AMALUR VENKAYYA NAIDU Vs. VISSA LAKSHMINARASAYYA

JUDGEMENT

(1.) The plaintiff had an agreement in his favour for sale of certain mica mines, the property of certain Marwaris of this town. The mines are situated in the District of Nellore. It appears that, in pursuance of that agreement, a deed of sale was executed, but it was not registered as the plaintiff was unable to find the entire amount of the consideration for it. Rs. 450, however, part of the consideration money, was recovered from him by a suit in the Small Cause Court. Subsequently, the plaintiff entered into negotiations with the 1st defendant, the 1st respondent in this appeal, with respect to the mines, I may mention that part of the property was free-hold and part of it was lease-hold. The term of the lease hold expired on 31st October 1907. The contract between the plaintiff and the 1st defendant is embodied in two letters, Exhibits C and C1, which were exchanged between the parties on 4th February 1907, and the constriction of those letters is one of the important questions for consideration in this suit. Thereafter, there was a conveyance of the property in the name of the 1st defendant, by the owner of the property and the plaintiff. The former has been described as the first vendor and the latter as the Second vendor. The property is conveyed to the 1st defendant for Rs. 1,250 and the document recites that the transaction between the plaintiff and the owner of the mines, fell through. So far as the deed of sale is concerned, there can be no doubt that it purports to be entirely in favour of the 1st. defendant, the consideration being Rs. 1,250. By the terms of this deed the plaintiff had no sort of interest in the property, but Exhibit I, i.e., the sale-deed, was undoubtedly executed in pursuance of the contrast between the parties as contained in Exhibits C and C1, the deed of sale having been executed on 28th February 1907, that is, 24 days after Exhibits C and C1.

(2.) The first question which arises is, whether Exhibits C and C1 constituted a partnership between the plaintiff and the 1st defendant from 4th February 1907, or, at least, from the date of Exhibit I, by which the 1st defendant obtained a conveyance of the property and was thus in a position to work the mines.

(3.) The learned Subordinate Judge has held that there was no partnership created by Exhibits C and C1; but what those documents provided was that partnership in respect of the mines was to become operative only from the date when the Kararnama mentioned therein was executed according to the terms of those documents. The learned Subordinate Judge found that the time mentioned, within which the Eararnama was to be executed, was not intended by the parties to be of the essence of the contrast, and no argument has been address ed to us to the contrary by the learned Vakil for the defendants. Exhibit C says that, as the plaintiff found it difficult to carry on the business, he agreed that the 1st defendant should buy the property and carry on business there crediting the sum of Rs. 450 which had been recovered from the plaintiff by the owner of the mines by a decree of the Small Cause Court, in the company s accounts or against the company, meaning by company the partnership the plaintiff undertakes to get a conveyance in favour of the 1st defendant, and then proceeds to stipulate that the 1st defendant should bear all the expenses of the working of the mines, carry on the business, take 14 annas in the rupee out of the profits, and pay the plaintiff the balance of 2 annas. Then, the last sentence of Exhibit C is in these words: "As soon as you pay the amount due to Kundamdass Garu (the owner of the mines), i.e., as soon as you pay the amount in my presences, you shall execute Kararnama with those conditions on proper stamp paper and register the same." The letter written by the 1st defendant, Exhibit C1, rafers to the terms of Exhibit C as to the agreement between the parties. But it adds: if this is not thus settled within the 15th of this month, I shall relinquish the same irrespective of all the conditions you executed in my favous. That is to say, if he failed to execute the Kararnama within the time mentioned, he (1st defendant) would give up all his rights in the property under these documents. Once it is conceded that time was not intended to be the essence of the contract--and it is not suggested that the Kararnama was to embody any terms not already set out in Exhibits C and C1--it seems to me to follow that the constitution of partnership between the parties was not made conditional or contingent on the execution of the Kararnama. The Kararnama was to be simply a memo, randum reducing into writing, the terms already settled between the parties. The presumption in such a ease is, that the contract was not a conditional one depending on the execution of the document but that it was a completed contract, and the rights of the parties would not be postponed till the execution of the contemplated document. The learned Pleader for the respondent refers to Exhibit I am somehow or other supporting his contention. But I do not thick that Exhibit I supports the defendant?s ease in this repeat at all. I am quite prepared to read Exhibits C, C1 and I together, in order to see whether there was a completed contract or not. But the whole scheme seems to be that the defendant was to be purchaser of the properties for Rs. 1,250 and that Rs. 450 already paid by the plaintiff was to be treated on a different footing. It was for that reason that there was no mention of Rs. 450, or of the terms of partnership in Exhibit 1. I do not suggest thereby that the draftsman Could not have so drawn Exhibit I as to include also the terms of Exhibits C and C1 between the plaintiff and the 1st defendant in that document. I am of opinion that there was a partnership created between the parties on 4th February 1997.