High Court Of Delhi
RAJ CHOPRA - Appellant
Versus
NARENDER ANAND - Respondent
Interim Application 2238 of 1990
Decided On : 04/01/1991
(ii) Section 54 and 55 — Section 27 Contract Act — Change of nature of business by partnership firm — Later parties decided to have separate business with separate showrooms — Through a Deed having restraint clause — Effect — The clause of restraint is void under Contract Act.
( 1 ) BY this order I am to decide two applications one filed by the plaintiffs under Order 39 Rules 1 and 2 of the Code of Civil Procedure and other by defendant No. 2b under Order 39 Rule 4 of the Code.
( 2 ) THE suit is for dissolution of partnership, rendition of accounts, winding up and for perpetual injunction. There are two plaintiffs and in effect tour defendants. Partnership ls in t e name of competent Builders of which first plaintiff and the first defendant are the partners. This was constituted by a deed of partnership dated February 20, 1978. These two partners extended the business of partnership and started a unit under the name competent Motors . For this purpose they entered into an agreement dated July 19, 1983 called the supplementary Agreement of Partnership. Though this unit was part of the partnership competent Builders whose main business was that of builders and promoters of multi-storeyed buildings, this unit was to deal in automobiles. Then on September 1, 1983 an agreement was signed between the Competent Motors and defendant No. 3, manufacturers of cars, under the name "marnti , as dealers of these cars. Competent Motors for all intent and purposes was Competent Builders in whose name assessments under the tax laws were being done. The partners, however, could not pull on together and on KSeptember 30, 1986 an agreement was executed between the partics styied as modification Deed . Under this deed the parties though continued to be the partners in Competent Builders agreed to segregate the activities of dealership in automobiles and motor-cycles (a dealership of Ind-Suzuki Motorcycies in the name of "competent Motorcycies was acquired on May 11, 1985 by the two partners ). They bad by this te two showrooms one at Connaught Place and the other at Bhikaji Cama Place, New Delhi, and certain workshops. They, however, nevertheless wanted to keep the agency of defendant No. 3 as a joint activity for limited purpose in partnership as mentioned in various terms in the deed. At the same time, they expressed the desire that the principal deed of partneiship shall remain in force as long as the partnership subsisted (Clause 2 ). The agency obtained from defendant No. 3 under the name of Competent Motors was to remain undivided and jointly exploited for the limited purpose inasmuch as of receiving the allocation of vehicles under the name and style of Competent Motors and making the payment against the vehicles received from defendant No. 3 from the joint bank account to be operated jointly by the partners or their nominees. These vehicles received in partnership account were to be divided equally between the partners. Otherwise from this deed it appears that parties separated for the purpose of sale of automobiles, first plaintiff getting the showroom of Connaught Place and the first defendant that of Bhikaji Cama Place. These partners also divided various other properties including workshops, etc. It was also provided that in the event of the remaining any unsold Maruti vehicles from defendant No. 3 for a period of three days with any of the parties, then such unsold vehicles were to be diverted to the other party at the cost of the party returning the unsold vehicles. The deed also provided that agency commission received from defendant No. 3 would be equally shared upto March 31, 1988 lrrespective of allocation between the parties, but after this. date the commission together with warranty claims would be shared on the ba is of and its proportionate to booking and allocation of vehicles respectively made by the two partners. Various clauses of this deed would show that the parties did separate thelr business of automobiles, the principal business being saie of Maniti vehicles of defendant No. 3. Then, Clauses 22 and 23, which have raised the present controversy are as under :- 55
"22. The parties hereto have mutually agreed that the other party would not open any showrooms or any s
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