RAMAGYA PRASAD GUPTA Vs. MURLI PRASAD

JUDGEMENT

(1.) These appeals are by certificate against the judgment of the Patna High Court which reversed the judgment and decree of the Trial Court in Title Suit No. 94 of 1956 filed by the first respondent Murli Prasad. A brief history of this case will be necessary for understanding the several contentions urged before us. One Mahendra Prasad obtained a licence for electrification of the Chhapra town which was granted to him in 1932. The licence was thereafter assigned to Janardhan Prasad Varma after the death of his father Mahendra Prasad in 1936. This licence was subsequently assigned to the Chhapra Electric Supply Company Ltd., which, however, went into voluntary liquidation in 1944. It was decided to sell the electricity undertaking by public auction and assign the licence to the purchaser with the previous sanction of the Government. In pursuance of this decision, the liquidator invited bidders for purchasing the electricity concern. But before the date of public auction, it is alleged that five person, namely, Ajodhya Prasad, Murli Prasad Respondent No. 1, Parasnath Prasad, Gurbharan Shah and Nandkishore Prasad entered into an oral agreement of partnership to purchase the electrical undertaking in the name of Murli Prasad, the share of Ajodhya was 8 annas, that of Murli Prasad 4 annas. Parasnath Prasad had 2 annas Gurbharan Shah and Nandkishore Prasad had one anna each. It was also agreed that the licence will be obtained in the name of Murli Prasad alone, though each partner had to contribute to the total purchase money in proportion of their respective shares in the partnership. Thereafter the electrical undertaking was sold by the official liquidator on September 15, 1944 to Murli Prasad as his was the highest bid of Rs. 4,10,000/- Thereafter each of the partners including Murli Prasad contributed in proportion to their respective shares in the partnership to make up the total sum of Rs. 4, 10,000/-. Payments to the official liquidator were made in three installments. It also appears that before the last installment of Rs. 2,50,000/- was paid on July 13, 1945, the oral agreement entered into between the partners was incorporated into a partnership deed executed on July 10, 1945 and registered under the India Registration Act. (Exhibit 'G'). Each of the partners had paid the following sums in accordance with their respective shares and in this manner all of them contributed Rs. 4,10,000/- towards the purchase money paid to the liquidator:Ajodhya Prasad Gupta - Rs. 2,05,000/-; Murli Prasad - Rupees 1,02,500/-; Parasnath Prasad - Rupees 51,250/-; Gurbharan shah Rs. 25,625/- and Nandkishore Prasad - Rs. 25, 625/- Nandkishore Prasad, however, retired from the partnership with the consent of all the partners and his one anna share was taken over by Gurbharan Shah. It also appears that in 1950 a further sum of Rs. 1,50,000/- was urgently required for taking delivery of some new plant and machinery which had arrived at the Chhapra Railways Station. Murli Prasad and Parasnath Prasad expressed their inability to contribute the sum of Rupees 1,50,000/- proportion to their shares, so this amount was also paid by Ajodhya Prasad Gupta to whom Murli Prasad and Parasnath Prasad sold one anna share each out of their respective shares. Thus, the share of Ajodhya Prasad increased to 10 annas while that of Murli Prasad and Parasnath Prasad reduced to 3 annas and one anna respectively. Thereafter the partners contributed the amount in accordance with their respective shares. This re-allocation of shares became the occasion for execution of a second partnership deed on August 31, 1950, which was also registered under the Indian Registration Act:Ext. 9. The partnership itself was registered under the Indian Partnership Act on May 13, 1953, Ext. 'C'. One other fact must also be stated at this stage, and that is, Ajodhya Prasad and Murli Prasad being Kartas of their respective joint families, had entered into partnership in that capacity. The 10 annas share held by Ajodhya Prasad and 3 annas share held by Murli Prasad were divided among the members of their respective joint families. The share of Murli Prasad was divided between himself, Dharnidhar Prasad each having one anna share, while the sons of Murli Prasad and Dharnidhar Prasad, namely, Chandreshwar Prasad Gupta and Kamleshwar Prasad Gupta and Ramagya Prasad Gupta had each 6 pies share. Similarly, Ajodhya Prasad and his brother Ram Sharan Shah got 3 annas 9 pies each while the two sons of Ram Sharan Shah, Brahmadev Prasad Gupta and Ramagya Prasad Gupta had respectively 1 anna 3 pies. There was no change in the shares of the two remaining partners Parasnath Prasad and Gurbharan Shah who held one anna and two annas share respectively.

(2.) It appears that some time after this revised partnership was registered, the Electrical Inspector, Government of Bihar, addressed a letter to Murli Prasad in which he stated that the partnership was illegal and void as it contravened the provisions of the Indian Electricity Act that, therefore, the Government did not recognise the partnership. The Government ultimately cancelled the licence. It is alleged that all this was due to the manipulations of Murli Prasad who, taking advantage of the letter, of the Electrical Inspector, tried to take forcible possession and wanted to dispossess the managing partner of the electrical undertaking. This attempt gave rise to proceedings under Section 144 of the Code of Criminal Procedure, which, however, were decided on April 14, 1954, in favour of Ramagya Prasad Gupta and the other partners. Thereafter it is alleged that Murli Prasad got Parasnath Prasad a partner and son-in-law of Murli Prasad's brother to institute Title Suit No, 68 of 1954, on May 28, 1954. This suit was for a declaration that the partnership had been dissolved by service of notice on the partners and for rendition of accounts and by Ramagya Prasad Gupta principally and by other partners. During the pendency of the suit, as stated earlier, the Government of Bihar acting under Section 4 (1) of the Indian Electricity Act, 1910 hereinafter referred to as 'the Act' - revoked the licence of Murli Prasad with the result that according to Section 5 (1) (a) of the Act all powers and liabilities of the licensee stood determined. Parasnath Prasad the plaintiff in that suit prayed for appointment of the Additional District Magistrate, Chhapra, as receiver. The Court granted his prayer and the Receiver in due course took over the electrical concern from Murli Prasad and Ramagya Prasad.

(3.) After the Receiver had taken possession, the Government decided to purchase the undertaking on October 20, 1955 and deposited on the same day a sum of Rs. 3,00,000/- in the Court as part of the purchase money payable to the owners of the undertaking. Murli Prasad thereafter filed a Title Suit No. 94 of 1956 on November 5, 1956, for a declaration that he being the sole licensee, was the exclusive owner of the undertaking, and as such he was the only person who was entitled to receive the entire price paid or payable by the Government in respect of the assets of the Chhapra Electric Supply Works. In this suit Murli Prasad had averred that it was he and he alone who had paid the entire auction money for the purchase of the undertaking on July 13, 1945 and thereafter he became the sole licencee in charge of the undertaking and that Ramagya Prasad Gupta was a mere employee and servant under him. The partnership was also characterised as illegal and void. Both the Title Suits No. 68/54 filed by Parasnath Prasad and No. 94/56 filed by Murli Prasad were consolidated. It may also be mentioned that Nandkishore Prasad who was the original partner and who had retired from the partnership and whose share had been taken over by Gurbharan Shah also filed a Suit No. 113/57 on September 21, 1957 for a declaration that he was still a partner and has 1 anna share. This suit was transferred to the Court where the other two title suits were being tried. All the three suits were thereafter consolidated and tried together. They were also disposed of by a common judgment dated February 10, 1959 passes by the 5th Additional Subordinate Judge, Chhapra.