JUDGMENT
N.G. Nandi, J.
(1) In this suit for declaration of shares of the plaintiffs in the profit and loss and net assets of the dissolved partnership firm (w.e.f. 31.10.1994) Shri Giriraj Trading Company at 15% and 10% respectively and require the defendants to render true, just and correct accounts of the said partnership firm w.e.f. 17.1.1982 till the defendant continue to use the assets etc. of the partnership firm and for a preliminary decree directing the defendants to render accounts of the partnership firm M/s. Goverdhan Traders with a further prayer for the appointment of the Local Commissioner to go into the accounts of the firm, also requiring the defendants to render accounts to the plaintiffs,byl.A. 3862/95, under0rder39, Rules 1 & 2, Cpc, the plaintiffs pray for ad interim injunction restraining the defendants from, in any manner, using the properties, goodwill and name of the partnership firm Shri Giriraj Trading Company and carrying on similar business in the firm’s name Shri Giriraj Trading Company, also restraining the defendants from, in any manner, selling, transferring, alienating or otherwise disposing of the assets of the said partnership firm and also praying for the appointment of the receiver with respect to the assets and property of the firm with a direction to take charge of the firm; by Ia No. 4562/95, the defendants, under Order 39, Rule 4, Cpc, pray for the vacation of the order dated 5.5.1995 granted under Order 39, Rules 1 & 2, Civil Procedure Code in Ia 3862/95.
(2) The say of the plaintiffs is that a partnership was entered into between the plaintiffs and the defendants vide partnership deed dated 17.1.1982; that the partnership was to carry on the business of commission agency in Kiryana goods in the name of Shri Giriraj Trading Company; that plaintiff No. 1 and 2 and defendants No. 1 to 3 are the partners in the said firm and the share profit in the ratio of 15%, 10%, 40%, 10% and 25% respectively; that prior to the said partnership, plaintiff No. 2 and the defendants were the partners carrying on the same business w.e.f. 17.6.1978 with late father of the plaintiffs, namely Shri Prabhu Dayal as another partner therein; that Shri Prabhu Dayal died on 16.1.1982 at Delhi; that consequently, a deed of dissolution was entered into between plaintiff No. 2 and defendants on 17.1.1982 and on that date, a fresh partnership between the plaintiffs and the defendants came into existence with a fresh deed of partnership, which is the subject matter of this suit; that the partnership business between the plaintiffs and the defendants carried on from 17.1.1982 to 31.10.1994; that the said partnership was, at Will, dissolved by plaintiff No. 1 on 30.10.1994 through his legal notice dated 27.7.1994; that earlier, on 1.4.1994, another partnership deed was entered into between the parties due to changes into the provisions of Income Tax Act for the partners and the partnership firm; that the partnership deed contains the rights and obligations of the parties to the same as also the present suit, in great details; that the said partnership carried on business in the premises which belongs to the plaintiffs and that defendant No. 1, who has the requisite experience in the commission agency of Kiryana business, was in actual control and possession of the books of accounts; that even after the dissolution of the firm w.e.f. 31.10.1994, the defendants have most illegally and arbitrarily, not settled the accounts of the firm and have not paid the plaintiffs their just and true share of the assets and profits of the said firm; that the defendants are liable to account for the shares of the plaintiffs of the profits earned since dissolution; that the defendants are bound to stop the user of the premises and the goodwill, customers and trade name of the said partnership firm from 31.10.94 but the defendants are, however, with impunity continuing to use the goodwill, customers and trade name of the partnership firm. In substance, the say of the plaintiff is that the partnership between the plaintiffs and the defendants, was a partnership at Will. The said partnership has been dissolved w.e.f. 31.10.94 and despite the dissolution, the defendants have not been rendering the accounts of the profit and the assets of the partnership to the plaintiffs and that the defendants have been continuing the use of the goodwill, customers and trade name of the partnership firm.
(3) As against this, the say of the defendants is that the suit of the plaintiffs is barred under the provisions of Order 2, Rule 2 CPC; that earlier plaintiffs had filed Suit No. 1052/95 against the defendants in respect of this very half portion of Shop No. 481; that Prabhu Dayal was a tenant of Shop Nos. 457,458 and 481 under Smt. Patashi Bai at Rs. 137.00 p.m. as rent; that Shops Nos. 457 and 458 are located in Khari Baoli whereas Shop No. 481 is situated in Katra Ishwar Bhavan, Khari Baoli, Delhi; that defendant No. 1 had been carrying on business of brokers in Chillies; in 1978 he thought of starting his own commission business in Chillies; Shop No. 481 was lying vacant and was not being used by said Prabhu Dayal; that defendant No. 1 approached said Prabhu Dayal, who refused to sublet the shop or portion thereof openly to defendant No. 1; he suggested that he could enter into a fictitious partnership with defendant No. 1, partition Shop No. 481 into two portions and hand over the possession of half portion to defendant No. 1; in the meanwhile, Shri Din Dayal, father of defendants 1 & 3 had retired from service in DCM; accordingly, said Prabhu Dayal divided Shop No. 481 into two portions by putting up iron sheet partition; that on 17.6.1978, a partnership deed was executed between the said Prabhu Dayal and his grand son Subhash Chand on one hand and defendants 1-3 on the other; that by means of the said partnership deed, which was merely a device, the said Prabhu Dayal sublet half portion of Shop No. 481 to the defendants; that this deed of partnership was merely fictitious and was not meant to be acted upon and was never acted upon. On the contrary, it was agreed between the parties that the defendants will pay rent @ Rs. 2,000.00 p.m. for half portion of Shop No: 481 opening in Katra Ishwar Bhavan; that said Prabhu Dayal also gave to the defendants in their portion of Shop No. 481, an extension of his telephone; that the defendants were paying the entire bill of that telephone including the calls made by Prabhu Dayal and his son and grand son. The defendants also were making investments and were carrying on the business of Chillies under the name and style of Shri Giriraj Trading Company; that the said partnership was merely entered into as a device to avoid and prevent eviction from the said premises; that Bank account was opened in 1978 in Canara Bank, Chandni Chowk, Delhi which was closed in 1980 and the current account was opened in Hongkong Bank, Chandni Chowk, Delhi; that the plaintiff has never issued a single cheque or withdrawn any amount; that neither the plaintiff nor late Shri Prabhu Dayal at any time entered into any bargain on behalf of the alleged partnership firm or made or received payment on its behalf; that the plaintiff and Prabhu Dayal were never the partners in reality in the business which the defendants were carrying on in half portion of Shop No. 481. Thus, according to the defendants, the partnership is a camouflage only to protect the possession and avoid eviction under Section 14(1)(v) of the Delhi Rent Control Act, 1958; that the plaintiffs are not entitled to any share in the profits nor liable for any losses and that the defendants are not liable to render accounts since the plaintiffs and defendants are not the partners of each other and in fact the defendants are the sub-tenants in the suit shop.
(4) The plaintiff has invoked the equitable jurisdiction of this Court by seeking ad interim injunction, as pointed out above, contending that the plaintiffs and defendants are the partners and that the partnership has been dissolved w.e.f. 31.10.1994 and despite the said dissolution, the defendants continue to use the goodwill, customers of the partnership firm, which the defendants have no right to do under Section 53 of the Partnership Act. As seen above, the defendants dispute the relationship of partners with the plaintiffs, contending that the partnership deed dated 17.1.1982 is a camouflage, never acted upon and was only with a view to protect the possession and avoid eviction under the provisions of the Delhi Rent control Act.
(5) It is submitted by Mr. Mehta that the plaintiffs had their own business in Ghee in some other premises and that for the purpose of doing commission business in Chillies in Shop No. 481, which was rented by the plaintiffs, with defendant No. I as the partner because of his experience and expertise in the business of Chillies, the commission business in Chillies was done in partnership. Thus, admittedly, there was no business of Chillies in Shop No. 481 prior to the alleged partnership between the plaintiffs and the defendants. It is a settled position of law that a tenant can take a partner in the business but the same, at the same time, should not be a sub-letting or illegal assignment by the tenant of the demised premises in favour of the person brought in the premises as the partner in the business of the tenant.
(6) It is a settled legal position that in order to form the relationship of partners, the two essential requirements are – (i) that there should be an agreement to share the profits and losses of the business; and (ii) the business must be carried on by all of the partners or any one of them, acting for all. There is implicit in the second requirement the principle of agency. Thus, the test of partnership lies in the agency between the partners i.e. authority to bind other partners and the authority with the other partner to bind oneself.
(7) It has been submitted by Mr. Mehta that the partnership is registered under the provisions of Partnership Act, registered before the Income Tax and the Sales Tax Authorities under the relevant laws and that the sales tax number has been obtained by the partnership and that the terms and conditions embodied in the partnership agreement dated 17.1.1982 suggest the requirements of sharing profits and loss as per Section 4 of the Partnership Act.
(8) It need hardly be said that the registration of partnership deed under the provisions of the Partnership Act and its submission to the income tax and sales tax authorities and obtaining the sales tax number for the business, contribution to the partnership capital are in themselves not sufficient to hold the partnership to be a genuine partnership. The sharing in profit and loss, contribution to the capital, absolute control of the business or exclusive operation of Bank account by one of the party to the partnership deed, signing statement as the partners are all factors which would be required to be taken into consideration for the purpose of deciding whether the partnership in question is a genuine partnership or not. But, above all, the test of partnership viz. the mutual agency between the partners, i.e. the authority to bind and the authority to be bound, would be the criterian for deciding whether the partnership is a genuine partnership or not.
(9) It is not the say of the plaintiff that the plaintiff ever entered into any transaction as the partner so as to bind the defendants as the partners, nor there is any transaction suggested by the plaintiff entered into by the defendants so as to bind the plaintiffs as the partners by such transaction. In other words, there is no transaction suggested by the plaintiff to prima facie point out the agency between the plaintiffs and the defendants, as the partners.
(10) In the present case, the submission of Mr. Lonial, learned Counsel for the defendants is that the partnership is not genuine; that is a camouflage to shield the eviction and dispossession at the hands of the landlord and the business carried on in the Shop No. 481 is the exclusive business of the defendants and the partnership deed dated 17.1.1982 was never acted upon. To this, the submission of Mr. Mehta, learned Counsel for the plaintiff is that the defense viz. the contract of sub-tenancy being unlawful and forbidden by law and if accepted, the same would defeat the provisions of the Delhi Rent Control Act which prohibits the sub-tenancy/illegal assignment, cannot be entertained in view of the provisions contained in Section 23 of the Indian Contract Act. For the present limited purpose, what is required to be seen is whether the partnership deed dated 17.1.1982 relied on by the plaintiffs for the purpose of seeking relief under Order 39, Rules 1 & 2 Cpc, prima facie satisfies the test of agency in order to determine the genuineness of the said partnership ? It would be for the plaintiff to show prima-facie that the test of agency, as pointed out above, is satisfied for the purpose of grant of relief in this IA.
(11) The partnership deed dated 17.1.82 produced on record, contains the usual terms and conditions, which would be found in case of partnership besides giving exclusive right to manage/run the business, exclusive right to operate the Bank account by the defendants and the capital investment of plaintiffs 1 & 2 to the extent of Rs. 10,000.00 and Rs. 11,000.00 respectively initially and rest of the capital investment to be by the defendants, besides the sharing of profit and loss by the plaintiffs and the defendants. The defendants have not been able to show that they have been paying Rs. 2,000.00 per month apart from the nature of payment, as alleged in the reply to the Ia in order to suggest that the partnership deed dated 17.1.82 has not been acted upon nor the plaintiff, at the same time, has shown any prima-facie evidence to suggest that he has been paid any amount by way of profit and that he ever acted as the agent by any overt act in the sense that the plaintiff did any act as the partner to bind the defendants as the partners and any act by the defendants, which would bind the plaintiffs as the partners. Thus, in my opinion, taking the averments in the pleadings and the evidence on record, the test of agency is prima-facie not suggested by the plaintiffs.
(12) One of the arguments advanced by Mr. Mehta is that by notice dated 27.9.94, the plaintiff in categorical terms asserted that a partnership has been entered into between the plaintiffs and the defendants vide partnership deed dated 17.1.1982 and that the said partnership is dissolved w.e.f.31.10.1994 and defendants 1-4 called upon by the said notice to make arrangements for handing over the peaceful and vacant possession of the business premises situated in Shop No. 481, Katra Ishwar Bhawan, Khari Baoli, Delhi; that by another notice dated 30.3.95, the plaintiffs in no mistakable terms asserted the partnership between the plaintiffs and the defendants by partnership deed dated 1.4.1992 also referring to the notice dated 27.9.94 and the receipt of the same by the defendants and the dissolution of the partnership firm w.e.f. 31.10.94; that despite all this, the defendants did not reply any of the above notices by the plaiptffs, which conduct of the defendants would suggest that there is a genuine partnership and the story and sub-tenancy of partnership deed being a camouflage is an after-thought. In this regard, reliance is placed on the decision reported in 1980 Rlr (Notes) page 44, wherein it is held by the learned Single Judge of this Court that” if the plaintiff before filing the suit makes serious assertions in a notice to the defendant then defendant must not remain silent by ignoring to reply, If he so does, then an adverse inference may be drawn against him”. There can be no disagreement with this proposition of law. It may be appreciated that conduct of the party may raise presumption and legitimate inferences may be drawn depending upon the conduct of the party. The question of drawing adverse inference or drawing presumption, in my opinion, for the purpose of determination of rights and obligations of the parties to the litigation, the conduct is required to be taken into consideration which may be drawing of assumption/inference. In my opinion, on presumption and inferences, based on the alleged conduct of the defendant, the interim relief of the nature prayed in this Ia should not be granted. The conduct of the defendant relied on by the plaintff, as pointed out above, may be relevant for the purpose of drawing adverse inference at the time when it comes to deciding the rights and obligations of the parties finally. I wish it to be clear that the drawing of presumption/inference cannot be at the interim stage and the same cannot be made the basis for ousting a person who is sitting in the premises for the last more than 18 years. Suffice it to say that this is not the stage where the presumption/inference should be drawn from the alleged conduct of the defendants for the purpose of grant or otherwise of the interim relief.
(13) Even assuming that the plaintiffs have been able to prima facie suggest the agency between the plaintiffs and the defendants, so as to prima-facie establish the relationship of the plaintiffs and the defendants to be that of partners, even then in my opinion, merely prima-facie suggesting the partnership between the plaintiffs and the defendants, would not entitle the plaintiffs to the relief of injunction prayed since irreparable injury would be caused to the defendants as the defendants have . been actually doing the business in Shop No. 481 for the last more than 18 years and actually conducting the business from this premises. The balance of convenience also requires that the defendants cannot be restrained from running the business in Shop No. 481, in my opinion, looking to the equities, the defendants should be directed to maintain the accounts of the business run in Shop No. 481 and the same be filed every six monthly in the Court so that in the event of plaintiffs ultimately succeeding in the suit and the defendant is held liable to render accounts of the business run in Shop No. 481 on the basis of partnership, in that event, the rights of the plaintiffs are not prejudicially affected.
(14) Thus, in my opinion, the plaintiffs would not be entitled to the equitable relief of injunction under Order 39, Rules 1 & 2 Civil Procedure Code as prayed for the reasons aforestated and the Ia would be liable to be dismissed with condition that the defendants shall maintain the accounts of the business run in Shop No. 481 and that the said accounts be filed every six monthly in the Court for inspection of the plaintiffs.
(15) In the above view, I.A. No. 3862/95 is dismissed, whereas Ia No. 4562/ 95 is granted. The order dated 5.5.1995 together with modification vide order dated 27.5.1995 is vacated.
(16) It is clarified that none of the above observations shall be construed to mean an expression of opinion on the merits of the contentions raised by the plaintiffs and the defendants in this proceeding.