SUPREME COURT OF INDIA
C.A. VAIDIALINGAM, D.G. PALEKAR AND K.K. MATHEW, JJ.
Ramagya Prasad Gupta and others (In Ca. A. No.1711 of 1967), Brahmadeo Prasad Gupta and another (In C. A. No. 1985 of (1968), Appellants
Versus
Murli Prasad and others, Respondents.
Civil Appeals Nos. 1711 of 1967 and 1985 of 1968, D/- 3-4-1972.
Advocates appeared
Mr. S. N. Prasad Advocate, (In C. A. No. 1711 of 1967) an Mr. U. P. Singh Advocate (In C. A. No. 1985 of 1968) for Appellant s; Mr. S. T. Desai, Sr. Advocate (Mr. M. B. Lal Advocate with him), (for No. 1). In both the Appeals; Mr. B. P. Singh Advocate (for No. 2) In both the Appeals; Mr. P. C. Bhartari, Advocate (for Nos. 9 and 10)(In C. A. No. 1711 of 1967), and M/s. S. C. Agarwala and V. J. Francies, Advocates for Mr. D. P. Singh, Advocate (for No. 17) (In C. A. No. 1985 of 1968), for Respondents.
Claimed Compensation - Share Of Each Of Partners In Amount - During pendency of suit proceedings for appointment of Receiver etc were commenced and seeing that concern was not functioning in a proper manner State Government stepped in revoked licence and took over concern - State Government also deposited in court Rs -3/- lakhs as compensation suit thereupon virtually became a suit for rendition of accounts till date of deposit of amount and for determining share of each of partners in amount so deposited - Held, It is settled law that when manager of a joint family becomes a partner in a firm other members of family do not thereby become partners therein although they might have interest in his share in partnership - If a partner has agreed to share his profits with a stranger and latter seeks an account of those profits he should bring his action against that one partner alone and not make others parties reason is that there is no privity of contract between other partners and stranger - Likewise for same reason when a partner files a suit for dissolution of partnership and for account stranger in whose favour there is an agreement by a partner should not be made a party - Appeals dismissed.
Judgement
PALEKAR, J.:- (on behalf of himself and Vaidialingam J.):- Civil Miscellaneous Petitions have been filed in the above appeals for an order that the appeals have abated.
2. A few facts are necessary to be stated. The Chapra Electric Supply Works Limited had a licence from the Government of Bihar for the electrification of the Chapra town, In 1944 the Company went into voluntary liquidation and concern was put up for sale by public auction by the Liquidator .On 15-9-1944 one Murli Prasad gave the highest bid and with the consent of the State Government the concern was purchased by Murli Prasad. By a notification dated 13-4-1945 Murli Prasad became the sole licensee.
3. The case was that for purposes of purchasing the concern and to carry on the business some five persons entered into a partnership on 11-7-1945. The partners were (1) Murli Prasad, (2) Ajodhya Prasad, (3) Parasnath Prasad, (4) Gharbharan Sah and (5) Nand Kishore Prasad.
4. In August 1950 the above partnership was dissolved and the business was taken over by a new partnership consisting of 10 partners. In the re-constituted partnership Nand Kishore Prasad was dropped and the remaining four partners of the old partnership were joined by (5) Ramsaran Sah Gupta, (6) Ramagya Prasad. (7) Brahmdeo Prasad, (8) Dharnidhar Prasad, (9) Chandreshwar Prasad and (10) Kamleshwar Prasad. On account of the reconstitution of the partnership the individual shares were also refixed. The above Ramagya Prasad was entrusted with the management of the concern.
5. On 22-5-1954 Parasnath Prasad filed Suit No. 68/1954 for the dissolution of partnership and rendition of accounts. To this suit the remaining a partners or their heirs were made parties. Parasnath claimed that in his own right under the partnership agreement he was entitled to one anna share and that out of his share of one anna, a 3 pies share had been sold in a public auction and purchased by one Thakur Prasad. Thakur Prasad was, therefore, made a party to the suit as Defendant No. 10.
6. During the pendency of the suit, proceedings, for the appointment of Receiver etc. were commenced and seeing that the concern was not functioning in a proper manner the State Government stepped in,. revoked the licence and took over the concern. The State Government also deposited in court Rs.3/- lakhs as compensation. The suit, thereupon, virtually became a suit for rendition of accounts till the date of deposit of the amount and for determining the share of each of the partners in the amount so deposited.
7. The suit was vehemently contested. Murli Prasad, who was defendant No. 8, claimed that he was the sole owner of the business and licensee from the Government and the rest of them had no lawful interest in the same in view of the provisions of the Electricity Act.
8. In the course of the suit three brothers viz. Kuldip Narain, Jagdish Narain and Kedarnath applied to the court that they had an interest in the partnership suit and should be made party defendants. They alleged that Parasnath, the plaintiff, was not entitled in his own right to the whole of the share of anna but that he was a partner on behalf of the joint family of which they also had been members. They alleged that Parasnath was entitled to only a 6 pies share while the three of them were entitled to 2 pies share each. They further contended that Thakur Prasad, defendant no,. 10 had not really purchased the 3 pies share of the plaintiff Parasnath and, therefore, the 1 anna share of Parasnath was liable to be divided only between Parasnath and themselves. Since a dispute was raised, they were added as defendants 12, 13 and 14. Jagdish Narain, with whom, we are principally concerned, was defendant no. 13. It would appear from the judgment of the Trial Court (see paragraphs 12 and 70 to 74) that Parasnath, the plaintiff, had contended in the first instance that defendants 12 to 14 had no interest in the share of 1 anna owned by him though later, at the time of the hearing h
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