KOMMALAPATI VENKATADRI Vs. KOMMALAPATI GOVINDARAJU

JUDGEMENT

(1.) These appeals are directed against a common Judgment of the Court of the Subordinate Judge of Bapatla. A.S. Nos. 6 and 7 of 1955 arises out of O.S. Nos. 95 of 1950 and 56 of 1950 respectively, which were filed for dissolution of partnership and rendition of accounts. A.S. No. 98 of 1956 arising out of O.S. No. 60 of 1952, was originally filed in the District Court, Guntur, and has since been transferred to this Court for disposal along with the other appeals. All the appeals raise an identical question regarding the legality of a partnership constituted for the purpose of carrying on business in tobacco. The learned Subordinate Judge dismissed the suits on the ground that the partnership put forward by the plaintiffs was illegal as prohibited by the Central Excises and Salt Act and the rules framed thereunder. It will be convenient to deal with this question of law before considering the merits in each of the appeals.

(2.) The admitted facts are these : One Govindarajulu (1st defendant in O.S. No. 95 of 1950) obtained a licence for carrying on business in tobacco in the year 1947. Subsequently, he made a proposal that the plaintiff and defendants 2 to 5 should join him as partners, and they having agreed to do so, the suit partnership began to function. When eventually the other partners sued the ist defendant for dissolution of partnership and rendition of accounts, they were met with the plea that the 1st defendant traded in tobacco under a licence granted to him personally under the Central Excises and Salt Act (I of 1944) (hereinafter referred to as "the Act'), and under the provisions of that Act and the rules made thereunder he could not validly enter into any partnership with the plaintiffs and the other defendants and consequently the suit partnership was illegal. This plea found favour with the learned Subordinate Judge, who dismissed the suits. Against the common judgment and separate decrees of dismissal, the plaintiffs have preferred these appeals. It is contended by the learned Advocate-General appearing for the appellants that the Court below was in error in holding that the suit partnership was illegal by reason of the provisions of the Act. He has argued that the object of the Legislature in imposing a penalty under the Act is merely the protection of the revenue and that no public policy is involved.

(3.) At the outset, it will be convenient to refer to the material provisions of the Act. The preamble to the Act explains its scope and intendment. The Act is designed to consolidate and amend the law relating to Central duties of excise on goods manufactured or produced in certain parts of India and to salt. The expression 'excisable goods' is defined to mean 'goods specified in the First Schedule as being subject to a duty of excise and includes salt.' Section 6 enacts as follows :