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K. E. M. Mohamed Ibrahim Marcan and anr. Vs. Perumal Padayachi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1974)1MLJ507
AppellantK. E. M. Mohamed Ibrahim Marcan and anr.
RespondentPerumal Padayachi
Cases ReferredK. M. Viswanatha Pillai v. K. M. Shanmugham Pillai
Excerpt:
- t. ramaprasada rao, j.1. the plaintiffs are the appellants. the defendant was a transport operator. he had two route permits covering cuddalore to ulundurpet and cuddalore to kachirapalayam, and was plying mdy 3870 and mdy 4396 respectively on the above routes. he sought financial assistance from the plaintiffs. after discussions the plaintiffs, under exhibit a-1, dated 14th may, 1964, entered into a sale agreement in respect of the bus mdy 3870 for a consideration of rs. 40,000. under exhibit a-1 it was agreed that the plaintiffs should take delivery of the bus from the defendant after paying the amounts due under hire purchase to one srimathi nani kavar bai. the defendant agreed to sign the necessary records for transferring the registration certificate of the vehicle and also seek for.....
Judgment:

T. Ramaprasada Rao, J.

1. The plaintiffs are the appellants. The defendant was a transport operator. He had two route permits covering Cuddalore to Ulundurpet and Cuddalore to Kachirapalayam, and was plying MDY 3870 and MDY 4396 respectively on the above routes. He sought financial assistance from the plaintiffs. After discussions the plaintiffs, under Exhibit A-1, dated 14th May, 1964, entered into a sale agreement in respect of the bus MDY 3870 for a consideration of Rs. 40,000. Under Exhibit A-1 it was agreed that the plaintiffs should take delivery of the bus from the defendant after paying the amounts due under hire purchase to one Srimathi Nani Kavar Bai. The defendant agreed to sign the necessary records for transferring the registration certificate of the vehicle and also seek for the transfer of the permit in favour of the plaintiffs. But immediately after entering into the agreement the plaintiffs understood that there was some dispute regarding the-route permit Cuddalore to Ulunderpet for which purpose MDY 3870 was utilised. Therefore, on the next day a second-agreement Exhibit A-2, dated 15th May, 1964 was entered into in supersession of the first agreement Exhibit A-1. Under this agreement the defendant agreed to sell his other vehicle MDY 4396 and in consequence stipulated to obtain a transfer of the route permit in connection with the said vehicle over the route Cuddalore to Kachirapalayam. The consideration for this sale was fixed at Rs. 80,000 which included the sum of Rs. 40,000 agreed tow be paid by the plaintiffs under Exhibit A-1. In order to safeguard their interests as financiers the plaintiffs, as an interim, measure and by way of abundant caution,, entered into a third agreement Exhibit A-3 and captioned it as a deed of partnership on the same day, namely, 15th May, 1964. Under this deed it was provisionally agreed that the defendant and the plaintiffs would continue the transport business previously carried on by the defendant in his individual name in partnership under the name and style of Andavar Bus Service. The parties agreed to take such steps as were necessary to have the permits transferred in favour and for the benefit of the partnership. The sum of Rs. 40,000 which was the consideration for Exhibit A-1 was to be treated as capital of the plaintiffs and they were to be in the day to day management of the business. The defendant was to be paid a monthly a sum of Rs. 100 towards salary and for being in charge of the workshop in addition to his half share of profits in the business. All capital expenses in relation to each of the routes Cuddalore to Kachirapalayam and Cuddalore to Ulundurpet were to be kept separately. The plaintiffs agreed to finance the partnership in connection with the repairing of the vehicles and for replacement of the vehicles. Accounts were to be prepared every month and copies were to be communicated to the partners which shall be audited by a Chartered Accountant at the end of each year. The period of the partnership was agreed to as five years and on the expiry of the said period or in the event of earlier dissolution, the permit along with the bus on the route Cuddalore to Ulunteprus shall be taken by the plaintiff and the other permit and the bus subject to the payment of any capital expenditure incurred was to be taken by the defendant. This partnership was signed at Nagapattinam where the plaintiffs resided.

2. The plaintiffs' case is that the partnership agreement, Exhibit A-3, dated 15th May, 1964 which was almost contemporaneous with the agreement for purchase of the bus MDY 4396 was intended only as an expedient or as a means to smoothen the way of transfer of the route permits as also the vehicles covered by the agreement Exhibit A-2 and that the partnership agreement was only understood as an interim arrangement for effecting such transfers of ownership and permits in favour of the partnership business, Andavar Bus Service. The plaintiffs took over the management of the partnership business which was hitherto run by the defendant and they were maintaining the accounts thereof. In fact, the plaintiffs made further advances to the defendant with regard to the two buses from time to time and such advances were for either effecting repairs or for paying taxes and for other urgent necessities of the defendant. It is not in dispute that the bus MDY 4396 referred to in Exhibit A-2 was replaced by the bus MDS 5216 for which purchase also the plaintiffs claim, to have advanced moneys. When this was the position, the defendant could not succeed in retaining the permit obtained by him in respect of the bus MDY 3870 running on the route Cuddalore to Ulundurpet as the State Transport Appellate Tribunal, by its order, dated 27th September, 1965 under Exhibit A-4 cancelled the same. After the defendant lost one of the permits which was to be transferred to the plaintiffs under the agreement Exhibit A-2 he became recalcitrant and was not apparently interested in performing his part of the contract. But, in order to secure their rights, the plaintiffs had to help the defendant when the bus MDS 5216, which was running between Cuddalore and Kachirapalayam, was attached by one Brindavathi Ammal pursuant to a money debt owed by the defendant to her. In fact the plaintiffs got the bus released from the attachment effected in the above suit. The defendant filed an application for appointment of a receiver and obtained release of the above vehicle from attachment. In those proceedings the plaintiffs assisted the defendant having regard to the responsibility undertaken by the plaintiffs with the defendant under Exhibits A-2 and A-4. Contemporaneous with the proceedings whereunder the bus MDS 5216 was attached by Brindavathi Ammal and was released, the plaintiffs obtained from the defendant a hire-purchase agreement so as to further safeguard their rights as against the defendant in general and in particular against the bus MDS 5216. The plaintiffs thereafter stood as sureties in the suit filed by Brindavathi Ammal and released the bus MDS 5216 from attachment in the suit. By that time the defendant is said to have received large amounts to the tune of Rs. 65,000 besides having had the benefit of the release of the bus from attachment on the security given by the plaintiffs in Brindavathi Ammal's suit. But it is the case of the plaintiffs that the defendant with a designed and improper motive induced one Narayanaswami Iyer to cause the bus once again to be attached in execution of a decree obtained by Narayanaswami Iyer. The plaintiffs unsuccessfully intervened with a claim petition and having regard to the large amounts by then advanced by them the plaintiffs were again compelled to pay a sum of Rs. 3,332-70 to Narayanaswami Iyer for discharging the decree. This was done in order to avoid the risk of losing possession of the bus and also the only route permit which was by then subsisting. The defendant further perpetrated his design to avoid his responsibilities by submitting to a decree in the suit filed by Brindavathi Ammal ; in the result the plaintiffs' personal bond which they gave in Brindavathi Ammal's suit became enforceable.

3. In the above circumstances and as the defendant lost his route permit between Cuddalore and Ulundurpet the plaintiffs have come to Court for specific performance of the contract to sell the bus MDS. 5216 which is a substitute for the bus MDY 4396 under the terms of Exhibit A-2, and for a direction to the defendant to apply for transfer of the route permit between Cuddalore and Kachirapalayam for a consideration of Rs. 80,000. The plaintiffs state that they have advanced a sum of Rs. 65,000 pursuant to the said agreement and that they are ready and willing to pay the balance out of 80,000 to get a conveyance of the bus and the permit transferred in their names. The plaintiffs claim that the hire-purchase agreement which was taken at the time when they gave personal security in Brindavathi Ammal's suit was further perfected by entering the same in the registration certificate in the name of their relation, One A. M. Hamid Maracair. The plaintiffs claim that the bus is subject to the said hire-purchase agreement. They caused a notice to be issued under Exhibits A-38 and A-39 setting out the above facts, but the defendant repudiated the same under Exhibit A-40 and claimed that the plaintiffs are not entitled to specific performance of the contract under Exhibit A-2 and that the partnership deed was genuine instrument and that the plaintiffs are not entitled to any relief. The plaintiffs allege that they have performed their part of the contract under the agreement Exhibit A-2 and they are ready and willing to perform the subsisting obligations under it. In any event and in the alternative they would state that if they are not entitled to the relief of specific performance, they would be entitled to the sum of about Rs 65,000 odd which they have actually paid to the defendant and a sum of Rs. 35,000 as damages. In the above sequence the suit was laid for ore or the other of the reliefs stated in the plaint.

4. The defendant in his written statement admits that he was faced with acute financial stringency and he had to approach the plaintiffs for succour and obtained advances so as to pay off as far as possible his creditors. His case is that Exhibits A-1 and A-2 were ent red into at a time when one of the buses was actually seized by one Nalini Kaval Bai under a hire-purchase agreement in her favour and that when he was in extreme financial difficulties. According to the defendant, the partnership agreement was forced out of him and that he was pursuaded to enter into by pressure and undue influence. His further case is that the agreements under Exhibits A-1 and A-2. (even if it is assumed that Exhibit A-2 is in supersession of Exhibit A-1) are two agreements which are unlawful and unenforceable in the eye of law and that the partnership deed which superseded the above agreements was the only document which evidences the mutual terms and conditions under which the parties should act. The plaintiffs having taken an improper advantage of the defendant's financial position and decrees, cannot retrogade and place any reliance upon the agreements Exhibits A-1 and A-2 when such agreements have been virtually superseded by the partnership agreement Exhibit A-3 and the plaintiffs are under a legal obligation to pay off all the debts of the defendant and continue the partnership and be bound by the terms set out thereto. The plaintiffs therefore arc not entitled to the relief of specific performance as if Exhibit A-2 or Exhibit A-1. which according to the defendant is superseded by Exhibit A-2 is still in force and enforceable. The defendant would allege that he lost his route permit relating to Cuddalore to Ulundurpet because of the attitude of the plaintiffs who would not take up the matter further to the higher hierarchy of Courts. The defendant in effect alleged that the terms of the partnership were implemented in that the vilasam of the bus service was changed and the plaintiffs took the management of the partnership business by keeping accounts, by making themselves responsible for daily collections, by making repairs and replacements to the bus., etc. The defendant admits that he was paid a sum of Rs. 100 as salary and was alleged to draw a sum of Rs. 200 per month out of his share in the expected profits. The defendant however would add that the illegal partnership was acted upon the and plaintiffs cannot take advantage of their own wrong in not having performed their part of the obligations springing from the deed of partnership. It was due to the unhelpful attitude of the plaintiffs that Brindavathi Ammal and Narayana Iyer filed their suits and as the defendant caused self-effacement as an individual bus-operator and as it was Andavar Bus Service which was running the transport business as a partnership, the plaintiffs are not entitled to any relief. The defendant denied that he signed any hire-purchase in the registration certificate, and even if it was made, it was by reason of the plaintiffs taking advantage of a forged document in support of the said hire-purchase agreement. In any event it is said that the plaintiffs having taken the bus MDS 5216 into their possession in the suit filed by Narayana Iyer, they should be deemed to be in custody of it even now and arc accountable to the income and profits therefrom, by reason of the permit, which was attached to the bus at the time when the plaintiffs obtained possession of the same in Narayana Iyer's suit. It was in those circumstances the plaintiffs got the bus MDF 1991 on hire-purchase agreement so that they could validly exploit his permit from Cuddalore to Kachira-palayam and averted the calamity of a total cancellation of the permit for non-performance by the permit-holder. It is impliedly conceded that the route permit always remained in the name of the defendant. The sheet-anchor of the defendant's case is that the agreements Exhibit A-1 and A-2 are unenforceable in the eye of law and it was only the final partnership agreement that was intended to be operative and as the defendant is willing to act in accordance therewith the plaintiffs are not entitled to a suit for specific performance of the agreement Exhibit A-2. The claim for damages is denied.

5. In the reply statement the plaintiffs reiterate their original stand. The parties went to trial and the plaintiffs examined a clerk of theirs and filed their account books in furtherance of their stand. But the defendant did not produce any relevant documentary evidence, nor did he examine himself. On the basis of the above pleadings the learned Subordinate Judge of Cuddalore framed the following issues :

I. Whether the agreement, dated 15th May, 1964 is illegal and void ?

2. Whether the defendant's signature to the agreement were taken by compulsion ?

3. Whether the suit agreement of sale has been superseded by the partnership agreement ?

4. Whether the suit agreement has been abandoned as contended by the defendant ?

5. Whether the plaintiffs are entitled to compel the defendant to join in the application for transfer of the route permit ?

6. Whether the plaintiffs are entitled to claim any damages, and if so, to what amount ?

7. To what relief are the plaintiffs entitled.

6. The learned Subordinate Judge mainly addressed himself to the question whether the agreement of sale under Exhibit A-2 was superseded by the so called partnership agreement Exhibit A-3 and found that the terms and conditions as reflected in Exhibit A-2 were abandoned or waived by reason of the subsequent agreement of partnership. Alternatively he considered the legality and enforceability of Exhibit A-2 and : elying upon a decision of this Court reported in Viswamtham Pillai v. Shanmugham : AIR1967Mad100 , found that Exhibit A-1 which was later revised under Exhibit A-2 is unenforceable in the eye of law and therefore void. In the result the suit for specific performance was dismissed. Even the alternative claim for return of the amount admittedly expended by the plaintiffs for the benefit of the defendant was negatived. Consequently the claim for damages representing the alleged loss sustained by the plaintiffs by reason of the beach of contract committed by the defendant was held to be not substantiated. We are unable to agree with the material findings so rendered by the learned Subordinate Judge.

7. We shall take up the first question regarding enforceability of Exhibit A 2. The principle laid down by this Court in Viswanatham Pillai V. Shanmugham was exp: easily dissented by the Supreme Court in K. M. Viswanatha Pillai v. K. M. Shanmugham Pillai : [1969]2SCR896 . Their Lordships of the Supreme Court were of the view that under the provisions of the Motor Vehicles Act, 1939 it is not necessary for the owner himself to obtain the permit and that the Act requires the owner of the transport vehicle to use the vehicle in accordance with the conditions of the permit and that the definition of the 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 a permit has to be in the owner's name. They laid down. categorically that the Act does not expressly or by implication ban benami transactions or persons owning buses benami and applying for permits on that basis. On the basis of this pronouncement it cannot be said that Exhibit A-2, which provides for a sale of the bus together with the route permit thereon by the defendant in favour of the plaintiffs, is an illegal transaction which cannot be countenanced in the eye of law. The learned Subordinate Judge was of the view that prior sanction of the Regional Transport Authority was necessary before the parties could venture as they attempted under Exhibit A-2. He also expressed that there was nothing intrinsic in Exhibit A-2 which compelled the parties to obtain approval or sanction of the Regional Transport Authority with regard to the transfer of the route permit from the name of the defendant to the plaintiffs. If an agreement as adumbrated in Exhibit A-2 is enforceable in the eye of law, the mere fact that the said agreement does not contain obvious stipulations regarding achievement of the purpose for which the agreement was entered into would not make such an agreement any the less enforceable and a valid agreement. In view of the ratio of the Supreme Court in K. M. Viswanatha Pillai v. K. M. Shanmugham Pillai : [1969]2SCR896 it does not lie in the mouth of the respondent, now to contend that an express recital; in the agreement of sale of a bus coupled with the route permit, but not referring to the method to be adopted later for effectuating the intention of the said agreement would make it an insipid or a void one. Under Exhibit A-2 there is by necessary implication an obligation on the part of the defendant to join with the plaintiffs and make an application to the appropriate authority for transfer of the route permit in favour of the plaintiffs. Merely because an express provision is not made in the said agreement, regarding the modus operandi for its implementation the legal obligation (on the part of the defendant, which is quite apparent in Exhibit A-2 cannot be avoided. The fact that the defendant due to reasons best known to himself did not join with the plaintiffs in the matter of securing the transfer of the route permit from his name to the name of the plaintiffs cannot, in our view, have any impact on the rights of parties which flow from Exhibit A-2. AU stipulations and acts which arise from and out of a written contract between the parties have to be understood pragmatically and given effect to in accordance with law. Thus understood, it is reasonable to expect that the parties should follow the procedure prescribed in law for achieving their object reflected in the said contract. If the parties either due to lethargy or with some design or purpose fail to adopt such a process to give effect to the object of the contract the contract itself cannot become) illegal or invalid. We are therefore unable to agree with the learned Subordinate Judge that Exhibit A-2 is unenforce able, illegal and invalid right from its inception.

8. This leads on to the question whether the partnership deed so prominently put in the forefront by the defendant did supersede the agreement Exhibit A-2. Mr. Ramaswami, learned Counsel for the respondent, while attempting to sustain the judgment of the learned Subordinate Judge, very strenuously unges that Exhibit A-3 the partnership deed is the real contract between the parties and having regard to the sequence of time Exhibit A-3 should be deemed to have replaced or substituted the earlier agreements and in particular Exhibit A-2, as they cannot co-exist. Much reliance was placed upon clause, 12 in Exhibit A-3 which provides for dissolution of the partnership and whereunder the permits along with the bus have to be taken respectively by one or the other of the contracting parties. Reference was made to the observation of the lower Court that it was brought into existence only with the intention to enable the appellants to have a hold on the buses and the routes and for the recovery of the amounts advanced by them and that the partnership deed Exhibit A-3 was the transaction which was intended to be acted upon. It was therefore said that the suit for specific performance of the contract which could be spelt from Exhibit A-2 or the alternative claim for recovery of the amounts advanced and damages for non-performance of the contract as reflected in Exhibit A-2 is not maintainable. Learned Counsel for the appellants contending contra and relying upon the pleadings and the correspondence that passed before suit maintained that Exhibit A-3 was only an interim working arrangement and at no time the parties desired to give up their rights and obligations under Exhibit A-2.

9. We are of the view that the partnership deed was never intended to be acted to its logical end and there is intrinsic evidence, as is seen from the conduct of the parties and the documents filed in the case, that it was only intended to project a working arrangement between the parties in order to protect the plaintiffs-'appellants who were acting as financiers and who undertook to advance and did advance at various stages large amounts to the respondent for the conduct of his business. The pattern of accounts kept and the methodology adopted by the parties do not establish the jural relationship of partners inter se. In Exhibit A-6, dated 13th July, 1964, which was long after the date of the alleged partnership, the respondent described himself as the proprietor of S.R.P.B.S. Bus Service. This was a promissory note executed by the defendant-respondent in favour of the plaintiffs-appellants and this was towards the expenses which the defendant incurred in respect of the bus MDS 5216 and for meeting his family expenses. One would expect the defendant who is a knowing person to have avoided the description 'Proprietor, S.R.P.B.S. Bus Service' which relates to MDS 5216 if it was unequivocally agreed that the bus should belong to the so called partnership business of Aadavar Bus Service, which was the name and style the parties agreed to give their alleged joint enterprise which is reflected in the formal agreement Exhibit A-3.

10. In Exhibit A-14 which was a personal security bond given by the appellants-plaintiffs, to the knowledge of the defendant they described the bus MDS 5216 as bearing the name of Andavar Bus belonging to the defendant. One would expect a real description in Exhibit A-14 which was a security bond executed in favour of the Subordinate Judge's Court, Cuddalo(sic)e, in a litigation between the defendant and his creditor Bnindavathi Ammal. That the running of the bus undertaken by the plaintiffs as financiers was never intended in pursuance of the so called partnership agreement Exhibit A-3 is clear from Exhibit A-32 wherein the defendant admitted that he would not consent to the presentation of joint application for transfer of the permits without settlement of accounts. He used, no doubt, the word 'partnership' in Exhibit A-32 read with Exhibit A-36 ; but his conduct is clear that he was only interested in sharing the profits of the undertaking without imprinting on himself in conjunction with the plaintiffs the badge of partnership as is known to law. In Exhibit A-36 he says that his share of income upto the 17th July, 1965, was paid to him. Though he refers to the expressions 'partner' and 'partnership' the intention which is manifest in these and other documents is that the defendant understood the transaction only as a financial agreement and not as a partnership simpliciter. The plaintiffs themselves filed a petition Exhibit A-42 in another civil proceeding between the defendant and his creditor Narayanaswami Iyer. Narayanaswami Iye filed O.S. No. 139 of 1965 on the file of the Court of the District Munsif of Cuddalone and obtained an order of attachment before judgment of the bus MDS 5216 as belonging to the defendant. The claim petition filed by the plaintiffs to raise the attachment was dismissed and in Exhibit A-52 the finding of the learned Distinct Munsif in the claim petition was that the bus absolutely belonged to the defendant. The contention of the defendant in that suit was that the partnership is illegal and that the judgment-debtor was solely interested in the bus and no one else had any subsisting interest therein. Reference was also made to the admissions in the earlier documents wherein it was said that the bus belonged to the defendant. In fact, the claim petition was dismissed.

11. Exhibit A-50 was an affidavit filed by the defendant himself in the suit filed by Narayanaswami Iyer. While opposing the application for attachment before judgment the defendant would state that the bus MDS 5216 was his stage carriage bus, that it was running between Cuddalore and Kachirapalayam and that the registration certificate for the vehicle was in his name and the route permit was granted to him as owner and operator. He also referred to the fact that the bus was left with two sureties, meaning thereby the representatives of the appellant, and he alleged that the said sureties were colluding with his creditors and therefore a receiver should be appointed. This conduct is absolutely inconsistent with the theory of partnership set out by the defendant and contained in Exhibit A-53. The defendant did not care to go into the box, but was satisfied to remain outside it. The best evidence which he could make available to Court by deposing in person was not made available. He was obviously not prepared to face cross-examination in the witness box which would bring out in truthful colours the real jural relationship between the parties.

12. We shall now consider the nature and purport of the account books which were disclosed in the trial Court to see whether Exhibit A-3 was acted upon. Exhibits A-7 and A-8 are the day books of Ranga Parthasarathy Bus Service, which admittedly was the trading style of the defendant. Exhibits A-45 to A-48 are separate ledgers maintained by the plaintiffs in connection with the running of the three buses MDY 3870, MDY 4396 and MDS 5216. It is nobody's case that these ledgers were captioned as account books relating to Andavar Bus Service, which according to Exhibit A-3. was the trading style of the intended partnership. These exhibits clinchingly establish that the plaintiffs as financiers who undertook to run the buses, maintained these ledgers to show the collections and the expenses relating to each of these buses and it was never the intention of the parties that the profits and losses relating to these buses and the expenses incurred thereto were intended to be shared by the partners in any proportion agreed to under Exhibit A-3. Again, Exhibits A-9 and A-12 do not further the case of the defendant. Exhibit A-9 is a ledger for the business dealings which the parties had as between themselves and Exhibit A-12 is a ledger in which the personal dealings of the plaintiffs are entered into. If really the parties expected and agreed that they should run all the available buses with the permits thereto as if a partnership was entered into between them, there was no necessity for two ledgers with reference to the defendant one relating to his business dealings and the other for his personal dealings. Though more than a year elapsed before the suit was filed, accounts were never closed and no profit and loss statement was struck. This consistent conduct of the parties immediately after the so-called patnership agreement, is inconsistent with a definite agreed jural relationship between them as partners under the Partnership Act.

13. Under Exhibit A-3 there are the clauses which knit the parties as partners and under which they oblige themselves reciprocally to be bound by them. There is no acceptable evidence to show that the name and style of the business was changed to Andavar Bus Service though this is referred to in Clause 1. No profit and loss statement has been prepared and there is no evidence to show that there was a sharing of the profits or losses as the case may be between the partners in the ratio of 2 : 1 :1 as provided for in clause 3. On the other hand the defendant says that he was paid his share of his income as seen from his allegation in Exhibit A-36, whilst there is no saying as to whether accounts were struck for purposes of division of the net profits or losses as the case may be. Clause 11 provides that accounts shall be prepared every month and copies thereof communicated to all partners and they shall be audited by a Chartered Accountant at the end of the year. Nothing has been done and in any event no one speaks about the follow-up procedure pursuant to this clause. A mere reference to clause 12 which provides for dissolution of the partnership at the end of five years, would not in any way improve the case of the defendant. This clause is a usual clause provided in a deed of partnership if it is intended that the partnership should be for a period. But in order to establish that the partnership was running as agreed to by them under Exhibit A-3 the defendant should prove to the satisfaction of the Court that they did abide by the conditions and stipulations under the deed and were respecting the rights and obligations created thereunder in terms thereof. We have already referred to the fact that the defendant did not go into the box to assert any one of the above circumstances. We have already seen the fate of the permit relating to Cuddalore and Ulundurpet. After the Appellate Tribunal set aside the permit granted to the defendant, no steps were taken by the parties to modify the terms of the partnership or to register their rights. This is sufficient indicia to show that the permits set out in clause 12 of the so-called partnership agreement Exhibit A-3 was understood only to remain on paper and not intended to be acted upon. Even as regards the bus which was put on the route Guddalore to Kachirapalayam, the hire-purchase holder is said to have seized the bus, though it is the case of the defendant that the hire-purchase holder is none else than a nominee of the plaintiffs. After such seizure the defendant's case is that he had to make his own arrangements for running the bus on the route by purchasing a new bus on his own volition. This again is a pointer to the fact that Exhibit A-3 could not have been understood by the parties as a partnership deed, but only as an ineffectual instrument to serve only as a piece of evidence to show that the plaintiffs advanced moneys to the defendant under certain circumstances and for purposes of recovery a working arrangement was entered into as between them.

14. The above features in this case militate against the existence of any partnership as between the parties. Weighing all the facts as seen from the documentary evidence in this case, we are unable to see any element of mutuality as between the parties, which is an essential precondition for the subsistence and continuance of a partnership. In every partnership, each partner is the agent of the other and has the authority to act for the other. But the circumstances disclosed do not justify the conclusion that each party was acting for the other in the instant case. On the other hand each party was acting independently of the other without any mutual consultation and obviously for the furtherance of their own interests. Whilst the plaintiffs were interested as financiers to get their money back as also a reasonable return thereof, the defendant was not interested in repaying the amounts borrowed and was evading and was making his own arrangements for the running of the bus from Guddalore to Kachirapalayam without reference to the plaintiffs. We have no hesitation therefore, to hold that Exhibit A-3 was only a formal document executed by the parties as between themselves with no intention to follow the terms thereof or act upon it.

15. If, therefore, there was no partnership and if the legal relationship only projects a case of financier and borrower, then the only question which remains for consideration is, what relief the plaintiffs could get in this appeal.

16. The plaintiffs have made an alternative claim for the return of the sum of about Rs. 65,000 which they say they have paid to the defendant, and in addition they have claimed a sum of Rs. 35,000 as damages. They base their cause of action on the agreement Exhibit A-2. We have already held that Exhibit A-2 is a legal document. The question is whether in the peculiar circumstances it is enforceable as on date and a decree for specific performance could rest on the recitals therein.

17. In so far as the bus MDY 3870 is concerned, which was running on the route Cuddalore to Ulundurpet, the permit has been set aside. Therefore there is no question of the relative permit in respect of the sale of that bus being subjected to a decree for specific performance. As regards the bus MDY 4396 replaced by bus MDS 5216 running on the route Guddalore to Kachirapalayam, this is not available as on date with the defendant for him to sell the same after accounts are settled between him and the financiers, namely, the plaintiffs. We have already adverted to the fact that there are two versions as regards this bus MDS 5216. The plaintiffs' case is that under a hire-purchase agreement this bus was seized by the hire-purchase holder and they have nothing to do with it. On the other hand, the defendant's case is that the hire-purchase holder is the nominee of the plaintiffs and that in reality the bus is in the custody of the plaintiffs and that they are wrongfully utilising the same for their exclusive advantage and that such an act amounts to an act of vandalism on the part of the plaintiffs. Neither the plaintiffs nor the defendants have urged seriously before us and convinced us as to in whose custody the said motor vehicle is. It is unnecessary for us to deal at this stage with this aspect in the view that we intend taking. As it is settled law that no specific performance of a contract, though it is not vitiated by fraud or misrepresentation, can be g anted if it could give an unfair advantage to the plaintiffs and where the propose of the contract would involve some hardship on the defendant which he did not foresee, we are not inclined to grant a decree for specific performance. In our view, the plaintiffs would be entitled to the alternative relief for return of the moneys advanced. The claim for damages, excepting for a plea raised in the plaint, has not been futhered or established in the instant case. The plaintiffs, therefore, would not be entitled to damages in the exorbitant sum of Rs. 35,000 for which no proof has been adduced and no effort has been made to substantiate it in a manner known to law.

18. After reviewing the entire material and after hearing arguments we are of the view that the plaintiffs would only be entitled to a decree for the return of moneys which they advanced to the defendant in the course of the working of the arrangement entered into between them in relation to the two buses MDY 3870 and MDY 4396 which was later substituted by MDS 5216. The lower Court did not advert to this aspect, but chose to dismiss the suit on the only ground that Exhibit A-2 was not enforceable and was illegal. As the quantification of the amount to which the plaintiffs would be entitled to would depend upon a scrutiny of the accounts as between the parties which was already filed by them into Court and as we a e not inclined to under take such an investigation at this end in appeal, the only course left open is to remit the subject-matter to the Court of the Subordinate Judge, Cuddalore, for a realistic determination of the amount actually due and payable by the defendant to the plaintiffs in the course of their dealings as financiers with him.

19. Whilst therefore setting aside the judgment and decree of the learned Subordinate Judge and allowing the appeal, we remit the subject-matter to the trial Court for the purpose of determining the actual amount due by the defendant to the plaintiffs and thereafter grant a decree to them. The evidence already on record shall be the only basis for determination and qualification of the amount due and payable by the defendant to the plaintiffs.

20. As the plaintiffs have only succeeded in part and as the matter is still to be investigated on remit, each party will bear their own costs. In view of the order of remit, the Court-fee shall be refunded to the plaintiff in the usual manner.


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