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Murlidhar Haspuria Vs. Bansidhar Halwai - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberAppeal from Original Decree No. 123 of 1971
Judge
Reported inAIR1973Cal193
ActsPartnership Act, 1932 - Sections 4 and 6
AppellantMurlidhar Haspuria
RespondentBansidhar Halwai
Appellant AdvocateSankar Ghosh, Adv.
Respondent AdvocateTebriwalla, Adv.
DispositionAppeal allowed
Cases ReferredK. D. Kamath and Co. v. C. I. T.
Excerpt:
- b.c. mitra, j.1. the respondentfiled the suit out of which this appeal arises, claiming specific performance of a verbal agreement, possession of various articles of the business carried on under the name and style of 'murlkihar apnrwalla,' alternatively a decree for rs. 20,500/- declaration that the sole owner of the business, alternatively decree for dissolution of the partnership business, and for various other reliefs. in this suit a judgment and preliminary decree was passed on february 3, 1971. for dissolur-tion of the partnership, a receiver of thepartnership assets was appointed and a decree for a sum of rs. 1000/- as damages was also passed in favour of the respondent for wrongful trespass by the appellant. this appeal is directed against this judgment and decree.2. the.....
Judgment:

B.C. Mitra, J.

1. The respondentfiled the suit out of which this appeal arises, claiming specific performance of a verbal agreement, possession of various articles of the business carried on under the name and style of 'Murlkihar Apnrwalla,' alternatively a decree for Rs. 20,500/- declaration that the sole owner of the business, alternatively decree for dissolution of the partnership business, and for various other reliefs. In this suit a judgment and preliminary decree was passed on February 3, 1971. for dissolur-tion of the partnership, a receiver of thepartnership assets was appointed and a decree for a sum of Rs. 1000/- as damages was also passed in favour of the respondent for wrongful trespass by the appellant. This appeal is directed against this judgment and decree.

2. The respondent's case was that since prior to December 1, 1961 he and the appellant carried on business of a Flour Mill in co-partnership under the name and style of 'Murlidhar Agarwalla'. In this partnership the respondent had a one third share and the appellant a two third share.

3. On or about December 1, 1961 the parties entered into an agreement in writing, which provided that the respondent would exclusively manage and be in charge of the said business for a period of 5 years, with an option for a further 2 years. During this period the respondent would pay to the appellant a sum of Rs. 125/- per month but the latter would not be liable for any loss or expenses. The liabilities for income tax upto March 1, 1962, would be paid by the appellant and respondent in the proportion of two third and one third respectively. In terms of this agreement the respondent carried on the business for 7 years. According to the respondent, before the expiry of the term of 7 years, on December 1, 1968, a verbal agreement was entered into between the parties under the terms of which, the appellant was to relinquish and transfer his right, title and interest in favour of the respondent, the consideration for such transfer being a sum of Rs. 17,500/-. Of this amount Rs. 500/- was to be paid in the first instance and the balance of Rs. 17,000/- was to be kept in deposit with a common friend, until transfer of the tenancy from the name of the appellant to the respondent. On such transfer this sum of Rs. 17,000/- was to be withdrawn by the appellant from the third party. It is alleged in the plaint that the sum of Rs. 500/- was paid on November 4, 1968 and the sum of Rs 17,000/- was deposited with one Banwarilal Agarwala.

4. Pursuant to the agreement mentioned above the respondent took charge of the firm and claims to have invested various sums of money in the business.

5. On December 2, 1968, the appellant is alleged to have wrongfully and illegally taken possession of the shop room including the stock-in-trade, cash money and other assets of the business. The respondent further alleged that the appellant was a trespasser and was in wrongful pos-session of the same business.

6. The appellant's case as laid in the written statement is that he was the sole proprietor of the business. He denies that the respondent had a one-third or any other share in the business. According to him the respondent was appointed as manager of the business for a period of 7 years, under the terms of the agreement of December 1, 1961. The oral agreement for transfer of the business for Rs, 17,500/- isdenied by the appellant. The allegation of payment of Rs. 500/- and deposit of Rupees 17,000/- is also denied. On these pleadings various issues were framed and the trial Court came to the conclusion that the respondent's case regarding oral agreement for transfer of the business by the appellant was false, but that the respondent was a partner in the business having a one-third share therein. On a consideration of the documentary evidence as also the oral testimony, the tria! Court came to the conclusion that the elements which go to constitute a partnership were present in this case.

7. It seems to me that the key to the whole situation is the agreement dated December 1, 1961, which Is admitted by both parties. The case of partnership between the parties, or of employment of the respondent by the appellant has to be determined in the light of the provisions in that agreement and the implications thereof. The oral testimony tendered on behalf of the parties has to be considered in the light of the admitted agreement between the parties.

8. This agreement is of great importance so far as this appeal is concerned. There is nothing in this agreement which provides for sharing of profits between the parties. There is not even any indication as to the share of the parties in the profits of the business. So far as the appellant is concerned the only provision is that he would get Rs. 125/- per month during the period of 7 years following the agreement It is difficult to treat this agreement as a partnership agreement between the parties. The internal evidence of the document shows that the respondent was to be in exclusive charge of the business for a period of 7 years, that he alone was to provide the funds for carrying on the business, that he alone was to be liable for the loss during this period, and that he would be entitled to appropriate the entire profits of the business subject to payment of Rupees 125/- per month to the appellant. Terms such as this are far from being indicative of a partnership agreement between the parties.

9. But even assuming that the agreement is in fact a partnership agreement and even assuming that the intention of the parties was to continue the partnership business during the period of 7 years, the question that arises is : in the light of the terms of the agreement what was to happen after expiry of the period of 7 years during which the agreement was to remain in force? It is to be remembered that the respondent has claimed and has obtained a decree for dissolution of a partnership in which he had a one-third share and the appellant had a two-third share. But thtre is nothing either in the pleading or in evi-dence that after the agreement came to an end, a fresh agreement was entered intobetween the parties by which the appellant Was to get a two-third share in the business, and the respondent was entitled to the remaining one-third. Nowhere has the respondent made out the case that upon expiry of the period covered by the agreement, a fresh partnership agreement was entered into under which the appellant and the respondent would be entitled to a share of two-third and one-third in the profits of the business respectively. The position, therefore, is that the relationship between the parties so far as the business was concerned remained altogether undefined except to the extent it was controlled and governed by the terms of the agreement itself. In this view of the matter, we do not see how the respondent can obtain a decree for dissolution of partnership, in Which the appellant and the respondent had a two-third and one-third share respectively. As we see it there is neither pleading nor evidence of such a case and there could therefore be no dissolution of a partnership, which never came into existence.

10. Let me now proceed to examine the contents of the agreement itself. The agreement in almost identical terms is recorded in 2 documents, one addressed by the respondent to the appellant and the other by the appellant to the respondent. In the copy addressed by the appellant to the respondent, it is stated : 'I have a shop at No. 33 Princess Street, I have given this shop to you on contract basis with effect from this day, date 1-12-61. I shall get Rs. 125/- (Rupees one hundred twenty five) from you in respect of the said, I have put you in charge of the following articles in my shop'. There can be no doubt that the appellant was treating the shop as his own and was making over the shop to the respondent from 1-12-61. There is nothing to show that the shop was a partnership business, or that the appellant, as one of the partners was making over the management of the partnership business to the respondent from 1-12-61. On the contrary the words used, quite clearly indicate, that the appellant was the owner of the shop. Thereafter the agreement proceeds to state : 'On the termination of the contract between you and me, you will put me (back) In charge of all these articles. I shall realise from you every month the sum of Rs. 125/- being the amount contracted for'. Pausing here for a moment the words quoted above make it clear as to what would be the position after termination of the contract. It was strenuously argued by Mr. Tebriwalla, counsel for the respondent, that the agreement between the parties was that, upon termination of the contract between the parties, the old partner-ship agreement should revive and their previous partnership with a two-third share for the appellant, and one-third share for the respondent, should be restored. This contention cannot be accepted, having regard to the clear provision aa mentionedabove as to what would happen upon termination of the contract. I shall revert to the question of the respective rights of the parties upon termination of the agreement later in this judgment.

11. The agreement thereafter proceeds to record : 'If you do not send the amount contracted for, for 3 months, then I shall come and take possession of my shop. You shall not (be competent to) raise any objection to that.' A provision in the agreement, such as this is altogether inconsistent with a contention that the partnership between the parties continued even after the agreement came into force or that it was to continue upon termination of the agreement If after the agreement came to an end, the business was to continue as a partnership business, the appellant could not have been given the right to take possession of the shop nor could the respondent have been debarred from raising objection to the appellant's taking possession of the shop. The words 'my shop' are very significant and in our judgment such words could not be used by parties who contemplated that the shop was to be treated as a partnership business during the subsistence of the agreement and even after the termination of the same. Thereafter the agreement records : 'If you introduce any change in respect of this I shall take back my shop'. The words 'I shall take back my shop' are quite definitely indicative of what was contemplated and agreed upon by the parties and also whether the shop was being carried on by the partnership or whether the appellant was the proprietor thereof. The next important provision in the agreement is : 'During this period whatever profits and losses there will be, the same will be yours and you will be the malik in respect of the same. i. e. entitled to the profits and liable for the losses'. This makes it clear that during the period covered by the agreement the whole of the profit of the business should go to the respondent, who would also be liable for the losses. The essential element of a partnership namely, sharing of profits and agency of one partner on behalf of the other is totally absent from the agreement. The contention of counsel for the respondent that even after this agreement came into existence, and during the subsistence of the same, the partnership continued, is entirely incompatible with the clear provision in the agreement relating to profits and losses. Thereafter it it stated in the agreement : 'The shop has been given on contract from date 1-12-1961 to 1-12-1966. And (with respect to the period) from 1-12-1966 to 1-12-1968 you shall have the option either to retain the shop or give it up'. A provision such as this is altogether inconsistent and incompatible with the contention of the respondent that the partnership continued even after the agreement came to an end. If such was the intention of the parties, there could be no question of one partner givine up the business of the partnership. Thereafter the agreement pro-ceeds to state that the liability for income-tax upto 1-3-1962, would be paid to the extent of 2/3rd by the appellant and I/3rd by the respondent.

12. On an examination of the terms of agreement, such as they are, I have no doubt in my mind that the business carried on at the shop at No. 33, Princess Street was a proprietary business of the appellant. There is not the least evidence in the agreement itself that the business was a partnership business or that such a partnership business was to continue during the period covered by the agreement. Thirdly, there is not the slightest evidence to show that upon termination of the agreement the alleged partnership between the parties was to revive, with a 2/3rd -share to the appellant and 1/3rd share to the respondent. The internal evidence of the agreement proves that the appellant was the proprietor of the business, that he was making over the management of the business to the respondent for a limited period, that he would be entitled to lake back the business upon expiry of the period, that during the period covered by the agreement the respondent will be entitled to the profits subject to payment of Rs. 125/- per month to the appellant, and liable for the losses. There is nothing in the agreement, not even a suggestion, that upon termination of the same the business would be carried on on a partnership basis between the par-tics. Admittedly, the period covered by the agreement expired and in the total absence of any evidence of a partnership coming into existence upon termination of the agreement a decree for dissolution of partnership, cannot, in our view, be passed.

13. Counsel for the respondent contended that the terms of the agreement which are quoted above were used as a mark of deference by the respondent towards the appellant. He also argued that the sum of Rs. 125/- per month was agreed to be paid to the appellant in lieu of his 2/3rd share. We are, however, unable to accept either of these two contentions. Having regard to the clear provision in the agreement, however, deferential and respectful might have been the attitude and behaviour of the respondent to the appellant, the parties certainly thought it necessary to protect their rights by recording the bargain between them in a written document. Secondly, in order to get a decree for dissolution of partnership, the respondent should have made out a case in his plaint that such a partnership came into existence upon expiry of the period covered by the agreement. Besides pleadings, there should have been evidence in support of such a case namely that the partnership was revived by agreement between the parties or that the partnership agreement between the parties would be treated as remaining in suspension during the period of the agreement. In this case there is neither any pleading nor any proof of any such case, and in the absence of pleading and proof such a con-tention cannot be accepted by us. Counsel for the respondent in his efforts to explain the use of the terms in the agreement indicating that the shop belonged to the respondent, and that the respondent had put the appellant in charge of the shop, and further that if the amount of Rs. 125/- per month was not sent to him he would come back and take possession of his shop, submitted that such terms were used in order to avoid trouble with the landlord. In other words, that terms indicating proprietary interest of the respondent were used to avoid the possibility of the landlord taking action against the tenant. There is neither merit nor force in this contention. There is nothing to show that the tenancy agreement prevented the tenant from carrying on a partnership business at the premises. The contention of Counsel for the respondent, therefore, cannot be accepted.

14. Let me now turn to the oral evidence tendered on behalf of the parties. The respondent's evidence is that the firm belonged to the appellant and he had 1/3rd share in it and that both he and the appellant carried on the business jointly. He added that the business was carried on in the name of the appellant and that is why he said that the firm belonged to the appellant (See Bansi-dhar's Qs. 51-54). So far as the evidence of the respondent is concerned the most important answer that he gave was that the l/3rd share, that would come to him, was by way of remuneration for the services that he would render to the appellant. This ani-wer was returned at Q. 355. It appears that Counsel appearing for the respondent at the hearing of the suit objected to the question. The ground of objection is by no means clear to us, and we see no reason for raising a frivolous objection to a perfectly proper question in cross-examination, unless it was for the purpose of cautioning the witness. The objection appears to have been raised after the witness had returned the answer, and for that reason we think it was all the more improper. At any rate the objection must have been overruled because the ans-wer went down in the deposition. But it seems to us that the purpose of the objection was partly served, because in the very next question the witness gave an answer to support his claim to a partnership. He said that for profit and loss of the business, he would be responsible for 1/3rd and the appellant for 2/3rd share and that all along he had been treated as a partner of 1/3rd share. This is an improvement of the answer given by him to question 355. When cross-examined on the question of the agreement, the respondent said that the terms of the agreement were correct when the agreement was drawn up, but that these terms became incorrect when the appellant forcibly ousted the respondent from the shop (Bansidhar's Qs. 469-478). It is difficult to follow what the respondent intended to convey by saying that the terms were correct at the time whenthe agreement was drawn up, but they became incorrect when the appellant took forcible possession of the shop. In answer to Q. 480 in which his attention was drawn to the clause providing for taking back of the shop by the appellant, which suggested that the appellant was the owner of the shop, the witness said that this statement was incorrect. It is to be remembered that the agreement between the parties is an admitted document. It is common case that the agreement was entered into between them and it was acted upon. I have no doubt that the respondent was prevaricating in his attempt to explain away the terms of the agreement. The agreement is a simple document and is couched in very plain terms. In saying in answer to Q. 480 that in so far as, it was recorded that the appellant was the owner of the shop, the shop belonged to Muralidhar Babu, and at the same time to assert that it was incorrectly stated, the respondent showed very scant regard for truth. On the question of the Chitta Book, which is the name for Balance Sheet and Profit and Loss Account, the respondent said that this account book was not in the shop because it was the last - profit and Loss Account, and as he had to go to his native village, possibly the account book was kept there and he brought it from his village (See Q. 742). This book, it is noted, was not disclosed in the affidavit of documents filed on behalf of the respondent but was disclosed later on by a letter. Again this book was not found in the shop room by the Receiver and admittedly it remained in the custody of the respondent. But in answer to Q. 605, the respondent said that he did not take any of the books of the firm to his native village and according to him all the books used to be kept in the shop room.

15. Turning now to the appellant's oral evidence it appears that the business has been carried on by the appellant since 1953 and the respondent was taken in by the appellant as an employee. Instead of fixed remuneration the respondent was paid 1/3rd share in the profits of the business (See Muralidhar Qs. 2, 3, 4, 35, 44, 48, 54 and 61). According to the appellant the business was started by him, he purchased the Grinding Machine for Rs. 2600/-, the trade licence was obtained by him, the electricity bills come in his name, and the tenancy was also in his name (see Muralidhar's Qs. 8, 35, 36, 69, 70). With regard to the various articles in the shop the appellants' case is that they all belong to him, and the respondent after some hesitation had to admit that the articles all belonged to the appellant (See Bansi-dhar Qs. 558-564).

16. Another witness Banwarilal Agarwala called by the respondent said that Muralidhar and Bansidhar had opened a new shop and recommendations were made to him to supply goods to them. According to him the shop was opened in 1953-54 andhe supplied goods to this new shop (See Banwarilal Agarwala Qs. 22-28). This evidence docs not support the respondent's case of partnership nor does it indicate (he terms of the partnership agreement between the parties, or the share of the partners in the business. This witness did not produce any books of account to show that goods were in fact supplied by him to the new business started by the appellant and the respondent It is significant that in the plaint itself the respondent has not alleged that the partnership between him and the appellant was started in 1953-54. All that is alleged in the plaint is that since prior to 1st December, 1961, the plaintiff and the defendant have been carrying on business of a Flour Mill. If the partnership was started in 1953-54 it is difficult to understand why that statement was not made in the plaint itself, even though it was alleged that since prior to Decembeu 1, 1961, the parties had been carrying on business in co-partnership. According to (he respondent Banwarilal is the person with whom he deposited a sum of Rs. 17,000/-bcing the balance of price of the share which he had agreed to purchase (See Bansidhar Qs. 125-127). The evidence of Banwarilal, to my mind, is of no assistance to the respondent in establishing the case of partnership which he has made out in the plaint.

17. Another witness Dulichand Agar-walla called by the respondent said that he opened a shop in November, 1955, at No. 10, Kapalitola Lane, and immediately thereafter he came to know the appellant and the respondent as both of them were sitting in their shop (sec Dulichand Qs. 10-15). At best this evidence proves that the respondent was found in the appellant's shop sometime in 1955-56. It does not, by any means, prove a partnership between the appellant and the respondent. As against this the appellant said in his evidence that prior to the respondent joining the business of the appellant, the latter alone carried on the business which he started in 1953 and he was the only man in the shop, but he appointed certain other persons to help him in the grocery business (See Muralidhar Qs. 531-535, 545-548). According to him the respondent joined him in his shop some time in 1957 or in 1958, when he brought Bansidher (See Muralidhar Q 558). On the question of share of profits he said that whatever profits would be there afteu deducting expenses, such profit would be distributed in the proportion of 2/3rd to himself and l/3rd to the respondent and apart from this profit the respondent was not entitled to anything else. So far as loss was concerned the respondent was not to share the loss but if there was any loss the shop was to suffer the same (See Muralidhar Qs. 48, 49, 54, 55 and 56).

18. On an analysis of the oral evidence adduced on behalf of the parties I am of the opinion. that the evidence of the appellant is more consistent with the writtenagreement of December 1, 1961. It is clear that the respondent instead of being paid a fixed sum on account of remuneration, was paid 1 /3rd share in the profits, arrived at after taking into account the various expenses in connection with the business. The respondent's case that he was a partner in the business, is in my view, altogether inconsistent with the terms of the written agreement to which 1 have referred earlier, on a careful consideration of the oral testimony of the parties, I accept the evidence of the appellant which is quite consistent with the admitted written document between the parties.

19. Let me now turn to the Chitta Book (Balance Sheet) on which a good deal of reliance was placed by Counsel for the respondent to prove the case of partnership.The entries in this book only go to show that the profit was shared between the appellant and the respondent in the proportion of 2/3rd and 1/3rd respectively. It also shows that the appellant had been paid certain sums of money in addition to his 2/3rd share of the profit. That, it was explained was withdrawal of the capital which he had contributed. It was argued by Counsel for the respondent that since the appellant had withdrawn the capital, he had invested, the respondent was entitled to a 1/3rd share in the value of the capital assets. We are unable to accept this contention. In the absence of a partnership agreement between the parties, under the terms of which the partners became entitled not only to sharing of profits but aho to a share of the assets on dissolution, it cannot be held that merely because a person is entitled to a l/3rd share of profit by way of remuneration, he would be entitled to a share in the assets of the firm upon dissolution. The Chitta Book is an admitted document and all that it proves, is that the respondent was paid l/3rd share of the profit* of the firm.

20. Section 4 of the Indian Partnership Act, (hereinafter referred as the Act) defines Partnership as the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Section 6 of the Act 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, regard shall be had to the real intention between the parties. Explanation 2 of this Section provides that receipt by a person of a share of profit of business does not by itself make him a partner with the persons carrying on the business, and thereafter the explanation goes on to provide that in particular the receipt of such a share by a servant as remuneration will not make him a partner. Relying on this provision Mr. Sankar Ghosh Counsel for the appellant argued that merely because lhe respondent was paid a share in the profits of the business, he did not become a partner in the business It was argued (sic) the evidenceboth oral and documentary all that could be said was that the respondent was paid by way of his remuneration l/3rd share of the profit of the business. Mr. Ghose contended that the admitted written agreement between the parties quite clearly negatived any concept of partnership between the parties. He also argued that the Chitta Book and the oral evidence proved that upto the time when the written agreement was arrived at between the parties, the appellant was the sole proprietor of the business which was carried on in his name and the respondent was an employee who was paid l/3rd share of profits by way of his remuneration.

21. In support of his contention MB. Ghosh relied on Miles v. Clarke, (1953) 1 AH ER 779. In that case a business of photography was started by a person in premises of which he had the lease. He inducted another person who was a photographer, into the business as a partner. The only agreement between the parties was that the profit should be shared equally and that the photographer was to draw Rs. 125/- per month on account of his share. The partnership thereafter was wound up and on the question of ownership of assets used in the business it was held that as there was no agreement except as to the division of the profit, no further agreement should be implied than was necessary to give business efficacy to the relationship between the parties. Relying on this decision Mr. Ghosh contended that the only agreement between his client and the respondent was to share the profits and from such agreement, a partnership agreement should not be inferred. Reliance was next placed on a Bench decision of the Bombay High Court reported in 47 Bom LR 808 = (ATR 1946 Rom 174), Hirabai Gendalal v. Bhagirath Ramchandra and Co. In that case there was a transfer of the managing agency of a company to another company for a period of 15 years and it was provided that during the period of 15 years, the transferee company would enjoy all the rights possessed by the transferor company as the managing agents and receive for its remuneration a commission of 12% of the net profit or Rs. 15,000/- a year whichever was more, and pay to the transferor company a 4 anna share in the commission so earned. It was held that the true test whether there was a partnership between the transferor and the transferee companies was whether the participation of profit constituted relationship of principal and agent between the parties, and that there was nothing in the agreement between the two companies to suggest that the transferee company was to carry on the managing agency business on behalf of itself and the transferor company and therefore the agreement was not a partnership agreement. Relying on this decision it was argued that the written agreement in this case did not constitute an agency between the appellant and the respondent the latter havinc been nut in exclusive charge of the business. On thequestion that the appellant alone was entitled to the tenancy of the premises where the shop was situated, reliance was placed on a decision reported in (1912) 1 Ch 663 and also on a Bench decision of the Patna High Court reported in : AIR1965Pat144 . On the question whether the relationship between the parties constituted a partnership, reliance was placed by Mr. Ghosh on a decision of the Supreme Court M. P. Davis v. Commr. of Agricultural Income-tax, : [1959]35ITR803(SC) - In that case, taking into consideration the fact that on dissolution the capital goes hack to one of the parties and that the document provided that one of the parties should employ diligence in carrying on the business and no provision was made whether one party would be bound to do any work for the farm and that account should be maintained by one of the partners which expressly gave to the other a privilege to look into them and ask questions relating to them and also that the remuneration payable to a party claiming to be a partner, was to be out of profits and no such remuneration was payable if there was a loss, and further no provision was made in the document as to how losses were to be dealt -with, it was held that all that circumstances of the case and the conduct of the parties indicated that the agreement was not intended to be a partnership agreement between the parties. On the question whether relationship between the parties was that of partners, reliance was also placed by Mr. Ghosh on another decision of the Supreme Court Charnparan Cane Concern v. State of Bihar, : [1963]49ITR152(SC) . In that case the question was whether two co-owners who shared the profits and loss of a business became partners in a partnership concern. It was held that the fact that profits or even the losses were distributed between the owners in accordance with the shares of the two owners, did not necessarily establish a partnership within the meaning of the Act. I do not think this decision is of any assistance to the appellant in this case because it is not the respondent's case that he was a co-owner. The facts in the case before the Supreme Court were different inasmuch as, admittedly the parties were co-owners of a cane farm.

22. It seems to us that the contention of Mr. Ghosh that the respondent did not become a partner of the appellant merely because he was paid 1/3rd share of the profits is well founded. The real intention of the parties does not appear to us to have been to constitute an agency between the appellant and respondent. On the other hand, the evidence is overwhelming in support of the appellant's contention that he was a sole proprietor of the business. On the question of pleading, Mr. Ghosh contended that it was not pleaded in the plaint that the agreement between the parties should be rectified or cancelled.because it did not reflect the true position as to the relationship between the parties. It was further argued that the plaintiff having pleaded the agreement and having accepted the same, should have asked for a declaration that the agreement is binding on the parties. In support of this contention reliance was placed on Blay v. Pollard and Morris, (1930) 1 KB 628. I do not think that the criticism of the plaint by Mr. Ghosh on the grounds he has urged can be sustained. There is no question of the respondent asking for cancellation or rectification of the agreement which he has accepted. It is not the respondent's case, (although he said in the evidence that the agreement was true when it was executed but had ceased to be true later on) that the agreement was not binding or that it did not record the consensus between the parties.

23. The plaint to our mind, however, suffers from another very serious deficiency. It has not made out a case that the oral partnership agreement between the parties was kept in abeyance for the duration of the agreement, and that this partnership was revived or came into existence upon termination of the agreement or upon expiry of the period covered by the agreement. As I have noticed earlier no such case has been made but in the plaint or in the evidence and in the absence of both pleading and proof that the partnership agreement came into exislence upon expiry of the period covered by the agreement, a decree for dissolution of a partnership cannot be passed, because such partnership never came into existence. Before proceeding to discuss the next question 1 should refer to two decisions on which reliance Was placed by counsel for the appellant regarding appreciation of oral evidence. The first of these is a decision of the Supreme Court Kanvi Nanji Virji v. State of Gujaral, : 1970CriLJ363 . The Second case re1ated to is a decision reported in AIR 1940 Lah 457.

24. Counsel for the respondent in dealing with the question of partnership contended that although in the written agreement there was nothing to indicate that there was a partnership between the parties, a partnership agreement should be inferred having regard to the relationship between the parlies, the entries in the Chitta Book and the oral testimony of the respondent. He submitted that a partnership agreement might be inferred even though there was no mention of such an agreement in a written document. In support of this contention he relied on a Bench decision of the Bombay High Court reported in AIR 1927 Bom 187. I do not think that the Bombay decision is of any assistance to the respondent. With regard to the agreement, counsel for the respondent made two different cases in course of his argument. He submitted that the oral partnershipagreement between the parties continued even after the written agreement and that the sum of Rs. 125/- per month was paid to the appellant in lieu of his 2/3rd share. Thereafter he argued that the oral partnership agreement was kept in abeyance during the period covered by the written document, and the agreement revived and came into existence upon expiry of the written agreement. The respondent's case of a partnership is based on an oral agreement and not on the written document because according, to him this partnership came into existence some time in 1953-54 when he joined the appellant.

25. On the question of the respondent's right to the partnership assets reliance was placed on a decision of the Supreme Court Addanki Narayanappa v. Bhiskara Krishnappa, ATR 1966 SC 1300. I do not think I need go into this question because the question of share In the assets would arise only if there is a valid subsisting partnership. As in this case we are of the opinion, that no such partnership existed between the parties, we need not go into this question. For the same reason we need not deal with a decision of this Court reported in (1964) 68 Cal WN 786 on which counsel for the respondent relied for the proposition that sharing of losses is not a necessary ingredient of partnership.

26. Counsel for the respondent argued that there is nothing in the written statement in support of the respondent's case that he ever paid 1/3rd share of the profits to the appellant by way of remuneration. He submitted that the appellant while denying in his written statement that there was no partnership between the parties did not plead that respondent was paid l/3rd share of the profit by way of his remuneration. He also argued that in order to make out such a case the appellant should have laid the foundation of it in his written statement. In support of this contention, reliance was placed on (1942) 1 All ER 97, AIR 1925 Mad 950 and AIR 1964 SC 538. It is true that the appellant has not pleaded in his written statement that although there was no partnership between the parties, the respondent was paid a 1/3rd share in the profits as his remuneration. But it is a cardinal principle of pleading and proof that the plaintiff must succeed on the strength of his own case and not on the weakness of the defendant's case. It is for the plaintiff to plead and prove that there was a partnership agreement and that such an agreement continued even after the execution of the written document and that it Was in existence at the time the suit was instituted. In this case as I have noticed earlier, such a case has neither been pleaded nor proved.

27. There is another decision on which counsel for the respondent relied for the proposition that an employee who shared in the profit as well as in the loss of abusiness was a partner in the business. The case relied on is reported in AIR 1918 Lah 319. This decision is of no assistance to the respondent because it is not his case that he was an employee and as such shared in the profits and losses. The case he has made out and sought to prove is that he was a partner from the time of his association with the appellant and was not an employee at any time.

28. Counsel for the respondent relied on a Bench decision of this Court reported in AIR 1916 Cal 376 for the proposition that a stipulation is to be implied in a written contract to give such business efficacy to the transaction as both parties must have been intended and that in certain cases an implied covenant might be inferred, having regard to the custom of trade or the course of business, usual in the class of transactions to which the contract related. I do not see how this decision is of any assistance to the respondent because there is no evidence of any trade custom, that in spite of the clear stipulations in the written agreement, a partnership is to be implied or that such a partnership should be deemed to have come into existence upon expiry or termination of the agreement.

29. After conclusion of the argument, counsel for the respondent drew our attention to a decision of the Supreme Court (not yet reported) K. D. Kamath and Co. v. C. I. T., Bangalore, C. A. No. 1242 of 1968 = (Since reported in 1972 Tax LR 197 (SC)), a brief summary of which has appeared in the Supreme Court Notes. In that case the question was whether the essential requirements of a partnership under Section 26-A of the Income-tax Act were present in that case. It was held that the fact that the exclusive power of control was given to one partner who was vested also with the power to operate the bank account and also to operate on behalf of the firm, were not destructive of a partnership, provided two essential conditions, namely, an agreement to share profit and loss and the principle of agency were satisfied. I do not think this decision is of any assistance to the respondent in the facts of this case. As I have noticed earlier there is neither evidence of a partnership agreement between the parties nor of any agency between the appellant and the respondent for the purpose of carrying on the business.

30. I now turn to the cross-objections filed by the respondent. Before doing that I should note that the trial Court rejected the respondent's claim for specific performance of the oral agreement pleaded. Grounds Nos. 1, 2 and 3 of the cross-objections related to the question of specific performance of the oral agreement. Counsel for the respondent submitted that his client was not ready and willing to perform his part of the alleged oral agreement and he did not press grounds Nos. 1, 2 and 3 ofthe cross-objections, but that he was pressing grounds Nos. 4, 5 and 6. So far as the ground No. 4 is concerned it is directed against the finding of the trial Court that the respondent had not established that any of the goods belonging to him was removed by the appellant before the Receiver took possession of the goods. In our opinion, the trial Curt was right in coming to this conclusion on the evidence on record. Ground No. 5 is directed against the finding that the respondent failed to prove that he had the entire goods and articles, as mentioned in paragraph 8 of the plaint. On the evidence, such as it is, We think the trial Court was entirely right in coming to the conclusion to which it did on this question. The last ground is directed against that part of the decree which directed the respondent to pay Rs. 2000/-to the Receiver in the first instance, the amount to be appropriated thereafter between the parties in the proportion of 1/3rd for the respondent and 2/3rd for the appellant. We do not think that there is any merit in this ground of cross-objection also. In our view, the trial Court was entirely right in giving the direction that the respondent was to pay the amount initially and in the first instance, to be adjusted later according to the share of the parties.

31. I now turn to another finding of the trial Court namely, that the appellant had committed trespass in taking possession of the shop. For this trespass Rupees 1000/- was awarded against him as damages. In our view, the trial Court was in error in directing the appellant to pay Rs. 1000/- as damages to the respondent as there is no prayer in the plaint for a decree for damages for wrongful trespass.

32. In our view, the trial Court failed to consider the importance of the written agreement between the parties of December 1, 1961. The case of partnership attempted to be proved by the respondent should have been closely examined in the light of the provisions in the agreement which is an admitted document. The terms and stipulations in the agreement plainly negative any partnership between the parties. Furthermore, there is absolutely no pleading or proof that upon termination of the agreement and upon expiry of the period covered by the same, the alleged oral partnership stood revived. Nor is there any evidence to prove that the intention of the parties was that the partnership should remain in abeyance during the period covered by the agreement. Fven if there was a partnership agreement between the parties before the written agreement, and in our view there is no evidence of such, it came to an end upon execution of the agreement. On the materials on record and on the plaint as framed, there was no partnership between the parties at the time of institution of the suit and a decree fordissolution of partnership could not, therefore, be passed.

33. For the reasons mentioned above this appeal is allowed. The cross-objection is dismissed. The judgment and decree of the trial Court are set aside. The suit is dismissed. The respondent to pay to the appellant the costs of the appeal and also of the trial Court.

Ajay K. Basu, J.

34. I agree.


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