HANSRAJ MANOT Vs. GORAK NATH CHAMPALAL PANDEY
HIGH COURT OF CALCUTTA
GORAK NATH CHAMPALAL PANDEY
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(1.) THESE are second appeals on behalf of the defendant in suits for ejectment on the ground of default in payment of rent. Various issues were taken in each of the suits in the first court. The first was whether the suit was maintainable; the second issue was whether there were defaults and the third was whether the notice to quit that was served was a good and proper notice. So far as the last two points are concerned both the courts came to the same finding that there were defaults and the notice to quit was served and it was a valid and good notice. The point that was urged here very seriously and the point on which there has been a difference of opinion so far as the courts below are concerned is whether the suit is maintainable or not.
(2.) THE suit was instituted by Messrs. Gorak Nath Champalal Pandey described as a firm. There is no dispute that Gorak Nath and Champalal Pandey entered into a partnership orally. That partnership was registered and the names of two partners appear in the Register of Firms as Gorak Nath and Champalal Pandey. Subsequently one of them died but the heirs were not brought on the said register. In spite of the death, the firm is said to have continued its business with the heirs of the deceased partner. The point that has been urged is that the suit Is not maintainable in view of section 69 (2) of the Partnership Act. When the plaintiff firm instituted the suit the defendant filed an interrogatory asking the plaintiff as to who the partners were. The plaintiff gave certain names and there is no dispute about that matter. It is also undisputed that the names of the heirs of the deceased partner were stated as partners of the firm but their names do not appear in the said register before the Joint Stock Company. In these circumstances, the first court held that there was an oral contract between the partners Gorak Nath and Champalal by which they agreed that the firm would not be dissolved on the death of either or both the partners but would continue with the heirs of the deceased partner or partners. This oral contract was accepted by the first court. The first court came to a finding that there was an oral agreement between them that the firm would subsist in spite of the death of one of the partners. This finding is based on evidence relating to subsequent conduct between the parties. This finding has not been reversed by the court of appeal below. On the other hand, the observation of the court of appeal below show that it accepted that finding of the trial court. The question, therefore, in this court cannot be raised that there was no oral agreement as between Gorak Nath and Champalal that their heirs would continue after the death of any of the partners and the firm would not stand dissolved by the death of either of the partners. But the courts below have differed on the question regarding the interpretation of section 69 (2) and that is the main point which has been urged before me.
(3.) MR. Chakravarti on behalf of the defendant-appellant submitted that the provisions of section 42 of the Indian Partnership Act would not apply where the partnership is formed by only two members. According to Mr. Chakravarti, on the death of one member there remains only one partner and the definition of a firm shows that there cannot be any firm of a partnership with one partner and for that reason he says that the heirs could not come in the firm because the heirs had no "firm" to come in. I am afraid, I cannot accept this argument. Mr. Chakravarti has referred to a decision in the case of M. S. V. Narayanan Chettiar v. M. S. M. Umayal Achi, (1) A. I. R 1959 Mad. 283. It was held in that case by Ramachandra Iyer, J. that the application of this rule will be difficult in the case of a firm composed only of two partners and that in that case if one of the partners died, there will not be any partnership existing to which the legal representatives of the deceased partner could be taken in. Mr. Chakravarti then referred to (2) A. I R. 1952 All 506 (Mt. Sughra and others v. Babu), a judgment of a Division Bench of the Allahabad High Court, where it has been held that partnership is not a matter of statute, it is a matter of contract and no heir can be said to become a partner with another person without his own consent, express or implied. In this case Sapru and Agarala, JJ. of the Allahabad High Court differed from another decision of a division Bench of the same High Court reported in (3) A. I R. 1946 All. 259 (Lala Ram Kumar v. Kishori Lal and others), a judgment of Iqbal Ahmad, C. J. and Sinha, J. In the latter case of the Allahabad High Court their Lordships found that if there is a contract between the original partners, the firm would not stand dissolved on the death of a partner. The question here before me is what is the principle underlying section 42 and what is the application of that section. That section states that "subject to a contract between the partners a firm is dissolved by the death of a partner. " Here the contract that has been referred to in the contract between the two partners Gorak Nath and Champlal. I have already found that there was a contract between Gorak Nath and Champalal. Therefore, it cannot be said that the contract ceased to have effect because a partner died. The contract, was there. There was no new contract with the heirs and there was no question of a new contract with the heirs because of the original contract, and by virtue of the original contract the heirs become partners as soon as one of the partners died. It is stated that at the death of the partner there is no partnership as long as there is no death there is the partnership As soon as there is the death, the heirs become the partners automatically without any agreement between the original partners by virtue of the original agreement between the partners while they were surviving. There is no question of interregnum. As soon as the death occurs the right of somebody else occurs. The question of interregnum does not arise. The heirs become partners not because of p contract between the heirs on the one hand and the other partners on the other but because of the contract between the original partners of the firm. The words of the section, I think completely support that subject to contract between the partners a firm is dissolved by the death of a partner. Therefore, there is no doubt that section 42 refers to the partners who enter into a contract and has no reference to the heirs of the deceased partner. I, therefore, overrule the first objection of Mr. Chakravarti.;
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