PUNJAB & HARYANA HIGH COURT
A.N.Grover and S.K.Kapur JJ.
Dharam Vir
Versus
Jagan Nath
Letter Patent Appeal No. 22D of 1963,
Decided On : AUGUST 4, 1966
PARTNERSHIP - MINOR AS PARTNER - EFFECT ON PARTNERSHIP DEED - INVALIDITY OF DEED QUA ALL PARTNERS - PARTNERSHIP ACT, 1932, SECTION 30.
Fact of the Case:
A partnership deed was executed between four adults and a minor. Disputes arose between the partners and the firm was dissolved. The minor, acting through his father, brought a suit for rendition of accounts or dissolution of the partnership. The trial court dismissed the suit holding that the partnership deed was void since a minor could not enter into a contract of partnership. The plaintiff appealed to the Additional Senior Subordinate Judge, who allowed the appeal and remanded the suit to the trial court for disposal in accordance with law. The defendant appealed to the High Court.
Finding of the Court:
The High Court held that the partnership deed was invalid not only qua the minor but also in regard to the other partners. The court found that the minor was made a full partner in the firm and not merely admitted to its benefits. The court also held that the partnership deed could not be given effect to qua the major partners after excluding the minor.
Issues: 1. Whether the partnership deed was void since a minor could not enter into a contract of partnership. 2. Whether the minor was made a full partner in the firm or merely admitted to its benefits. 3. Whether the partnership deed could be given effect to qua the major partners after excluding the minor.
Ratio Decidendi: 1. Section 30 of the Partnership Act, 1932, provides that a minor cannot become a partner though, with the consent of the adult partners, he may be admitted to the benefits of the partnership. 2. The partnership deed showed that the minor was made a full partner in the firm and not merely admitted to its benefits. 3. A partnership is created only by voluntary contract of the parties. Where a minor is made a full partner in the firm, the partnership deed is invalid not only qua the minor but also in regard to the other partners.
Final Decision: The High Court dismissed the appeal and held that the suit deserved to be dismissed.
S.K.Kapur, J.
1. This Letters Patent Appeal against the order of the learned Single Judge dated 14.12.1962, arises in the following circumstances:
2. On 10.11.1949, a partnership deed was executed between Dharam Vir, plaintiff, and Jagan Nath, Ram Saran Das, Bhim Sen and Sat Pal, defendants. The partnership was formed to take over the business of "Bhartia Kam Kaj Corporation" and its allied concern "Bhartia Art Pictures". The preamble of the said deed mentions Dharam Vir as the owner of the said two concerns Sat Pal was, on the date of execution of the partnership deed a minor being 8/9 years old and the fact of his minority is expressed in the document itself. Disputes arose between the partners and the firm was agreed to be dissolved with effect from 7.03.1950. Sat Pal minor, acting through his father, brought a suit on 22.05.1951, for rendition of accounts of the dissolved partnership, or in the alternative, for dissolution of the partnership and rendition of accounts His brother Dharam Vir, appellant, who was defendant No. 4 in that suit supported the plaintiff in his written statement but the remaining partners contested the suit Before the Court trying that suit a preliminary objection was raised by the contesting defendants that since a minor could not enter into any contract of partnership the contract was void and unenforceable This objection prevailed with the trial Court which rejected the plaint by its order dated 25th January 1952 An appeal against the said judgment also failed and on 4th of March 1953 Dharam Vir appellant filed a suit out of which the present appeal arises. The trial Court framed the following four issues:
"1 Whether the suit for accounts lies in view of the decision dated 25-1-1952 of Shri H. D. Lamba. Sub Judge, 1st Class, Delhi. In a previous instituted and decided suit No. 616 of 1951 between the parties?
2. Whether the plaintiff is estopped from bringing the present suit?
3. Whether the suit does not disclose any cause of action
4. Whether the partnership contract has already been held to be void and unenforceable? If so, with what effect?"
3. Issue No. 4 was decided against the plaintiff and the suit was dismissed. The Additional Senior Subordinate Judge, Delhi, by his judgment dated 13th February, 1957, allowed the appeal filed by Dharam Vir and decided that the contract of partnership could not be treated as void in so far as the parties other than the minor were concerned. The suit was, therefore, remanded to the trial Court for disposal in accordance with law. Aggrieved by the said judgment of the Additional Senior Subordinate Judge, Delhi, Jagan Nath defendant filed an appeal in this Court. The said appeal was, it appears, by mistake registered as first appeal from order No. 59-D of 1957, though this was a second appeal. The appeal was heard by our learned brother S. B. Capoor, J. who allowed the same by his judgment dated 14th December 1962 and the present Letters Patent Appeal is directed against the said judgment.
4. S. B. Capoor, J. decided that when the partnership document dated 10th November. 1949, was executed there was no partnership in existence and, therefore, the minor could not have been admitted to its benefits, for no one can be admitted to what does not exist. He further held that even on the construction of tht partnership document the minor was made a full partner in the firm and not merely admitted to its benefits and the partnership deed was invalid not only qua (vis-a-vis?) the minor but also in regard to the other partners. Three principal contentions have been raised before us by Mr. Radhey Lal Agarwal the learned counsel for the appellant
(1) The finding of the learned Single Judge is erroneous inasmuch as there was a partnership in existence when the partnership deed dated 10th November 1949, was entered into
He, however, does not dispute that if the finding about non-existence of any partnership be correct then the question of admission of the minor to
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.