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1943 Supreme(Mad) 294
IN THE HIGH COURT OF MADRAS
Krishnaswami Ayyangar, J.
Mohammad Abdul Sathar Baig and Ors.
Versus
Hafija Bibi and Ors.
Decided On : 01.11.1943
Partnership law, inheritance rights, and the valuation of goodwill and trade marks were central to the judgment.
Headnote:
Partition - Mahomedan Law - Partnership - Goodwill - Turkey Topee - Deed of Release - Business Shares - Dissolution of Partnership - Trade Mark - Inheritance - Compromise Decree - Ex Parte Decree
Fact of the Case:
The case involved a dispute over the shares in a business partnership and the inheritance of assets and goodwill after the death of a partner. The court also considered the validity of a compromise decree and an ex parte decree.
Finding of the Court:
The court found that the deceased partner was entitled to a larger share in the business and that the heirs were entitled to a share in the goodwill and the 'Turkey Topee' trade mark. The court also determined that the entire decree, including the compromise decree, should be set aside.
Issues: The main issues included the determination of business shares, inheritance rights, the valuation of goodwill, and the validity of the compromise and ex parte decrees.
Ratio Decidendi: The court relied on the partnership law, Mahomedan Law, and legal principles related to goodwill and trade marks to reach its decision. It emphasized the importance of evidence and the rights of heirs in the absence of a special provision in the partnership contract.
Final Decision: The court modified the decree, awarded costs to the appellants, and directed a valuation of the trade mark to determine the heirs' shares in its value.
Krishnaswami Ayyangar, J.
1. This is an appeal from the decree of the Subordinate Judge of Guntur in a suit instituted by the two sons and three daughters of a deceased Mahomedan Yusuf Baig, for a partition and recovery of their shares in the estate left by him. Yusuf Baig died on 3rd December 1927. Defendant 1 is his widow and she is the mother of the plaintiff. Defendants 2 and 3, Mohamed Ismail and Mohamed Gaffur, are his younger brothers. Defendants i and 5 are the wives of Mohammed Ismail.
2. The three brothers, Yusuf, Ismail and Gaffur were together carrying on a business in the manufacture and sale of beedies. From the profits of the business several immovable properties were purchased. They were treated as part of the assets of the business. On 22nd January 1926, Gaffur, the youngest of the brothers, left the business receiving for his share cash and property of the total value of Rs. 6000. The arrangement come to by the partners at the time is evidenced by a deed of release, Ex. A, executed by Gaffur in favour of his brothers. It is said that there was a counter part of this release, but it has not been produced. This deed of release contains the statement that it was Yusuf who began the business and subsequently took his two brothers into it out of brotherly affection and for business purposes and it goes on to state:
But as we (Ismail and Gafiur) requested Mohammed Yusuf Baig Sahib to give me and Mohamed Ismail Sahib some share in all those properties and in the business, he agreed to it out of affection and gratitude towards us and the following are the particulars of the shares which he and we got settled. It was settled that Mohamed Ismail Baig should have one share and that I (Gaflur) should have one share.
These recitals show that in the business so far carried on Yusuf was entitled to a half share and his two younger brothers were each entitled to an one-fourth share. The business was continued by Yusuf and Ismail and other properties were purchased from the profits earned. The death of Yusuf on 3rd December 1927, brought about a dissolution of the partnership, but nonetheless, Ismail carried on the business but in his own name utilising the entire assets as they stood at the time of Yusufs death. The partnership was not wound up and the share of Yusuf was not ascertained and paid to the heirs of the deceased. Before proceeding further, it may also be mentioned that a trade mark known as the "Turkey Topee" distinguished the beedies manufactured by the partnership and was largely used on the beedies and the wrappers containing them.
3. Although defendant 3 Gaffur is not among the legal heirs of the deceased Yusuf, his father and mother were and they were together entitled to an one-third share. By a deed of assignment dated 18th January 1928, executed by his father and mother, defendant 3 Gaffur acquired their one-third share in the estate of the deceased. Defendant 2 Ismail claimed that he was entitled to a half share in the business carried on by him along with Yusuf since the date of the release deed refer-red to above. In the course of his evidence in the Court below, he stated that the shares mentioned in the deed of release were not correct but that they were so mentioned because Yusuf wanted to cut defendant 3 out with a smaller share. In fact he stated:
Yusuf said that unless I pretended that I agreed to one-fourth share defendant 3 would create troubles. So, I agreed. Defendant 3 took his share and separated.
His case really is that throughout, both before and after the deed of release, Yusuf and he had an equal share in the business and in the property acquired out of the profits earned. The plaintiffs and defendant 3 contended that the shares of Yusuf and Ismail were in the proportion of 2:1 and this question formed the main point of contest between the parties. The learned Subordinate Judge has held that Yusuf was entitled to a half share while his two brothers were entitled to a one-fourth share e
