RANGASAMI GOUNDER Vs. K R EASWARAMURTHI GOUNDAN

JUDGEMENT

(1.) THE 21st defendant is the appellant in the first of these second appeals and the other is by the third defendant. The suit was brought by the first respondent for partition of a half share in two items of immovable properties which the first defendant had purchased in court auction in execution of a money decree obtained by a firm of which he was a partner. The basis of the plaintiff's claim was two agreements, both oral, the first entered into in about January 1941 and the other in about March of the same year, with the first defendant. The plaintiff claimed that the first agreement brought into existence a partnership for the single purpose of purchasing the properties in court auction with the stipulation that the plaintiff and the firm were to equally contribute towards the purchase and have equal shares in them when purchased. It was also understood, according to the plaintiff, that the first defendant or persons duly authorised by him were to bid and purchase in court auction as the agent of the partnership. The court auction purchase was on 8th January 1941, on a bid by the first defendant. The sale was confirmed on 17th February 1941, in his favour. As it was apprehended apparently that there might be difficulty in getting possession and there would be litigation in that connection, the second agreement between the plaintiff and the first defendant representing his firm, it was claimed, provided that the first defendant and his firm were to be in charge of the litigation, either pending or expected, that the plaintiff was to bear half the litigation expenses and half of the value of encumbrances cleared, which might be found to be existing on the properties and that

(2.) THE substantial contention for the appellants is based on Sec. 66, C. P. Code Mr. Mohan, for one of the appellants, urges that the plaintiff's prayer for partition presupposes that he has title vested in him to the two items to the extent of his share and that this means that his claim for partition, was or should be taken to be, necessarily based on the court auction purchase as regards his half share made by the first defendant benami for him. It seems to me that this contention is well founded. The courts below, as I said got over S. 66 C. P. C. on the view that the two agreements brought about a firm of partnership for the purpose of a single venture, namely, purchase at the court auction. The courts below, as learned counsel for the contesting respondent before this court, relied on Viswanath dhondiraj v. Pandharinath Ganesh, ILR 50 Bom 600= (AIR 1926 Bom 525 ). That was, on facts, no doubt similar to the one before us. There, a house was sold by auction in execution of a decree and the first defendant in the suit for partition was the certified purchaser. Half of the purchase money was supplied by the plaintiff in that suit. Having done that, he brought the suit claiming to recover half of the house by partition. The suit was dismissed in view of S. 66, C. P. C. A division Bench of the Bombay High Court reversed that decision and held that the case was one of partnership in a single transaction in which the plaintiff and the defendant agreed to unite their funds for the purpose of purchasing the property and that there was no intention of a secret purchase by one person in the name of another so as to bring the case within the scope of that section. It is well settled now that if a partner purchases property at a court auction utilising the funds of the firm, the purchase may be taken to be on behalf of the firm and to such a case S. 66 (1) will have no application. To that extent, ILR 50 bom 600= (AIR 1926 Bom 525) is clearly an authority. But the question whether where two persons join and provide funds for purchase of a property at a court auction under an agreement, they constitute a firm of partnership for a single venture was not specifically considered in the Bombay case, but as it seems to me it was assumed that the partnership in the venture was in the nature of a firm of partnership within the meaning of the Partnership Act. S. 4 of that Act defines a partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. It is manifest therefore that it is not any combination of two or more persons for any purpose that will constitute a partnership within the definition. To have that character, the combination or association of persons must be the result of an agreement to share the profits of a business. What is essential to invest the combination or association with the character of a partnership is that it must be for the purpose of carrying on a business. The word business is of course of a wide connotation. But for the purpose of the definition it is used in the sense of trade or commerce. It may be that to constitute business there need not be a series of transactions of a commercial character. Even a single transaction may constitute business, but only if it carries with it intrinsically the quality of trade or commerce or business. When two or more persons join to purchase immovable properties without anything more, as I consider, it will not be appropriate to regard the transaction as of a commercial character. It may be of that character if facts show that the persons who join for the purpose of purchasing immovable property, did so with the intention of selling them with a view to make profits after developing or preparing the same to realise a profit. There is no evidence in the instant case that the plaintiff and the first defendant entered into the two agreements with a view to make any profit. Much less is there any indication that the transaction of court auction purchase was intended by them to be of a commercial nature. this point of view entirely escaped the attention of the courts below, I am of the view therefore, that their finding that by their agreements the plaintiff and the first defendant brought into existence the relationship between them of partners and a firm of partnership in the sense of sec 4 of the Partnership Act cannot be accepted.

(3.) SECTION 66, C. P. C prohibits any claim based on a court auction purchase being benami. The whole policy behind the section is to avoid secret purchases or manipulated deal, smacking of fraud or which will be prejudicial to a decree-holder by the judgment debtor attempting to get at the property through a benami purchase for him Sub-sec (1) of S. 66 forges an absolute ban against a plaintiff basing his title on the ground that the purchase at a court auction sale by a third party was on his behalf. This ban in my view is not merely confined to a plaintiff claiming the entirety of the property covered by the court auction purchase but also any part of it. On principle there appears to be no difference between the two cases, for even where the plaintiff claims that half of the property covered by the auction purchase was purchased benami for him, he has necessarily to rely on the sale certificate issued in favour of the actual purchaser. That is what is hit by S. 66. This view of mine has the support of Bishan Dayal v. Kesho Prasad, AIR 1937 All 176. In that case the plaintiff sued for possession of a half share of a certain property in which the defendant was the certified purchaser at an auction sale in execution of some other person's decree. The plaintiff's allegation was that the bid at the auction was made by the defendant on behalf of both the plaintiff and the defendant and the plaintiff was accordingly the owner of half the property. The parties were not members of a joint Hindu family or of a partnership firm. The allahabad High Court held that the suit was barred by S. 66 C. P. C. Sulaiman C. J. and Bajpai J. repelled a contention to the contrary and held that it was immaterial whether the property in suit was the entire property which was purchased, or whether it was part of a lot so purchased and whether the plaintiff claimed the whole of it or only a share of it. The learned Judges observed.