Judgment :- 1. This is an appeal from a decree dismissing a suit for dissolution of a partnership and for appointment of a receiver to wind up the affairs of the partnership. 2. The defendant was plying a bus service on the route, Taliparamba Cannanore, under the name and style of "Peeyam Transports". The permit for the bus stood in the name of "Peeyam Transports". The defendant took the plaintiff as a partner in the business under Ext. A-1 dated 31-5-1961. He made over the bus to the partnership at a value of Rs. 35.000, out of which Rs. 17,500 was to be paid by the plaintiff to the defendant and that was to be his contribution to the capital of the partnership. The defendant was to manage the affairs of the partnership and as remuneration be was to be paid Rs. 350/-per month. The collections of the partnership have to be kept by the plaintiff and he was to keep the accounts. All appointments in the partnership business have to be made by the defendant with the consent of the plaintiff. The profit or loss of the partnership should be divided or suffered equally between the parties. These, in substance, are the main terms of Ext. A-1. Alleging that differences of opinion have arisen between the parties and that it is impossible to carry on the business in partnership, the plaintiff has filed the suit. 3. The defendant contended that the partnership was illegal, and so the suit was not maintainable. He also raised other contentions, which are not material for the purpose of disposing this appeal. 4. The court below held that the agreement of partnership was illegal for the reason that 'the ownership of the bus was intended to be transferred to the partnership, thereby allowing the permit to be utilised by the partnership instead of by the defendant alone', and dismissed the suit. 5. The question to be considered is whether the partnership agreement was forbidden by law, or was of such a nature that if permitted it would defeat the provisions of any law or was opposed to public policy. 5. The question to be considered is whether the partnership agreement was forbidden by law, or was of such a nature that if permitted it would defeat the provisions of any law or was opposed to public policy. In order to show that the partnership is illegal, it is necessary to establish that the object of the partnership is one the attainment of which is contrary to law or that the object being legal, its attainment is sought in a manner which the law forbids. In Anderson Ltd, v. Daniel 1924-1 K. B.138, Atkin L. J., formulated the principle as follows: "The question of illegality in a contract generally arises in connexion with its formation, but it may also arise, as it does here, in connexion with its performance. In the former case, where the parties have agreed to something which is prohibited by Act of Parliament, it is indisputable that the contract is unenforceable by either party. And I think that it is equally unenforceable by the offending party where the illegality arises from the fact that the mode of performance adopted by the party performing it is in violation of some statute, even though the contract as agreed upon between the parties was capable of being performed in a perfectly legal manner." There are two principles involved. The first is that a contract which is entered into with the object of committing an illegal act is unenforceable. The second is that a court will not enforce a contract which is expressly or impliedly prohibited by statute. There has been no transfer of the permit to the plaintiff or to the partnership under Ext. A-1 agreement. The agreement did not provide for the transfer of the permit to the partnership. But in the plaint there is a statement that with the formation of the partnership the permit also became the property of the firm. That is a statement of the legal effect resulting from the transfer of the bus to the partnership and of agreement to run the business in partnership thereafter. We cannot go outside Ext. A-1 to find out the intention of the parties. If the inevitable effect of the transfer of the bus to the partnership was a transfer of the permit also, we would have thought that the intention of the parties was the doing of an act prohibited by law. We cannot go outside Ext. A-1 to find out the intention of the parties. If the inevitable effect of the transfer of the bus to the partnership was a transfer of the permit also, we would have thought that the intention of the parties was the doing of an act prohibited by law. We think that neither the formation of the partnership in the business of transport nor the transfer of the bus to the partnership had that effect. The transfer of the bus to the partnership was not forbidden by law. S.31 of the Motor Vehicles Act only requires that the transferor and the transferee should report the transfer to the registering authority. Persons may be partners in a business and yet the property by means of which the business is carried on may not be the property of the firm but the separate property of one or more of the partners. (See Fromont v. Coupland 130 E. R.271 and Miles v, Clarke 1963-1 All. E. R.779). A permit even if considered as a personal privilege and cannot be transferred without the consent of the transport authority, it was not necessary that there should have been a transfer of the permit in question to the partnership for the formation of the partnership. A partnership in the business of transport could have been constituted without a transfer of the permit, and we think that it was so constituted. The fact that the parties did not provide for the transfer of the permit to the partnership and the fact that a partnership could be formed in the business without a transfer of the permit to the partnership should conclude the question that there was no intention to do a prohibited act in Ext. A-1. Nor has a contract prohibited by law been made. In'Lindley on Partnership', 12th Edition, page 132, it is observed: "Illegality is never presumed, but must always be proved by those who assert its existence; but if the illegality is either apparent on the face of the proceedings or appears in the course of the trial, the court will itself take cognizance of the illegality and act accordingly even though the illegality is not relied upon by either party." In Manbharibai v. B. R. Mill AIR. 1956 Nagpur 225 the Court said: "Illegality is never presumed, but must always be proved by those who assert its existence". 6. 1956 Nagpur 225 the Court said: "Illegality is never presumed, but must always be proved by those who assert its existence". 6. A'permit' is defined in the Motor Vehicles Act as follows: "'Permit means the document issued by the commission or, a State or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage, or stage carriage, or authorising the owner as a private carrier or public carrier to use such vehicle" (See S.2 (20). The Supreme Court in Veerappa Pillai v. Raman and Raman Ltd. AIR. 1952 S.C.192 has observed that the ownership of vehicle is not necessary for obtaining a permit and that possession of the vehicle would suffice. But this court said in Vypeen Transport Corporation v. State Transport A.T. 1960 KLT.1058 that the above decision was arrived at before the amendment to S.60 (1) (c) of the Motor Vehicles Act, substituting the word 'own' for the word 'possess' in the sub-clause and therefore the ownership of the vehicle is a qualification for getting a permit. What the amendment has done is to give a discretion to the transport authority to cancel permit on the ground that the permit-holder has ceased to own the vehicle. From the definition of 'permit' in the Act it would appear that so far as a stage carriage is concerned, the ownership of the vehicle has not been made necessary for obtaining a permit. We do not find any other express provision to that effect. Whether that is the radiating effect of the amendment is doubtful. The Supreme Court said in Veerappa Pillai v. Raman and Raman Ltd. AIR. 19:2 S. C. 192: 'An examination of the relevant sections of the Motor Vehicles Act does not support the view that the issue of a permit for a bus which falls within the definition of a "state carriage" is necessarily, dependent on the ownership of the vehicle. All that is required for obtaining a permit is possession of the bus. 19:2 S. C. 192: 'An examination of the relevant sections of the Motor Vehicles Act does not support the view that the issue of a permit for a bus which falls within the definition of a "state carriage" is necessarily, dependent on the ownership of the vehicle. All that is required for obtaining a permit is possession of the bus. As ownership is not a condition precedent for the grant of permits and as a person can get a permit provided he is in possession of a vehicle which satisfies the requirements of the statute or the rules framed thereunder, we have to hold that the parties and the authorities were labouring under a misconception if they entertained a contrary view It has been pointed out already that nowhere do we find in the Act anything to indicate that the issue of permits depends on ownership." In Khalil-Ul-Rahman Khan v. S. T. A. Tribunal AIR. 1963 Allahabad 383 the court said: "Under S.2 (20) a permit holder in respect of a stage carriage need not have any interest, proprietary or possessory, in the vehicle itself. Of course in order to use the vehicle he will have to be in control of it and that control may in most cases amount to possession. Cl. (c) of sub-section (1) of S.60 also does not show that the permit holder should be the owner of the vehicle. That is only a permissible clause and the Transport Authority has only been given a discretion to cancel the permit in that contingency. It may, or may not cancel it, even if the holder of the permit ceases to own the vehicle covered by it. But it is by no means necessary that clause (c) should be applicable to the case of every permit holder. There may be permit holders who own the vehicle covered by the permit and there may be permit holders who do not own the vehicle. This clause appears to apply only to the former case and not to the latter. The fact that prior to the pawing of Act 100 of 1956 the word used in clause (c) was 'possess' and now it is 'own' makes no difference. The change only shows that though formerly a permit could be cancelled on the ground that the permit holder had lost possession over the vehicle it cannot be cancelled now on that ground. The change only shows that though formerly a permit could be cancelled on the ground that the permit holder had lost possession over the vehicle it cannot be cancelled now on that ground. Now, it may be cancelled only if it is proved that the permit holder his lost the ownership of the vehicle". (See the head note>. 7. In Dayabhai & Co. v. I. T. Commissioner, AIR. 1966 M. P. 13, one Dayabhai was carrying on a business of plying buses and trucks under the style "Dayabhai & Co". The permits for the stage carriages and trucks were issued in the name of Dayabhai. He took his brother as a partner in the business and transferred the trucks to the partnership and a partnership deed was executed between them. The firm made an application for registration for the assessment year 1956-57 under S.26A of the Indian Income-Tax Act. The application was rejected by the Income Tax Officer on the ground that the agreement was illegal. In considering the question whether the Income-Tax Officer was right in rejecting the application, Dixit C. J., speaking for the Bench, said; "It follows from the above propositions that partnership business in transport, can be carried on the strength of a permit obtained by a partner and with a vehicle belonging to him. It can also be carried on with vehicles belonging to the partnership firm on the basis of permits obtained by a partner in respect of those vehicles, as a partner though not owner of those vehicles is clearly as a partner in possession of those vehicles. In the absence of any provision in the Motor Vehicles Act laying down that transport business in partnership can only be done on permits issued and obtained by the firm itself and with vehicles of which the firm is the owner, it cannot be held that S.31, 42 and 59 of the Motor Vehicles Act are transgressed when transport business is carried on with vehicles belonging to a partner or to the 6rm on the authorization of permits held by a partner. In the partnership business done by partner with vehicles belonging to him or to the partnership firm on permits obtained and held by him, there is no transfer of vehicles or transfer of permits. In the partnership business done by partner with vehicles belonging to him or to the partnership firm on permits obtained and held by him, there is no transfer of vehicles or transfer of permits. There being thus no violation of any provision of the Motor Vehicles Act, a partnership firm constituted for carrying on transport business cannot be regarded as illegal merely because the partnership business is carried on by a partner on the strength of permits obtained and held by him and with vehicles belonging to him or to the partnership firm... All these cases fully support the view that where the relevant statute does not prohibit a licensee or a permit-holder from taking a partner but simply prohibits a transfer or a sublease of the licence or the permit, then the licensee or the permit-holder by merely admitting a partner or partners in the business to which the licence or the permit relates does not transgress the prohibition against transfer or sub-lease and the partnership is legal". 8. The observations of the Supreme Court in Umacharan Shaw & Bros v. Commissioner of Income-Tax 1959-37 I. T. R.271 would lend support to the view that if a partnership is formed for conducting the business of transport without transferring the permit standing in the name of a partner to the partnership, the agreement of partnership would not be hit by the provisions of S.23 of the Contract Act. The case was concerned with the genuineness of a partnership for the purpose of registration under S.26-A of the Indian Income-Tax Act. 1922. The Court observed: "Though the Tribunal stated that it had not proceeded on the ground that the partnership was illegal being against the Bengal Excise Act, 1911, the argument was referred to as supporting the conclusion that the firm was not genuine. S.42 (1) (a) of the Bengal Excise Act reads: "42 (1). Subject to such restrictions as the State Government may prescribe the authority who granted any licence, permit or pass under this Act may cancel or suspend it (a) If it is transferred or sub-let by the holder thereof without the permission of the said authority." There was no evidence that the excise licences were transferred or sub-let. The three shops, it appears, were managed separately and their accounts were kept distinct. The three shops, it appears, were managed separately and their accounts were kept distinct. There was thus nothing which militated against the partnership and it cannot be said that this affected the genuineness of the agreement". In Champsey v. Gordhandas AIR. 1917 Bombay 250 it was held that where a licensee under S.11 of the Bombay Salt Act, who was prohibited by the terms of his licence, from sub-letting the whole or a part of the privilege, admitted some members of his family and others as partners in the business to share the profits, the partners however not having any part in the manufacture of salt, the arrangement did not infringe the provisions either of the licence or of S.11 of the Act. The court observed that the admission of partners to share in the profits cannot be considered as a sub-letting or alienation of a part of the privilege, unless there has been a document directly transferring to the partners or attempting to transfer to the partners a part of the right to manufacture or vend. In Gordhandas Kessowji v. Champsey Dossa AIR. 1921 PC. 137, this decision of the Bombay High Court was approved by the Privy Council. 9. Horwill J., observed in Velu Padayachi v. Sivasooriam AIR. 1950 Madras 444: "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 difference between the object of a partnership entered into before the licence was granted and one entered into after it was granted. In either case, the partnership would be entered into for the purpose of bringing about a result prohibited by law, i. e, the vending of arrack by a person who had no licence to do so." In Padmanabhan v. Sarda 21 MLJ. In either case, the partnership would be entered into for the purpose of bringing about a result prohibited by law, i. e, the vending of arrack by a person who had no licence to do so." In Padmanabhan v. Sarda 21 MLJ. 425 the learned judges observed: "But 'if one person carrying on a trade and possessing stock' and capital, 'admits another into partnership' with himself, making the stock and capital, the joint property of both, 'it is impossible to contend that there is not a transfer' in such a case We are not concerned in construing a statute like the Opium Act with the mere form of the transaction but with the substance of it." If a partnership can be formed in the business of transport without a transfer of the permit standing in the name of one partner either to the partnership or to the other partner or partners, why should it be assumed that the necessary result of the formation of the partnership is a transfer of the permit? If a partnership in the business is possible in law without transferring the ownership of property, or the privilege in the shape of a permit, by means of which the partnership is being carried on, we can see no reason for the assumption that formation of the partnership must have the inevitable effect of transferring the permit from the partner to the partnership, and as already stated, there is no presumption of illegality. Be it noted that S.59 (1) only prohibits a transfer of permit from one person to another without the permission of the transport authority. It is doubtful whether by transferring a permit from the partner to the partnership there is a transfer from one person to another as contemplated in S.59 (1). A partnership has no separate legal personality. At any rate, there is no divestment of the interest of the transferor or an investment of all the rights of the transferor in the transferee. At best by the transfer to the partnership there is the creation of a co-ownership in the property or the privilege among the partners including the partner transferring the permit. The partnership property is property belonging to the partners in co-ownership. We are not sure whether creation of co-ownership is a transfer from one person to another within the wording of S.59 (1). The partnership property is property belonging to the partners in co-ownership. We are not sure whether creation of co-ownership is a transfer from one person to another within the wording of S.59 (1). The leading Madras case is the one reported in Velu Padayachi v. Sivasooriam AIR. 1950 Madras 444 referred to above. In that case it was held that a partnership entered into for the purpose of conducting business in arrack or toddy on a licence granted or to be granted to only one of the partners 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 R.27 and punishable under S.56 or a breach of S.15 of the Abkari Act, punishable under S.55, because the un¬licensed partner by himself or through his agent, the other partner, sells without a licence. It was also held that if a partnership is lawful at its inception, because it is not intended to infringe any provisions 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. This view was followed in the subsequent decisions of the Madras High Court. The decision in Varadarajulu v. Thavasi Nadar AIR. 1953 Madras 413 relates to a partnership in a lorry business and there it was held that the partnership was illegal. After referring to the Full Bench case in Velu Padayachi v. Sivasooriam AIR. 1950 Madras 444 the Court said: "Then the Full Bench proceeded to observe that it could be taken as settled law that, if a contract is forbidden by a statute either expressly or by necessary implication or the contract itself is ex facie illegal, or where the contract though legal can be performed only illegally or was intended to be so performed, neither party would be entitled either directly or indirectly to enforce his rights under such a contract. The crux of the matter in this case is that the partnership was formed for the purchase of the lorry and therefore to own it, and thereafter to run the lorry for a lorry transport service with the permit in the 2nd defendant's name. The partnership fully carried out the above scheme. The crux of the matter in this case is that the partnership was formed for the purchase of the lorry and therefore to own it, and thereafter to run the lorry for a lorry transport service with the permit in the 2nd defendant's name. The partnership fully carried out the above scheme. The 2nd defendant was a partner, and as a partner, he became an agent of the partnership as well as the other partner, and the running of the lorry with the permit of the 2nd defendant, involved a contravention of the Motor Vehicles Act, namely, the user of the lorry by the owner namely, the partnership, who had no licence in its name. The view in Velu Padayachi's case is still good law, and therefore we are of the opinion that the partnership in this case was an illegal one, and therefore the suit claim which arose out of the settlement of accounts of the partnership is also illegal and cannot be so enforced " 10. The illegality in the last case was found to consist in the user of the lorry by the partnership which had no permit. The illegality did not consist in an implied transfer of the permit by the permit-holder partner to the partnership. Two lines of thought, perhaps inconsistent, seem to underlie the above decisions of the Madras High Court. In the Full Bench case in Velu Padayachi v. Sivasooriam AIR. 1950) Mad. 444 the ratio seems to be that the formation of a partnership would operate as a transfer of the licence or permit granted to one of the partners to the partnership, and such a transfer is forbidden. In the other case the reasoning is that the user of the vehicle by the partnership under a permit standing in the name of one of the partners is illegal. The illegality does not consist in any implied transfer of the permit to the partnership. A permit-holder partner does not cease to own the vehicle by transferring it to the partnership. It is therefore a bit difficult to understand the concept of user of the lorry by the partnership as user by a person other than the owner. Besides, the decision of the Supreme Court in Veerappa Pillai v. Raman and Raman Ltd. AIR. 1952 SC. It is therefore a bit difficult to understand the concept of user of the lorry by the partnership as user by a person other than the owner. Besides, the decision of the Supreme Court in Veerappa Pillai v. Raman and Raman Ltd. AIR. 1952 SC. 192 visualises the possibility of the ownership of the bus in one person and the permit being issued in favour of the possessor or person having control of the vehicle. That apart, as already indicated, S.60 (1) (a) may not come into play because the permit-holder partner does not by transfer of the vehicle to the partnership cease to own it. If the partnership agreement did not inevitably involve the transfer of the permit, or contemplated the transfer, the fact that it was subsequently transferred or intended to be transferred may not be material. It is observed in'Lindley on Partnership' 12th Edition, page 132: "But proof that a firm has been guilty of an illegal act is not sufficient to bring the firm within the class of illegal partnerships."; Tenterden C. J. stated the law as follows in Wetherell v. Jones: 1832-3 B & Ad. 221, 225: "But where the consideration and the matter to be performed are both legal, we are not aware that a plaintiff has ever been precluded from recovering by an infringement of the law, not contemplated by the contract, in the performance of something to be done on his part." 11. In Hiria Gowder v. Naga Maistry AIR. 1957 Madras 620, it was held that a partnership in respect of a lorry business which involves a transfer of a permit will be illegal and void, as S.59 (1), Motor Vehicles Act, expressly prohibits transfer of a permit except with the permission of the transport authority. In Basavayya v. Kotayya, AIR. 1964 A. P. 145, it was held that a licence issued to a dealer in clothes under the Madras Cloth (Dealers) Control Order, 1944, is a personal privilege given to the dealer and that the privilege cannot extend to any person with whom the dealer chooses to form a partnership. The court said: "Formation of a partnership in effect amounts to transfer of rights under the licence by the licensee mentioned in that licence to his partners. The court said: "Formation of a partnership in effect amounts to transfer of rights under the licence by the licensee mentioned in that licence to his partners. The fact that the said order does not contain an express prohibition of the formation of partnership or transfer of licence or an express provision that formation of partnership or transfer of licence is illegal, is immaterial when such a prohibition, formation or transfer can be implied from the Order ". (See the headnote). In the above case, the learned judge has quoted the following observations of the Supreme Court in C. A. No. 30 of 1960 decided on 1141962: "Without going into the pleas of the defendants, it is quite clear that the appellant (plaintiff j was making it easy for the respondents to trade in food grains in Central Provinces and Berar without holding a licence, thus abetting an offence of the contravention of the Food Grains Control Order by the respondents, if not committing an offence himself. The definition of the phrase 'deal in food grains' which we have quoted above, clearly shows that every person who dealt in food grains in a place where the Order applied, had to possess a licence. The word 'person' in S.3 (1) must include a group or association of persons like a firm of partners. A licence in the name of one of the partners was not enough. The partnership thus was an illegal one, because the object of the partnership was illegal What we have to find out is whether the partnership was legal because the suit was for accounts of that dissolved partnership. If the partnership was illegal or was for an unlawful purpose, then the Court will give no assistance to a plaintiff in such a case. It is obvious that the partnership was not licensed as a partnership. Therefore, the partnership could not deal in foodgrains in Central Provinces and Berar. The licence in the name of the appellant was not in favour of the partnership, and the whole of the transaction by the partnership was in contravention of the Food Grains Control Order". We doubt whether the above observations of the Supreme Court concerning as they do with the terms and conditions of the Order in question in that case and the public policy underlying it can be applied to the case of the partnership under consideration here. We doubt whether the above observations of the Supreme Court concerning as they do with the terms and conditions of the Order in question in that case and the public policy underlying it can be applied to the case of the partnership under consideration here. 12. In Dungate v. Lee 1967-2 WLR. 670 Buckley J., had to consider a question like this. By an agreement between the plaintiff and the defendant there, they agreed to carry on the business of a licensed betting office in partnership. That agreement provided that each of them should contribute £500 as capital, that the betting office should be managed by the defendant, who was to be in fulltime attendance, and to draw £10 per week in consideration of his attendance, that the plaintiff would attend the office only on days on which there was more than one race meeting, and on Fridays and Saturdays, that the profits of the business should be divided between the plaintiff and the defendant equally, and that the defendant should apply for a permit to carry on a licensed betting office in his own name. Differences arose between the parties and a suit was instituted by the plaintiff for dissolution of the partnership and for an accounting. The defence was that the partnership was constituted under an illegal agreement in view of S.2 of the Betting and Gaming Act, 1960 which provides that no person shall act as a bookmaker on his own account unless he is the holder of a permit authorising him so to act which is for the time being in force; and if any person acts as a book-maker in contravention of this sub-section he shall be guilty of an offence. The court in considering the question observed as follows: "In my judgment, the Act does not require that every partner in a bookmaker's business must obtain a permit, although it appears to me that it does require that every partner in a bookmaker's business who acts as a bookmaker in the course of that business must have a permit. There would, I think, be nothing wrong in A holding a bookmaker's permit and B holding no such permit carrying on a book-making business in partnership, A alone being actively engaged in the conduct of the business and B contributing the capital but taking no active part in the business. There would, I think, be nothing wrong in A holding a bookmaker's permit and B holding no such permit carrying on a book-making business in partnership, A alone being actively engaged in the conduct of the business and B contributing the capital but taking no active part in the business. Nor do I think there would be anything wrong if B, instead of taking no active part in the conduct of the business, confined his activities in the business to activities other than receiving or negotiating bets or conducting part betting operations; in other words, so long as B did not act as a bookmaker. He might, for instance, confine his participation in the business to keeping accounts and records". In this case, Ext. A.1 would show that the defendant was to manage the affairs of the partnership and that the plaintiff was only to keep the collections and maintain the accounts. 13. This Court in Commissioner of Income-tax v. Union Tobacco Company 1960 KLT.122 distinguished the decision in Umacharan Shaw & Bros. v. Commissioner of Income-tax 1959-37 I. T. R.271 and said that the result of forming a partnership under such circumstances is the creation of equitable interests in the other partners in the licence or permit, as the case may be, and that the partner in whose name the licence or permit stands becomes a trustee of the benefits under the licence or permit in favour of another and himself, and that the creation of trust of the benefits under the permit would amount to transfer and is forbidden. The court observed: "It cannot be disputed that creating equitable interests out of the benefits under a licence is covered by the prohibition against transfers. If it is to hold otherwise a licensee by declaring himself a trustee for another of the benefits under a licence would bring about what the prohibition under the notification seeks to prevent. It also follows that the prohibition against such a transfer would cover any alienations of the partial benefits as well, and the licensee cannot declare himself a trustee of the benefits in favour of another and himself. Doing that contravenes a rule against transfers and entering into a partnership also amounts to such a violation as a partner is a trustee for his other partners. It is. Doing that contravenes a rule against transfers and entering into a partnership also amounts to such a violation as a partner is a trustee for his other partners. It is. therefore, clear that a licensee by entering into a partnership passes partial but substantial interests in what he has in favour of another, and thereby does what the rule seeks to forbid without permission. The same result is reached when prohibition against transfer of possession is analysed; for it cannot be disputed that by becoming a partner, a licensee in possession of the goods converts without transfer of corpus his possession into that of an agent. The vicarious possession is then substantially different and the rule against transfer is attracted. Mere entering into partnership amounts to transfer of licensee's right and the contract to do so is void because such a transfer is prohibited." (See the headnotes) We do not know whether a partner is a trustee for another partner. We are not certain whether by declaring himself trustee of a permit, a partner would be transferring his interest in the permit to the partnership in contravention of S.59 (1). The question whether creation of beneficial interest would amount to a transfer of interest in the trust property is itself doubtful. Maitland thought it would not, and his argument that if it would, the question of protecting the bona fide purchaser for value would not have arisen in the law of trust stands refuted. (See Maitland on 'Equity' pages 111 to 121). A trust in Indian law is only obligation annexed to the trust property, and not a transfer of an interest in that property. The subsequent decision of the Full Bench of this Court is reported in Krishna Menon alias Appu Menon v. Narayana Ayyar 1961 KLT. 620. There the Court said: "The general policy behind the Abkari Act, is not merely to secure revenue, but to serve public welfare as well ...A party allowing another to do business without licence, which can be carried only under licence, should not be allowed to recover money due for doing such a business. It is true that the maxim pari delicto potior est conditio defendants has exception and one such exception is that a party can recover money where the unlawful object has not been carried out." (See the headnote). It is true that the maxim pari delicto potior est conditio defendants has exception and one such exception is that a party can recover money where the unlawful object has not been carried out." (See the headnote). We think that as the defendant was managing the business there was nothing wrong in the permit standing in his name and taking a partner as held by Buckley J. As for the distinction between a provision to secure revenue and one to secure the protection of the public, we might quote the following observations in "The Law of Contract" by G. H. Treitel, page 267: "But this distinction between statutes for the protection of the revenue and statutes for the protection of the public has fallen into disfavour, for to evade the revenue is in the long run to injure the public. It now seems that breach of the statute does not make the contract illegal (unless both parties conspire to commit the breach) but may make it unenforceable by the guilty party". The much-laboured Latin maxim in pari delicto potior est conditio defendantis is sometimes used as if it were both the statement of the law and its justification. Maxims are a useful legal tool but in time inevitably tend to become misleading and impose fetters upon the progress of the law. The maxim is sometimes regarded as expressing a moral principle; and the plaintiff deprived of his remedy because he is a willing party to a bargain involving moral turpitude. "No polluted hand shall touch the pare fountains of justice". (See Wilmont C. J. in Collins v. Blantern 1767-2 Wilson 341 at 350). Lord Mansfield said in Holman v. Johnson 1775-1 Cowp. 341: "The objection that a contract is immoral or illegal as between plaintiff and defendant sounds at all times ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say so". The maxim in pari delicto imposes unnecessary and artificial fetters upon the court's freedom of action. Little would be lost and much gained if it were replaced by an examination of the transaction as a whole, upon its merits. The maxim in pari delicto imposes unnecessary and artificial fetters upon the court's freedom of action. Little would be lost and much gained if it were replaced by an examination of the transaction as a whole, upon its merits. The refusal on the part of the courts to intervene at the instance of one party may be justified only if the contract involves gross moral turpitude. But where no such moral turpitude is involved, what is the public policy to be served by judicial abstention from considering the merits of the case and doing justice between the parties? How is the dignity of the court affected by looking into such a transaction; and what prevents the court in applying the golden metewand of reason to the case? In Vita Food Products Inc. v. Urus Shipping Co. (1939) AC. 277, Lord Wright said: "Nor must it be forgotten that the rule by which contracts not expressly forbidden by statute or declared to be void are in proper cases nullified for disobedience to a statute is a rule of public policy only, and public policy understood in a wider sense may at times be better served by refusing to nullify a bargain save on serious and sufficient grounds". Devlin J observed in St. John Shipping Corporation v. Joseph Rank Ltd 1957-1 Q.B. 267, 288: "It may be questionable also whether public policy is well served by driving from the seat of judgment everyone who has been guilty of a minor transgression." 14. From the moral point of view the best solution might well be the confiscation of partnership property formed under an unlawful contract, rather than allowing a windfall to one of the partners. St. Thomas Acquinas advocated a like solution in the case of recovery under illegal contract. "The giver deserves to lose what he gave, wherefore restitution should not be made to him; and, since the receiver acted against the law in receiving, he must not retain the price but must use it for some pious object". (See Summa Theologica-Translation by Fathers of the English Dominican Province II II Q. 62, Art.5). The greatest merit of confiscation is that neither party derives any benefit from his delictum. This is a matter for legislation. 15. (See Summa Theologica-Translation by Fathers of the English Dominican Province II II Q. 62, Art.5). The greatest merit of confiscation is that neither party derives any benefit from his delictum. This is a matter for legislation. 15. It is argued that although the permit for the bus was not transferred to the partnership the parties subsequently intended to transfer it and that was why the plaintiff had stated in the plaint that the permit became the partnership property. Even if subsequent to the agreement and formation of the partnership, the permit was intended to be transferred, that would not, as already indicated, in any way render the partnership agreement illegal. We do not think, that the fact that the plaintiff has unwittingly stated that the permit became the partnership property as a result of the transfer of the bus to the partnership, possibly under a misconception of law, should preclude the court from giving him a decree. The court below has not found that there was a transfer of the permit to the partnership. Its finding, as already stated, is that since the bus was transferred, the permit was allowed by the defendant to be utilised by the partnership. We do not think that the statement in the plaint that the permit became the property of the firm should have any adverse consequence on the plaintiff's claim. We, therefore, set aside the judgment and decree of the court below and pass a preliminary decree for dissolution of the partnership and for taking accounts. The appeal is allowed with costs in the lower court. The parties will suffer the costs here. Allowed.