1. The plaintiff is the licensee of a country liquor shop. His son is the licensee of an imported liquor shop. He brought a suit against the defendant, now appellant, for accounts alleging that the defendant was his servant or karmachari. In the alternative he asked that if the defendant was found to be a partner, the partnership should be dissolved and an account in respect of the partnership taken.
2. The defendant appeared and said that he was a partner, and the learned Munsif found that he was a partner to the extent of 8 annas and he passed a decree accordingly.
3. Then the plaintiff preferred an appeal to the District Judge and the learned Judge held that the defendant could not be a partner, because the license of a liquor shop is a personal privilege and the licensee cannot take any one as a partner into the business. He also held that as the license for the imported liquor shop stood in the name of plaintiff's son, the plaintiff could proceed with the suit only with regard to the country liquor shop. Having found that the defendant could not be a partner, he proceeded to ascertain what he really was. He came to the conclusion that he was not an ordinary servant but that he was an agent and he ordered that he should render an account.
4. The defendant has appealed to this Court and it is urged on his behalf that the District Judge is wrong in finding that the defendant cannot lawfully be a partner, and secondly, that the finding as to the defendant being an agent is against the admitted facts on the record, and thirdly, that the subject, of defendant's status was not argued before the lower Court. With regard to the first point the learned District Judge quotes two cases Rakhal Chandra Shah v. Damodar Shaha 9 Ind. Cas. 115 : 12 Cr. L.J. 11 : 15 C.W.N. 169 and Behari Lal Shah v. Jagodish Chunder Shaha 8 C.W.N. 635 : 31 C. 798.
5. The former of these cases caine before this Court in its revisional criminal jurisdiction, and I do not think it lays down any principle useful to the present case. In the second case the licensee sold his stock in trade to another person, with the intention that the transferee should carry on the business of selling liquor without obtaining a license. The agreement was held to be void. I do not think it follows from this decision, or from the prohibition contained in the Act against transferring, sub-letting and assigning, that a partnership in any form for the sale of excisable articles is illegal. But whether the learned Judge's view as to the legality of partnership is right or wrong, I think he was clearly wrong in arguing that because defendant coulff not legally be a partner, he must stand in some other relation to the plaintiff. The Judge should have ascertained whether the defendant was a partner in fact, and if so, what was the legal consequence. This brings me to the second and third points.
6. With regard to the status of the defendant, it appears from the order sheet that the learned District Judge only heard arguments on the question of law and after that the case did not come up again for hearing.
7. This was an error and the parties should have been allowed an opportunity of setting1 before the Court their arguments as to the true relation between the plaintiff and defendant.
8. The view I take is this that the lower Appellate Court should first of all determine the relation which really existed between the parties. If it is found that they were partners, it will be for the Court to determine whether the terms of the partnership were such as to make it illegal, if they were, then it would follow from the principle laid down in the case of Behari Lal Shah v. Jagodish Chunder Shaha 8 C.W.N. 635 : 31 C. 798 that the agreement between them was one upon which the plaintiff could not sue.
9. l I, therefore, set aside the decision of the lower Appellate Court and remand the case, for the appeal to be heard again in the light of these remarks.
10. Costs will abide the result.