DEVI PRASAD RAI Vs. KANHAIYALAL MUKHARYA

JUDGEMENT

(1.) The plaintiffs and defendant 1 were partners of a firm constituted under a partnership deed dated 12/09/1936. Defendant 1 who was owner of certain vacant site with a structure standing upon a part of it had agreed to allow the said property to be used by the firm for raising a cinema exhibition hall by the firm and had undertaken not to alienate the property during the subsistence of the firm. The initial term of the partnership was forty years and the same was extended to fifty years and as it appears, in 1982, parties have made its life to be at will with a provision that if some of the partners fall out for any reason, the remaining may continue the firm business. The original deed stipulated that after the term of forty years expired, defendant 1 could pay for the construction and take over the building.

(2.) Notwithstanding the restriction in the partnership deed, defendant 1 alienated the property in favour of defendant 2 by a registered sale deed dated 20/03/1963. Thereupon the plaintiffs filed a suit for declaration that the sale was null and void and they alternately claimed for pre-emption.

(3.) The trial court dismissed the suit but held that the plaintiffs were entitled to the value of the construction from defendant 2 and asked the same to be determined in the execution proceedings. On appeal by the plaintiffs, the High court found that title to the property had always remained with defendant 1 and the same could be alienated unfettered by the contractual obligations under the partnership deed but possession of the property was with the firm and the alienee wasnot entitled to possession on the basis of title. The High court further held that the alienation was not void but was a voidable transaction. It held: