Calcutta High Court
Gobardhan Chakraborty And Others vs Abani Mohan And Another on 21 February, 1990
Equivalent citations: AIR1991CAL195, 94CWN614, AIR 1991 CALCUTTA 195, (1991) 1 CALLJ 107 (1990) 1 CAL HN 504, (1990) 1 CAL HN 504
JUDGMENT
1. These appeals are directed against the judgment and decree dated June 10, 1972 passed by the Additional District Judge, 10th Court, Alipore, in Title Appeals Nos.593 of 1971 and 658 of 1971 affirming those dated April 30, 1971 passed by the Munsif, 3rd Court of Baruipur 24-Parganas in Title Suit No. 290 of 1969.
2. The defendant No. 1 has preferred S. A. No. 86 of 1973 while defendant No. 2 has preferred S.A. 1788 of 1972 and plaintiff is the respondent No. I in both the appeals. These two appeals are taken up for hearing together.
3. The plaintiff instituted the suit for dissolution of partnership and for accounts or in the alternative, for accounts of the dissolved firm and for final decree of accounting and also for appointment of a Receiver and also for injunction.
4. The plaintiff's case, in brief, is as follows:--
That the plaintiff and the defendants Nos. 1 and 2 are the partners of a Cinema business run under the name and style of Mahamaya Talkies at Dakshin Barasat; that the plaintiff has experience in the cinema line business, the defendant No. 1 had land suitable for installation of cinema hall and the defendant No. 2 owned a projector machine; these three persons business and partnership agreement was thus entered into by and between the parties. The Deed of Partnership was drawn up on June 5, 1963 duly executed by the said three partners; that the terms of the said deed, inter alia, provides that the defendant No. 1 Gobardhan Chakraborty, was to get every day 7 1/2% of the net sale on that particular date irrespective of profit and loss, the plaintiff Abani Mohan Chakraborty, was to get after deduction as stated above, 10% of the net profits of the said partnership business and the balance was to be taken by the defendant No. 2, Jahar Lal Mukherjee. At the close of the year, the first pact, i.e. the defendant No. 1 was to get 29 1/2% of the net profits, the second part i.e. the defendant No. 2 was to get 58% of the net profits and the remaining 12 1/2% was to go to the third party, viz. the plaintiff. The plaintiff raised a grievance that he did not receive his share of profits and so he made a formal demand for accounts. The cinema shows continued till about 17th February, 1967. Further claim of the plaintiff is that he put in his labour and also supplied a few furniture and fittings for the said business. On such allegations, the plaintiff claims for reliefs as mentioned hereinbefore.
5. The defendants filed separate written statements. The defendant No. 1 first took the plea of limitation and also pleaded that as he was not a sharer in the net profits of the business, he cannot be treated as a partner and since he is not a partner, he is not liable to render accounts, as demanded by the plaintiff. The defendant No. 1 next contended that even if there was any partnership agreement that could only be treated as partnership at Will and the same was dissolved on-May 8; 1966 by a Notice. The defendant No. 1 further asserted that on September 15, 1966 he, purchased the material and furnitures from the defendant No. 2 and also referred to the arbitration clauses in the partnership agreement and claimed that the suit does not lie.
6. The defendant No. 2 in his written statement while denying the plaint assertion pleaded limitation. His next contention is that the agreement dated June 5, 1963 did not constitute a legal partnership agreement as the same was opposed to statute and public policy. The said agreement, according to the defendant No. 2 should be treated as void on the ground that the licence was personal and not transferable and the licensee had no right to enter into any valid and legal partnership under the terms and conditions of the licence. His further case is that the plaintiff was more an employee and not a partner. Whatever agreed to be given to the plaintiff was in lieu of remuneration. The defendant No. 1 had only a temporary licence for three months and the provision as to sharing of profits was rendered ineffective after the terms of the said temporary licence came to an end. He also alleged mismanagement by the plaintiff. He further contended that the partnership was dissolved by Notice dated June 8, 1966 served by the defendant No. 1; that he sold his articles e.g. chairs and fans, etc. to the defendant No. 1 on September 15, 1966 and since then he had no connection with the cinema business.
7. On the pleadings of the parties, the trial Court framed as many as ten issues. Issue Nos. 1 and 2 were decided in favour of the plaintiff. On issue Nos. 4 and 5, viz. Does any relationship of partners exists between the plaintiff and the defendants? and Is the cinema business run under the name of Mahamaya Talkies a partnership firm? If so is the plaintiff a partner?, the trial Court considered the provisions of Ss. 4 and 6 of the Partnership Act (for short the said Act hereafter), the Deed of Partnership (Ext. 7) and other materials on record and came to the finding that a partnership business was formed by the plaintiff and the defendants by the alleged Deed of Partnership and that each party thereto is a partner and, as such, relationship of partners existed between the plaintiff and the defendants and the plaintiff was a partner in the said cinema business. Issue No. 3, viz. "Is the alleged partnership agreement legal in view of the provisions of licence granted under the West Bengal Cinema (Regulation) Act, 1954 and if not, is the plaintiff's suit maintainable?" was decided in favour of the plaintiff by holding that the partnership agreement is not illegal nor opposed to public policy within the meaning of S. 23 of the Contract Act and hence, the suit is maintainable.
8. As regards Issue No. 9, viz. Is the suit barred by the alleged arbitration clause in the alleged Deed of Partnership, the trial Court after referring to the relevant clause, namely, clause 15 of the partnership agreement as also several decisions of the Supreme Court and Calcutta High Court, the trial Court held that the said arbitration clause 15 is not a bar to the institution of the present suit and, as such, the present suit is maintainable.
9. As regards, Issue No. 6 which relates to the plaintiff's claim for a decree for dissolution of the partnership and for accounts of the firm, the trial Court held in favour of the plaintiff. But as regards the plaintiffs alter-
native prayer for a decree for accounts of dissolved firm, the trial Court found that since the partnership in question is not a partnership at Will, the same could not be determined by the defendant No. 1 by notice of dissolution dated June 8,1966 (Ext. B) and hence the alternative prayer of the plaintiff was rejected by the trial Court. Similarly, the plaintiffs prayer for appointment of a receiver was also rejected by the trial Court. The issue No. 10 namely, "Is the suit barred by limitation?" was answered in the negative and in favour of the plaintiff.
10. Upon the findings as aforesaid, the trial Court decreed the suit. Against the said decision, two appeals preferred by the defendants separately.
11. The first appellate Court dealt with clause 8 of the licence (Ext. E) for the purpose of coming to the finding as to whether the partnership agreement was opposed to the public policy and whether it amounts to infringement of the conditions of the licence. The first appellate Court also considered the plea of the defendants appellants that entering into a partnership business with regard to the subject-matter of the licence amounts to a transfer which is prohibited by the licence itself and came to the finding that in such case of partnership agreement following a licence, it must involve a transfer of licence itself. In this connection, the first appellate Court referred to the following decisions: (1) Velu Padayachi v. Sivasooriam Pillai feported in ; (2)K. Viswanathan v. Namak Chand Gupta reported ; and (3) Gobardhan Kassowji v. Champsay Dossa reported in AIR 1921 PC 137. It is also held by the first appellate Court that Ext. 7 does not suggest that the licence itself is made the subject-matter of the partnership business. After carefully considering the aforesaid decisions as also the Ext. 7 the first appellate Court held that licence in the present case has not contravened the terms of the licence itself. That being so, the only conclusion is that the licence itself has not been transferred or assigned in favour of any of the parties. In this connection, the first appellate Court also referred to the decision . In extension of its findings, the first appellate Court held that the agreement could to neither said to be illegal nor opposed to public policy in terms of S. 23 of the Contract Act. On the basis of its findings, the first appellate Court dismissed the appeals and affirmed the decision of the trial Court with certain modifications.
12. Being aggrieved thereby, the defendants separately preferred these two appeals.
13. Mr. Alak Chakraborty appears for the defendant No. 2 who is the appellant in S.A. 1788 of 1972, Mr. Mukti Prasanna Mukherjee appears for the defendant No. 1 who is the appellant in S.A. 86 of 1973 and Mr. Ashis Kumar Sanyal appears for the plaintiff who is respondent No. 1 in both these appeals.
14. The three questions that fall for consideration in these appeals are as follows:--
(1) Whether the Partnership Agreement is void on the ground of infringement of the terms of licence;
(2) Whether the Partnership Agreement is opposed to public policy in terms of S. 23 of the Contract Act and the agreement itself is a partnership agreement;
(3) Whether the Limitation Clause applies and the suit is barred by limitation?
15. Mr. Alak Chakraborty, the learned Advocate appearing for the defendant No. 2, who is the appellant in S.A. No. 1788 of 1972 claimed and contended that the appeal involves questions of law by reason of non-consideration of the relevant provisions of law as also the materials on record. Mr. Chakraborty referred to the recital of the Partnership Agreement dated June 8, 1963 and laid emphasis on the relevant terms of the same which reads as follows:--
"Whether the first party is the holder of the licence granted by the West Bengal Government for running a cinema at village Dakshin Baraset within P. S. Joynagar, District-24, Parganas, by constructing a temporary construction under the name and style of Maha-maya Talkies provisionally for a period of three months from June 5, 1963 with every possibility of renewal of licence by the said Government."
16. Special stress was laid on the words "every possibility" Mr. Chakraborty also referred to clauses (1) and (2) of the said Partnership Agreement and claimed and contended that the licence itself is the foundation of the agreement. If it is considered to the exclusion of the temporary licence, partnership would be rendered ineffective for all practical purposes. Both the Courts below did not consider clauses (1) and (2) of the said agreement in its contextual and legal prospective inasmuch as the licence thus obtained by the first party, namely, the defendant No. 1 not only formed the basis of the partnership agreement but also the very foundation of continuance thereof. It must be said at this stage that Mr. Ashis Kumar Sanyal, the learned Advocate appearing for the plaintiff/respondent No. 1 in both the appeals, has shown extreme fairness by referring to the decision in the case of Mohrilal v. Sri Ballabh, . I will consider the said decision later on.
17. Mr. Chakraborty relied on the following decisions:--
1. Gour Chandra Sinha v. Bata Krishna Ghosh reported in 81 CWN 385;
2. Mafizuddin Khan Chowdhuri v. Habibuddin SK. ;
3. Hanism Hiria Gowder v. Naga Mistry ;
4. A. V. Varadarajulu Naidu v. K. V. Tharvasi ;
5. Mohrilal v. Sri Ballabh ;
6. Neikole Udayar v. S. P. Pariasami Konar reported ;
7. K. Viswanthan v. Nanak Chand Gupta reported .
18. Mr. Chakraborty also relied on the provisions of S. 6 of the West Bengal Cinema Regulations Act, 1954 (for short the said Act hereafter) read with Rules 8, 9 and 10 of the West Bengal Cinema (Regulations of Public Exhibitions) Rules, 1956 (for short the said Rules hereafter) in support of his contention that the licence shall not be transferred and shall be for the benefit of only the licensee.
19. That being so, a partner, according to Mr. Chakraborty, even if the partnership agreement is found to be valid, cannot use his licence for the firm. Apart from that, Mr. Chakraborty also seriously assailed the decision of the Courts below on the ground that the agreement apart from being violative of the provisions of the said Act and the said Rules, the terms of the licence is also opposed to public policy. The next contention of Mr. Chakraborty is that both the Courts below completely overlooked the fundamental aspect of the matter, namely, there cannot be a renewal of the temporary licence. Temporary licence can be valid for a maximum period of two years and after that a fresh application is to be filed for fresh licence. Clauses (1) and (2) cannot be treated to be legal by reason of incorporation of certain terms which are otherwise not permissible and warranted in law.
20. Mr. Chakraborty next contended that the findings of the Courts below that the said agreement should not be treated as partnership at Will is wholly without any legal foundation inasmuch as the recital of the agreement which was completely lost sight of inter alia, provides that the first party, i.e. the defendant No. 1 and the appellant in S.A, No. 86 of 1973, was a party to the said agreement and recorded that the licence was provisionally for a period of three months at the first instance and thereafter, proceeded to recite with the words "every possibility" of usual renewal of the licence by the Government. Mr. Chakraborty laid stress on the words "every possibility" and assailed the findings of the Courts below by contending that there being no provision for renewal of licence in the said Act or in the said Rules, clauses (1) and (2) of the Agreement are completely in contravention of the provisions of sub-rule (3) of Rule 9 of the said Rules which, inter alia, provides:--
"Person desirous of holding shows after the expiry of two years from the date of commencement of the licence for a temporary indoor cinema shall make a fresh application for licence. Such an application shall be considered as a fresh application and shall be dealt with accordingly."
21. So the said clauses (1) and (2) of the said agreement are contrary to sub-rule (3) of Rule 9 of the said Rules. Apart from that, the parties, according to Mr. Chakraborty, are well aware that there existed "every possibility" of usual renewal of the said licence by the Government. The expression "every possibility" means and implies, there existed uncertainty about the same. So, the basic points as would appear from the decision of the Supreme Court in the case of Karumuthu Thiagarajan Chettiar v. E. M. Muthappa Chettiar, are to be considered. The very nature of the terms of agreement demonstrates the state of uncertainty and that being so, the said agreement, according to Mr. Chakraborty, should be treated as partnership at Will.
22. The last contention of Mr. Chakraborty is that the suit ought to have been filed within three years from the date of demand i.e. June 5, 1966. Mr. Chakraborty also strenuously urged that the finding of the Courts below that Ext. 8 is the foundation for arriving at the finding whether the suit is barred by limitation or not is required to be examined in the light of the deposition of P.W. 1. Ext. 8 is the letter addressed to the Branch Manager, Film Division. Mr. Chakraborty claimed and contended that the Court cannot act on the basis of the said Ext. 8 inasmuch as there is no material before the Court that there was any grant of licence in terms of the said agreement. The document, namely, Ext. E shows the licence for running temporary exhibition by means of cinematography was granted on September 27, 1965 and the said licence was valid up till April 12, 1966. Thereafter, there is no document showing any such licence being subsequently granted after April 12, 1966. Hence Ext. 8 according to Mr. Chakraborty, should not be treated as substantial evidence for the purpose of arriving at the findings that after April 12, (966, licence was granted for a further period. The suit having been filed after a lapse of three years, the starting point being June 5, 1966, suit thus instituted on September 9, 1969 is barred by limitation.
23. Mr. Ashis Kumar Sanyal, the learned Advocate appearing for the plaintiff, who is respondent No. 1 in both the appeals, claimed and contended that the terms of the agreement did not refer to any transfer/ assignment of the licence. He further claimed that the present agreement did not involve any violation or contravention of the said Act and the said Rules as also the terms and conditions of the licence inasmuch as there is no transfer or assignment. In support of his contention, Mr. Sanyal referred to the decision of this Court in the case of Mafizuddin Khan Chowdhury v. Babibuddin SK., , Mr. Sanyal contended that this case does not present such a situation where there is a definite provision forbidding showing of the temporary cinema nor did respective cases of the parties establish that there was a sale, transfer or subletting of the licence. In such a situation, the Court should not refuse to enforce contract as the condition and object of such agreement was not forbidden by law.
24. On the issue of partnership at Will, Mr. Sanyal placed reliance on the findings of the Courts below and then contended that renewal of the licence itself constituted certainty and the contention of Mr. Chakraborty, according to Mr. Sanyal, is not well founded. Definite period is mentioned in the said agreement by incorporating a clause for renewal of licence, which should not be considered on such grounds as are sought to be advanced by Mr. Chakraborty, Mr. Sanyal further claims that materials on record show that the temporary cinema on the basis of the licence granted by the Government continued up to February 17, 1967 and there was no break or interruption nor was there any question of uncertainty. Mr. Sanyal's further contention is that the said agreement in the contextual conceptual and legal perspective cannot be treated as a partnership at Will. On the question of limitation, Mr. Sanyal's clear answer is that Ext. 8 clearly demonstrates that the cinema business continued till February 17, 1967 and the suit was filed on September 9, 1969. Hence, the suit is not barred by limitation.
25. Mr. Mukti Prasanna Mukherjee, the learned Advocate appearing for the appellant in S.A. No. 86 of 1973 -- defendant No. 1 after elaborately placing the findings of both the Courts below claimed and contended that the same could not be sustained on the same footing and on the same ground as are advanced by Mr. Chakraborty.
26. It is now fit and proper for this Court to examine the rival contentions of the respective parties because these appeals involve questions of law. Before I embark upon consideration of the decisions cited by the learned Advocate for the parties. I think it fit and proper to refer to S. 5 of the said Act and also to Rules 8, 9 and 19 of the said Rules. S. 5, inter alia, puts restrictions on the powers of the licensing authority and provides that the licensing authority shall not grant a licence under this Act unless it is satisfied that (a) rules made under this Act have been substantially complied with and (b) the prescribed precautions have been taken in the places in respect of which the licence is to be given, to provide for the safety of persons attending exhibitions therein. Rule 8 of the said Rules lays down the procedure for the grant of temporary indoor cinema licence. Rule 9 of the said Rules provides for the rate of licence fee, period of licence and fresh application. Regarding fresh application, sub-rule (3) of Rule 9 of the said Rules reads thus: --
"The person desirous of holding shows after the expiry of two years from the date of commencement of licence for a temporary indoor cinema shall make a fresh application for licence. Such an application shall be considered as new application and shall be dealt with accordingly."
27. Sub-rule (1) of Rule 19 provides that subject to the provisions of sub-rule (2) a licence granted under these Rules shall not be transferable and shall be for the benefit of only the licensee.
28. Sub-rule (2) of Rule 19 further provides that where during the period of validity of a licence--
(a) the proprietorship of the business to which the licence relates passes from the licensee to any other person by reason of the death of the licensee or of a transfer effected by the licensee with the previous approval in writing of the licensing authority, or
(b) a Receiver appointed by a competent Court lakes possession of such business for management.
29. In the instant case, sub-rule (2) of Rule 19 of the said Rules does not operate by reason of the complete absence of the conditions, as laid down in sub-rule (2) of Rule 19 of the said Rules, in the facts of the case, being manifest.
30. The Full Bench of the Madras High Court in case of Velu Padayachi v. Sivas-coriam Pillai, (supra) after considering the provisions of Ss. 15, 55 and 56 of the Madras Akbari Act and Rule 27 of the Rules framed thereunder came to the finding that the facts and circumstances of the case constitute and establish a transfer of licence which is prohibited by Rule 27 of the Rules framed thereunder and the partnership deed is not valid.
31. In case of K. Viswanathan v. Namakchand Gupta, (supra), the Madras High Court held that the partnership is illegal by reason of the prohibition contained in one of the terms of the licence, even though it may not be punishable under S. 8 of Cinematograph Act, 1918. Such a provision as one of the terms of the licence is in the interest of the public and for promotion of its welfare, hence a contravention thereof must be held to be illegal.
32. In case of Maniam Miria Gowder v. Naga Maistry, (supra) Madras High Court held that the principle being that an agreement of partnership which will entail a transfer of a licence or permit granted by the Government when there is an express provision prohibiting such a transfer is illegal and void ab initio, a partnership in respect of a lorry business which involves a transfer of a permit will be illegal and void.
33. In case of A. V. Varadarajilu Naidu (deceased) v. K. V. Tharasi Madar AIR 1963 Mad 613 (supra) Madras High Court held that partnership between A and B for the purpose of a lorry and to use it for carrying on business of transport business with a permit obtained in B's name only is illegal and opposed to public policy, as it involves the contravention of the provisions of Ss. 42(1) and 59(1) of the Motor Vehicles Act. The partnership firm being the owner of the vehicle cannot use the permit obtained in its name unless the permit is transferred in the name of the partnership with permission of the Transport Authority under S. 59(1) of the Motor Vehicles Act. Therefore, any claim arising out of the settlement of accounts of partnership is also illegal and cannot be enforced.
34. In case of Mohrilal v. Sri Ballabh, (supra) Rajasthan High Court while deciding the defendant as to whether illegal or not held at page 281--
"Reading all these provisions collectively in the light of the circumstances of the case which I have adverted to above. I have no hesitation in coming to the conclusion that the partnership in this case was illegal and, therefore, it is not for the Courts of law to order a dissolution or rendition of accounts with respect to such partnership at page 283 (Para 9).
Applying the law as laid down by their Lordships to the case before me, the conclusion to my mind seems irresistible that as the partnership in the present case was not licensed it could not deal in the wholesale trade of tobacco and the licence in the name of the defendant could not be accepted to be in favour of the partnership and consequently, the whole of the tobacco business which according to the plaintiff belonged to the partnership was unlawful, and a suit for dissolution of such a partnership and rendition of accounts could not be maintained in any Court of Law."
35. In case of Gordhandas Kessowji v. Champsey Dossa AIR 1921 PC 137 (supra) it has been held that where a licensee under S. 11 of the Bombay Salt Act who is prohibited by the terms of his licence from subletting his whole or a part of the privilege, admits some members of his family and others as partners in the business to share the profits. Such partners thus not having taken any part in the manufacture of salt, the arrangement did not infringe the provision either of the licence or of S. 11 of the Act.
36. The ratio of the decision was that the admission of the partners to share in the profits cannot be considered as a sub-letting or alienation of the privilege or a part thereof unless there has been a document directly transferring to the partners a part of the right to manufacture or vend. In Rajasthan's case i.e. Mohrial v. Sri Ballabh, (supra) it was found to be radically different on facts and Dosa's case stands distinguished by the Rajasthan High Court in Mohrilal's case.
37. In case of Mafizuddin Khan Chowdhury v. Babibuddin Sheikh, (supra) the Court held that contract of partnership between A and B did not involve any violation or contravention of the Bengal Silk Control Order, 1945 because the order did not prohibit the formation of any partnership for starting of a filature or for carrying on the said business.
38. In case of Gour Chandra Sinha v. Bata Krishna Ghosh, 81 CWN 386 (supra), while dealing with the question of carrying on business under Rule 174 of the Rules framed on the basis of a licence granted to a partner of a firm personally to carry on any business under the aforesaid Rules the trust held, inter alia, where a licence is granted to a partner of a firm personally to carry on any business under Rule 174 of the Rules framed under the Central Excise and Salt Act, 1944, the partnership firm cannot carry on such business without obtaining a licence in the name of the firm. Any partnership carrying on such business before the business brought within the purview of the said Act is dissolved on the date of such bringing it within the purview of the said Act.
39. I have carefully considered the rival contentions of the parties and the decisions cited above. I am of the view that the licence granted in terms of the provision of West Bengal Cinema Regulation Act and the Rules thereunder cannot be transferred and shall be for the benefit of only the licensee in a case where sub-rule (2) of Rule 19 of the said Rules does apply.
40. In the instant case, the permit was granted for the benefit of only the licensee namely, the defendant No. 1 but not for other partners namely, the plaintiff and the defendant No. 2. The said agreement apart from being in violation of the terms of the licence completely militates against sub-rule (1) of Rule 19 of the said Rules. When the Rules expressly provides, the licence shall be for the benefit of only the licensee running of the cinema business on the basis of the temporary permit granted to the defendant No. 1 for the benefit of other persons on the foundation of the said partnership agreement, the Court cannot but come to the finding that the agreement itself is void and illegal. The Rajasthan High Court in Memorial's case (supra) elaborately analysed the principles as regards the illegal partnership and came to the finding that the said partnership in question in a given situation cannot but be declared to be illegal and void. Unfortunately, both the Courts below never considered the provisions bf the said Act and sub-rule (1) of Rule 19 and sub-rule (3) of Rule 9 of the said Rules.
41. The partnership formed on the basis of the agreement for a purpose, in my view, is forbidden by law. The factual matrix, if viewed, in the fight of the legal perspective compels this Court to hold that no suit can be filed for accounts and, therefore, no action shall lie for reliefs as prayed, under illegal partnership.
42. In the instant/incase, the defendant No. 1 was the holder of a temporary licence under the said Act and the said Rules in his own name as proprietor but entered into a partnership for carrying on the business with the others. The provisions as quoted above forbid carrying on business with the others for the benefit of others. The benefit shall be for only the licensee and for nobody else. The decisions cited above dealing with the legality of partnership lay down the principles that in a given case where a person holding licence in individual name entered into the partnership for carrying on business with the other, the partnership agreement by reason of prohibition imposed by the said Act and the Rules should be, therefore, either expressly or impliedly forbidden.
43. The principles as laid down in Mohrilal's case, (supra) apply to the facts of the present case. The contention of Mr. Sanyal could not be accepted inasmuch as the agreement could not be saved from the vice of unlawfulness because firm held no licence ,in its name. The defendant No. 1 was granted licence in his individual capacity and licence also indicates that the grant was made in favour of the defendant No. 1 who is shown to be the proprietor of Mahamaya Talkies.
44. The partnership was formed in contravention of the statutory provisions as contained in sub-rule (1) of Rule 19 of the said Rules as aforesaid. In the instant case, licence thus granted shows the defendant No. 1 as the proprietor of Mahamaya Talkies and that licence is not liable to be transferred. It is for the benefit of only the licencee. The word "for the benefit" of only the licensee cannot be equated with the benefit of partnership firm inasmuch as the defendant No. 1 obtained the licence of running temporary cinemas as the proprietor of the said cinema hall. The said licence, therefore, can only be for the enjoyment and user of the defendant No. 1 as the proprietor of Mahamaya Talkies.
45. Here, for the benefit of only the licensee is to be construed as for the benefit of the proprietor concerned. The word "benefit" means advantage, profit, fruit, privilege, gain and interest. The advantage, profits, fruit, privilege, gain and interest should only go to the defendant No. 1 and not to the partnership firm and the other partners. Partnership for the reasons indicated above comes into existence on the basis of invalid and void agreement. I am of the view that the parties entered into an agreement with full awareness of the prevailing law that partnership was illegal and the consequence of taking part in such illegal partnership.
46. That being so, no equity could be worked out for granting relief to the plaintiff and the defendants. The business would have been a mere name of the licence thus granted to a proprietor concerned not being used. I hold that the partnership from the very beginning was illegal. The partnership being illegal no suit for settlement of account or other reliefs would lie. I have already indicated that the partnership thus rendered illegal and void by reason of prohibition contained in one of the terms of the licence as also sub-rule (1) of Rule 19 of the said Rules, the defendant No. 1 being the licensee by entering into partnership passed partial and substantial interest in what he has in favour of the plaintiff/defendant and the defendant No. 2.
47. Therefore, on this aspect, I am unable to accept the contention of Mr. Sanyal that the agreement is legal and valid inasmuch as it directly contravenes Rule 19 of sub-rule (1) of the said Rules. The fundamental of partnership at Will is where no provision is made for duration of the partnership or for the determination of the partnership.
48. The decision of the Supreme Court in case of K. Thiagarajan Chettiar v. H. M. Muthappa Chettiar, (supra) as cited above while allowing the appeal in part held in the manner following at page 1229:--
"Reading the terms of the agreement the intention could not be to create a partnership at Will. The partners contemplated that the management would be carried on in rotation between them in four yearly periods. It was also contemplated that the heirs of the partners would also carry on the management in rotation.
Considering this provisions as well as the nature of the business of partners, it could not be contemplated that the partnership could be brought to an end by notice by either partner.
The intention obviously was to have a partnership of some duration though the duration was not expressly fixed in the agreement. It contemplates two exceptions to a partnership at will. The execution to a partnership at will. The execution is where there is a provision in the contract for the duration of partnership; the second exception is where there is a provision for the determination of the partnership. In wither of these cases the partnership is not at will. The duration of a partnership is not will. The duration of a partnership may be expressly provided for in the contract, but even where there is no express provisions, courts have held that the partnership will not be at will if the duration can be implied."
49. The general rules of partnership at will are well settled. Where no item ix expressly limited for its duration and there is nothing in the contract to fix it, the partnership may be terminated at a moment's notice by either party. Without doubt in the absence of provision either express or by implication there may be an implied contract as to the duration of a partnership.
50. In the instant case, the duration of partnership either by express provision or by implication could not be found. Here, the duration is not only uncertain but the same depends upon the event which may happen. No person could claim the grant of licence as a matter of right it simply depends on the authority who may grant licence or may not. The reading of S. 7 of the said Act makes it clear that two conditions are to be satisfied before it can be said that the said partnership is a partnership at will or put it differently that partnership does not contain any provision whether expressly or impliedly and to the duration of the partnership or for the determination of the partnership.
51. In the instant case, the two tests or conditions are not present either expressly, or by implication. The Court after a careful analysis of the pros and cons of the entire matter is of the view that the partnership in question is partnership at will.
52. The finding on the basis of Exhibit H which ought to have been considered in the light of the deposition of the plaintiff but that was not admittedly done. The business was closed on and from April 12, 1966 as would appear from the said deposition of the plaintiff. The suit was failed on September 9, 1969, that is long after the period of three years. The suit is also barred by law of limitation.
53. The partnership agreement is to be read as a whole. The recital of an agreement in the absence of unambuguity and uncertainty may be made use of to explain the real intention of the parties. The recital as indicated above only records the expression "every possibility". If that expression is read with Cls.(1) and (2), the only interpretation of the agreement would be that the parties with their full knowledge went in for the agreement in a partnership at will. There is no escape from it. Recital in a document may be compared to the preamble in a statute. It may be proper key to ascertain the meaning of operative part of the agreement, in case later is in any manner doubtful as to the subject matter.
54. Mr. Ashis Sanyal, the learned Advocated for respondents claimed that this Court sitting in the second Appellate Jurisidiction should not set aside the cocurrent finding of facts. Reference was made to the decisions of the Supreme Court in a case of Pandurang Jivaji Apte v. Ramchandra Gangadhar Ashtekar (dead) reported in AIR 1961 SC 2235; K. Mehboob Saheb v. V. Sabbarayan Choudhary .
55. Mr. Alak Chakraborty, the Advocate appearing for the petitioner submitted that even in a case where concurrent findings are reached, the Second Appellate Court can interfere with the said concurrent finding of fact by setting aside the same. The following decisions in support of the aforesaid contention are cited at the bar:--
1. Damadilal v. Parashram :
2. Radha Nath Seal V. Haripada Jana ;
3. The Buckingham and Carnatic Co. Ltd. V. Workers of the Buckingham and Carnatic Co. Ltd. ;
4. I.C.I. (India) Private Limited, Calcutta v. The Commissioner of Income-tax, West Bengal III reported in AIR 1972 SC 1524.
56. In case of Pandurang Jivaji Apte v. Ramchandra Gangadhar Ashtekar (dead) AIR 1961 SC 2235 (supra), the learned Judges of the Supreme Court held that concurrent findings of the two folds being final in nature could not normally be set aside by the Second Appellate Court.
57. In E. Mahoob Saheb v. N. Sabbarayan Chowdhary, (supra) the learned Judges of the Supreme Court held that on concurrent findings of facts reached by the lower Courts, High Court cannot re-appreciate evidence and substitute his own conclusion in place of those entered by the lower Courts.
58. In case of Damdilal v. Pareshram, (supra) the learned Judges of the Supreme Court held in the manner following:--
If a finding of facts is arrived at ignoring important relevant facts then finding is bad in law.
59. In Case of I.C.I. (India) Private Limited v. The Commissioner of Income-tax West Bengal AIR 1972 SC 1524 (supra), the learned Judges of the Supreme Court, inter alia, held that the construction of documents of title or a document which is a foundation of the right of the parties necessarily raises a pure question of law.
60. In case of The Huckingham and Carnatic Co. Ltd. V. Workers of Buckinghem and Carnatic Co. ?Ltd. (supra), the learned Judges of the Supreme Court held that an interpretation of statutory rule is an instance of substantial questions of law.
61. After careful consideration of the facts and circumstances of the instant case, I am of the view that both the courts below completely overlooked the evidence of P.W.1 as regards the date of closure of the partnership firm and such findings of fact thus arrived at by the courts below ignoring important relevant evidence call for interference by this Court exercising its jurisdiction under S. 100 of the Civil P.C., 1908.
62. Similarly, the construction of the partnership agreement being the foundation of the right of the parties raises a pure question of law, The interpretation of sub-rule (3) of R.9 and sub-rules (1) and (2) of R.19, in my view, constitute substantial questions of law.
63. In view (sic) of Mr. Sanyal that the concurrent findings of fact could not be set aside by this Court, in my view, is without any substance.
64. The well-settled principles of law as laid down by the Supreme Court in the decisions thus cited by Mr. Alak Chakraborty applying in the case on hand.
65. In the result, this appeal for the reasons stated above succeeds, The judgment and decree of both the courts below are set aside. The suit is dismissed. No order as to costs. The judgment will govern Appeal No.86 of 1973, without there being any orders as to costs.
66. Appeal allowed.