MONGHIBAI Vs. COOVERJI UMERSEY

JUDGEMENT

(1.) This case raises a short point for the decision of the Board. It is an appeal from the judgment and decree of the High Court at Bombay in its appellate jurisdiction dated 16th March 1937. By its judgment the Appeal Court affirmed a decree of the High Court in its ordinary original civil jurisdiction dated 30 July 1936. Up to and after the year 1925 a firm of Cooverji Umersey & Co. were carrying on business in partnership in Bombay. In 1925 it consisted of nine partners, Cooverji Umersey, the respondent, his father Umersey Katchra, and seven others who were defendants 4 to 10 below. On 30 September 1925, one Mawji Waghji and his wife, the appellant, borrowed Rs. 1,20,000 from the firm and gave a promissory note for that sum in favour of the firm. The advance was secured by certain bales of cotton and at the same time the title deeds of two houses belonging to the appellant and to her husband and situated at King Lane and Borah Bazar Street were deposited with the firm by way of equitable security and as further cover for the loan. In case of default the firm was to have recourse to the bales of cotton in the first instance and against the house property for any deficiency.

(2.) In pursuance of this arrangement the firm sold the bales of cotton, leaving however, a large portion of the debt unpaid. In November 1926 seven members of the firm retired, leaving the respondent and his father the only remaining members. Of those seven, defendant 10, Bhulabhai Devi, pursuant to an oral agreement made on 6 November 1926, with the respondent and his father retired from the firm, paid to them the sum of Rs.17,000 for his share of the losses of the business, released all his share, right, title and interest in the assets, outstandings, property and good will of the partnership business in favour of the respondent and his father, and agreed to execute in their favour all such transfers as might become necessary for better and more effectively assigning and transferring his share, right, title and interests.

(3.) On 17 November 1926, the other six defendants, 4 to 9, executed a document purporting to assign their interest in the partnership property to the respondent and his father. This document was not registered in accordance with the terms of Section 17 (1) (b), Registration Act, 1908, and it was contended by the appellant and was not disputed by the respondent that neither defendant 10's oral agreement nor the written document of 17th November were effective to transfer an interest in immovable property. The mortgage rights in the house property therefore remained in all the original partners.