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Kader Bux Omer Hyat Vs. Bukt Behari and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1932Cal768,140Ind.Cas.751
AppellantKader Bux Omer Hyat
RespondentBukt Behari and anr.
Cases ReferredAhmed Musaji v. Hashim Ebrahim A.I.R.
Excerpt:
- .....it was a partnership suit. one of the defendants was described as gohurmull manmull, a partnership firm. the point raised was that the suit was improperly constituted because there was no such firm as johurmull manmull and that they were two individuals. the contention was that not having been sued as individuals it was too late to bring them on record by reason of limitation, and that therefore all parties necessary for a partnership suit were not present. page, j., allowed the defendants to raise this point as a matter of fact, i. a., whether johurmull manmull was a firm. if it was a firm it is not suggested that there would have been any difficulty. but it was found on the facts that johurmull manmull was not a firm. page, j., pointed out that, although the two persons were parties in.....
Judgment:

Ameer Ali, J.

1. In this case the only point apart from the question as to the form of account raised by the defendants, is a point by way of demurrer that the suit does not lie. As I understand it, the foundation for this demurrer is as follows : that the alleged partnership between what is described in the partnership deed as the firm of Kader Bux Omer Hyat and the two defendants, Mohamed Hussain and Mohamed Siddique, is unlawful according to Indian law and that therefore the Court will not pass a partnership decree and order accounts.

2. The argument is as follows : Mr. Bose relies, first of all, on Section 239, Contract Act. Secondly, he relies upon certain cases and in particular upon a judgment of Page, J., in Seodoyal Khemka v. Joharmull Man-mull (1). The argument based on the Contract Act is as follows : that 'partnership' is defined as a relationship between persons, that a firm is not a legal person, and that therefore a partnership which purports to exist between a firm and an individual is unlawful according to Indian law. The fallacy in that argument is as follows: Conceding that a firm is not a legal person--for that no authority is required--a person within the meaning of Section 239 may yet be a combination of persons. Person' is not defined in the Contract Act, and the definition of person in the General Clauses Act premises of this being the case. The terms of the section do not render unlawful or impossible a partnership between an association of persons, although unregistered, and an individual. I agree how-over that a firm is nothing but an association of individuals, and that when such an association under a firm name enters into a partnership with another individual or another association of individuals it is not the aggregate that combines with the individual, but the individuals composing that aggregate. To that extent, and no further, I agree with the argument on demurrar.

3. As to the judgment in Seodoyal Khemka v. Johurmull Manmull : AIR1924Cal74 the particular passage relied on is as follows : 'A firm as such cannot be a member of a partnership.' I agree 'as such.' The case however does not support Mr. Bosa's proposition. On the contrary, it is quite clear from that case that it was common ground that if Johurmull Manmull had in fact been a firm there would have been no trouble : see pp. 550, 553, 555 and 557(of 50 Cal.). The point in that case was this: It was a partnership suit. One of the defendants was described as Gohurmull Manmull, a partnership firm. The point raised was that the suit was improperly constituted because there was no such firm as Johurmull Manmull and that they were two individuals. The contention was that not having been sued as individuals it was too late to bring them on record by reason of limitation, and that therefore all parties necessary for a partnership suit were not present. Page, J., allowed the defendants to raise this point as a matter of fact, i. a., whether Johurmull Manmull was a firm. If it was a firm it is not suggested that there would have been any difficulty. But it was found on the facts that Johurmull Manmull was not a firm. Page, J., pointed out that, although the two persons were parties in the firm name only, a firm being only an association of individuals they were in fact and substantially parties as individuals. It was in that connexion that he used the phrase 'a firm as such cannot be a member of a partnership' and in no other connexion. I am therefore of opinion that the case properly read is against the contention of Mr. Bose. In my view the position is as follows, and this appears from the cases under the English law which are cited in Lindley on Partnership, pp. 437, 438 and 348. Assuming that a partnership between a firm and an individual is in law a partnership between the individuals which compose the firm and the individual, the only question that arises is of this nature. I will give an example : Y and Z enter into partnership with A and B. Apart from special contract, each take 1 1/4. If Y and Z are partners and they combine with A and B, and there are no terms of partnership, the question arises as to whether Y and Z are to take a third between them or take a quarter each. This depends upon whether Y and Z have entered into the partnership contract as a unit, although not a legal unit, or as separate individuals.

4. In other words, if Y + Z join with A + B, Y and Z will take a third. If Y + Z join A+ B, Y Z A + B each take a one-fourth where there is a partnership deed the difficulty hardly arises. Here Hossain and Siddiq are Y+Z by virtue of the deed and they together take 12/16. In my view, there is no legal obstacle to the members of a firm entering into partnership with other individuals or members of other firms, and the mere fact that in such contract or in such business they describe themselves as a firm does not make the association unlawful. Further, it appears to me, although I do not decide this point, that when it comes to filing a suit for dissolution of partnership the individuals composing the firm, in the position of Kedar Bux Omar Hyat, can sue in the firm name. It may however be argued that if a suit is brought in the firm name or one of the parties or some of the parties are collected together under the firm name, all the individual members of the partnership of which dissolution is sought are not on the record. I myself think that Seodoyal Khemka v. Johurmull Man-mull : AIR1924Cal74 is an authority against that contention, but I express no formal opinion on the matter. (Mr. Basu further contended that while taking partnership accounts, profits made by plaintiff with the assets of the dissolved firm, after date of its dissolution should be taken into account on which his Lordship delivered the following judgment.) Mr. Basu on behalf of the defendants has asked me not only to order ordinary partnership accounts but to order an account in some form or other, as to which I am not very clear, by the plaintiff of what was done with the assets of the firm after the date of dissolution.. He relies upon a certain passage in Ahmed Musaji v. Hashim Ebrahim A.I.R. 1915 P. C. 116 (at p. 925 of 42 Cal.) and he suggests that it is the universal rule that where on a dissolution partnership accounts are not gone into and adjusted by a decree of Court or otherwise any partner who continues to use the assets is liable to account to the other partners for all profits earned apparently in perpetuity I am unable to accept this contention. I can quite understand that in many eases on the principle of Section 42 of the English Act, a person who continues to trade with assets which are really due to one of his late partners may be liable either to pay interest on the sum which he has retained and used or to account for the profits made with those assets. But it appears to me entirely exclusive to suggest that in every partnership decree where any assets have continued to be used after dissolution, an account such as is asked for by the plaintiff should be ordered. The defendants may have liberty to apply if any sum is found to be due to them, and if they elect to claim an account of profits it is quite possible that such an order may he made. At present I only propose to pass the ordinary preliminary decree in a partnership action. There will be a declaration that the partnership is dissolved as and from 31st December 1924. The shares of the parties will be declared as stated in the plaint. Accounts will be taken without disturbing settled accounts, if any.


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