JUDGMENT
A.M. Bhattacharjee, J.
1. The
predecessor-in-interest of the defendants 1, 2 and 5 was the holder of a stall in the Hogg Market which is a Municipal market belonging to the Corporation of Calcutta and he used to run his shop therein. The plaintiffs case is that being unable to run his business, the said predecessor of defendants 1, 2 and 5 (hereinafter ‘defendants’ for short) ‘decided to transfer the shop to the plaintiff for valuable consideration”. But as the relevant Rules of the Corporation did not allow such transfer, the plaintiff was sought to be taken in as a partner by the said predecessor. The plaintiff, however, asserts with utmost emphasis in his plaint and also in his deposition in Court that though apparently the transaction was given the shape and the colour of a partnership and a Deed of Partnership was also executed, in reality the transaction was an out and out transfer and “was intended for transferring the licence and the business. In the plaint the plaintiff has referred to the terms of the Deed of Partnership in great details asserting repeatedly that the transaction in reality amounted to a transfer under the garb of a partnership and has gone to such a length as to state that “the Partnership Deed was created only to hoodwink the rule debarring transfer.”
2. The case of the defendants, however, is that the transaction entered into by their predecessor with the plaintiff was a partnership pure and simple and that the partnership has, on the death of the predecessor, automatically come to an end
by operation of law and they have accordingly approached the Corporation so that the stall and the business may exclusively be restored to them. Hence this suit by the plaintiff for a declaration that “the business and possession of the shop” stood “duly transferred in favour of the plaintiff, “that the plaintiff is the rightful occupier of the suit shop room” and that “the plaintiff is entitled to have his name mutated alone as a sole occupier, in the alternative, as joint occupiers with the defendants 1, 2 and 5 in the records of the Corporation of Calcutta” and for other incidental and consequential reliefs.
We are afraid that if the purpose of the plaintiff was and is, as stated by him in para 6 of the plaint, “to hoodwink the rules debarring transfer”, he has chosen the most inappropriate place in coming to the Court which exists to uphold the laws and the rules and not to help a person to hoodwink or circumvent them. The learned trial Judge has dismissed the suit and for the reasons to be indicated hereunder, which are, however, different from those adopted by the learned Judge, we have no doubt that he was perfectly right in throwing the suit out.
3. As already noted, the disputed stall is in the Municipal Market belonging to the Corporation of Calcutta. Under Section 449(1), Calcutta Municipal Act, 1951, which contained the relevant law at the material time, “no person shall, without a licence from the Commissioner sell or expose for sale any animal, article or thing whatsoever in any municipal market”. Now if a person having a licence for a stall in a Municipal Market transfers the stall and/or the business carried on therein, and the transferee proceeds to carry on business in such stall, the transferee would then be doing so “without a licence” in his favour in that behalf within the meaning of Section 449(1), Calcutta Municipal Act, 1951 and the licence in name of his transferor cannot in any way help him to come out of the mischief of Section 449(1) prohibiting business in a Municipal stall except by a licenced stall holder. Such a transfer, therefore, enabling the transferee to carry on business without a licence in a Municipal stall would have for its object something which is forbidden by
Section 449(1) and the transaction would also be such as would defeat the provisions of Section 449(1). The transaction would, therefore, squarely come within the mischief of Section 23, Contract Act, and would be void thereunder. The plaintiff in his plaint and also in his deposition has made it expressly clear that he proceeded to purchase the shop from the predecessor of the defendants even though he found on enquiry that he would not be able to get the licence for the stall transferred to him. That makes it crystal clear that the whole object of the plaintiff was to carry on business in that Municipal stall under the cover of the licence of his transferor and thus to carry on business “without a licence” in his favour in clear violation of Section 449(1), Calcutta Municipal Act. The object thus being, as already noted, something which was forbidden by law and the transaction being of a nature which if permitted would defeat the provisions of law, no Court can assist the plaintiff in achieving this object and lend any countenance to any such transaction.
4. As already noted, the case of the plaintiff is that as the intended transfer of the stall would not have been permissible under the law, the transaction, though intended to be a sale, was shaped as and was given the colour of a partnership. As also already noted, the case of the defendants is that the transaction was intended to be and was also in effect a partnership pure and simple. The terms of the Deed of Partnership, Ext. E, make it abundantly clear that the plaintiff was sought to be admitted not as a mere financing partner only to share the profits of the business, but was also to carry on the business himself. The Deed of Partnership, Ext. E, would show that the plaintiff was “to regularly attend the business”, “to take steps to stop anything which will undermine or prove harmful to the business”, “to look after the outgoing of the said business and meet all establishment charges as well as Income-tax and Sales Tax demands”, “to be in charge of the accounts”, “to meet all liabilities of the said business”, while the predecessor of the defendants was to receive only Rs. 300/- “by way of fixed profit in lie u of his share” but not to “bear any loss, if there be any, of more than Rs. 100/- in any one year.”
5. As already noted. Section 449(1), Calcutta Municipal Act, prohibits carrying on business in a Municipal stall without a licence. Now if a licencee of a stall admits a partner and the arrangement is such that the unlicenced partner by himself or through the licenced partner or otherwise carries on business in that stall, then the unlicenced partner would be carrying on business in a Municipal stall “without a licence” within the meaning of Section 449(1), Calcutta Municipal Act. Such a partnership would also, therefore, have as its object something forbidden by Section 449(1), Calcutta Municipal Act, and would be of a nature which, if permitted, would defeat the provisions of that Section, and would, therefore, be void under Section 23, Contract Act.
6. Our view would find full support from the Full Bench decision of the Madras High Court in Velu Padayachi v. Sivasooriam, . In “that case, Section 15, Madras Abkari Act, prohibited vending of arrack without a licence and it was held (at p. 447) that in view of such prohibition the purpose of Section 15 would be defeated if under the licence granted thereunder to one person to vend arrack, another person, whom he had admitted as a partner, could also vend arrack without any licence in his favour. It was pointed out (at p. 449) that the very purpose of Section 15 prohibiting vending of arrack without a licence would stand frustrated under such partnership as in that case the unlicenced partner by himself or through his agent, the licenced partner would nevertheless be selling arrack without licence. It is true that in a single Judge Decision of the Bombay High Court in Champsey Dossa v. Gordhandas, AIR 1917 Bom 250, a partnership entered into by a licencee under the Bombay Salt Act was held to be lawful even though the licencee was prohibited from transferring his privilege under the licence and this decision was approved by the Privy Council in Gordhandas v. Champsey Dossa. AIR 1921 PC 137. The Privy Council, however, simply affirmed the Bombay decision without any discussion at all on any question of fact or law. But as it would appear from the Bombay judgment, the licensee in that case admitted some members of his family only to share the profits
of the business, but those partners were given no part at all in the business of manufacture of salt and, therefore, the unlicensed partners were not doing anything for which a licence under the Bombay Act was necessary.
7. Licences granted to the predecessor of the defendants under Section 449(1), Calcutta Municipal Act, have been proved as Ext. 1 series and it has been urged that under the express terms and conditions of the licence transfer and partnership in respect of the stall are permissible with the sanction of the Corporation and that such sanction was obtained in this case. Condition 2 printed at the back of such licences runs thus : –
“That no stall holder shall sub-let the use of the stall or any portion thereof or transfer his title interests or any portion of interest in the business conducted in the stall or admit or discharge any partner in the business without special sanction being first obtained from the Corporation in that behalf.”
8. Now if Section 449(1) prohibits carrying on business in any Municipal Market without a licence, it may be difficult to understand as to how any condition in any such licence can permit any transfer or partnership in respect of such a stall or the business carried on therein which would enable a transferee or a partner of the licensee to carry on the business in such stall without a licence in his favour under Section 449(1). If Section 449(1) forbids, as it expressly does, carrying on business in a stall, unless the person carrying on the business has a licence under that Section, then it may be difficult to conceive how even a formal permission of the Corporation under Condition 2, sanctioning transfer or partnership in respect of a business carried on in a stall can authorise the transferee or the partner to carry on business in such stall, unless the transferee or the partner has also become a licensee or a co-licensee in respect of such stall. But this question need not detain us here as even assuming that a special sanction as envisaged in Condition 2 would enable a licensee to transfer his business or admit a partner therein, there is absolutely no satisfactory evidence on record to show that any such sanction was ever obtained from or accorded by the Corporation in respect of the transaction entered into by the
predecessor of the defendants with the plaintiff. To prove such special sanction the only piece of evidence to which our attention has been drawn is Ext. 2 which reads thus :-
“TO WHOM IT CONCERNS
Certified that the recorded occupier of Stall No. (old) 48 Section S. Hogg Market, as per the Regd. Deed’ of Partnership dated 11th August, 1967 has taken Sri Rasamoy Chowdhury as partner in the stall. The Deed of Partnership has been certified by our Ch. Law Officer on 7-12-67 to be in order. The daily rent of the Stall is Rs. 2/- and the sanctioned business of the stall is Suit-case, Steel trunks, Hand Bags and travelling requisites.
This Deptt. has got no objection if necessary licence is issued in the name of the partner Sri Rasamoy Chowdhury.
Sd/- Illegible 12-3-68
Offg. Head Clerk   Â
S.S. Hogg Market   Â
Corporation of Calcutta.” Â Â Â Â
9. Obviously this was not a sanction by the Corporation and it was at most a recommendation of the officiating Head Clerk that the proposed partnership might be allowed and that the licence might be issued in the name of the plaintiff, the proposed partner. If “necessary licence” as suggested
in Ext. 2, was issued in the name of the plaintiff there would have no question of any violation of Section 449(1), Calcutta Municipal Act. It is also obvious that if such sanction, as prayed for, was really granted by the Corporation, the licences in respect of the stall would have been issued in the name of the plaintiff either
alone or along with the predecessor of the defendants. But no such licence has been shown to have been issued under Section 449(1) and the licences exhibited in this case, Ext. 1 series, are in the name of the said predecessor alone. It is true that one licence in Ext. 1 series appears to be jointly in the names of the plaintiff and the said predecessor of the defendants. But that was a mere Trade Licence under Sections 218 and 219, Calcutta Municipal Act which are granted to all persons carrying on any trade, profession or calling anywhere within Corporation and has got
nothing to do with carrying on business in a Municipal stall and the licence specifically required therefor under 5.449(1), Calcutta Municipal Act. As already stated, all the licences under Section 449( 1) produced in this case show only the predecessor of the defendants
to be the sole licensee.
10. In our view, therefore, there was no merit in the suit, nor any merit in this appeal arising therefrom and the learned trial Judge was right in dismissing the suit. We accordingly dismiss the appeal with costs.
Sukumar Chakravarty, J.
11. I agree.