CHENNURU RAMARAO Vs. GOWRI SANKAR TALKIES TEKKALI

JUDGEMENT

(1.) The appellant is the plaintiff. He lost the suit, which he filed for rendition of the accounts of the dissolved partnership of the first defendant by the second defendant and for an account being taken regarding the plaintiffs share of net assets and profits to be paid by the second defendant or in the alternative for dissolution of the defendant-firm and rendition of accounts by the second defendant and for a direction to pay the plaintiffs share of assets and profits.

(2.) The plaintiff, the second defendant and seven others entered into an agreement. Ex. B-1, on 16-5-1949 to construct a cinema hall at Gopinthapuram near Tekkali in Srikakulam District under the name and style as "Gowri Shankar Talkies" and to do joint cinema business with a total share capital of Rs. 1,04,500-00. Later on, a partnership deed under Ex. B-2 dated 18-8-1951 was entered into by 9 partners, namely, (1) Sri Chennuru Sambasiva Rao (D-2), (2) Chennuru Ramarao (Plaintiff), (3) S. Iswarappa Chowdary, (4) L. Kameswara Rao, (D-3), (5) P. Lakshminarasamma, (6) Chennuru Lakshmana Murthy. (7) M. Appa Rao (D-4) (8) s. Suryanarayana (D-5) and (9) T. Tulasidas. According to the terms of Ex. B-2, the second defendant, who is the Managing Partner, should manage the business. This partnership business continued till 1952. In that year the second defendant acquired the shares of S. Ishwaraya Chowdary, Ch. Lakshmana Murty, Lakshiminarasamma and Tulasi Das and introduced Koppala Jagannaikulu (D-6) as a new partners. Hence, another partnership deed Ex. B. 3 dated 2-3-1952 was executed with six partners, namely, (1) Ch. Ramarao (Plaintiff), (2) Ch. Sambasivarao (D-2) (3) Lopinti Kameswara Rao (D-3) (4) Madugala Apparao (D-4), and (6) Koppala Jagannaikulu (D-6), the first defendant being the Gowri Shankara Talkies. This partnership under Ex. B. 3 was again dissolved in the year 1959 and a new registered partnership deed. Ex. B.4 dt. 30-9-1959 was executed with the second defendant continuing as the managing partner. None of these partnership deeds mentions in whose name the license should be obtained. But it was admitted by the plaintiff and the 2nd defendant and others that the licence for running the cinema hall was obtained in the name of the plaintiff. The licence was renewed every year by the plaintiff for running the cinema. Disputes arose between the plaintiff and the second defendant in connection with the salt business at Nowpada, which was said to have been entrusted by the second defendant to the plaintiff from 1-4-1957 to 31-3-1967 and the plaintiff was said to be due to him about Rs. 28,000.00 in the salt business. The plaintiff, of course, admits that he was looking after the salt business of the second defendant but denies that it was completely entrusted to him and also denies the allegation of the second defendant that he was due to him in a sum of Rs. 28,000.00 in salt business. The plaintiff contends that though the second defendant was carrying on the business as the managing partner of the first defendant-firm, the second defendant was not showing the accounts to him or the other partners and he was postponing on some pretext or other and had not given any share in the profits to the plaintiff in spite of repeated demands. Thus the disputes that had arisen on account of the failure on the part of the second defendant to show the accounts and to give any share in the profits to the plaintiff and other partners were referred to the arbitrator under the arbitration agreement Ex. B. 7, dt. 27-9-1969. The plaintiff admitted that the disputes were referred to the arbitrator under the arbitration agreement, Ex. B. 7. The second defendant submitted an application before the Collector requesting him to renew the licence in his name; but not in the name of the plaintiff. The Collector refused to renew the licence in the name of the second defendant. In view of the dispute raised by the second defendant the plaintiff also did not submit his application for the renewal of the licence. The Collector, while refusing to renew the licence in the name of the second defendant, stated in his order that the grant of renewal of licence would be considered when the application would be considered when the application would be submitted by the plaintiff after fulfilling the requirements under the Cinematograph Act and the Rules framed thereunder. (Vide Ex. B. 5 dt. 1-9-1969). It is, therefore, clear that the business was admittedly carried on till 1968 and it was stopped subsequently due to failure o obtain renewal of licence by the plaintiff on account of the disputes between the brothers. The plaintiff contends that since the second defendant failed to produce the accounts or to pay to the partners their shares in the profits, the plaintiff issued the registered notice dt. 20-8-1968 to the second defendant to render accounts within one week sending copies of the same to defendants 3, 4, 5, and 6. The second defendant on the receipt of the notice issued reply dt. 26-8-1968 with counter allegations. The plaintiff, therefore, filed the suit.

(3.) The second defendant raised several contentions while resisting the suit. One of the contentions is that as per the conditions of the licence, the plaintiff cannot assign, sub-let or otherwise transfer the licence or the licenced premises without the previous permission of the licensing authority nor shall the licensee without the permission allow any other person during the period of the currency of the licence to exhibit films in the licensed premises and as the plaintiff entered into the partnership agreement dt. 30-9-59 whereunder he assigned and transferred his rights to defendants 2 to 5 and particularly to the second defendant in the matter of film selection, film booking and exhibition of films etc., and as the prohibition contemplated under the Cinematograph Act is absolute, the partnership agreement for running the business is illegal and void ab initio as it is opposed to public policy and also it is violative of the licensing conditions and the partnership agreements is, therefore, hit by Sec. 23 of the Contract Act and the suit is thus not maintainable under law. The second defendant also contends that as the disputes are referred to arbitrators, civil court has no jurisdiction to entertain the suit. He further contends that as the partnership deed is not registered, the suit for accounts against the said firm is not maintainable under S. 69 of the Partnership Act.