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PETITIONER:

BHAGWANT P. SULAKHE

Vs.

RESPONDENT:

DIGAMBAK GOPAL SULAKH AND OBS.

DATE OF JUDGMENT30/09/1985

BENCH:

SEN, AMARENDRA NATH (J)

BENCH:

SEN, AMARENDRA NATH (J)

BHAGWATI, P.N. (CJ)

MADON, D.P.

CITATION:

1986 AIR 79 1985 SCR Supl. (3) 169

1986 SCC (1) 366 1985 SCALE (2)819

ACT:

Joint family property, character of - When lt changes

ether by an unilateral act it is open to any member of the

joint family to convert any joint family property into his

personal property - Partnership firm formed out of joint

family funds and managing agency agreement entered into by

such a partnership firm with another company - Commission

received by the co-sharers of the point family in terms of

the managing agency agreement and the remuneration received

by them as the managing director treated as the joint family

property for all purposes - Whether one of the co-sharers by

a simple letter claim the commission remuneration received

by him as his personal property till the joint family is

disrupted - Position of managing director and the managing

agent, explained.

HEADNOTE:

One Pandarinath Martand Sulakhe died leaving behind him

his sons Vishwanath, Gopal, Govind and Bhagwant and

considerable properties. Vishwanath died in 1910 leaving

behind his son Dattatraya, Govind, one of the brothers who

constituted a pint family after the death of their father

Pandarinath Sulakhe, separated from the joint family in 1914

taking his share of the family properties. However, the

other two brothers along with the son of Vishwanath

continued to remain pint and lived as members of the joint

family till 8.12.1941 on which date Bhagwant intimated

Dattatraya son of Vishwanath his intention to cause

severance of the point family status.

Prior to it, in the year 1922, a Public Limited Company

named Lokmanya Mills Ltd. was intended to be floated and

with that in view Dattatraya and Bhagwant entered into a

partnership under the name and style of M/s. Sulakhe and Co.

with four outsiders, as per the Partnership Agreement dated

3rd January, 1923. me said Partnership firm Sulakhe and Co.

entered into a Managing Agency agreement on 5.2.1923 with

the said Lokmanya Mills Company Ltd. The said agreement was

to expire after 35 years. The mill actually went into

production in the year 1938. on the basis of the managing

agency agreement between the company

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and the firm Sulakhe & Co., Dattatraya acted as the managing

agent upto 1935 and thereafter Bhagwant became the managing

agent. After Bhagwant’s appointment as managing agent,

Dattatraya was appointed as the Director of the company.

At the time when the company was incorporated and its

articles were adopted and also at the time when the company

entered into the managing agency agreement with Sulakhe and

Co. and when the deed of partnership of the firm was

executed Bhagwant and Dattatraya being members of the joint

family, all the 325 shares which was initially purchased in

the company - 200 in the name of Dattatraya and 125 in the

name of Bhagwant - plus the 83 further shares - 79 in the

name of Bhagwant and 4 in the name of Gopal - were paid for

by the joint family out of the joint family funds.

Therefore, the entire amount of remuneration which was

received by Dattatraya and Bhagwant not only on account of

their shares of commission under the managing agency

agreement on the basis of the partnership deed but also on

account of the Director’s fees paid to them and also on

account of the salary paid to Dattatraya who acted as the

managing agent of the company till 1935, was treated as

joint family property. Even after Bhagwant took over as the

managing agent in 1935, the position cont