Champsey Dossa's case, Gordhandas Kessowji's case, Mt. Man-bharibai's case and Umacharan Shaw's case.
10. Their Lordships of the Supreme Court have examined, amongst others, the provisions of Sections 2 (19), 2 (20) and Section 42 (1) of the Act in K, N, Viswa-natha's case. It was held therein that the definition of permit itself shows that all permits need not be in the name of the owner because the latter part of the definition shows that it is only in the case of a private carrier or a public carrier that permit has to be in the owner's name. It was further observed that the Act does not expressly or by implication bar benami transactions or persons owning buses benami and applying for permits on that basis. Their Lordships overruled the decision reported in A. V. Varadarajulu Naidu's case which was relied on by the learned counsel for the respondents. A Division Bench of the Nagpur High Court in Mt. Manbharibai's case held that the mere infringement of a term of the Government in the agreement against sub-letting or transfer did not render the transaction illegal especially when the agreement entered into provided for the carrying on of the business by only one of the partners. In that case, the plaintiffs entered into a partnership with one K to carry on the business of agency which K had from the Government for the purchase of grain and the agreement between the parties provided for the carrying on of the business entirely by K and the agreement between the Government and K was that 'the agent will not assign, sub-let or transfer in any manner whatsoever the whole or any part of his interest inthis agreement'. In para 11 of the report, it was observed as under,--
'...... the rule is that illegality isnever presumed, but must always be proved by those who assert its existence. To show that a partnership is illegal it is necessary to prove either that the object of the partnership is one the attainment of which is contrary to law, or that the object being illegal, its attainment is sought in a manner which the law forbids.'In Mt. Manbharibai's case, Champsey Dossa's case and Gordhandas Kessowji's case were followed. In this case, the truck was purchased by the plaintiff and the defendant Gheesukhan, and partnership was entered into for plying it jointly in the name of Gheesukhan and thereafter permit was obtained on Feb. 6, 1963 which was, in the name of defendant Gheesukhan. In these circumstances, under the Partnership Act and the Act, the partnership between the plaintiff and Gheesukhan was valid and lawful for plying truck No. RJY 1497, though it was plied on the strength of the permit obtained by one of the partners. Gheesukhan, in whose name the partnership business was to be carried on. At the risk of repetition, it may be mentioned that the truck was jointly purchased by jthe plaintiff and Gheesukhan as found by the trial court. It is not the case of the defendant Gheesukhan or of defendants Nos. 2 to 5 that there was any transfer of vehicle or permit in contravention of Sections31 or Section 59 of the Act. In these circumstances, it cannot be said that the agreement of partnership is hit by Section 23 of the Contract Act. The decisions relied on by the learned counsel for the appellant support the conclusion to which I have arrived at and which have already been mentioned above.
11. Inderjitsingh's case, on which the learned counsel for the respondents placed strong reliance, is clearly distinguishable. In that case, Shinghal J., as he then was, on the facts and circumstances of that case, reached the conclusion that there is no room for doubt that the partners transferred the permit in proportion to their respective shares, without the permission of the Transport Authority and conferred on themselves, the right to use and manage the vehicle in the manner authorised by the permit in terms of the partnership agreement. He, therefore, held that the partnership agreement contravened the provisions of Section 59 of the Act in doing what was for-bidden by it and the consideration or object of the agreement was unlawful within the meaning of Section 23 of the Contract Act and it was, therefore, void. It may be mentioned here that, amongst others, the learned Judge relied on A. V. Varadarajulu Naidu's case, which has been overruled in M/s. Dayabhai & Co.'s case. Here, in the case before me, there was neither any transfer of vehicle nor of permit. D. Satyanaraina's case is of no avail to the learned counsel for the respondents. In appeal, before the An-dhra pradesh High Court, the contention was raised whether the moneys advanced by way of capital for an illegal partnership could be recovered. It was held that none of the parties to an illegal partnership can lay an action inter se for the recovery of that money and that a party to an illegal contract cannot carry into effect as law will not tolerate any party to violate any moral or legal duties. A perusal of the decision reported in Commr. of I.-T.'s case shows that in that case, twelve persons formed a partnership out of whom, some of them had earlier obtained several tobacco licences at the auction conducted and the partnership was formed to exploit the licences obtained by the partners as well as two licences held by the strangers. Para 2 of the partnership deed, in that case, provided that the shops for which the licences were held, should be run under the trade name of 'Union Tobacco Company, Ernakulam' and in accordance with the terms and conditions of the deed. The document further provided that the business should be owned by the partners in four equal shares: one share to be held by a group comprising of three partners another by a group comprising of two; the third by another group of two partners and the fourth share by five partners. Para 4 of the deed provided that the profits or losses of the partnership should be divided among the twelve partners in the manner mentioned therein. In those facts, it was held that a licensee entering into a partnership passes partial but substantial interests in what he has in favour of another and thereby does what the rule against transfers seeks to forbid without permission. The same result is reached when prohibition against transfer of possession is analysed for it cannot be disputed that by becoming a partner a licensee in possession of the goods converts without transfer of corpus his possession into that of an agent. Under Section 26A of the Income-tax Act, registration of the firm was declined. The Kerala case was referred in M/s. Dayabhai's case. In my opinion, the Kerala decision is distinguishable on facts. In Brijmohan's case, the business was carried on without a proper licence in the name of partnership in accordance with the provisions of Section 6 of the Medicinal and Toilet Preparation (Excise Duties) Act read with Rule 85 (4) of the Rules made thereunder. It was held by the learned Judges that if the same was being carried on in disregard thereof, that would amount to an offence under Section 7 of the aforesaid Act, and, therefore, it was not possible for the courts of law to order the rendition of accounts thereof. There is no doubt that in case of an illegal partnership, rendition of accounts in respect thereof cannot be ordered. As held by me above, the agreement between the plaintiff and defendant No. 1 for plying the truck which belonged to the partnership was valid and lawful. For the purpose of deciding the question of the validity of the partnership, the cases relied on by the learned counsel for the respondents are not of any assistance. I, therefore, hold that the partnership between the plaintiff and defendant Gheesu-khan is not void and illegal. The decision on issue No. 4 arrived at bv the learned Additional District Judge in appeal is, therefore, reversed. Since findings arrived at by the trial court in respect of issues Nos. 1, 2 and 3 were not assailed before the learned District Judge at the time of hearing of the appeal and nothing was argued before me, the inevitable result is that the findings on issues Nos. 1, 2 and 3 remain intact, Thus, all the four issues framed by the trial court stand decided in favour of the plaintiff-appellant. It, therefore, follows that the plaintiff is entitled to a preliminary decree for dissolution of partnership and taking of partnership accounts.
12. In this case, in para 2 (3), the plaintiff alleged that the partnership between the parties was at will. In para 6 of the plaint, the plaintiff has averred that in view of the facts stated in this para, it had become necessary to dissolve the partnership and, therefore, notice was given to the defendants on July 8, 1963. The plaintiff has prayed that the partnership may be dissolved from July 10, 1963. Defendant Gheesukhan, in his written statement, has admitted the receipt of the notice dated Julv 8, 1063and has stated that he gave a correct reply to the notice. According to Section 43 of the Partnership Act, a partnership at will is dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. The firm is dissolved from the date mentioned in the notice as the date of dissolution or if no date is mentioned, from the date of communication of the notice, Thus, the firm would stand dissolved from the date of notice i.e. July 8, 1963 as no date from which the plaintiff wanted the dissolution of the partnership is mentioned in the notice and there is nothing on the record to show when the notice was served on the defendant.
13. The result is that this appeal succeeds so far as defendant No. 1 is concerned and the judgment and decree of the learned District Judge, dated Oct. 21, 1963 are set aside and the suit of the plaintiff for dissolution of partnership and rendition of accounts is decreed. Let a preliminary decree be passed in favour of the plaintiff and against defendant No. 1 in the following terms,--
1. It is declared that the plaintiff and defendant Gheesukhan had half share each in the partnership which was entered into for purchase and plying of truck No. RJY 1497;
2. The partnership between the plaintiff and defendant No. 1 shall be deemed to have been dissolved from July 8, 1963;
3. It is also ordered that the follow-ing accounts be taken,--
(a) an account of the credits, property and assets now belonging to the said partnership,
(b) an account of the debts and liabi-lities of the said partnership, and
(c) an account of all the dealings and transactions between the plaintiff and defendant No. 1 Gheesukhan in respect of the partnership business.
4. It is further ordered that the above accounts shall be taken by the trial court (Civil Judge, Chittorgarh) and he will call upon the plaintiff as well as defendant No. 1 to furnish a statement of particulars relating to the business and its transactions. Both plaintiff and defendant No. 1 Gheesukhan shall produce account books and other documents relating to the partnership in their possession. After taking accounts of the partnership, the trial court shall pass a final decree in accordance with law.
14. The plaintiff is not entitled to any relief against defendants Nos. 2 to 6,and the suit against them is, therefore, dismissed.
15. In the circumstances of the case, 1 leave the parties to bear their own costs of this appeal.