APPA DADA PATIL Vs. RAMKRISHNA VASUDEV JOSHI

JUDGEMENT

(1.) This case involves a large number of interesting points which counsel have had some difficulty, not unnaturally, in dealing with. It is an unusual case on which specific authority is scanty; and at the outset a point arises which does not seem to have been taken in the Court below. The suit is in form a simple one, namely, by the plaintiff for the balance of an account in cross-dealings in goods and money between him and the thirteen defendants and some others, He pleaded, and it is a fact, that he deposited in the first instance a sum of Rs. 9,000 on August 16, 1918. Then followed sales and purchases by him through the defendants, the result of which was that by October 23, 1919, Rs. 5,552 were due to him.

(2.) I have said "defendants", but therein lies one of the difficulties. The shop, to use the plaintiff's expression, with which he was dealing, was called "The Dudhgaon Vyapari Mandal", or "The Dudhgaon Commercial Association." The defence is that this association consisted of far more than twenty persons at all material dates, and that accordingly it was illegal under Section 4 of the Indian Companies Act, and that therefore neither the association itself nor the individual defendants are liable. The learned Judge found that the association was an illegal association, but he held that defendants Nos. 1, 2 and 3 were liable to the plaintiff because they were respectively the promoter, the manager and the chairman of the association, and that accordingly by analogy to Secs.245 and 246 of the Indian Contract Act relating to holding out in partnership matters, they were liable to third persons like the plaintiff.

(3.) Now at the outset there is a point not taken in the Court below, but which requires to be dealt with. It is this: The plaintiff himself was a trader in the Miraj State. The shop in question with which he dealt was within the Sangli State, which is a Native State, It is true that the defendants reside at Dudhgaon in British India, and that the Sangli shop, with which the plaintiff dealt, was under the control of or was a branch of the Dudhgaon shop. But that raises this point. Assuming for the sake of argument that an association on more than twenty persons was illegal in Dudhgaon in British India, would a similar business carried on by them in a Native State be illegal according to the law of the Native State ?