Judgment

SUBBA RAO, J.: The facts leading up to this appeal may briefly be narrated. Gujarat Cotton Mills Co. Ltd., hereinafter called the Company, is a limited company having its registered office at Ahmedabad. In the year 1938 the Company appointed Messrs, Pira Maj Girdhar Lal and Co. hereinafter called the Agency Firm, as its Managing Agency. On February 28, 1938, a formal agreement was entered into between the Company and the Agency Firm. The said Agency Firm was formed under an instrument of partnership, dated February 26, 1938, with II partners - 3 of them are compendiously described as the "Bombay Group" and the remaining 8 of them as the "Kanpur Group". With certain variations in the constitution of the Agency Firm, the said firm functioned as the Managing Agents of the Company till September, 1946. In September 1946 the shareholding of the partners of the Agency Firm in the Company was as follows:

Kanpur Group 32,500 shares.

Bombay Group 26,362 shares.

Because of certain differences between the partners, they decided among themselves to sell their shares and to surrender their Managing Agency. On September 7, 1946, the said 11 partners entered into an agreement with the firm