SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1955 Supreme(Bom) 113

IN THE HIGH COURT OF BOMBAY
Shah, J.
Appellants: Shankar Bandu
Versus
Respondent: Shankar Babaji and Ors.
A.F.O. No. 24 of 1954
Decided On: 13.09.1955
Counsels:
For Appellant/Petitioner/Plaintiff: R.A. Jahagirdar, G.R. Samant and V.V. Divekar, Advs.
For Respondents/Defendant: R.B. Kotwal, Adv.

Oral evidence is not admissible to vary or modify the terms of a partnership deed.

Headnote:

PARTNERSHIP - SUIT FOR DISSOLUTION OF PARTNERSHIP - PARTNERSHIP DEED - CONSTRUCTION - ORAL EVIDENCE - ADMISSIBILITY - EVIDENCE ACT, SECTIONS 91, 92.

Fact of the Case:

Plaintiff filed a suit for dissolution of partnership and accounts against 14 defendants, including the 2nd defendant. The 2nd defendant contended that he was not a partner and that the 1st defendant was a partner. The trial court held that the 2nd defendant was not a partner and struck off his name from the suit. The plaintiff appealed to the District Court, which held that the 2nd defendant was a partner and restored his name to the record.

Finding of the Court:

The High Court held that the 2nd defendant was a partner and that the trial court erred in striking off his name from the suit. The court found that the partnership deed was clear and unambiguous and that the 2nd defendant had signed the deed as a partner. The court also held that oral evidence was not admissible to vary or modify the terms of the partnership deed.

Issues: 1. Whether the 2nd defendant was a partner in the partnership. 2. Whether oral evidence was admissible to show that the 2nd defendant was not a partner.

Ratio Decidendi: 1. The partnership deed was clear and unambiguous and showed that the 2nd defendant was a partner. 2. Oral evidence was not admissible to vary or modify the terms of the partnership deed.

Final Decision: The High Court dismissed the appeal and upheld the decision of the District Court.

Judgment

1. This appeal is filed against the order passed by the Assistant Judge Dhulia, allowing the appeal filed by the plaintiff setting aside the decree passed by the trial Court striking off the name of the 2nd defendant and holding the 2nd defendant not to be a partner.

The plaintiff filed suit No. 338 of 1949 in the Court of the Civil Judge, Senior Division, at Dhulia against 14 defendants for a declaration that the partnership between himself and the defendants had been dissolved in or about March 1948 and for an account of the partnership. Alternatively, the plaintiff claimed a decree for dissolution of partnership and for accounts.

2. It was the plaintiffs case that the plaintiff and the defendants had entered into a partnership to carry on business in cloth in the name and style of "The Cloth Merchants Association", and that certain terms were agreed upon and th3 same were recorded in an agreement.

The plaintiff claimed in the suit that defendants 1 and 2 were grossly negligent in their conduct and were liable to make good an amount alleged to have been lost by them and account of the partnership should be made on that footing.

3. Defendant 1 by his written statement inter alia contended that he was the partner land that the 2nd defendant was not a partner of the firm. He also contended that the suit was not maintainable on the footing that there had been a dissolution of the firm. The 2nd defendant by his written statement contended inter alia that he was not a partner and that the 1st defendant was a partner.

He also contended that an amount of Rs. 15,000/- was lost on account of the unexpected accident of robbery and that he was not liable for the amount. At the trial evidence was sought to be led on behalf of defendants 1 and 2 that defendant 2 signed the partnership agreement, because defendant 1 was not present at the time when the agreement was executed and presented for registration. It was also urged that the 2nd defendant was merely a benamidaf for the 1st deft, and was not liable on the partnership agreement.

4. The learned trial Judge held that it was the 1st defendant who had entered into the partnership agreement, and that the 2nd defendant had signed the partnership agreement merely because the 1st defendant could not remain present. The learned Judge accordingly directed that the name of the 2nd defendant be struck off as he was improperly joined as a party to the suit.

The learned Judge accordingly amended the plaint by deleting the name of the 2nd defendant and proceeded to pass a preliminary decree for an account on the footing that the plaintiff, defendant 1 and the other defendants, but not defendant 2, were partners. Against that decree, an appeal was preferred by the plaintiff to the District Court.

The contention substantially was that it was the 2nd defendant who was a partner. The learned District Judge held that the 2nd defendant was a partner of the firm and that the order passed by the trial Court striking off the name of, the 2nd defendant was erroneous.

The learned Judge accordingly rectified the decree passed by the trial Court and restored the name of the 2nd defendant on the record and directed that the case be sent back to the trial Court for deciding other questions on the footing that the 2nd defendant was a partner. Against that decree the 2nd defendant has come to this Court in appeal.

5. Now, the learned appellate Judge observed that the partnership deed Ex. 58, in the operative part thereof was "transparently clear" and it showed that the 2nd defendant, who was described as the owner and manager of the shop Trimbak Bandu Shet, was a partner of the suit firm. He further observed that even though the preamble of the deed referred to cloth licence holders it did not prohibit a non-licence holder from becoming a partner.

In the view of the learned appellate Judge the trial Court had discarded the operative part and had given undue importance to the recital contained in the preamble and he





























Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
Judicial Analysis

AI

SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top