T S GOVINDARAJ Vs. A B KANDASWAMI GOUNDAR

JUDGEMENT

(1.) THIS is an appeal by the plain tiff against the decree in O. S. No. 9 of 1951, sub- Court, Dindigul, dismissing his suit for the taking of the accounts of a dissolved partnership, for dealing in tobacco. The learned Subordinate Judge has dismissed the suit on the ground that the partner ship put forward by the plaintiff was illegal as being prohibited by the Central Excises Act and the rules framed thereunder.

(2.) THE plaintiffs case was that in or about 1945 he and the defendants (two in number) formed a partnership for trading in tobacco in Jakkamanayakkanpatti under the terms of which the plaintiff undertook to furnish the necessary finance, these advances carrying interest at six per cent, per annum, while the defendants were to be in charge of the day to day management of the business maintaining true and regular accounts, and that the profit and loss should be shared, one half by the plaintiff, the two defendants together taking the other half. The agreement which resulted in these arrangements was stated to be oral but that subsequently there was some writing evidencing slight variations of these terms. The plaintiff went on to state that the partnership which was at will was carried on for sometime but had become dissolved by notice of dissolution by him dated 18-9-1950, and that the accounts had not been taken. The suit therefore prayed for the taking of an account of this dissolved partnership from August 1945 and the usual decree after the accounts were taken.

(3.) THE first defendant filed a written statement which was adopted by the 2nd defendant, raising primarily two defences. The first was that there was no partnership relationship between the plaintiff on the one hand and the defendants on the other but that the latter was merely working under the direction and control of the plaintiff, the plaintiff being in possession of all the accounts. It was therefore pleaded that there was no basis for any claim against them. The second defence was that the plaintiff traded in tobacco under a licence granted to him under the Central Excises and Salt Act (Act 1 of 1944) and under the provisions of that Act and the rules made thereunder the plaintiff could not validly enter Into any partnership with the defendants and that consequently the suit partnership, if the Court should hold that there was any such, was illegal. The learned Subordinate Judge has upheld this second defence and dismissed the suit. This conclusion is canvassed in this appeal.