SHYAM SUNDARSHAW Vs. NETAI CHAND SHAW

JUDGEMENT

(1.) This second appeal is directed against the judgment and decree passed by the learned Additional District Judge, 2nd Court, Midnapore, in other (sic) Appeal No. 320 of 1971, confirming the judgment and decree passed by the learned Munsif, 2nd Court, Midnapore, in Title Suit No.93 of 1970.

(2.) The plaintiff filed the suit for dissolution of partnership and for accounts. It was the case of the plaintiff in brief that the partnership business was run under the style of Mrs. Farquhar alone and that on 10-7-62 Mrs. Farquhar accepted the defendant Shyam Sundar Shaw as 8 as. partner in her business with effect from June 1962 on the defendant's payment of Rs.6000/- only towards capital. Mrs. Farquhar from time to time took loans from the plaintiff and the total amount of such loan stood at Rs.6000/-. Mrs. Farquhar took the aforesaid loan with an intention to sell her share in the partnership business to the plaintiff provided she would fail to repay the loan. Mrs. Farquhar finally decided to leave India for settling permanently in England and on 25-3-63 a bond with regard to the loan amount of Rs. 6000/- and agreement for sale of the 8 as. share of Mrs. Farquhar to the plaintiff in case of her failure to repay the loan were executed between the plaintiff and Mrs. Farquhar in presence of the defendant who put his signature in the aforesaid document. The defendant also on the same date wrote a letter to the plaintiff accepting him as a partner in the partnership business. Mrs. Farquhar also executed the power of attorney in favour of the defendant on the same day. All the documents were executed in the office of the Solicitors G.C. Mitra. In the agreement for sale Mrs. Farquhar agreed to sell her half share in the partnership business to the plaintiff by the 30th of November 1965 in case of her failure to repay the loan of Rs. 6000/- to the plaintiff by the date. It was also agreed in the said deed of agreement for sale that the plaintiff was to get the amount of profits in the share of Mrs. Farquhar as interest on the said sum of Rs. 6000/- till either the said amount of Rs. 6000/- is repaid or the sale of her share took place in pursuance of the said agreement for sale. In the bond executed on the same date i.e. 25-3-63 it was recited that Mrs. Farquhar agreed either to repay the said sum of Rs. 6000/- to the plaintiff by 30th November 1965 or to convey her share in the partnership business to the plaintiff on or before the said date of 30th November 1965. It was further stipulated in the said agreement that all the profits in her share in the partnership business since the 1st day of March 1963 were to be credited to the plaintiff by way of interest for the said sum of Rs. 6000/-. By the letter written by the defendant to the plaintiff on the same day, the defendant accepted the plaintiff as a partner in the partnership business in place of Mrs. Farquhar and the defendant further acknowledged to have received a sum of Rs. 7536/- from the plaintiff in addition to the sum of Rs. 6000/- which was advanced by the plaintiff to Mrs. Farquhar. It was further stipulated in the said letter that till the full repayment of the sum of Rs. 7536/- the defendant would not take any share of the profits in the partnership business but would take Rs.100/- only per month for his maintenance on loan account. In the deed of agreement for sale a reference was made with regard to the agreement dated 15-2-63 between the partners of the firm Mrs. Farquher's Bakery and the Railway Administration on the basis of which the partnership firm agreed to supply breads and confectionery to the Railway Administration for three years up to 30-11-65 and the said agreement also recited that the partners would not allow any person to be interested in the partnership business during the continuance of the said agreement between the partners and the Railway Administration without the consent of the Railway Administration. Mrs. Farquher left for England and decided to permanently settle there. Mrs. Farquher decided also not to repay the loan of Rs. 6000/- taken from the plaintiff and accordingly decided to sell her share in the partnership business to the plaintiff before 30-11-65 and accordingly by a letter dated 8-10-65. Mrs. Farquher sold her half share in the partnership business to the plaintiff and revoked the power of attorney already executed by her in favour of the defendant to look after partnership business on her behalf. The plaintiff became the partner on the basis of the sale of the share of Mrs. Farquher in the partnership business as per the letter dated 8-10-65. The plaintiff and the defendant were running the partnership business and opened their joint account with the United Bank of India at its Kharagpur Branch. The defendant subsequently opened a hotel at Midnapore under the style as 'Farquher Hotel and Restaurant' with the assets of the partnership business without the consent of the plaintiff and the defendant illegally opened also an account in the name of the partnership firm in the United Industrial Bank and was operating the said account alone in violation of the partnership agreement. The defendant did not repay also the amount of Rs. 7536/- received from the plaintiff and by his misconduct in the affairs of the partnership business tried to deprive the plaintiff of the profits of the partnership business. The plaintiff found it impossible to continue the partnership business any longer along with the defendant. As all his amicable attempts to settle the dispute between the two partners failed the plaintiff brought the suit for the relief as claimed.

(3.) The defendant contested the suit after filing the written statement. The defendant denied the allegations of the plaintiff and denied also that the plaintiff became a partner in the partnership business under the style Mrs. Farquher's Bakery by his alleged purchase of the share of Mrs. Farquher. It was contended that under the terms of the partnership agreement between the defendant and Mrs. Farquher, Mrs. Farquher could not legally transfer her share in the partnership business to any person without the consent of the defendant who was a partner along with Mrs. Farquher in the partnership business. According to the defendant, the sum of Rs. 6000/- was taken by Mrs. Farquher from the plaintiff from time to time by way of loan and it was agreed that the said loan was to be paid from the partnership business and for this purpose Mrs. Farquher executed the power of attorney in favour of the defendant on 25-3-63. The defendant denied that the plaintiff gave any amount of Rs. 7536/- to the defendant in excess of the amount of Rs. 6000/- advanced by the plaintiff to Mrs. Farquher. It was also contended that the defendant did not know English well and that without understanding the purport of the documents which were executed in the office of the Solicitors on 25-3-63 the defendant put his signature on the documents and on a letter purported to have been written to him by the plaintiff. Ths defendant contended also that during the continuance of the agreement dated 15-2-63 between the partnership firm and the Railway Administration the partners of the firm M/s. Farquher's Bakery were prohibited not to allow any person to be interested in the partnership business without the consent of the Railway Administration and that accordingly any agreement for sale of the share of Mrs. Farquher to any outsider without the consent of the Railway Administration was hit by S. 23 of the Indian Contract Act as such agreement was opposed to public policy and against the law. It was also contended that the sale of the share of a partner in the partnership business without any registered document was invalid and ineffective and accordingly the plaintiff could not acquire any share in the partnership business by the alleged sale of the share of Mrs. Farquher without any registered document. It was also denied by the defendant that he committed any misconduct in connection with the affairs of the partnership business. According to the defendant, the plaintiff was not entitled to get any relief in the present suit.