Noni Gopal Mitra v. Asharani Bose — 1980 DIGILAW 227 (CAL)

Judgment: The plaintiff has alleged that the property in question belonged to her mother, Annapurna Ghosh. The latter made a gift of the same to her. It is a shop, where darma and hogla are dealt with, Oil the 7th April, 1962, she entered into a registered deed of agreement for partnership with the defendant, Nonigopal, with respect of such darma and hogla business. The agreement is that such business would run from the 1st April, 1962, to the 30th April, 1967. The share of the properties will be equal. The plaintiff will get a fixed monthly sum of Rs. 115/- out of which Rs. 65/-Will be paid to the superior landlord. She will not be liable for any loss and she will not get any profits. Nonigopal will remain in charge of the business, enjoy the profits and share the loss. After the 3uth April, 1967, that partnership has come to an end. She informed the defendant to vacate the property. But Nonigopal did not comply with her demand. Hence the suit for recovery of khas possession and for recovery of mensne profits. 2. The defence is that it was never intended between the parties that there would be a partnership business, The real relation ship between the parties is of landlord and tenant. The agreement for partnership was a camouflage with a view to evading the provisions of the Calcutta Thika Tenancy Act and the Premises Rent Control Act. He is the sole owner of the business. He used to pay the rent of Rs. 115/- to the plaintiff. Out of that sum, Rs. 65/- was paid to the superior landlord. 3. The learned Munsif accepted the plaintiff's version and granted her a decree. The defendant preferred an appeal and became unsuccessful. Hence this second appeal. 4. It has been contended on behalf of the appellant that in view of the provisions of S. 6 of the Indian Partnership Act the real intention between the parties will have to be considered. The registered document in question is Ext. 1(a). A proper consideration of the document shows that the real intention of the parties was not to create any such agency of partnership. The real intention was that the plaintiff would be the defendant's tenant regarding the premises in question. He is the sole owner, Previously there was an income-tax proceeding vide Ext. 1(a). A proper consideration of the document shows that the real intention of the parties was not to create any such agency of partnership. The real intention was that the plaintiff would be the defendant's tenant regarding the premises in question. He is the sole owner, Previously there was an income-tax proceeding vide Ext. A. It appears from that order that the plaintiff disclaimed any share in that business and the defendant was held to be the owner of the hogla darma business in question, Reference has been made to the case of Raghumull v. Official Assignee in 28 CWN 34 and to the observations of Sir Lawrence Jenkins in the case of Secretary of State v. G.I.P. Railway in AIR 1925 PC to 103. It has been stated that in view of the terms of the registered deed of agreement (Ext 1(a) the defendant to get the profits, share the entire loss, pay the income-tax and shoulder the entire responsibility of the business in question. The plaintiff is not to get a share of the profits or contribute anything awards the loss, Hence the court should hold that it was a case of a hidden lease. Of course the order-sheet of this suit shows that the learned Advocate appearing on behalf of the defendant admitted the facts stated in the plaint. But such admission will not advance the plaintiffs case or negative the defendants contention. 5. The learned Advocate appearing on behalf of the plaintiff respondent has stated that no evidence was adduced in this case because the order-sheet shows that on behalf of the defendant an admission was made that the statements made in the plaint were correct. The Ss. 4 and 6 of the Partnership Act clearly show that the court has to consider the real intention between the parties with reference to the terms of the document in question. That deed in question, Ext. 1(a), shows, that the partnership agreement was arrived at between the parties. The sum of Rs. 115/- was to be paid to the defendant. In the case of Raghumull v. Official Assignee (supra), the agreement was that the appellant was to get a remuneration of Rs. 500/- per month and a commission of 10 per cent on tile net profits. 1(a), shows, that the partnership agreement was arrived at between the parties. The sum of Rs. 115/- was to be paid to the defendant. In the case of Raghumull v. Official Assignee (supra), the agreement was that the appellant was to get a remuneration of Rs. 500/- per month and a commission of 10 per cent on tile net profits. Sanderson, C.J., agreeing with Richardson, J has stated that if the appellant was, not a partner but a mere servant or managing agent, there was no, necessity of providing that even if the firm should suffer loss, he should still get his monthly remuneration regularly. Applying the test of that case the court should hold that since there was a provision for payment of Rs. 115/- per mensem to the plaintiff, that shows that it was a case of principles of agency and not of landlord and tenant, between the parties. Section 168(1) of the Indian Partnership Act says that any statement, intimation or notice recorded or noted in the Register of Firms shall, as against any person by whom or on whose behalf such statement, intimation or notice was signed, be conclusive proof of any fact therein stated. In this case during the tenure of ownership of Annapurn a Ghosh, plaintiff's mother, there was a registration of the firm The instant registered deed of partnership, Ext. 1(a), which shows that the old business was continuing. So in view of sub-s, (1) of S. 68 of the Act the court should hold that the plaintiffs contention is true because the previous registration of the firm is a conclusive proof of that fact within the meaning or the provisions of sub-s. (1) of S. 68 of the Act. The fact that the defendant alone was to pay the income-tax or he alone was assessed to income-tax is of no consequence in view of the provisions of, S. 26A of the Income-tax Act. 6. The first question a rises about the effect of the admission made by the defendant's lawyer at the trial. Law is well-settled that any concession male by the defendant’s lawyer pm a point of fact is binding on him. But any concession made on a point of law as no effect in .the eye of law. The principal laid down in the case in AIR 1954 SC 526 may be cited. Law is well-settled that any concession male by the defendant’s lawyer pm a point of fact is binding on him. But any concession made on a point of law as no effect in .the eye of law. The principal laid down in the case in AIR 1954 SC 526 may be cited. Section 58 of the Indian Evidence Act clearly shows that even if an admission be made at the hearing regarding any question of fact, the court can ignore the same and direct the party concerned to prove the same otherwise. This is clear from the proviso to S. 58 of the Indian Evidence Act. Since there are complicated questions of law, I shall go by the evidence on record and the principles of law. The defendant will not be debarred from making his submissions in view of such concession made by his lawyer at the trial. 7. Now about the merits of the case. Section 4 of the Indian Partnership Act defines partnership as the relation between persons, who have agreed to shine the profits of the business carried on by all or any of them acting for all. Section 6 of the Act is important because it says that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties as shown by all relevant facts taken together. Explanation I there of says that the sharing of profits or gross returns arising from property by persons holding a joint or common interest in that property does not of itself make them partners. Explanation II indicates that the receipt by a person of a share of the profit 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. So the real intention between the parties will have to be gathered from the contents of the registered document, Ext. 1(a), and other facts and surrounding circumstances. 8. Both the sides relied on the well-known decision of Raghumull v. Official Assignee (supra). In that case the terms of the agreement were that the capital of the partnership business would be supplied by the landlord. 1(a), and other facts and surrounding circumstances. 8. Both the sides relied on the well-known decision of Raghumull v. Official Assignee (supra). In that case the terms of the agreement were that the capital of the partnership business would be supplied by the landlord. Raghumull, alone for which he will get the interest at the rate of 6 per cent per annum. Dorian Evans will he in charge of the firm and will get Rs. 500/-per mensem as his remuneration together with 10 per cent as commission on the net profits of the business exclusive of all the cost expense for payment or rent. taxes, municipal licence, salaries of servants and all other charges and expenses to be incurred in carrying on the business. The facts of that case are therefore clearly distinguishable, because in this case there is no agreement that the plaintiff is entitled to a fixed sum of 115/- a month and also some commission over and above the sums so fixed. 9. In the case of See etary of State v. GIP Railway (supra), the defendant G.I.P. Railway agreed to work the plaintiff's railway. It agreed to maintain, manage and work the plaintiff's railway system. For the purpose of the contract the plaintiff (Secretary of State) was to hand over to the defendant company the railway system together with a rolling stock plant and machinery beginning thereto The capital money required was, to be provided for by the plaintiff, All expense were to be sanctioned by the plaintiff. At the end of the period or contract, the defendant company was to hand over possession of the undertaking of the railway to the plaintiff. It was held by the Privy Council that the provision in the contract, for the appropriation of one-twentieth of the profits to the defendant company did not make the parties partners. The appropriation was only a remuneration for the services rendered by the defendant company as the plaintiff’s agent, ride the p. 104 of the report. 10. It was held by the Privy Council that the provision in the contract, for the appropriation of one-twentieth of the profits to the defendant company did not make the parties partners. The appropriation was only a remuneration for the services rendered by the defendant company as the plaintiff’s agent, ride the p. 104 of the report. 10. Before further dealing with this case, it is necessary to state at this stage that the learned Advocate appearing on behalf of the plaintiff respondent has referred to the provisions of S. 92 of the Indian Evidence Act and contended that in view of the terms embodied in the registered deed of agreement, the defendant cannot be 'permitted to go back upon it or vary its terms and plead that there was a hidden 'ease. Almost the same consideration arose in the case of Shew Prasad v. Anil in 68 CWN 786. In that case, the tenant of the common tenancy of a shop room on a rent of Rs. 55/- per mensem entered into an agreement of partnership with another to carryon business in that room. The agreement was that he would receive a sum of Rs. 100/- per month as his fixed remuneration and without sharing any profits and losses. It has been held that the real relationship between them is more of a hidden lease than of a partnership and a suit for eviction from the shop room on the allegation of breach of contract is not maintainable. The effect of the decision of Raghumnll v. Official Assignee (supra) was considered, vide the p. 791 and 792 of the report. 11. In the Bench case of Murlidhar v. Bansidhar in AIR 1973 Cal 193 , the plaintiff filed a suit for dissolution of partnership. The facts were that one of the parties to the agreement was to be in exclusive charge of the business for a limited period. He alone was to provide for the funds of the business, liable for the loss and entitled to the profits, subject to a certain monthly payment to the other party. It has been held that the agreement is not a partnership agreement. Of course in that case there was no deed of agreement. He alone was to provide for the funds of the business, liable for the loss and entitled to the profits, subject to a certain monthly payment to the other party. It has been held that the agreement is not a partnership agreement. Of course in that case there was no deed of agreement. It has been stated that in the absence of a partnership agreement for sharing profits and to share assets on dissolution, a person would not be entitled to share in the assets of the firm upon dissolution merely because he is entitled to a certain share of profits by way of remuneration. The further observation is that in such case the plaintiff his to prove the existence of partnership agreement instead of pending that no foundation has been lad in the written statement about the non existence of the partnership. 12. This fact is important because according to the plaint the partnership business has been dissolved. The allegation is that the parties shares were equal. In that view of the matter, the other terms of that deed, Ext. 1(a), that the plaintiff will not share the profits and the loss, become inconsistent. If the shares are equal, it cannot be overlooked that the plaintiff has not asked for any accounts At once the question arises, why the plaintiff omitted to do so if she is really eight annas partner in the firm in question and if there was any relationship of partners between the parties. 13. The fact that previously the plaintiff’s mother's firm was registered under the provisions of the Indian Partnership Act is of no avail to the plaintiff because the deed of agreement, Ext. 1(a), was registered, it was not registered according to the provisions of the Act. Consequently the provisions of the sub-s. (1) of S. 68 of the Ad cannot stand the respondent in good stead. 14. It is further necessary to refer to Ext. A. which is the decision of the income-tax case. It appears therefrom that Nanigopal preferred an appeal in the court of the District Judge, Alipore, A compromise was arrived at between Nandarani Debi and Nonigopal. In the compromise deed it has been decided that Nandarani would have no share of the loss and would not have to contribute any capital and this arrangement would be valid till February, 1962. It appears therefrom that Nanigopal preferred an appeal in the court of the District Judge, Alipore, A compromise was arrived at between Nandarani Debi and Nonigopal. In the compromise deed it has been decided that Nandarani would have no share of the loss and would not have to contribute any capital and this arrangement would be valid till February, 1962. The business was not a partnership concern, but an arrangement was, made by Nonigopal who as to pay some sort of rent or premium for carrying on the business owned by Annapuma. As such the status has been taken as the individual business of Nonigopal Mitra. This, important item of evidence was not properly considered by the courts below. During the proceeding of that case the, present plaintiff filed a petition disclaiming her share in the business in question. So this item of evidence also goes to show that there was no partnership between the parties. Hence S. 26A of the. Income Tax Act does not advance matters. 15. The upshot of the aforesaid discussion is that the provisions of S. 91 or for the matter of that, of 92 of the Indian Evidence Act are of no avail to the plaintiff respondent. The payment of Rs. 115/- a month was some sort of rent or premium. From a construction of the registered deed of agreement, Ext. 1(a)’’ it seems that the real intention of the parties was to create some sort of relationship of landlord and tenant between them and there was fraud because in the garb of a partnership it was a more of a hidden lease than of a partnership to evade the provisions of the Tenancy Laws. In any view of the matter there is no escape the conclusion that the plaintiff has failed to substantiate her case that it was a case of agency or that Nonigopal was acting for both or she is a partner of the firm in question. 16. The appeal is, therefore, allowed. The judgment a'1d decree appealed against be and hereby set aside and the suit dismissed. The parties will bear their own costs throughout. Appeal allowed.