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1962 DIGILAW 105 (KER)

Yohannan George v. Geevarghese Pappan

1962-03-23

body1962
Judgment :- 1. The plaintiffs in S.C.S. No. 197 of 1959 of the Munsiff's Court of Kottarakara, who are the petitioners in this Civil Revision Petition, sued for money alleged to be due from the defendant as price of goods supplied on credit. The defendant denied the transaction and further contended that the suit was barred under S.69 of the Indian Partnership Act as the six plaintiffs constituted a firm not registered under the Act. The learned Munsiff found the transaction to be true but dismissed the suit holding that it was barred under S.69. 2. The only question for decision is whether the suit is liable to be dismissed under S.69 of the Partnership Act, for want of registration of the firm. This raises the further question whether the plaintiffs are partners. The finding of the learned Munsiff is: "In effect this is a business continued by the sons now and the father has given his consent for the same." Originally the father was the owner of the business. Plaintiffs 4 to 6 were minors on the date of suit. There was no allegation in the plaint that the plaintiffs were partners and the defendant had no clear plea that they were. All that was pleaded in the written statement was that it was not clear from the plaint whether the plaintiffs had registered the firm under the Partnership Act and that if there was no registration, the suit could not be maintained. 3. "Partnership" has been defined in S.4 of the Partnership Act as: "The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all." The learned Munsiff did not devote sufficient attention to the important elements in this definition. There must be an agreement to share the profits of the business, but there is neither allegation nor proof that there was such an agreement. There must be an agreement to share the profits of the business, but there is neither allegation nor proof that there was such an agreement. It was held by a Full Bench of the Patna High Court in Hira Lal v. Jamaluddin (224 I.C. 106) that where a suit was brought by two plaintiffs but there was no evidence as to what the exact contract between them was with regard to the joint business which was carried on by them and there was no evidence that the business was carried on by all or any of them, acting for all, the essential element in the definition of a Partnership was wanting and that S.69 had no application to the case. Even the sharing of the profits by itself will not constitute the relation a partnership, and there is no initial presumption in favour of the existence of a partnership on account of receipt by a person of the share of profits of the business. This is a point on which the law in India differs from the English Partnership Act which provides that receipt by a person of share of the profits of a business is prima facie evidence that he is a partner in the business. This has been pointed out in Debi Parahad v. Jai Bam Das (AIR. 1952 Punjab 284). Explanation (2) to S.6 of the Act reads: "The receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business." It has already been stated that plaintiffs 4 to 6 were minors on the date of suit. A minor being incapable of entering into a contract cannot take part in the formation of a partnership although he may be admitted to the benefits of one which existed independently of him. The defence case appears to be that the six plaintiffs entered into a partnership which cannot be accepted in view of S.11 of the Indian Contract Act. Thus, there is neither allegation nor proof that the plaintiffs entered into an agreement of partnership to carry on the business. There is no evidence that they ever shared the profits either. The defence case appears to be that the six plaintiffs entered into a partnership which cannot be accepted in view of S.11 of the Indian Contract Act. Thus, there is neither allegation nor proof that the plaintiffs entered into an agreement of partnership to carry on the business. There is no evidence that they ever shared the profits either. The court has first to determine whether the plaintiffs are partners within the meaning of the Act, and in the absence of a plea or evidence to that effect, it cannot be held that they are partners or that the suit is barred under S.69. 4. In view of the finding that the defendant had transactions with the plaintiffs as a result of which the amount sued for was due to them and the absence of the bar under S.69 of the Indian Partnership Act, the suit must be decreed. Accordingly, I allow the Civil Revision Petition, set aside dismissal of the suit and pass a decree as prayed for. The petitioners will get their costs here and in the court below from the respondent. Allowed.