MAGANLAL KISHORDAS SHAH Vs. RAMANLAL HIRALAL SHAH

JUDGEMENT

(1.) 1. This second appeal arises out of a suit for the dissolution of a partnership, or in the alternative, if the partnership be found to have been already dissolved, then for accounts and recovery of the amount found due.

(2.) ON August 11, 1924, the plaintiff-appellant entered into an oral agreement of partnership with defendant No.1 to conduct a cloth shop at Thasra in the name of Ramanlal Maganlal. The plaintiff was to advance the necessary capital on which he was to get interest at six per cent per annum, and the profits and losses were to be shared equally by the two partners. The partnership was dissolved by mutual consent on January 15, 1935. The stock-in-trade, which was valued at Rs. 602, was taken over by defendant No.1 and the plaintiff was given a promissory note for Rs. 301 as his half share in it. The creditors of the shop were also divided between the partners, and the plaintiff undertook to pay off Rs. 445-8-0 due. by the shop to one Motilal Bhogilal. The accounts of the shop were not, however, taken and defendant No.2, who is the father of defendant No.1, agreed to execute a promissory note to the plaintiff for whatever be found on accounts to be due to him. To that effect an agreement was passed by the defendants to the plaintiff (exh. 79). ON the strength of that document the plaintiff asked for a declaration that defendant No.2 was bound to pass a promissory note in his favour for the amount that would be found due to him by the firm under the agreement. But such a claim for a bare declaration, when consequential relief could be asked, being barred under Section 42 of the Specific Relief Act, 1877, it was rejected and is not pressed in this Court. Even as against defendant No.2 the suit was dismissed on the ground that defendant No.1 was a minor when the agreement of partnership was entered into. In his written statement (exh. 13), defendant No.1 admitted the partnership and its terms as set out in the plaint and also its dissolution on January 15, 1935, but he denied the agreement (exh. 79) and set up a further agreement in Samvat 1983 that he was to be paid a salary of Rs. 300 per year. By a supplementary written statement he pleaded that when the oral agreement was entered into on August 11, 1924, he was a minor. Both the Courts below have held that both the defendants signed the agreement of 1935 (exh. 79) and that there was no fresh agreement in Samvat 1983 for the payment of a salary to defendant No.1, but they found that defendant No.1 attained majority nine days after he entered into the agreement of partnership on August 11, 1924, and that the agreement was, therefore, void. Thus there being no valid agreement of partnership, of which accounts could be taken, the suit was wholly dismissed.

(3.) IN INdian Cotton Co. v. Raghunath (1930) 33 Bom. L.R. 111 the undivided uncle of the plaintiff gave one of the family lands in lease to the defendant company for a period of five years during his minority, agreeing that after the period had expired, if subsequently the defendant required the land, he would go on giving it to the company, on receiving the same rent as before. On the expiry of five years, the company, without any fresh agreement of lease, remained on the land on payment of the same rent as before and the lessor continued to accept the rent even after he attained majority. After his death the plaintiff sued to recover possession of the land on the ground that the original lease was void on account of the minority of his uncle. The company contended that the lease created a permanent tenancy and that the plaintiff was bound by it as he had accepted the rent even after the expiry of the period of lease. It was held that although the agreement would create a permanent tenancy, yet it was not binding on the plaintiff as it was void in its inception and could not be ratified by the lessor on his attaining majority. IN that case the company relied on the principle laid down by the Privy Council in Gregson's case. But Patkar J. distinguished it on the ground that in that case the defendant who was under disability had made an application to secure the Commissioner's sanction to the lease which went on during the period of incapacity and which was subsequently entered into by the defendant after he was free from the disability, and that if in the case under consideration the lessor after attaining majority had confirmed the agreement to grant the subsequent leases should the defendant company require them, the matter would have been different. Patkar J. observed as follows (p. 120): IN Gregson's case the estate was in fact released from management, and the owner became free to manage the affairs as any other man, and he used his freedom to adopt the previous documents as binding on himself and he was compelled to act according to their tenor. But he differed from the ruling in Roy v. Tkakur Ram Jiwan Sing (1905) I.L.R. 33 Cal. 363, if it was capable of being construed as allowing a person under disability, on being free from disability, to ratify an agreement contained in the lease effected while under disability as in the case of a minor, without passing a subsequent deed for consideration. With respect, I fully agree with this, as a void agreement cannot be ratified. Barlee J. also distinguished Gregson's case on the same ground observing that the defendant in that case was held to be bound, not because after his disability ceased he had ratified the contract made whilst under disability, but because the contract was actually completed after his disability ceased.