KASTURCHAND OKAJI MARWADI Vs. HARI GOVIND WAGLE

JUDGEMENT

(1.) This appeal arises out of suit No. 315 of 1926 filed by the appellants against the respondent in the Court of the Second Class Subordinate Judge at Alibag. The appellants alleged that the defendant Wagle was till 1921 in the service of their firm as a clerk and that while he was in their service he had entered into an agreement with them by which he and they jointly were to render financial assistance to certain litigants in connection with their suits on condition of their receiving half the profits of the litigation if it was successful, the half share so received to be divided between the plaintiffs firm and the defendant.

(2.) On July 28, 1913, the defendant Wagle entered into an agreement with one Vinayak Mukund Deshmukh in connection with a suit filed by one Kelkar against Vinayak. The agreement is exhibit 81. By this agreement Vinayak, in consideration of the defendant's giving him monetary help for the purposes of the litigation, agreed to give the defendant a half share in whatever he might gain from the suit. On October 7, 1914, there was an agreement on similar terms between Vinayak Mukund and one Patkar, another servant of the plaintiffs firm, relating to the same litigation. The agreement is exhibit 80. While this suit was still going on, a written agreement was entered into by the defendant with the plaintiffs on July 4, 1918, (exhibit 108), by which the plaintiffs and the defendant agreed jointly to finance several transactions of the same kind as the one entered into by the defendant with Vinayak. The agreement included Vinayak's litigation. The conditions with regard to it were as follows: In the litigation of Vinayak Mukund Deshmukh there is our partnership half and half from the beginning. The whole expense of the litigation is incurred by my hand (i.e. defendant s). Those sums are debited in your book in the name of Vinayak Mukund. Those sums are half yours and half mine. And the profit and loss resulting from this litigation is to be shared by us both. After the termination of the litigation I will give you half the amount (profit).

(3.) The suit between Kelkar and Vinayak ended in a compromise on January 8, 1919. The defendant called upon Vinayak to carry out the terms of his agreements of 1913 and 1914 and, on Vinayak refusing to do so, filed suit No. 57 of 1920 for specific performance. On April 6, 1921, there was a decree in the defendant's favour which provided that Vinayak should pay to the defendant Rs. 2,500 and costs. Vinayak could not pay this amount in cash and so, on September 29, 1921, he passed to the defendant a sale-deed (exhibit 86) by which he sold to him for Rs. 3,050 the house and compound which are now in suit. Prior to this the defendant had attached certain lands of Vinayak in execution of the decree which he had obtained against him. These lands had been sold and the defendant received Rs. 2,135 as the sale price in 1922. In the meanwhile some time in 1921 the defendant left the plaintiffs service. Certain notices were exchanged between the parties between 1921 and 1925. On April 1, 1921, the defendant gave a notice to the plaintiffs (exhibit 98) in which he demanded some arrears of pay due to him. To this the plaintiffs replied on May 28, 1921, by exhibit 97, denying their liability to pay and asking the defendant to produce the accounts of their partnership. On June 9, 1921, the defendant gave a reply to the plaintiffs (exhibit 100) asking them to explain what the partnership transactions referred to by them in exhibit 97 were. Finally, on October 2, 1925, the plaintiffs gave a notice to the defendant (exhibit 96) demanding from him accounts of the suit transactions, i.e., the litigation of Vinayak Mukund and all other transactions, and threatening to file a suit if accounts were not furnished. The defendant gave no reply to this, and the plaintiffs thereupon filed a suit on October 27, 1926. The defendant raised various contentions against the plaintiffs claim, denying that plaintiff No. 3 was a partner in the firm, alleging that the agreement (exhibit 108) sued on had been obtained from him by coercion and denying that there were any partnership transactions between him and the plaintiffs firm in connection with Vinayak Mukund's litigation.