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Dulaldas Mullick and ors. Vs. Ganesh Das Damani and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 1 of 1953
Judge
Reported inAIR1957Cal280
ActsCode of Civil Procedure (CPC) , 1908 - Section 47; ;Partnership Act, 1932 - Section 55; ;Contract Act, 1872 - Section 27
AppellantDulaldas Mullick and ors.
RespondentGanesh Das Damani and ors.
Appellant AdvocateHazra, Adv.
Respondent AdvocateS. Chatterjee, Adv.
DispositionAppeal dismissed
Cases ReferredH. C. Gupta v. Mackertich John
Excerpt:
- .....now be denied the value of his purchase by depriving him of the right of occupation of the said shoproom which is the very foundatinn of the goodwill he has purchased. we are of the opinion that there is no substance whatever in this argument. a court in order in find out what has pushed at a sheriff's sale looks into the order directing the sole, the proclamation of sale and the surrounding circumstances. the surrounding; circumstance in this case is the higher value paid and the appellant never applied to set aside such sale on the ground of any alleged irregularity and defect. all these factors taken individiually find together leave no doubt in our mind that the goodwill of the business oe d. mullick & co. of 46/a, netaji subhas road as a going concern including the monthly.....
Judgment:

P.B. Mukhakji, J.

1. This is an appeal from the judgment of the learned trial Judge dismissing the plaintiff's suit with costs.

2. The suit was instituted by the plaintiff on the 17th February, 1950, for the delivery of possession of a shop room in premises No. 46/A, Netaji Subhas Road, Calcutta, and for seeking other incidental reliefs. The plaintiff's case was that he was carrying on business as a dealer inpaints and varnish at the said shop room as a monthly tenant paying rent at the rate of Rs. 144-6 per month under the name and style of D. Mullick & Company. He was indebted to a person called Gopal Lal Daga who instituted a suit being Suit No. 610 of IMS against the present plaintiff under Order 37, Civil P. C., for the sum of Rs. 3735-9-9 on certain hundis. That suit was decreed with costs on 7-5-1948. The decree-holder Daga of that case started execution proceedings and in course of such execution proceedings the furniture, stock-in-trade and goodwill of the business of D. Mullick & Company of the plaintiff were sold as a going concern and were purchased by the defendant Ganesh Das Damani on 19-2-1949 for the sum of Rs. 8,100. The sale was held by the Sheriff. It is the plaintiff's allegation in the plaint that on 22-2-1949, Damani wrongfully put his padlocks on the doors of the said shop room and has continued to be in possession of such room since then. It is also his allegation in the plaint that the second defendant Usha Bolt and Nut Company is now in possession of the said shop room and is carrying on business there. In fact the second defendant Usha Bolt & Nut Company purchased on 23-6-1949 for valuable consideration the business of D. Mullick & Company with its goodwill stock-in-trade and furniture as a going concern.

3. The learned trial Judge after hearing the parties and their evidence came to the conclusion that the sale in this case included the goodwill of the business of the plaintiff in the said shop room as a going concern, and that by sale of such goodwill the plaintiff also lost his monthly tenancy rights therein.

4. The essential point for determination in this appeal is whether the goodwill in the present case includes the right of the plaintiff as a monthly tenant to occupy that said shop room. Before a decision can be reached on that point the primary enquiry must be what in fact was sold by the Sheriff. In other words was the 'goodwill' in fact sold? For that purpose the relevant sale proclamation and orders of sale are material.

5. The relevant sale proclamation dated 1-2-1949, settled on notice to the attorneys on record which is directed to be filed herewith with the records of this appeal shows what was sold. The material terms of the Sheriff's sale proclamation are:

'To be peremptorily sold pursuant to the order of the High Court of Judicature at Fort William in Bengal in its Ordinary Original Civil Jurisdiction dated the tenth day of December one thousand nine hundred and forty eight made in execution of the decree dated 7-5-1948 and pursuant to the orders dated respectively 10-8-1948 and 9-9-194S made in Suit No. 610 of 1948 by the She-riff of Calcutta at No. 46/A, Netaji Subhas Road in the town of Calcutta by public auction on Saturday. 19-2-1949 at the hour of twelve o'clock noon the goodwill of the business of D. Mullick & Co., of No. 46/A, Netaji Subhas Road and the right, title and interest, of the defendant Dulal Das Mullick the sole proprietor of D. Mullick & Co., in the following moveable properties'.

Then the proclamation recited the items of the moveable properties. At the end of these recitals are stated the words 'in one Jot as a going concern.'

6. The proclamation expressly' states in clearest terms that what was being sold was the goodwill of the business of D. Mullick and Com-pany of No. 46/A, Netaji Subhas Road as a going concern in one lot.

7. The order of Mr. Justice Majumdar of 9-9-1948 also says -

'It is ordered that the Sheriff of Calcutta do in execution of the said decree sell the goodwill of the defendant firm D. Mullick & Co. of NO. 46/A, Netaji Subhas Road. Calcutta, without attachment under Section 51(b), Civil P: C., along with the move-able properties.'

The next order material for this purpose is the one by Mr. Justice, Banerjee dated 10-12-1948 which also directs -

'the Sheriff of Calcutta do sell by public auction to the best purchaser or purchasers that can be got for the same as a going concern in one lot the goodwill and the furniture and other articles of the defendant firm D. Mullick & Co., attached in execution of the said decree and directed to be sold under the said orders and that such sale be held at the premises No. 46A, Netaji Subhas Road, Calcutta.'

8. It is clear in our opinion both from the sale proclamation as well as from the relevant orders directing the Sheriff to sell that the property to be sold in this case was nothing else than the goodwill of the business of D. Mullick & Co. of 46/A. Netaji Subhas Road as a going concern, apart from the other stock-in-trade and furniture mentioned in the relevant orders. There is therefore, no substance in the appellant's contention that as the sale was by the Sheriff and as the conditions of sale were made-appropriate to those of sale of moveable property therefore the plaintiff's goodwill, if it includes his right to immovable property namely that of a monthly tenant of the shop room, had not been lost by the sale. Even for these irregularities, if irregularities they be, the sale today cannot be set aside as it has become final and the procedure that the appellant should have followed was by application under Order 21, Rule 90, Civil P. C., to set aside such sale. The appellant made no such application.

9. Mr. Das appearing for the appellant then urged before us that the goodwill that was sold would not include the judgment-debtor's right as a monthly tenant to occupy the said shop room. We are unable to accent that argument on the facts and law in the present case. The relevant facts on this point are (1) that the plaintiff's right to occupy the shop-room is based at best on a monthly tenancy, (2) that his business is a business of paints and varnish, (3) that the particular shop room is situated In the well-known and famous business area in Calcutta formerly known as the live Street area and which is the very heart of the business centre of this city and (4) that the plaintiff is not a manufacturer or producer of paints but is only a dealer or trader in selling paints. On that context of fact we are of opinion that good-will in this case must necessarily' include the monthly tenancy of that shon-room. To hold otherwise would reduce the goodwill to mere nothing. Nothing will be left of the goodwill of any ordinary dealer's shop or business if custom is separated from the shop room in which the business is carried on.

10. The law of goodwill is often misunderstood because I think Jurisprudence not infrequently treats it as an abstract notion, which in fact it is not. Goodwill must always be understood in relation to facts. Goodwill in jurisprudence is not the abstract quality which the grammarianmeans by that expression but a very concrete notion of great practical import. What the goodwill of a business is depends a good deal on the facts and circumstances of the particular business. Goodwill represents business reputation. Business reputation in my view is a complex of personal reputation, local reputation and objective reputation of the products of the business. Which one of these elements will predominate will depend on the facts and circumstances of each case. Except where the reputation of a business and where the product of the business more than its proprietor have won widespread popularity and universal approval and except in the case of well-known pa-tents and manufacturing processes in which event the personal and objective reputations predominate, it is the local reputation or the attribute of locality which forms the largest content of good- will in almost every other business. Specially is the attribute of locality the most important consideration in the business of an ordinary trader or a dealer as in the present case. In my opinion there can be no hard and fast rule, no simple formula and no inflexible and rigid definition of the term 'goodwill' but in each case it is necessary to see the entire nexus of facts connected with the business whose goodwill is to be determined.

11. In fact, Vice-Chancellor Wood in Chur-ton v. Douglas, reported in 1809 John 174 at 188 (A), quotes with approval the well-known observations of Lord Eldon where the learned Lord had said-

' 'goodwill' must mean every advantage - every positive advantage, if I may so express it, as contrasted with the negative advantage of the late partner not carrying on the business himself - that has been acquired by the old firm in carrying on its business, whether connected with the premises in which the business was previously carried on, or with the name of the late firm, or with any other matter carrying with it the benefit of the business.'

12. In Cruttwell v. Lye, reported in (1810) 17 Ves 335 (B), Lord Eldnn again made the emphatic observation at page 346-

'The goodwill is nothing more than the pro-babilitv, that the old customers will resort to the old place,'

13. Lord Westbury in Ricket v Metropolitan Ry. Co., (1867) 2 H.L. 175 at p. 204 (C), says-

'It is a fallacy, almost a mockery, to answer, the custom is one thing and the house another and the injury is to the custom, not to the house. You cannot severe the custom from the house itself, or from the interest of the occupier, for the custom is the thing appertaining to the house which gives it its special character, and constitutes its value to the occupier.'

14. On the importance of the attribute of locality the speeches of the different law Lords deciding the case of Commissioners of Inland Revenue v. Muller & Co.'s Margarine. Limited, reported in, 1901 AC. 217 (D), appear to be unanimous. Lord MacNaghten at page 224 of that report observed-

'For my part. I think that if there is one at-tributs common to all capes of goodwill it is the attribute of locality. For goodwill has no independent existence. It cannot subsist by itself. It must be attached to a business. Destroy the business, and the goodwill perishes with it, though elements remain which may perhaps be gathered up and be revived again. No doubt, where the reputation of a business is very widely spread or where it is the article produced rather than the producer of thearticle that has won popular favour, it may be difficult to localise goodwill.'

Lord Lindley in the same case at page 235 of the report says that goodwill regarded as property has nc meaning except in connection with some trade, business, or calling, and went on to add:

'In that connection I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any of these things, and there may be others which do not occur to me. In this wide sense, goodwill is inseparable from the business to which it adds value, and in my opinion, exists where the business is carried on. Such business may be carried on in one place or country or in several and it in several there may be several businesses, each having a goodwill of its own.'

15. In the present case before us I am satisfied both on the law and on the facts that the goodwill of the business of D. Mullick & Co. of 46/A, Netaji Subhas Road was sold and that the sale of goodwill in this case included the monthly tenancy right or whatever right of occupation the plaintiff Dulaldas Mullick had in the said shop room. The terms of the relevant orders for sale and the terms of the sale proclamation in this ease, expressly emphasise the fact that the goodwill of the business as a going concern was sold. To sell the ordinary dealer's business as a going concern and then to say that it does not include the very basic right to occupy the shop room from where the business is carried on will be to dislocate and destroy the business and not to sell it as a going concern for the present business cannot go on except from that shop and it is a business where locality is a significant part of the goodwill sold.

16. We are also fortified in our opinion that the sale of the goodwill included in this case the tenancy right by reason of the fact that the price of Rs. 8,100/- paid for such sale far exceeds the value of the furniture and stock-in-trade which are worth only about Rs. 2,000/- and also the debt of only about Rs. 3,000/- for which the sale was being held. It is in evidence that the plaintiff was indebted to many other persons.

17. Mr. Das then took up the position that even if the goodwill included the tenancy right, in this particular case the tenancy right in fact was not sold. In other, words, he took up a wholly untenable attitude that although the Court directed the Sheriff to sell the goodwill, although the Sheriff's sale proclamation said so and although the purchaser paid the higher value of more than Rs. 8,000/- for the sale, yet the purchaser should now be denied the value of his purchase by depriving him of the right of occupation of the said shoproom which is the very foundatinn of the goodwill he has purchased. We are of the opinion that there is no substance whatever in this argument. A Court in order in find out what has pushed at a Sheriff's sale looks into the order directing the sole, the proclamation of sale and the surrounding circumstances. The surrounding; circumstance in this case is the higher value paid and the appellant never applied to set aside such sale on the ground of any alleged irregularity and defect. All these factors taken individiually find together leave no doubt in our mind that the goodwill of the business oe D. Mullick & Co. of 46/A, Netaji Subhas Road as a going concern including the monthly tenancy rieht of that shop room was In fact sold in this particular instance. We see nothing in the decision of Das J., in the matter of - 'H. C. Gupta v. Mackertich John', 49 CalWN 322: (AIR 1946 Cal 140) CE), which supports Mr. Das's contention in this appeal. In fact, Das J., refers to some of the decisions that we have mentioned above.

18. We, therefore, dismiss this appeal with costs.

Bachawat, J.

19. I agree.


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