JUDGMENT G. Viswanatha Iyer, J. 1. Two suits, namely, O.S. No. 63 of 1968 and 77 of 1970, were heard together and by a common judgment the lower court dismissed both the suits. Plaintiffs in O.S. 63 of 1968 have filed A.S. No. 140 of 1975. As per the plaint valuation an appeal from the decision in O.S. 77 of 1970 lies to the district court only. The plaintiffs therein therefore filed an appeal before the district court as A.S. No. 104 of 1975. As that appeal was filed beyond time an application to excuse the delay had also been filed. The District Court did not find sufficient reasons to excuse the delay. So, the application and the appeal were dismissed. S.A. No. 1034 of 1976 is filed against the decision of the district court dismissing the appeal. C.R.P. No. 4255 of 1976 is filed against the order refusing to excuse the delay. 2. We shall first state the facts in O.S. 63 of 1968. This is a suit for an account and for recovery of the plaintiffs' share of profits and assets of a dissolved partnership. The privilege of vending toddy in four shops in Kothamangalam, Muvattupuzha taluk, namely, Ramaloor, Kuthukuzhy, Kavalangad and Puthupady for the year 1967-68 was bid in auction jointly by defendants 1, 2 and 6 together for a total amount of Rs. 2,60,100. According to the plaintiff, the initial capital to run the business was contributed by the plaintiff and the defendants, defendants 1 and 2 investing half and the other defendants and the plaintiff together investing the other half. An agreement was executed by the plaintiff and defendants on 29th March 1967, marked Ext. B4 under which the said toddy shops were to be conducted and managed by defendants 2 and 6; they were to keep true and correct accounts of the business and to deposit the net proceeds daily in a joint account to be opened in their name, in the Union Bank of India. It was also agreed between the parties that they will share the profit or loss in the business in proportion to the share in the initial investment. A jeep K.L.Q. 1637 purchased for Rs. 13,000 was to be the joint property of the parties. According to the original plaintiff the business conducted by the firm ended with the financial year 1967-68. A jeep K.L.Q. 1637 purchased for Rs. 13,000 was to be the joint property of the parties. According to the original plaintiff the business conducted by the firm ended with the financial year 1967-68. Alleging that the defendants have not rendered accounts and paid his share in spite of demand, the suit was filed for an account. 3. Second defendant was the main contesting defendant. He admitted that the four toddy shops were bid in auction by defendants 1, 2 and 6. But this was did only for the benefit of defendants 1, 2 and 6 and they have executed an agreement with the Kerala Government for depositing the bid amount in instalments as per the rules under the Abkari Act. The licence for the conduct of the business was issued to defendants 1, 2 and 6 only. After the shops were bid plaintiff and defendants 3 to 5 approached defendants 1,2 and 6 and requested that they may be included as additional partners in the business of conducting the toddy shops. This was agreed to and all of them together executed an agreement on 29th March 1967. Thereafter plaintiff and defendants and one Nirappel Varkey Joseph jointly decided to bid in auction 8 more shops in Kozhikode District. The arrangement there was that the partnership of plaintiff and defendants will share one half of the profit and loss in the above 8 shops and the remaining half share should go to Nirappel Varkey Joseph. Large amounts belonging to the first partnership were diverted and spent for the conduct of the Kozhikode shops. The accounts of the Kothamangalam shops (for brevity the first four shops will be so described) were written by one Kalayil Yacob and that of the Kozhikode shops by one Raghavan. The conduct of the 8 shops at Kozhikode was an utter failure and the partners were not able to pay the amount due to the Government, Rs. 90,000 being the arrears of instalments due to the Government. Steps were taken by the Government under the Revenue Recovery Act against the licencees, namely, the first defendant in this case and Nirappel Varkey Joseph. After the death of the first defendant the legal representatives are paying the arrears. The accounts of the shops of the Kozhikode District and that at Kothamangalam were for convenience separately maintained. Steps were taken by the Government under the Revenue Recovery Act against the licencees, namely, the first defendant in this case and Nirappel Varkey Joseph. After the death of the first defendant the legal representatives are paying the arrears. The accounts of the shops of the Kozhikode District and that at Kothamangalam were for convenience separately maintained. The accountants, who maintained the accounts, entrusted them for checking to one Madhavan and to prepare a balance sheet. He prepared a kurippu showing the amount spent for the Kozhikode shops from the Kothamangalam shop, but without showing the loss incurred by the Kozhikode shops. A copy of this account was given to the 2nd defendant. Copies of the balance sheet prepared by the two accountants were also given to the second defendant. From the accounts thus prepared plaintiff and defendants 3to6 realised that the profits earned from the conduct of the shops at Kothamangalam are not enough to pay off the heavy loss incurred by the conduct of the shops at Kozhikode. They fraudulently took into their custody the accounts of the Kothamangalam shops from O. G. Madhavan and have filed this suit without owning the liability for the loss incurred for the Kozhikode shops. The jeep referred to has been purchased by defendants 2 and 3 from the partnership to run their toddy business for the next year, namely, 1968-69. The plaintiff is responsible to pay the loss incurred in the conduct of the toddy shops at Kozhikode. The suit is not maintainable. The original licensees of the toddy shop have transferred part of their rights to plaintiff and defendants 3 to5 without the knowledge and approval of the Excise Authorities. The terms of Ext. B4 agreement amounts to a sub lease or a transfer which is void in law. Such a transfer is against the provisions of the Abkari Act. The suit is not maintainable for another reason namely that Nirappel Varkey Joseph is not made a party to the suit. Defendants 3, 4, 5 and 6 supported the plaintiff and they claimed their share also settled and paid. Defendants 7 to 12 who are the legal heirs of the deceased first defendant supported the second defendant. They admitted both the agreements and the averments of the second defendant that the Kozhikode shops ended in a loss. Defendants 3, 4, 5 and 6 supported the plaintiff and they claimed their share also settled and paid. Defendants 7 to 12 who are the legal heirs of the deceased first defendant supported the second defendant. They admitted both the agreements and the averments of the second defendant that the Kozhikode shops ended in a loss. They further alleged that the jeep which belonged to the partnership has been converted to the use of defendants 2 and 3. About Rs. 20,000 the balance in the Union Bank belonging to the partnership has been withdrawn by defendants 2 and 6. In the accounting they claimed an adjustment of the amounts paid by them to avert revenue recovery steps for the dues of the Calicut shops. 4. On these allegations and counter allegations the parties went to trial and the lower court has dismissed both the suits mainly on the ground that the partnership agreement Ext. B4 which is the basis of the suit in respect of the Kothamangalam shops is an illegal partnership opposed to S.23, Contract Act and hence not enforceable. The lower court also found that the partnership of the Kothamangalam shops agreed to partake in the conduct of the Calicut shops and the plaintiff in the other suit is entitled to club together the accounts of the Kothamangalam and Calicut shops. But the other suit was also dismissed on the ground that Ext. B5 is against public policy and not enforceable through court. 5. The first question for consideration, therefore, is whether Ext. B4 agreement is any way forbidden by law and / or in violation of any of the provisions of the Abkari Act and as such opposed to public policy and unenforceable. It will be useful to set out briefly the terms of the agreement itself to appreciate the nature of the arrangement that was entered into between the parties. It is stated that all the parties considered and decided that executants 1 and 2 (defendants 1 and 2) will have half share and executants 3 to 7 (plaintiff and defendants 3 to 6) will have a half share and on that four toddy shops were bid for Rs. 2,60,100. In the bid executants 1 and 2 represented their half share and the 6th executant (6th defendant) represented the other half share, namely plaintiff and defendants 3, 4 and 5. 2,60,100. In the bid executants 1 and 2 represented their half share and the 6th executant (6th defendant) represented the other half share, namely plaintiff and defendants 3, 4 and 5. It is further stated that in pursuance to this arrangement and the bid the executants have proportionately contributed to the initial deposit and purchase of equipments. It is further provided that the conduct of the shops will be attended to by the second defendant on behalf of himself and the first executant, and the sixth defendant on behalf of executants 3 to 7. The accounts are directed to be maintained by executants 2 and 6, an account should be opened in the Union Bank, Kothamangalam in the name of executants 2 and 6 and the turnover of each day should be deposited into that account and drawn from there when need arises. A jeep No. K.L.Q 1637 registered in the name of the son of the first executant has been purchased with the assets of the firm. There is also a provision that the profit and loss of the business will be shared in proportion to the investment. 6. It will be seen that the parties entered into an agreement before the bid though it has been recorded after the bid. There is no provision for transfer of the licence in the name of the partnership. There is no provision for non licensee attending to the business of the firm. That has to be attended to only by the licensees. In this view the question for consideration is whether the provisions of the Abkari Act and the conditions of licence are violated. 7. For this bid and licence the Act that applies is the Travancore Abkari Act IV of 1073. S.13 of that Act prohibits sale of liquor or intoxicating drug without a licence from the commissioner. If this is done by any person he will be committing an abkari offence mentioned in S.51(h) of the Act. That provision reads as follows: "51. For this bid and licence the Act that applies is the Travancore Abkari Act IV of 1073. S.13 of that Act prohibits sale of liquor or intoxicating drug without a licence from the commissioner. If this is done by any person he will be committing an abkari offence mentioned in S.51(h) of the Act. That provision reads as follows: "51. Whoever, in contravention of the Regulation, or of any rules or order made under this Regulation, or of any licence or permit obtained under this regulation: - (a) * * * (b) * * * (c) * * * (d) * * * (e) * * * (f) * * * (g) * * * (h) Sells liquor or any intoxicating drug shall, on conviction before a Magistrate, be punished for each such offence with fine which may extend to one thousand rupees, or with imprisonment for a term which may extend to six months or with both." S.52 provides that if the holder of a licence granted under the Act does any act in breach of any of the conditions of his licence or permit, not otherwise provided for in this Regulation, he commits an offence and is liable to be proceeded against. R.22 of the general conditions applicable to Licenses for the privilege of vending toddy, arrack, foreign liquor provides that the licensee shall not sell or otherwise transfer the subject matter of the contract or licence without the written consent of the Assistant Excise Commissioner. No licensee shall lease out or subrent the whole or any portion granted to him under the licence. (See the notification regarding the sale of the privilege of vending toddy and arrack for the year 1966-67 published in the Gazette No. 5, dated 1st February 1966, Part I page 4 which was adopted for the year 1967-68 as well, by the notification in the Gazette Extraordinary No. 8, dated 12th January 1967). Ext. B4 shows that the parties decided to form a partnership and to conduct a business in vending toddy and it was in pursuance to that defendants 1, 2 and 6 bid in auction. These three jointly obtained the licence and the relationship among them can be as partners of a firm. Among themselves they can agree to the share that each is entitled to. It is conceded that defendants 1 and 2 are entitled to a one half right. These three jointly obtained the licence and the relationship among them can be as partners of a firm. Among themselves they can agree to the share that each is entitled to. It is conceded that defendants 1 and 2 are entitled to a one half right. The other half will go to the 6th defendant if there is not this partnership. In this case the partnership was entered into before the bid and so defendants 1, 2 and 6 represented all the partners in the bid. Even if it is taken that the terms of the partnership were agreed upon and reduced to writing only after the bid by defendants 1, 2 and 6, the formation of a partnership by them with the plaintiff and defendants 3 and 4 and 5 do not amount to a transfer or lease or sub lease of the privilege. The Act and the Rules and conditions of the licence referred to above do not prohibit a partnership to share the profits and loss without a transfer of the licence. It is not correct to say that if the licensee enters into a partnership with another, in all cases there is a transfer of licence from one person to another. 8. It is always a matter for agreement between the partners regarding the partnership property and what shall be the separate property of one or more of them. The mere use of the property by the partnership without any indication as to whom the property was treated as belonging, will not usually bring about change in the beneficial ownership of the property which will therefore remain vested with the partner or partners previously entitled to. This has been held to be so in the case of such important items of property as goodwill in a business carried on by the partnership and the lease of premises on which the partnership business was carried on. It is not a universal rule that persons who are partners by virtue of their participation in profits are entitled as such to that which produced profits. For example, the dormant partners have no interest in anything except profits accruing to the firm to which they belong. It is not a universal rule that persons who are partners by virtue of their participation in profits are entitled as such to that which produced profits. For example, the dormant partners have no interest in anything except profits accruing to the firm to which they belong. Where a merchant employs a broker for purchase of goods to him and sells them again on his account although it may be agreed that the profits are to be divided, the goods themselves, and the money arising from such sale; are the property of the merchant and not the joint property of himself and the broker - see Smith v. Watson 1828 (2) B and C 401. In the same manner the house and land in and upon which the partnership business was carried on often belongs to one of the partners only without any lease to all. In Miles v. Clarke 1953 (1) WLR 537 the plaintiff and the defendant as partners at will conducted a business as photographers. The plaintiff was a well known photographer and brought in a considerable goodwill into the partnership. The leasehold premises, furniture and studio equipment belonged to the defendant. Both partners contributed to the stock in trade. The only agreement between the parties was the partners should share profits equally. On dissolution of the partnership it was held that no terms ought to be implied except such as were essential to business efficacy and that only the consumable items of stock in trade should be regarded as partible assets. As already observed the only true method of determining as between the partners themselves what belongs to the firm and that not, is to ascertain what agreement has been come to upon the subject This is by no means always an easy matter. In this case Ext. B4 is the agreement. There is nothing in Ext. B4 to lead to an inference that the bidders of the shops ever transferred or intended to transfer to the partnership the licence in their favour. The fact that the licence is made use of to earn a profit which is to be shared among the partners does not make the licence a partnership asset. In this conclusion we are supported by the decision of Mathew, J., as he then was, in Kumaran v. Kunhi 1967 KLT 710 . The fact that the licence is made use of to earn a profit which is to be shared among the partners does not make the licence a partnership asset. In this conclusion we are supported by the decision of Mathew, J., as he then was, in Kumaran v. Kunhi 1967 KLT 710 . No doubt that was a case of a holder of a permit to run a motor vehicle entering into partnership after obtaining the permit. The relationship of a partner with the permit holder is stated thus by Mathew, J., (as he then was) "Be it noted that S.59(i) 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(i). 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 transferrer in the transferee. At best by the transfer to the partnership there is the creation of a coownership 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 coownership. We are not sure whether creation of coownership is a transfer from one person to another within the wording of S.59(i)." The case cited by the respondent's counsel in Velu Padayachi v. Sivasooriam Pillai AIR 1950 Mad. 444 was considered and distinguished in that case. It was held that a mere formation of a partnership by a licensee or permit holder does not without more, amount to a transfer of the licence or permit to the partnership and make it a partnership asset. To the same effect is the decision of the Travancore High court in Soosa Surling v. Adimoolam Pillai 17 TLJ 874. The principle is stated thus at page 878: "The preponderance of authority is therefore in favour of the view that the taking in of a partner in the business does not per se amount to a transfer of the licence or of any portion of the privilege granted thereunder, though it is not impossible that a partnership agreement may sometimes amount to such a transfer. The licence Ext. The licence Ext. III, as it stands, does not prohibit the licencee from taking in a partner for the carrying on of the business of vending arrack. The taking in of the plaintiff as a partner in the trade conducted by the defendant can be held to be illegal only if it amounts to a transfer of any portion of the privilege conferred by the licence. We are clear that the partnership agreement in the present case does not amount to a transfer by the defendant to the plaintiff or vice versa of the privilege granted by the respective licence to each." This case was distinguished in Nanoo v. Ummini 21 TLJ 768 where the terras of the partnership deed was held to amount to an assignment of the licence. It was also pointed out that whether a particular transaction amounts to a transfer or not is a question of fact to be decided in the circumstances of each case. For the same reason the decision of this court in Commissioner of Income Tax v. Union Tobacco Co. 1960 KLT 122 can be distinguished. The same is the case of the decision in Appu Menon v. Narayana Ayyar 1961 KLT 620. In the above two cases the agreements were construed as amounting to a transfer of the licence itself to the firm and non licensees allowed to trade in liquor. That is not the case here as seen from the language of Ext. B4. So far as the government is concerned non licensees have no interest in the licence. Non licensees also are not allowed to carry on the business, but only to share the profits and loss. This will not amount to a transfer or sub lease prohibited under Clause.22 of the conditions of licence. 9. Similar question had arisen relating to partnerships in respect of other business governed by statutory provisions which contain a prohibition similar to the one we are dealing with. Under the Motor Vehicles Act there is a provision prohibiting the transfer of the permit without the Transport Authority's permission. The permit holder entered into a partnership with another and transferred the bus to the firm. In a dispute that arose later between the partners the question arose whether the partnership deed is valid. Under the Motor Vehicles Act there is a provision prohibiting the transfer of the permit without the Transport Authority's permission. The permit holder entered into a partnership with another and transferred the bus to the firm. In a dispute that arose later between the partners the question arose whether the partnership deed is valid. In Kumaran v. Kunhi referred to earlier, a Division Bench of this court held that the contract of partnership is not one prohibited by law. Again in Narayanan Nambiar v. Ambu 1970 KLT 770 a Division Bench of this court took a similar view in respect of a partnership entered into by a licensee under the Madras Cloth Dealers' Control Order. In Champsey v. Gordhandas AIR 1917 Bom. 250 it was held by the Bombay High Court that the admission of partners to share in the profits in the manufacture and sale of salt will not be a subletting or alienation of a part of the privilege. In that case also the license e under the Bombay Salt Act prohibited by the terms of the licence from subletting the whole or part of the privilege, admitted some members as partners to share the profits, the partners having no part in the manufacture of salt. Macleod, J., held that unless there has been a document directly transferring to the partners or attempting to transfer to the partners a right the manufacture and to vend salt the in partnership arrangement does not violate S.11 of the Bombay Salt Act. This decision was appealed against before the Privy Council. The Privy Council in Gordhandas Kessowji v. Champsey Dossa AIR 1921 PC 137 upheld the decision. The facts in this case are similar to the above Bombay case. 10. There is one other aspect to be looked into in this connection. In Velu Padayachi v. Sivasooriam Pillai AIR 1950 Mad. 444 and in Commissioner of Income Tax v. Union Tobacco Co. 1960 KLT 122 a view is expressed that under the partnership law every partner is a member and an agent for the other partner and since by the partnership non licensee partner will be doing business through his agent, this will violate the provisions of the Abkari Act and hence the partnership agreement is illegal. But in the light of the wording of S.13 this may not be correct. But in the light of the wording of S.13 this may not be correct. S.13 of the Act prohibits sale of liquor or intoxicating drug without a licence from the commissioner. This refers to the actual sale and here the man who does the trade has the licence. Hence violation of S.13 is not there. We are supported in this by the decision in Dungate v. Lee 1967 (2) WLR 670. In that case the plaintiff and defendant entered into a partnership agreement to operate a licensed betting office on a profit sharing basis. Pursuant to it the defendant applied for and obtained the permit; the agreement being the defendant should manage the betting office while the plaintiff will attend to the incidental work. In the course of that work the plaintiff dealt with credit bets placed by telephone. Sometime afterwards difference arose between them and the plaintiff called upon the defendant to join in winding up the partnership. The defendant denied the existence of the partnership and also contended that the alleged partnership is in violation of the Betting and Gaming Act, 1960 and therefore void for illegality. Buckley, J., held that the Betting and Gaming Act does not require every partner in the bookmaker's business should have a permit but that every partner who acts as a bookmaker in the course of the business must have a permit. The principle is stated thus at page 675: - "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 not 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 bookmaking 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. 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, only the partners who have licence are to carry on the business, keep accounts and share profits and loss with the other partners. So there is no violation of S.13 of the Abkari Act by a non licensed partner. Thus taking all the circumstances into consideration we do not agree with the learned Subordinate Judge's conclusion that the partnership agreement is illegal and unenforceable. 11. The next question that arises for consideration in this appeal is whether the parties to the suit had entered into another partnership with Nirappael Varkey Joseph to run the Calicut shops. As stated earlier the Calicut shop was bid in action by Nirappael Joseph and defendants 1 and 2. The case pat forward by defendants 1 and 2 is that the parties to this suit have formed a partnership with Nirappael Joseph. This is totally denied by the other partners. The genuineness of Ext. B5 is disputed by them. A perusal of Ext. B5 shows that the signature appearing against the names of plaintiff and other defendants do not tally with their admitted signatures. The person who wrote Ext. B5, namely DW 4, denies having seen the executant signing it. The third defendant as DW 8 denies his signature in Ext. B5. In the absence of better evidence we hold that Ext. B5 has not been proved to be a genuine agreement. It follows that in taking accounts, the accounts of the Kozhikode shops cannot be clubbed with that of the Kothamangalam shops. The profit and loss of the Kothamangalam shops will have to be settled and accounted for independently. 12. In the result, this appeal is allowed, the judgment and decree of the lower court are set aside and a preliminary decree for taking accounts and for payment, of the amounts due to the various partners in terms of the agreement is passed. The lower court will, after settlement of account pass a final decree in accordance with law. 12. In the result, this appeal is allowed, the judgment and decree of the lower court are set aside and a preliminary decree for taking accounts and for payment, of the amounts due to the various partners in terms of the agreement is passed. The lower court will, after settlement of account pass a final decree in accordance with law. The appellants are entitled to their costs. 13. As stated earlier S. A. No. 1034 of 1976 and G. R. P. No. 4255 of 1976 are inter connected. The suit filed by the plaintiffs, who are the legal representatives of the first defendant in the connected suit, for taking accounts of the partnership said to have been formed between their predecessor and defendants was dismissed by the lower court as not maintainable. The appeal against that decision was filed in the District Court as A. S. No. 104 of 1975. As the appeal was filed beyond time an application to excuse the delay had been filed. The District Court dismissed the petition to excuse the delay as it was not satisfied that sufficient cause has been made out for excusing the same. On going through the grounds alleged to excuse the delay we feel that the ground is vague. No dates are given to make a scrutiny of the matters stated in the affidavit. We agree with the respondent's counsel that the appeal against the decree in O. S.77 of 1970 was filed as an afterthought and on coming to know of the filing of the appeal A. S. No. 140 of 1975 before this court by the appellants in that case. Notice of appeal was issued from this court on 27th June 1975 and the appeal A. S. No. 104 of 1975 was filed in the District Court on 3rd July 1975 without curing defects and without filing the petition to excuse delay. That was filed only on 16th July 1975. In that view we agree with the lower appellate court that the ground alleged is not the real reason for not filing the appeal earlier. So we agree with the lower appellate court in holding that the appeal was filed out of time. Hence the S. A. and C. R. P. are both dismissed, but in the circumstances without any order as to costs.