Hormasji Motabhai vs Pestanji Dhanjibhai on 27 July, 1887

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Bombay High Court
Hormasji Motabhai vs Pestanji Dhanjibhai on 27 July, 1887
Equivalent citations: (1888) ILR 12 Bom 422
Author: West
Bench: West, Birdwood


West, J.

1. In this case the plaintiff sued the defendants for an account of partnership transactions. The defence is that the partnership having been entered into in violation of the law, no obligation was constituted by it. The defendants Nos. 3 and 4 took a liquor contract from the Government, and, by the terms of their license, were forbidden to take a partner. By taking the plaintiff as a partner they consequently became liable to a penalty of Rs. 100 under Section 45 of the A’bkari Act (Bombay Act V of 1878). The plaintiff has himself been a licensee, and must be familiar with the terms embodied in the usual form, which was made use of in the present case. In entering into partnership with the defendants, therefore, he was consciously taking part in a breach of the law prohibited by a penalty. The case of Sykes v. Beadon L.R., 11 Ch. Div., referred to in argument, shows that a contract entered into for the purpose, or with the necessary effect, of defeating a statute will not be enforced or recognized by the Courts, at any rate where both parties stand in pari delicto. The Indian Contract Act, Sections 23, 24, involves the same principle, which may be indeed gathered also from the judgment of Sir R. Couch in Joseph v. Solano 9 Beng. L.R., 441 relied on for the appellant. See, too, Cannan v. Bryce 3 B. & Al., 179; Story on Bailments, Section 158(7th ed.); Story on Partnership, Section 6(5th ed.)

2. The case of Gordon v. Howden 12 Clause and Finnelly, 237 is identical in principle with the one before us, and in that case the House of Lords refused to give effect to a secret partnership for pawnbroking contrary to the terms of the Statute 39 and 40, Geo. III, cap. 99.

3. We, therefore, confirm the decree of the Subordinate Judge. Each party is to bear his own costs throughout.

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