JUDGMENT
Kanhaiya Singh, J.
1. This appeal by the plaintiff arises out of a suit for declaration. The facts found by the courts below, which are no longer in dispute, are these :
2. Defendants 1 and 2 owned and ran in partnership a hotel called New Milan Hotel in mohalla Muradpur holding half share each. The rent of the house, in which the hotel was located having fallen in arrears, the landlord instituted a proceeding for their eviction on the ground of non-payment of rent. During the pendency of the proceedings, the plaintiff purchased the half share of defendant Mo, 2 in the said hotel by a registered deed of sale dated the 6th April, 1950. On 15th September, 1950, the plaintiff paid Rs. 975/- to the landlord as rent from September, 1949 to the date of the payment and in consequence whereof the proceedings for eviction were dropped. The plaintiff further paid rent from his own pocket from September, 1950 to January, 1951 at the rate of Rs. 75/- per month. He further paid Rs. 200/4/-on account of electric charges from January, 1950 to January, 1951. The plaintiff thereafter brought the present suit on 20th February, 1951, claiming contribution from the defendants on the ground that they were benefited by these payments and he was entitled to recover all the amounts due from defendants 1 and 2. He accordingly claimed Rs. 738/12/- from defendant No. 1 and Rs. 293/2/- from defendant No. 2.
3. Both the courts below granted the plaintiff a decree against defendant No. 2 only. They disallowed his claim against defendant No. 1 on the ground that he was not liable to contribute. Hence this appeal by the plaintiff.
4. Learned counsel for the appellant contended that after having acquired the interest of defendant No. 2 in the partnership business, the plaintiff was interested in payment of the dues which the defendants were liable to pay and accordingly he was entitled in law to be reimbursed by both the defendants in proportion to their shares in the amount claimed. This argument is based on the provisions of Section 69 of the Indian Contract Act. Learned counsel for the respondents, on the other hand, contended that the plaintiff had no right to claim contribution from defendant No. 1 and relied upon a Bench decision of this Court in the case of Mst. Jagpati Kuer v. Sukhdeo Prasad, AIR 1942 Pat 204.
In this case it has been laid down by their Lordships that where one of the partners pays off a partnership debt, his only remedy against the other partners in respect of such debt is by way of suit for account or dissolution and not suit for contribution. Learned counsel for the appellant did not challenge the above proposition of law, but contended that the plaintiff is not a partner in the firm, and, therefore, there is no provision in law against his claim for contribution. His case is that as a transferee he had the right to run the partnership business by making these payments. It is true that assignment of the interest in a partnership does not ipso facto entitle the transferee to become a partner in the
firm. Me, as the transferee of a share of a partner, has got very limited rights. As laid down in Section 31 of the Indian Partnership Act, no person shall be introduced as a partner into a firm without the consent of all the existing partners. In this case it has been found by the courts below that the plaintiff was not admitted by both the defendants as a partner in the said firm. He was, therefore, not a partner in the firm and as a transferee he had very limited rights. All that he was entitled to was a right to claim a share of the profit to which the transferring partner would be otherwise entitled to. As provided in Section 29 of the Indian Partnership Act such a transferee had no right to interfere in the conduct of the business, or to require accounts, or to inspect the books of the firm. The transfer only entitles him to receive the share of the profits of the transferring partner. He cannot even question the accounts as settled between the partners of the partnership firm. He is to accept the account so settled; he cannot impeach the partnership account so long as the partnership lasts, except of coutse on the ground of fraud. It is only when a dissolution occurs that the right of an assignee arises to take action in the same way as the assignor would have done in demanding the account from the date of dissolution. This right howsoever limited no doubt creates some interest in his favour in the partnership business, but this fact alone is not sufficient to give him a right to claim contribution. The entire contention of the learned counsel for the appellant is based upon the ordinary law of contribution ignoring what the partners could claim legally. It is manifest that defendant No. 2 could not claim any contribution and it is illogical to contend that what defendant No. 2 could not do his assignee could in law do. If that were so, then easily any co-partner, after making payments of the dues of the partnership firm may make a transfer of his share and thereby recover the same from the other co-partners without bringing about a dissolution of the partnership business. This will amount to circumvention of the provisions of the Partnership Act. Therefore, this contention of the appellant is not tenable,
5. Then, there is another circumstance. The transferee of a share in the partnership business is not liable towards the creditors of the firm. The creditors could not have made any demand for the dues of the firm on the plaintiff. In law the assignor remains always liable notwithstanding the assignment of his interest. Further, under Section 19 of the Indian Partnership Act, the act of a partner, which is done to carry on, in the usual way, business of the firm, binds the firm. This authority is conferred upon a partner by law. But, as provided in Sub-section (2) of Section 19 of the Act, this implied authority does not empower him inter alia to admit any liability in a suit or proceeding against the firm. It has been found by the courts below that the proceedings for eviction had been taken only against defendant No. 2. Defendant No. 1 was not a party and before any final order was passed in that case the amount was repaid which naturally resulted in dropping of the proceedings. There is no evidence and no finding that the payment by the plaintiff was made with the consent of both defendants 1 and 2. In these circumstances, these payments, which amount to an indirect admission of the claim, will hardly bind defendant No. 2. Thus, there was no liability at all on the plaintiff to make any payment and he cannot be said to be interested in the payment of the said amount, and, therefore, such a payment cannot but be regarded as gratuitous. From this point of view also the plaintiff, in my opinion, is not entitled to claim contribution from defendant No. 1. There is thus no merit in this appeal and it is accordingly dismissed with costs.
Ramratna Singh, J.
6. I agree.