SATYALA SANYASI Vs. BHOGAVALLI SANYASI ALIAS BULLODU

JUDGEMENT

(1.) The lower Court has now submitted its findings. I may mention that I formulated three questions provisionally but the case depends on the answer to the third alone. As regards that question, the facts as found may be thus stated. The suit promissory note was executed on 27 August, 1930 and on the same date the plaintiff, the defendant and three others entered into a partnership. It was then agreed that the plaintiff on behalf of the partnership was to bid for the right to sell toddy and obtain a license in his name. At the auction held a month thereafter, he became the successful bidder. The license has since been produced and bears the date 23 September, 1930. On these facts the lower Court has held that no transfer is involved in the transaction and that the suit promissory note is therefore enforceable.

(2.) The question really to be decided is, whether the partnership formed in the circumstances mentioned above is illegal or not. That again depends upon whether any part of Rule 27 to which I made reference in my previous order, has been infringed. That Rule runs thus: No privilege of supply or vend shall be sold, transferred or sub-rented without the Collector's previous permission.

(3.) No question of "selling" the privilege or "subrenting" it, arises on the facts here. Then the point remains, was there a "transfer" of the privilege? If the partnership involved a transfer, it would be illegal; otherwise, not. For the purpose of deciding whether or nor there was a transfer, I now turn to Nalain Padmanabham V/s. Sait Badrinadh Sarda (1911) I.L.R. 35 Mad. 582 : 21 M.L.J. 425. The learned Judges there observe, It is no doubt true that every contract of partnership is not necessarily a transfer but it is equally clear that such a contract may in many cases involve a transfer. Thus if two persons agree to start a business in partner-shin and to contribute capital therefor, there is no transfer involved in the transaction. But if one person carrying on a trade and possessing stock and capital, admits another into partnership with himself, making the stock and capitals, the joint property of both, it is impossible to contend that there is not a transfer in such a case.