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1989 Supreme(Cal) 386
HIGH COURT OF CALCUTTA
Lilamoy Ghosh & Sunil Kumar Guin, JJ.
Biswanath Halwal
vs.
Amritlal Halwal
FIRST APPEAL No. 603 of 1978
Decided On : July 28, 1989
Advocate Appeared:
Sudhis Dasgupta, Jayanta Dasgupta for the appellant
Bidyut Banerjee, Shila Sarkar for the respondent.
A partnership is formed when two or more persons agree to combine their property, labour, and skill in a business, with the intention of sharing the profits and losses.
Headnote:
PARTNERSHIP - PARTNERSHIP DEED - CONSTRUCTION - PARTNERSHIP BUSINESS - ESSENTIAL ELEMENTS - SHARING OF PROFITS - SHARING OF LOSSES - AGENCY - INTENTION OF PARTIES - SUBLEASE - HINDEN LEASE - DISTINCTION - SUBSEQUENT EVENTS - EFFECT.
Fact of the Case:
The plaintiff and the defendant entered into an agreement to run a sweetmeat shop. A partnership deed was executed between the parties on August 20, 1963, which stipulated that the plaintiff would be entitled to a fixed profit of Rs.105/- per month and would not be liable for any loss. The monthly rent of the shop room would be paid by the plaintiff, and all charges to the Corporation would be paid by him. The trade license would also stand in his name. The defendant defaulted in paying the plaintiff his fixed profit by the time fixed, and the plaintiff instituted a suit for a declaration that the partnership stood dissolved, for a decree for ejectment, and for restraining the defendant from interfering with the carrying on of the business by the plaintiff.
Finding of the Court:
The court held that there was a partnership formed between the plaintiff and the defendant and that for breach of the term of the instrument, the partnership automatically stood dissolved. The court also held that the defendant was restrained from carrying on the business at the same premises and that the plaintiff was entitled to a decree for ejectment against the defendant from the sweetmeat shop room.
Issues: 1. Whether there was a partnership formed between the plaintiff and the defendant? 2. Whether the partnership stood dissolved? 3. Whether the defendant was entitled to carry on the business at the same premises? 4. Whether the plaintiff was entitled to a decree for ejectment against the defendant?
Ratio Decidendi: 1. The court held that there was a partnership formed between the plaintiff and the defendant on the basis of the following factors: - The partnership deed stipulated that the plaintiff would be entitled to a fixed profit of Rs.105/- per month and would not be liable for any loss. - The monthly rent of the shop room would be paid by the plaintiff, and all charges to the Corporation would be paid by him. - The trade license would also stand in his name. - The defendant defaulted in paying the plaintiff his fixed profit by the time fixed. 2. The court held that the partnership stood dissolved due to the defendant's breach of the term of the instrument. 3. The court held that the defendant was restrained from carrying on the business at the same premises because after the dissolution of the partnership, the defendant could not exploit the business. 4. The court held that the plaintiff was entitled to a decree for ejectment against the defendant from the sweetmeat shop room.
Final Decision: The appeal was allowed, and the judgment and decree of the learned trial court were set aside. The suit was decreed against the defendant. It was declared that the partnership created by the deed of partnership executed by the plaintiff and the defendant on August 20, 1963, stands dissolved. The defendant was restrained from carrying on the business at the same premises. The learned trial court's decree for a sum of Rs. 3,780/- with proportionate costs was maintained, but it was converted into a decree on account of profits due to the plaintiff. The plaintiff also got a decree for ejectment against the defendant from the sweetmeat shop room at Premises No. 180, Vivekananda Road, P. S. Amherst Street, Calcutta after evicting the defendant therefrom.
Lilamoy Ghosh, J.: The shop room in 180, Vivekananda Road, Calcutta is the subject-matter of this appeal and the suit out of which it arises. The crucial question for determination is whether the plaintiff and the defendant entered into a partnership agreement with regard to the business in the shop or whether the plaintiff sublet a room to the defendant.
2. The plaintiff pleaded that he was running the confectionery shop from before and because of his advanced age, it become difficult for him alone to manage the said sweetmeat shop. In that situation, it was stated, the plaintiff entered into a partnership business with the defendant for running the sweetmeat business in the shop and a partnership deed was executed between the parties on the 20th August, 1563. The various terms of the partnership deed are set out in the plaint, but it is necessary to refer at this stage to only the salient features of the agreement. It was agreed, as per the deed, that the first party (plaintiff) would be entitled to a fixed profit of Rs.105/- per month and would not be liable for any loss. It was also stipulated that the monthly rent of the shop room would be paid regularly by the plaintiff and all charges to Corporation would be paid by him and the trade licence would also stand in his name. The 9th clause of the deed, which is very important, is that in case the second party, that is, the defendant, failed to pay the first party his fixed profit by the time fixed, the partnership would stand dissolved. Incidentally, it may be mentioned that in the deed, there is also a stipulation that the first party (plaintiff), would assist the defendant in all possible ways. The plaintiff alleged that the business was being carried on accordingly for some time and the defendant also made payments of monthly profits upto the month of August, 1972. Thereafter, it was alleged, the defendant defaulted. So, on the ground that the defendant became guilty of breach of the terms of the deed. the plaintiff instituted the suit for reliefs set out in the prayer portion. The plaintiff asked for a declaration that the partnership stood dissolved. The plaintiff also prayed for decree for ejectment and for restraining the defendant from interfering with the carrying on of the is business by the plaintiff. Similarly, he has prayed for that the defendant be restrained from carrying on the business at the suit premises. There was also a prayer for accounts.
3. The main defence of the defendant was that there was no partnership business between the plaintiff and the defendant and that the plaintiff had sublet the premises to him. It was stated in paragraph 11 of the written statement that in 1952 the sweetmeat shop of the plaintiff came to a standstill due to want of funds and the plaintiff stopped that business. In 1952, as stated by the defendant, the plaintiff sublet the suit premises to the defendant and since then the defendant was carrying on the business in the suit premises. At first, the rent was fixed at Rs. 100/- per month. Later, in order to avoid the decree for eviction in a suit filed by the superior landlord, the parties brought into existence a partnership deed, to conceal the position of subletting. At that time, according to the defendant, the rent was enhanced to Rs. 105/- per month. The defendant, however, admitted in paragraph 12(a) that the plaintiff permitted him to use some of his articles. Title Suit No. 193 of 1963 was filed against the defendant in the City Civil Court, Calcutta, in order to avoid the provisions of s. 13(1)(6) of the West Bengal Premises Tenancy Act, as pleaded by the defendant. The defendant emphasised that he was the sole proprietor of the business and was in exclusive possession and that the plaintiff had only the right to collect rent from him on certain conditions, which right also he forfeited for failure to perform his duty. These in short, were the respective cases of the parties.
4. The matter was fought out in th
