The point that arises for consideration in this case is whether a partnership that was entered into for the purpose of exploiting a licence for an arrack shop before the licence was obtained is void ab initio and therefore a suit based upon such partnership for settlement of accounts is not maintainable. The facts are these. On the 8th March, 1943, plaintiff, defendant, Arjunam Pillai and Ramaswami Mudaliar agreed that the licence for the Kallidaikurichi arrack shop should be taken in the name of the defendant but that the profits from the shop should be equally divided between the four members. There was a settlement of account on 9th April, 1944, whereunder the defendant had to pay a sum of Rs. 260-4-6 to the plaintiff. On that day itself the defendant paid Rs. 130-4-6. The suit was filed for the recovery of the balance due to the plaintiff. The defendant raised various contentions one of them being that the suit was not maintainable in view of the Rules under the Madras Abkari Act I of 1886. The learned District Munsiff held that the plaintiff was not a partner but a mere financier and there was no question of any transfer of a right to vend. Following the decision of Wadsworth, J., in Rama Moopan v. Muthu Moopan1, the learned Munsiff held that the suit was maintainable. The finding of the learned District Munsiff is obviously not based on the evidence in the case. Indeed he did not say on what evidence he came to that conclusion. P.W.1, the plaintiff, in unambiguous terms stated in his evidence as follows: “As per the agreement the four persons agreeed that if an arrack shop was taken in auction the capital as well as the profits are to be divided between us. The Kallidaikurichi licence was taken in the name of the defendant in March, 1943. The licence was for one year from April 1st. The business was carried on for one year. At the end of the year on 9th January, 1944, we four persons settled the accounts. For my share I was entitled to get Rs. 260-4-6 from the de fendant on that day.” This evidence leaves no doubt in my mind that the plaintiff was a partner along with three persons for the purpose of bidding at the auction and exploiting the arrack licence. For my share I was entitled to get Rs. 260-4-6 from the de fendant on that day.” This evidence leaves no doubt in my mind that the plaintiff was a partner along with three persons for the purpose of bidding at the auction and exploiting the arrack licence. On this finding the question for consideration is whether the partnership is void. There are conflicting decisions on this question. It really turns upon the construction of clause (a) rule 27 promulgated under the Madras Abkari Act. It reads as follows: “No privilege of supply or vend shall be sold, transferred or sub-rented without the Collector’s previous permission.” Venkatasubba Rao, J., in Satyala Sanyasi v. Bhogavalli Sanyasi2, held that if at the time when the person bid, the partnership had come into existence and it was only subsequently he became a successful bidder, there was no transfer involved in the transaction which would be against rule 27 of the Excise Manual. This view was accepted and followed by Venkataramana Rao, J., in Rangaswami Pillai v. Narayanaswami Naicker3. In Rama Moopan v. Muthu Moopan,1 Wadsworth, J., made observations contrary to those made by the other two learned Judges. In that case the alleged partnership agreement was entered into after one of the partners successfully bid for the shop at the auction. Though the point to be decided now did not arise directly in that case, the learned Judge incidentally stated as follows: “I may observe that to my mind it makes no difference whether the partnership agreement was entered into before the bid at the auction or after the bid at the auction, provided that the bid was not made in the names of the partners as and for the partnership.” All these judgments were reviewed by Leach, C. J., and Lakshmana Rao, J., in Italia v. Cowasjee.4 where the facts briefly arc these. The Collector called for tenders in respect of toddy shops in Madras City. The plaintiff, a partner, submitted a tender on 23rd August, 1937, on behalf of the partnership but in his own name. The plaintiff had already informed the Secretary to the Board of Revenue of the partnership and the Revenue authorities were fully aware of the arrangement at all material times. On 31st August, the tender was ultimately accepted. The plaintiff, a partner, submitted a tender on 23rd August, 1937, on behalf of the partnership but in his own name. The plaintiff had already informed the Secretary to the Board of Revenue of the partnership and the Revenue authorities were fully aware of the arrangement at all material times. On 31st August, the tender was ultimately accepted. Later, on 11th April, 1938, the Collector insisted upon the plaintiff registering the partnership and as more time was asked for, the Collector on 18th May, 1938, wrote to him informing that the licence would be issued in his own name only. It is therefore clear that till 18th May, 1938, the Revenue authorities were agreeable to the business being carried on in partnership and as the plaintiff was not able to comply with the suggestion to register the partnership, the authorities decided that they would recognise only the plaintiff and would issue a permanent licence in his favour. The suit was filed for a declaration that the partnership was dissolved on the 30th September, 1938, and for accounts. The learned Judges held that the plaintiff was entitled to an account up to the 18th May 1938, and from that date he was not entitled to an account as in their view the partnership was unlawful from 18th May, 1938. The ratio decidendi of the decision is that the partners had failed to comply with the conditions which the revenue authorities required to be fulfilled for the issue of a permanent licence to the partnership and consequently they decided that they would not recognise the partnership at all. The partnership became illegal from the date when the conditions imposed were not acepted by the partners. In the learned Judges’ view the partnership was valid till that date as the full facts were diclosed to the revenue authorities. If in this case any conditions imposed by the Revenue authorities were contravened, I would be bound by this decision. But the only rule that is alleged to have been contravened is rule 27 of the Abkari Rules. On that question, this decision is not a binding authority on me. If in this case any conditions imposed by the Revenue authorities were contravened, I would be bound by this decision. But the only rule that is alleged to have been contravened is rule 27 of the Abkari Rules. On that question, this decision is not a binding authority on me. There are no doubt certain observations in the course of the judgment questioning the correctness of the judgment of Venkatasubba Rao, J., in Satyala Sanyasi v. Bhogavalli Sanyasi2, At page 101 the learned Chief Justice observed: “The appeal was heard by Venkatasubba Rao, J., who distinguished the case from Nalam Padmanabham v. Sail Badrinatt Sarda1, on the ground that the partnership had been formed before the auction and therefore there was no transfer of an interest in the licence. The wider question of public policy the necessity of controlling all those who hold liquor licences in the interests of the public was not discussed by Venkatasubba Rao, J. Where a partnership is entered into before the auction and one of the partners is deputed to bid for and obtain the licence in his own name on behalf of the partnership, it may be that in law there is no transfer of an interest in the licence, but it does not follow that the partnership would be a lawful one. There are other factors to be considered. The judgment of Venkatasubba Rao, J., was followed by Venkataramana Rao, J., in Rangasami Pillai v. Harayanasami Naicken2, but in Rama Moopan v. Muthu Moopan3, Wadsworth, J., expresses strong dissent.” These observations are not fair to Venkatasubba Rao, J. The learned Judge did consider other factors based upon public policy. In Satyala Sanyasi v. Bogavalli Sanyasi4, the learned Judge states at page 495: “The defendant’s learned counsel contends that even if it be held that the contract is not illegal, it is in any event opposed to public policy. I am afraid I cannot accede to this contention. What is ‘public policy’ with reference to an enactment, except what is manifested by its provisions? The Abkari Act lays down that it is illegal to sell, transfer or sub-rent the privilege. To attempt to discover a ‘policy’ with a view to make illegal, things not expressly prohibited, seems unwarranted. I am afraid I cannot accede to this contention. What is ‘public policy’ with reference to an enactment, except what is manifested by its provisions? The Abkari Act lays down that it is illegal to sell, transfer or sub-rent the privilege. To attempt to discover a ‘policy’ with a view to make illegal, things not expressly prohibited, seems unwarranted. The argument in effect is, that although only three acts are in terms forbidden, the Courts must somehow infer some kind of policy, which would render illegal other acts, though not so specified.” In the present case, as aforesaid, no other condition of the Abkari Act or the Rules framed thereunder are shown to have been contravened or otherwise infringed by the partners. The only rule which is alleged to have been contravened is rule 27 of the Abkari Rules. As the learned Judges who considered this point expressed different views, I think this is a fit case for being posted before a Bench. (In pursuance of the aforesaid Order of Reference to the Bench, this petition coming on for hearing before Satyanarayana Rao and Govinda Menon, JJ., on 1st February, 1949, the Court made the following): Order of Reference to a Full Bench. Satyanarayana Rao, J.-After this Civil Revision Petition was referred to a Bench by Subba Rao, J., and was posted for hearing before us it was brought to our notice that besides the decisions referred to in the judgment of Subba Rao, J., there are also other decisions dealing with the question and expressing different opinions, some of them being decisions of Benches. Reilly, J., in Narayanamurthi v. Subramaniam5, and Ananthakrishna Aiyar, J., in Vazhmuni v. Nathumuni6 expressed views which are in consonance with that of Venkatasubba Rao and Venkataramana Rao, JJ., while Horwill, J., in Chennayya v. Janikamma7 and Happell and Panchapagesa Sastri, JJ., in Vekkatasubbiah v. Attar Sheik Masthan8 take a different view which supports the view of Leach, C.J., and Lakshmana Rao, J., in the case in Italia v. Cowasjee9. There is an earlier decision of this Court in Natla Bapiraju v. Achuta Rajaju10. (Miller and Krishnaswami Aiyar, JJ.) which decided that if the partnership concerned commenced before the date on which the prohibition in the licence was legally promulgated there was no objection to the partnership. In this opinion they were supported by an earlier unreported decision in S. A. No. 870 of 1906. (Miller and Krishnaswami Aiyar, JJ.) which decided that if the partnership concerned commenced before the date on which the prohibition in the licence was legally promulgated there was no objection to the partnership. In this opinion they were supported by an earlier unreported decision in S. A. No. 870 of 1906. This supports the position that apart from statutory prohibition or prohibition under a rule framed under a statute an agreement of the nature under consideration is not illegal or void either on the ground of public policy or otherwise. In The Commissioner of Income-tax v. Mohideen Sahib11, a case under the Income-tax Act, it was assumed by the Full Bench that a partnership agreement of the nature does not offend rule 27 of the rules promulgated under the Abkari Act. In view of this difference of opinion, we think that the case should be disposed of by a Full Bench and the matter should be settled by it. The papers will be placed before the Chief Justice for constituting a Full Bench. (In pursuance of the aforesaid Order of Reference to the Full Bench, this petition coining on for hearing, the Court delivered the following): The Judgment of the Court was delivered by Horwill, J.-This Civil Revision Petition has been referred to a Full Bench because of a supposed deep cleavage of opinion in the decisions of this Court on the sole question of law that arises in this Civil Revision Petition, i.e., whether a partner in a partnership entered into for the purpose of vending arrack can file a suit for the balance due on setdement of accounts when only one of the partners has obtained a licence under the Abkari Act for the vending of arrack. It was found by the District Munsiff that the suit did not contravene the provisions of the Madras Abkari Act (I of 1886); and so he decreed the suit for a sum of Rs. 56-13-9 with further interest at six per cent, per annum and costs. The matter came in revision under section 25 of the Provincial Small Causes Courts Act before Subba Rao, J., who in view of a conflict of opinion referred the matter to a Bench. 56-13-9 with further interest at six per cent, per annum and costs. The matter came in revision under section 25 of the Provincial Small Causes Courts Act before Subba Rao, J., who in view of a conflict of opinion referred the matter to a Bench. When the matter came before Satyanarayana Rao and Govinda Menon, JJ., many cases other than those cited before Subba Rao, J., were referred to, some of them being Bench decisions; and so they referred the matter to a Full Bench. After the question of law that arises in this Civil Revision Petition had been fully discussed, Mr. S. Ramachandra Aiyar for the plaintiff contended that the licence granted to the defendant had not been produced and that there was no evidence to show either that those partners who had not been granted a licence were partners not only for the sharing of the profits but for the vending of arrack also or that the licence issued to the defendant contained conditions similar to those found in rule 27 of the Rules framed under the Abkari Act. If that had been so, these matters should have been brought to the attention of Subba Rao, J., who, if satisfied that important questions of fact necessary for the proper disposal of the Civil Revision Petition had not been decided, would have called for findings. Nothing seems to have been said either before him, or before the Bench, which suggested that the licence might not have been granted exclusively to the defendant, or that the licence did not contain a clause that the right in it should not be transferred, or that the other parties to the partnership were not in the fullest sense of the word partners for the vending of the arrack. As these points have been taken before us for the first time, we are not prepared to consider them. The disposal of this Civil Revision Petition must proceed on the footing that the parties to the partnership agreement sold arrack themselves or through other partners as their agents, on a licence granted to the defendant alone, in which there was a term prohibiting him from transferring his rights. The relevant provisions of the Abkari Act are sections 15, 55 and 56 and Rule 27 framed under the Act. The relevant provisions of the Abkari Act are sections 15, 55 and 56 and Rule 27 framed under the Act. Section 15 runs: " No liquor or intoxicating drug shall be sold without a licence from the Collector.......‘, Section 55 makes punishable, with respect to the subject of the various sub-clauses, including the selling of liquor or any intoxicating drug, any " contravention of this Act, or o any rule or order made under this Act, or of any licence or permit obtained under this Act." Section 56 makes punishable a contravention of any term of a licence or permit granted under the Act which is not covered by section 55 or any other provisions of the Act. Rule 27 says: " No privilege of supply or vend shall be sold, transferred or sub-rented without the Collector’s previous permission." The decisions dealing with the question whether it is a contravention of the terms of a licence granted to an individual if he enters into a partnership either before or after the licence was granted have been discussed so often and so fully in the very many cases cited before us that we feel that it is unnecessary to reconsider them here in the same detail. The learned advocate for the petitioner (defendant) relies on Marudamuthu Pillai v. Rangasami Moopan1, Thithi Pakurudasu v. Bheemudu2, Nalam Padmanabharn v. Sait Badrinatt Sarda3, Namasivaya Kurukkal v. Subramania Ayyan4, Bramayya v. Ramayya5, Santanarama Mudaliar v. Sami Karuppandar6, Ramanayudu v. Seetharamayya7, Rama Moopan v. Muthu Moopan8, Narasimhalu Naidu v. Nagareddi9 Italia v. Cowasjee1, Chinnayya v. Janikamma2 and Venkatasubbiah v. Attar Sheik Mastan3 The earliest of these cases is important, because it dealt with a case where, as in the present case, a partnership was formed before the licences were granted. Two persons entered into a contract for the sale of toddy and arrack. One partner took a licence in toddy and the other in arrack, and by conducting the two businesses in partnership they contravened the rule that an arrack vendor should not have an interest in toddy and vice versa. It was held that the suit based on the partnership would not lie for two reasons, that the partnership was void ab initio, because it offended against public policy, and secondly that the partnership was illegal because it purported to carry on business by non-licencees, which was against the spirit of the Act. It was held that the suit based on the partnership would not lie for two reasons, that the partnership was void ab initio, because it offended against public policy, and secondly that the partnership was illegal because it purported to carry on business by non-licencees, which was against the spirit of the Act. The principle laid down in this decision has never, as far as we have seen, been departed from; and it will be useful to state the principle there laid down in the words of the learned Judges, “.........we should hold that the contract was invalid also on the ground that the licence in each case was to be obtained by only one of the partners. The provisions of the Abkari Act, as a whole, show clearly that every person carrying on Abkari business as a principal must be licensed under the Act. The reason is obvious that, unless he were licensed, there could be no control over him. To hold that a person who has not got a licence could still be partner with one who has a licence and as such partner carry on the business with or without the other would enable the unlicensed partner to evade the liabilities intended by the Law to be cast on persons carrying on Abkari business.” Thithi Pakurudasu v. Bheemudu4, followed Marudamuthu Pillai v. Rangaswami Moopan5. In Nalam Padmanabham v. Salt Badrinatt Sarda6, the learned Judges were concerned with an opium licence which was worked by a partnership entered into before the licence was issued. They pointed out that the licence was a personal privilege granted to the licencee and that the agreement to work the business in partnership amounted to a transfer, approving and following Marudamuthu Pillai v. Rangaswami Moopan5 . Namasivaya Kurukkal v. Subramania Ayyan7, a decision of a single Judge, followed the above decisions. Brahmayya v. Ramayya8, was in respect of a suit by a “person” who had lent money to a partnership, and two questions were raised: (1) whether the partnership was an illegal one, and (2) whether the plaintiff was aware of the illegality of the partnership. The learned Judges followed Marudamuthu Pillai v. Rangaswami Moopan5, Thithi Pakurudasu v. Bheemudu4, and Nalam Padmanabham v. Salt Badrinatt Sarda6 and held that the partnership was illegal and mala in se. Santanarama Mudaliar v. Sami Karuppandar9, a decision of a single Judge, followed the above decisions. The learned Judges followed Marudamuthu Pillai v. Rangaswami Moopan5, Thithi Pakurudasu v. Bheemudu4, and Nalam Padmanabham v. Salt Badrinatt Sarda6 and held that the partnership was illegal and mala in se. Santanarama Mudaliar v. Sami Karuppandar9, a decision of a single Judge, followed the above decisions. The learned Judge held that the partnership was void under section 23 of the Contract Act, because it necessitated the commission of offences punishable under the Act. Ramanayudu v. Seetharamayya10, is a decision of a Full Bench. There, a partnership was entered into after the auction sale, both before the licence was granted, between the defendant, the successful bidder at the auction, and the plaintiff, who advanced money for the conducting of the business by both the partners. It was held that the partnership was an illegal one and that therefore no suit lay on the promissory note executed by the defendant for the money lent by the plaintiff. Mr. Ramachandra Ayyar contends that the case dealt with by the Full Bench must be classified amongst those cases where the partnership is entered into after the licence is granted and which should be distinguished, it is said, from the category of cases where the partnership comes into existence before the licence is granted; for, it is contended the issue of a licence to the auction purchaser is a mere formality. We cannot agree that issue of a licence is a formality. If the Collector had considered that the highest bidder was an undesirable person to hold a licence, he would undoubtedly have refused to grant him a licence. However, the discussion of the principles of law involved showed that the learned Judges considered it immaterial whether the partnership was entered into before or after the licence was issued. After the Full Bench decision, the question was prominently raised whether any distinction could be drawn between a partnership entered into before the licence was granted and one entered into after the licence was granted. After the Full Bench decision, the question was prominently raised whether any distinction could be drawn between a partnership entered into before the licence was granted and one entered into after the licence was granted. Venkatasubba Rao, J., in Satyala Sanyasi v. Bhogavalli Sanyasi1and Venkataramana Rao, J., in Rangaswaii Pillai v. Narayanaswami Naicken2, held that such a distinction could be drawn, and that a partnership entered into before the Act was legal The same question was raised before Wadsworth, J., in Rama Moopan v. MuthuMoopan3; and in his judgment he expressed a strong dissent from the decisions of Venkatasubba Rao and Venkataramana Rao, JJ., as did King, J., in Narasimhalu Naidu v. Nagareddi4. In Italia v. Cowasjee5, which was a decision on appeal from the judgment of Krishnaswami Ayyangar, J., in G.S.No. 201 of 1939, the learned Judges agreed with Wadsworth, J., and overruled the decisions of VenkataramanaRao and Venkatasubba Rao, JJ., on the ground that Venkatasubba Rao, J., had overlooked the wider question of public policy. In the course of his judgment, the learned Chief Justice cited, as embodying the relevant principles governing the matter, the following passage from Bensley v. Bignold6: " (a) When a transaction is forbidden, the grounds of the prohibition are immaterial. Courts of Justice cannot take note of any difference between mala prohibita and mala in se. (b) The imposition of a penalty by the Legislature on any specific actor onussion is prima facie equivalent to an express prohibition." On the facts, the learned Judges found that the contract was initially a valid one; because it contemplated the securing of licences in the name of both the partners. The Revenue authorities granted temporary licences to one of the partners, knowing that the businesses would be worked by two partners and tacitly approving of its being worked by both of them. The Revenue authorities later insisted on a registration of the partnership as a condition precedent to the recognition of the partnership and refused to issue licences in their joint names. As the partners failed to register themselves as a company, the licence was issued m the name of one partner only. Both partners nevertheless continued the business. The learned Judges held that from the 18th May, 1938, the date on which the Revenue authorities definitely refused to issue a licence in their joint names, the partnership became an illegal one. As the partners failed to register themselves as a company, the licence was issued m the name of one partner only. Both partners nevertheless continued the business. The learned Judges held that from the 18th May, 1938, the date on which the Revenue authorities definitely refused to issue a licence in their joint names, the partnership became an illegal one. This decision is important; because the partnership was held to be valid at its inception and became invalid only when the partnership decided to do something forbidden by law, i.e., to vend toddy on a licence granted to one of them only. Venkatasubbiah v. Attar Sheik Mastan7, was a Letters Patent Appeal against the judgment of Shahabuddin, J., affirming it and following Italia v. Cowasjee5. The general argument of Mr. Ramachandra Iyer is that where a partnership is entered into before the licence is granted, no transfer is involved, because in accordance with the principle underlying section 88 of the Trusts Act, the licence becomes the property of the partnership as soon as it is acquired. We do not however agree; for this equitable principle merely requires that the partner acquiring the asset should hold it for the partnership. Even when immoveable property is acquired, the legal ownership would be in the partner who had purchased the property, though "equity would require that he should hold it on behalf of the partnership. A fortiori, when a licence, which is a personal privilege to vend, is acquired by one partner, it is certainly his licence and not the licence of the partnership. Since it was granted to him on the express understanding that it was to be used by him and by him alone, its use by the partnership would involve a transfer in precisely the same way as it would if the partnership were entered into after the licence was issued. On the question of public policy, it is difficult to see any differ learned Judges however incidentally referred to the question whether the partnership was an illegal one or not; but they did not discuss the question, nor did they refer in any detail to the authorities bearing on the subject. Odgers, J., said: “In my opinion, the business was not illegal at all. Odgers, J., said: “In my opinion, the business was not illegal at all. It was no doubt controlled by the conditions not only set out in section 24, Abkari Act, to which we have been referred, but also by something in the Abkari Rules to which we have been referred or in the conditions to the grant ot the licence itself.” He then went on to say that the licence was not before them. No further discussion of this point is found. He then referred to Brahmayya v. Ramayya1, in which it had been held that the partnership was illegal and in which a decree had been passed in favour of the person advancing money as against the share of the person who had obtained a licence, not on the question whether the partnership was illegal, but on the question whether the person advancing money was particeps criminus with the partners carrying on an illegal trade. The learned Judge distinguished that case on the ground that there the plaintiff had notice of the illegality of the partnership. Madhavan Nair, J., in a separate judgment said with regard to the question of the illegality of the partnership only this: “Prima facie there is nothing illegal in such a partnership under the Abkari Act, and no rule issued under the Act has been brought to our notice to show that the arrangement is illegal. The decision in Brahmayya v. Ramayya1, as regards the illegal nature of the partnership in the case depended on the terms of the licence issued to the paries.” He then went on to say: “I do not think that the plaintiff can be said to have known about the illegality of the contract when he lent the money.” Such remarks as may be found in this judgment supporting the argument of the respondent must therefore be regarded as obiter. In Gangadhara v. Swaminadha2, Srinivasa Aiyangar, J., was considering the case of a partnership entered into in the Mysore State for the vending of intoxicating liquor. During the course of his judgment he expressed an opinion that the observations found in Marudamuthu Pillai v. Rangaswami Moopan3, were obiter and disapproved of them. He distinguished Nalam Padmanabham v. Sait Badrinatt Sarda4,as dealing with a case under the Opium Act, and dissented from Brahmayya v. Ramayya1, although that was a decision of a Bench which he was bound to follow. He distinguished Nalam Padmanabham v. Sait Badrinatt Sarda4,as dealing with a case under the Opium Act, and dissented from Brahmayya v. Ramayya1, although that was a decision of a Bench which he was bound to follow. The decision of Srinivasa Aiyangar, J., must, however, be considered together with the appellate judgment against his decision in O.S.A. No. 72 of 1925, in which the learned Judges disposed of the matter, not on a consideration of the Madras cases, but on the ground that the law of Mysore, as a foreign State, was a question of fact, and that the defendant had failed to adduce any evidence worth the name as to the law in Mysore or of the terms of the license issued. The Commissioner of Income-tax, Madras v. Mohideen Sahib5 dealt with an income-tax reference by the Commissioner of Income-tax. The judgment is a very short one. After setting out the question referred to them, the learned Chief Justice said: “The Income-tax Commissioner finds that there was a body of seven persons who formed a sort of partnership. Of these seven persons, four bid and obtained leases of four toddy shops, and the profits from those four toddy shops were shared between the seven persons; apparently also all the seven assisted in the working and financing of those shops. On this finding he holds that this association of persons was not an illegal association under the Abkari rules. Here the petitioner’s vakil questions that finding and contends that his client and others have offended against the law in that they have contravened the provisions of rule 27 of the general conditions of those licences..... There is no evidence that the licence holders have either sold, transferred or sub-rented the shops which they have taken on lease. It is not, therefore, apparent how that rule has been contravened and, certainly, we cannot presume illegality, in the absence of any evidence of such illegality.” It is clear from this short judgment that no question of law was decided, that the question whether there was any illegality was considered to be a question of fact, and that there was no evidence that there had been an illegal transfer or sub-renting of the shops. The Commissioner had given a finding that it was an illegal partnership on certain facts; but the correctness of that finding was questioned before the learned Judges. The Commissioner had given a finding that it was an illegal partnership on certain facts; but the correctness of that finding was questioned before the learned Judges. No principle was held down in that case, except that the illegality of contracts has to be affirmatively proved. Reilly, J., in Narayanamurthi v. Subramania1, said that Marudamuthu Pillai v. Rangaswami Moopan2, Thithi Pakurudasu v. Bheemudu3 and Brahmayya v. Ramayya4, laid down the principle that a partnership entered into in contravention of a licence or any rule under the Abkari Act is void and that a licencee of a toddy or arrack shop cannot legally take a partner without sanction, but that these decisions did not go so far as to hold that it was illegal for persons to enter into a partnership for the purpose of carrying on a toddy shop business, for which, they hoped at a future date to obtain a licence. There is nothing in this statement to which objection can be taken provided, as pointed out by the learned Chief Justice in the Full Bench decision, Ramanayudu v. Seetharamayya5, that “it is intended at a future date to get a licence in the names of all the partners”. Much reliance has been placed by Mr. Ramachandra Aiyar, as well as by Venkatasubba Rao, J., in Satyala Sanyasi v. Bhogavalli Sanyasi6, on the judgment of Ananthakrishna Aiyar, J., in Vazhmuni v. Nathumuni7. in particular, the passage in which he approved of an opinion expressed by the District Judge, the passage of the District Judge’s judgment being in these words: “As I understand the evidence, the case is not one of the respondent having a going toddy trade and taking the other two (plaintiff I and defendant 2) into partnership. So far as I can gather, each of the three parties, contributed an equal share of money and the business was started, the licence being taken in the name of defendant 1. So far as I can gather, each of the three parties, contributed an equal share of money and the business was started, the licence being taken in the name of defendant 1. It seems to be clear that at the time the partnership was formed he had not begun the trade in toddy and had no stock which he made the joint property of all the three.” The learned Judge (Ananthakrishna Aiyar, J.) seemed to have considered that the conclusion from these facts that the partnership was a lawful one, whatever its intention, had the approval of Nalam Padmanabham v. Sait Badrinatt Sarda8, contains no support at all for such a conclusion. Whatever might have been the intention of the partners at the time when the partnership was formed, the partnership became illegal as soon as the partners decided to use the licence as a privilege common to all the partners. It is however clear that Ananthakrishna Aiyar, J., really disposed of the case on the footing that the licence had not been produced; for the learned Judge said that for all they knew, the licence might have been granted to all four of the partners. The learned Judge said finally: “In this view, I do not propose to discuss the various decisions cited before me by the learned advocates on either side in the second appeal,” the cases that he did not propose to discuss including Marudamuthu Pillai v. Rangaswami Moopan2, Thithi Pakurudasu v. Bheemudu3 and Brahmayya v. Ramayya4. It was because Ananthakrishna Aiyar, J., disposed of the case on the ground that the licence had not been produced that the learned Chief Justice in Ramanayudu v. Seetharamayya5 said: “Ananthakrishna Aiyar, J., held that it was essential that the licence granted to defendant 1 should be produced and that the view of the District Judge was correct in stating that at the time the partnership was formed the first defendant had not begun to trade in toddy and had no stock which he made the joint property of all the three partners. In this view the partnership could not be held to be illegal as there was nothing prima facie illegal in such a partnership under the Abkari Act. In this view the partnership could not be held to be illegal as there was nothing prima facie illegal in such a partnership under the Abkari Act. The decision in this case appears to me to have turned on the absence of proof that the partnership was entered into for an illegal purpose.” This cannot be regarded as an approval of the obiter dictum of Ananthakrishna Aiyar, J., with regard to the views of the District Judge. On the question whether there was a transfer of the licence, Venkatasubba Rao, J., cited a passage from Nalam Padmanabham v. Salt Badrinatt Sarda1, to the effect that if two persons agree to start a business in partnership and to contribute capital therefor, there is no transfer, and then went on to say that adopting that test no transfer was involved in the partnership under consideration. He then added: “The facts here disclose that the persons concerned first entered into the partnership with the object of acquiring the right and that the plaintiff on the firm’s behalf sometime later acquired that right.” There the learned Judge left the matter. There was, of course, no transfer of the original assets of the business; but the subsequently acquired licence granted to-one partner had to be transferred if it could be used by both partners. On the question of public policy Venkatasubba Rao, J., said: “To attempt to discover a policy with a view to make illegal, things not expressly prohibited, seems unwarranted.” He then went on to refer briefly to Natla Bapiraju v. Achuta Rajaju2, Nalam Padmanabham v. Sait Badrinatt Sarda1 and the difference in the wording of section 9 of the Opium Act and section 15 of the Abkari Act, and again held that there was no transfer of the licence. From this he concluded that the argument based on the “so-called public policy” was extremely misleading. The learned Judge attempted to distinguish the Full Bench case as one in which the partnership was formed subsequent to the auction sale. It is unnecessary for us to discuss the judgment of Venkataramana Rao, J., in Rangaswami Pillai v. Narayanaswami Maicken3, for there was a finding of fact that it had not been proved that any person in whose name there was no licence ever interfered with the business of the toddy shop. It is unnecessary for us to discuss the judgment of Venkataramana Rao, J., in Rangaswami Pillai v. Narayanaswami Maicken3, for there was a finding of fact that it had not been proved that any person in whose name there was no licence ever interfered with the business of the toddy shop. From the above discussion it is evident that there is a long and consistent body of opinion of this High Court from Marudamuthu Pillai v. Rangaswami Moopan4, onwards, with which we agree, that a partnership entered into for the purpose of conducting a business in arrack or toddy on a licence granted or to be granted to only one of them is void ab initio, whether the contract was entered into before the licence was granted or afterwards, in that it either involves a transfer of the licence, which is prohibited under rule 27 and punishable under section 56, or a breach of section 15 of the Abkari Act, punishable under section 55, because the unlicensed partner, by himself or through his agent, the other partner sells without a licence. If a partnership is lawful at its inception, because it is not intended to infringe any provision of the Contract Act, it nevertheless becomes unlawful when it intends to conduct the business jointly on a licence granted to one only of the partners. Such differences of opinion as have arisen in connection with this type of transaction is doubtless due to the difficulty of envisaging the legal consequences of the use by a partnership of a licence issued in the name of one only of the partners. If the licencee holds his licence for the partnership or by an act of volition shares his licence with his partner, then there is a transfer which offends rule 27. If it be found that the licencee does not hold the licence for the partnership, because it is illegal for him to do so, or because for any other reason the non-licensed partner does not purport to sell, by himself or through his partner, under his partner’s licence, then there is no transfer; but the non-licensed partner would then commit a breach of section 15 of the Act. In either case, a punishable offence would be committed; and a partnership formed that would lead to a breach of these provisions would be illegal, either because an offence would necessarily be committed or because it would be against the general public policy underlying the enactment that only approved persons, specifically licensed, should be allowed to sell liquor. The Civil Revision Petition is therefore allowed with costs throughout. K.S. ----- Petition allowed.