{"id":171833,"date":"2006-12-12T00:00:00","date_gmt":"2006-12-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/shreedhar-govind-kamerkar-vs-yesahwant-govind-kamerkar-and-anr-on-12-december-2006"},"modified":"2018-04-05T20:52:40","modified_gmt":"2018-04-05T15:22:40","slug":"shreedhar-govind-kamerkar-vs-yesahwant-govind-kamerkar-and-anr-on-12-december-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/shreedhar-govind-kamerkar-vs-yesahwant-govind-kamerkar-and-anr-on-12-december-2006","title":{"rendered":"Shreedhar Govind Kamerkar vs Yesahwant Govind Kamerkar And Anr on 12 December, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Shreedhar Govind Kamerkar vs Yesahwant Govind Kamerkar And Anr on 12 December, 2006<\/div>\n
Author: S.B. Sinha<\/div>\n
Bench: S.B. Sinha, Markandey Katju<\/div>\n
           CASE NO.:\nAppeal (civil)  5720 of 2006\n\nPETITIONER:\nShreedhar Govind Kamerkar\n\nRESPONDENT:\nYesahwant Govind Kamerkar and Anr\n\nDATE OF JUDGMENT: 12\/12\/2006\n\nBENCH:\nS.B. Sinha & Markandey Katju\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\n[Arising out of SLP (Civil) No.8368 of 2005]<\/p>\n
S.B. SINHA,  J :\n<\/p>\n
\tLeave granted.\n<\/p>\n
\tParties herein are brothers.  The dispute between them is tenancy right
\nin respect of  a premises known as ‘Navalkar Building’ situate at N.C.
\nKelkar Road, Dadar in the town of Mumbai.   Appellant herein allegedly
\nacquired the said tenancy right  in terms of a deed of assignment entered into
\nby and between him and one Saraswati Balkrishna Pawar and three others.
\nOne Krishna Tatoba Pawar alias Balkrishna Tatoba Pawar was the original
\ntenant of the said premises.  He was running a hair cutting saloon therein
\nunder the name and style of ‘Anant Hair Dressing Saloon’.  He died leaving
\nbehind him the assignors of the said  deed of assignment dated 18.01.1966.
\nThe business as also the tenanted premises was assigned for valuable
\nconsideration.  He was allegedly carrying on business therein.  Leave and
\nlicence agreement was executed by him in relation to the self-same premises
\nin favour of one Shri Walke on 01.02.1970.  The said Walke was running a
\nbusiness in the said premises under the name and style of ‘Deepak
\nProvisional Store’.  A dispute arose between the parties resulting in initiation
\nof a proceeding under Section 145 of the Code of Criminal Procedure.  The
\nproperties were attached.  The said Walke also filed a suit.  The said suit is
\nsaid to have been compromised.  Appellant herein is said to have obtained
\npossession of the said premises on 23.03.1978, whereafter he started a
\nbusiness under the name and style of ‘Shree Medico’.\n<\/p>\n
\tThe parties hereto i.e. the three brothers, entered into a partnership on
\n01.04.1971.  The same was dissolved on 31.03.1977, inter alia, on the
\npremise that the appellant had been claiming full ownership in relation to the
\nsaid tenanted premises as also the business in Shree Medico.  A suit was
\nfiled by Respondent No.1 in the City Civil Court, Mumbai, which was
\nregistered as S.C. Suit No.5903 of 1981 wherein, inter alia,  the following
\nprayers were made :\n<\/p>\n
(a)\tIt be declared that the Plaintiff and the Defendants
\nNos. 1 and 2 have 1\/3 shares in the suit business of
\nMedical and General Store carried on Navalkar
\nBuilding on the ground floor, N.C. Kelkar Road,
\nDadar, Bombay 400 028 as also the tenancy rights
\nin the presmises as also the premises on the ground
\nfloor of Navalkar Building, N.C. Kelkar Road,
\nDadar, Bombay-400 028.\n<\/p>\n
(b)\tIt may be declared that the partnership business of
\nMedical and General Stores carried on in Navalkar
\nBuilding on the ground floor, N.C. Kelkar Road,
\nDadar, Bombay-400 028, stood dissolved as from
\nthe date of the suit or from such other date as this
\nHon’ble Court may deem fit.\n<\/p>\n
(c)\tThe accounts of the partnership business of
\nMedical and General Stores be made up and the
\nPlaintiff be awarded the amount found due to his
\nshare at the foot of the account.”\n<\/p>\n
\tAlthough in the said suit allegedly no relief was claimed in respect of
\nthe business of the Deepak Provisional Store,  at the hearing,  the plaintiff
\nmade his claim in respect of  the business running under the name and style
\nof ‘Shree Medico’ and claimed interest in the said ‘Deepak Provisional
\nStore’.  The appellant in his written statement did not raise any question as
\nregards legality or otherwise of  the said tenancy right in the partnership in
\nterms of Section 15 of the Bombay Rents, Hotel and Lodging House Rates
\nControl Act, 1947 (for short, ‘the  Bombay Act’).\n<\/p>\n
\tIn the said suit, inter alia, the following issues were framed :\n<\/p>\n
“1.\tWhether the Plaintiff proves that the partnership
\n\tfirm of M\/s Shreedhar Govind Kamerkar was\/is
\n\tregistered under the Indian Partnership Act?\n<\/p>\n
 2.\tIs the answer to the above issue is in the
\naffirmative, whether the Plaintiff proves that the
\nbusiness known as Deepak Provision Centre and
\nthe shop premises on the Ground Floor, Navalkar
\nBuilding, N.C. Kelkar Road, Dadar, Bombay-400
\n028 ?\n<\/p>\n
3.\tIf the answer of the above issues in the affirmative,
\nwhether the Plaintiff proves that on 31st March,
\n1977 the said business of Deepak Provision Centre
\nwas in existence ?\n<\/p>\n
4.\tIf the answer to the above issues is in the
\naffirmative, whether the Plaintiff proves that the
\nsaid business of Deepak Provision Centre and the
\nsaid premises were excluded from the dissolution
\nof the said firm of M\/s Shreedhar Govind
\nKamerkar ?\n<\/p>\n
5.\tWhether the Plaintiff proves that the business of
\nM\/s Shree Medico carried on by the Defendant
\nNo.1 in the said premises is a partnership business
\nof the parties to the suit ?\n<\/p>\n
8.\tWhether the Plaintiff proves that he is entitled to
\n1\/3rd share in the said business of the 1st Defendant
\nand in the tenancy rights in the said premises ?\n<\/p>\n
9.\tWhether the Plaintiff proves that he is entitled to
\nthe dissolution and accounts of the said business of
\nthe 1st Defendant and the tenancy rights of the said
\npremises ?”\n<\/p>\n
\tIssue Nos. 2, 8 and 9 were answered  in the negative, whereas Issue
\nNos.3, 4 and 5 were held to be not surviving.  The learned Trial Judge, inter
\nalia, on the aforementioned findings dismissed the suit.  On an appeal
\npreferred by the respondents herein, a learned Single Judge of the High
\nCourt, however, allowed the appeal directing :\n<\/p>\n
“a)\tIt is declared that the plaintiff and defendant Nos.1
\n\tand 2 have 1\/3rd share each in the business of
\n\tDeepak General Stores carried on the ground floor
\n\tin Navalkar building at N.C. Kelkar Road, Dadar,
\n\tMumbai-400 028 and also equal tenancy rights in
\n\tthe premises where Deepak General Stores
\n\tbusiness was being carried out.\n<\/p>\n
b)\tIt is declared that partnership business of Deepak
\n\tGeneral Stores at the aforesaid premises stood
\n\tdissolved as from July 1981.\n<\/p>\n
c)\tThe accounts of the partnership business of
\n\tDeepak General Stores shall be made and the
\n\tplaintiff and the defendants will be entitled to
\n\tamount found due to their share at the foot of the
\n\taccount.\n<\/p>\n
d)\tPartnership premises where Deepak General Stores
\n\twas being run shall be partitioned by metes and
\n\tbounds and they will be entitled to possession of
\n\t1\/3rd share and will be placed in possession.\n<\/p>\n
e)\tThere will be an enquiry into the mesne profits
\n\tfrom the date of the suit till delivery of possession
\n\tin respect of Deepak General Stores and that of the
\n\tpremises.\n<\/p>\n
\tPlaintiff will be entitled to costs of this suit as well
\n\tas of the Appeal.”\n<\/p>\n
\tThe High Court in its judgment, inter alia, relied upon the admission
\nof the appellant herein that the royalty received in respect of the said
\ntenanted premises used to be deposited in the partnership account.\n<\/p>\n
\tThe deed of dissolution dated 31.03.1977 clearly postulated that the
\nsaid tenancy was a part of the assets of the partnership (Ex.P-3) and
\nagreement dated 01.02.1977 (Ex. P-4), whereby and whereunder the parties
\nthereto agreed that the partnership should be dissolved.\n<\/p>\n
\tMr. U.U. Lalit, the learned Senior Counsel appearing on behalf of the
\nappellant, would inter alia submit :\n<\/p>\n
1)\tHaving regard to the stand taken by the learned counsel for the
\n\trespondents before the City Civil Court as also before the High Court
\n\tto the effect that no share was being claimed in respect of the business
\n\tof ‘Shree Medico’, and the said claim having been kept confined only
\n\tto ‘Deepak Provisional Store’, the High Court committed a manifest
\n\terror in  passing the impugned judgment.\n<\/p>\n
2) \tHaving regard to the finding of fact arrived at by the City Civil Court
\n\tthat the tenancy right in respect of the premises in question had been
\n\tacquired by the appellant in his individual capacity and he having
\n\tobtained  possession thereof from the licensee only in the year \t1978,
\n\tprior whereto the partnership was dissolved, the question of the \tsaid
\n\tproperty being an asset of the partnership did not and could not \tarise.\n<\/p>\n
3)\tThe plaintiff-respondent, in his deposition having clearly admitted
\n\tthat he had \tno concern with the said tenanted premises, the
\n\timpugned judgment cannot be sustained.\n<\/p>\n
4)\tIn any event having regard to the provisions contained in Section 15
\n\tof the Bombay Act, the tenancy right could not have been assigned.\n<\/p>\n
5)\tPartnership having been dissolved on 31.03.1977 and  the suit
\n\thaving been filed on 16.10. 1981, the same was clearly barred by
\n\tlimitation.\n<\/p>\n
\tMr. Shekhar Napadhe, the learned Senior Counsel appearing on
\nbehalf of the respondents, on the other hand, would contend :\n<\/p>\n
1.\tIt is not a fit case where this Court should exercise its discretionary
\njurisdiction under Article 136 of the Constitution of India.\n<\/p>\n
2.\tHaving regard to the provisions contained in Section 17 of the
\nPartnership Act, the suit was not barred by limitation.\n<\/p>\n
3.\tNo question as regards applicability of Section 15 of the Bombay Act
\nhaving been raised in the written statement, nor any issue having been
\nframed in that behalf, the same should not be permitted to be raised
\nfor the first time before this Court.\n<\/p>\n
\tThe deed of partnership admittedly has not been produced.  The
\nparties, however, had entered into a formal deed of partnership. Non
\nproduction of the said document has, however, not been taken serious note
\nof by the High Court.  What was produced was extract from the certificate of
\nregistration issued by the Registrar of Firms.\n<\/p>\n
\tIn absence of the deed of partnership, it might not be  possible for us
\nto arrive at a finding that the partnership was originally brought in the stock
\nof the firm.\n<\/p>\n
\tWe will, therefore, have to proceed to determine the said question on
\nthe basis of the  materials which are available on records.\n<\/p>\n
\tWe may at the outset notice the admission of the appellant in his
\ndeposition before the learned Civil Court, which is in the following terms :\n<\/p>\n
“Q.\tYou have stated that the business of M\/s Shridhar
\n\tGovind Kamerkar was carried on at Navalkar
\n\tBldg.  So what was this premises at Navalkar
\n\tBldg. used ?\n<\/p>\n
Ans.\tThe said premises were given for running the
\n\tbusiness to one Shri Walke and the royalty was
\n\treceived therefrom was credited to the accounts of
\n\tM\/s Shridhar Govind Kamerkar a partnership firm.\n<\/p>\n
Q.\tI put it to you that prior to giving the premises in
\n\tNavalkar Bldg. to Shri Walke Deepak Provision
\n\tCentre was being run therefrom.  What have you to
\n\tsay?\n<\/p>\n
Ans.\tI started the said business of M\/s Deepak Provision
\n\tCentre in the said premises.”\n<\/p>\n
\tIndisputably, a deed of dissolution  was entered into by and between
\nthe parties.  The said instrument was executed on 31.03.1977, the  relevant
\nportions whereof are as under :\n<\/p>\n
“WHEREAS   the parties above named were partners in a
\npartnership, a will for carrying on the business of Bidis,
\nTobacco, Cigarette and other sundry articles under the
\nname and style of M\/S SHREEDHAR GOVIND
\nKAMERKAR, at 203\/205, Haji Habib Chawl, N.M.
\nJoshi Marg, Bombay 13 and the tobacco shop at
\nHarharwala Building, Delisle Road, (N.M. Joshi Marg),
\nBombay and  Deepak Provision Centre, Navalkar Bldg.
\nN.C. Kelkar Road, Dadar, Bombay-28, and a tobacco
\ngodown at Rangari Chawl, Maidan, Patra Shed, N.M.
\nJoshi Marg, Bombay 13, under the terms and the
\nconditions of a deed of partnership duly executed on the
\nday of January, 1971, Between the Party of First Part,
\nSecond  Part & Third Part.”\n<\/p>\n
\t\t\txxx\t\t\txxx\t\txxx\n<\/p>\n
1.\tThe parties hereby agreed that the partnership
\nbetween them to carry on the said business in the name
\nand style of Messers SHREEDHAR, GOVIND
\nKAMERKAR and other sundry articles at 203\/205 Haji
\nBabib Chawl, N.M. Joshi Marg, Bombay 13 and a
\ntobacco shop at Harharwala Building, N.M. Joshi Marg,
\nknown as Ganesh Tea House and Deepak Provision
\nCentre, Navalkar Building, N.C. Kelkar Road, Dadar,
\nBombay 28 and tobacco godown at Rangari Chawl
\nMaidan, Patra Shed, N.M. Joshi Marg, Bombay 13 and
\nMor Brand Chuna (Lime) and the parties had agreed the
\nterms under which the said partnership was dissolved on
\nthe further terms and conditions.\n<\/p>\n
\t\t\txxx\t\t\txxx\t\t\txxx<\/p>\n
3. In respect of Bidi shop at Harharwala Bldg., N.M.
\nJoshi Marg, Bombay-13, known as Hotel Ganesh Tea
\nHouse which is given on royalty shall remain with the
\nparty of the Third Part Shri P.G. Kamerkar and he shall
\nbe responsible to repay the deposit amount received.\n<\/p>\n
4. In respect of Deepak Provision Centre at N.C. Kelkar
\nRoad, Dadar, Bombay 28 the case is pending in court of
\nthe said shop and after the court decision the decision
\nwill be taken with the mutual consent of all the partners.
\nAnd secondly in respect of Mor Brand Chuna (Lime) the
\nmatter is under dispute with other parties and that matter
\nwill be decided with the mutual consent of these
\npartners.”\n<\/p>\n
\tAlthough  the agreement dated 01.02.1977 is a disputed document,
\nbut having regard to the fact that the High Court had placed reliance
\nthereupon, we may also notice clause 8 thereof which is in the following
\nterms :\n<\/p>\n
8)\tThe closed shop viz. Deepak Provisional Stores
\nwith the room situated at Nawalkar Building, N.C.
\nKelkar Road, Dadar, Mumbai-400028 is of the
\nownership of all the three partners and all the three
\nshall bear the expenditure to be incurred therefor.
\nFurther, all the three shall equally bear the entire
\nexpenditure viz. its rent etc.”\n<\/p>\n
We may also notice that although a claim was made by the plaintiff
\nthat the tenancy had been acquired by the partnership from the beginning,
\nfrom the deposition of the plaintiff-respondent no.1, it appears that the
\nfollowing facts have been elicited : (i)  Deepak Provisional Store (Centre)
\nwas not run by the partners (page 61);  (ii) All licences of Shree Medico
\nwere standing in the name of defendant no.1.  He  had  never signed on any
\ndocument pertaining to Shree Medico (page 62);  (iii)  He  had no source of
\nincome in 1966 (page 71); (iv) There is no documentary evidence to show
\nthat the said premises were acquired out of the funds of partnership firm
\n(page 72);  (v) No documentary evidence exists to show that the business of
\npartnership was carried out at the same premises (page 82); (vi) The
\nproperty was under attachment from 1969 to 1978 (page 82); (vii) The
\npossession of the property was obtained in 1978 (page 84); and (viii)
\nPlaintiff claimed a share in the business which was running under the name
\nand style of ‘Shree Medico’ and not of ‘Deepak Provisional Store’ (page\n<\/p>\n
94).\n<\/p>\n
However despite a claim having been made by the plaintiff in respect
\nof ‘Shree Medico’, it appears, a statement was made at the Bar by the
\nlearned counsel for the plaintiff on 17.03.1994, which had been recorded by
\nthe learned Trial Judge  as under :\n<\/p>\n
“(1)\tThat the Plaintiff is not claiming any right in the
\n\tbusiness of \t‘Shree Medico’.\n<\/p>\n
(2)\tThe Plaintiff is claiming the right only in respect
\n\tof the business of ‘Deepak Provision Centre”.\n<\/p>\n
(3)\tThe tenancy rights in respect of the shop premises
\n\tbeing Shop No.1.”\n<\/p>\n
The High Court also in para 6 of its judgment noticed the said
\nstatements in the following terms  :\n<\/p>\n
“Counsel for the appellants however fairly conceded
\nthat the plaintiffs-appellants  are not making any claim in
\nrespect of Shree Medico.”\n<\/p>\n
\tThe learned Senior Counsel appearing on behalf of the appellant may,
\nthus, be right in his submission that keeping in view the pleadings of the
\nparties as also the statements of the plaintiff in his deposition before the
\nlearned City Civil Court, the respondent could not lay any claim in respect
\nof any business which was being carried in the premises in question under
\nthe name and style of ‘Deepak Provisional Store, but the same, in our
\nopinion,  may not be decisive to arrive at a conclusion that the right in
\nrespect of the tenanted premises in question never formed the part of the
\nassets of the partnership.\n<\/p>\n
\tWe have noticed hereinbefore that either there was no deed of
\npartnership, or in any event the same had not been produced.  What,
\ntherefore, formed ‘the assets’ of the partnership must be gathered from the
\nadmission of the parties as also the other materials available on records.\n<\/p>\n
\tWhat forms the property of the firm is stated in Section 14 of the
\nIndian Partnership Act, 1932  (for short, ‘the  Act’).  It reads as under :\n<\/p>\n
“14.   The property of the firm.-  Subject to contract
\nbetween the partners, the property of the firm includes all
\nproperty and rights and interests in property originally
\nbrought into the stock of the firm, or acquired, by
\npurchase or otherwise, by or for the firm, or for the
\npurposes and in the course of business of the firm, and
\nincludes also the goodwill of the business.\n<\/p>\n
\tUnless the contrary intention appears, property and
\nrights and interests in property acquired with money
\nbelonging to the firm are deemed to have been required
\nfor the firm.”\n<\/p>\n
\tWith a view to determine the said question, we  may notice some
\nother provisions of the Act as well.\n<\/p>\n
“17. Rights and duties of partners. – Subject to contract
\nbetween the partners –\n<\/p>\n
after a change in the firm<\/p>\n
(a) – where a change occurs in the constitution of a firm,
\nthe mutual rights and duties of the partners in the
\nreconstituted firm remain the same as they were
\nimmediately before the change, as far as may be;\n<\/p>\n
after the expiry of the term of the firm, and<\/p>\n
(b) – where a firm constituted for a fixed term continues
\nto carry on business after the expiry of that term, the
\nmutual rights and duties of the partners remain the same
\nas they were before the expiry, so far as they may be
\nconsistent with the incidents of partners at will; and<\/p>\n
where additional undertakings are carried out,<\/p>\n
(c) where a firm constituted to carry out one or more
\nadventures or undertakings carries out other adventures
\nor undertakings, the mutual rights and duties of the
\npartners in respect of the other adventures or
\nundertakings  are the same as those in respect of the
\noriginal adventures or undertakings.”\n<\/p>\n
“50.  Personal profits earned after dissolution.-
\nSubject to contract between the partners, the provisions
\nof clause (a) of section 16 shall apply to transactions by
\nany surviving partner or by the representatives of a
\ndeceased partner, undertaken after the firm is dissolved
\non account of the death of a partner and before its affairs
\nhave been completely wound up :\n<\/p>\n
\tProvided that where any partner or his
\nrepresentative has bought the goodwill of the firm,
\nnothing in this section shall affect his right to use the firm
\nname.”\n<\/p>\n
 “53. Right to restrain from use of firm name or firm
\nproperty.- After a firm is dissolved, every partner or his
\nrepresentative may, in the absence of a contract between
\nthe partners to the contrary, restrain any other partner or
\nhis representative from carrying on a similar business in
\nthe firm name or from using any of the property of the
\nfirm for his own benefit, until the affairs of the firm have
\nbeen completely wound up :\n<\/p>\n
 \tProvided that where any partner or his
\nrepresentative has bought the goodwill of the firm,
\nnothing in this section shall affect his right to use the firm
\nname.”\n<\/p>\n
\tThe parties have entered into the deed of dissolution voluntarily.  The
\nappellant herein is not an illiterate.  He has been carrying on business.  He
\nhad acquired tenancy right on his own showing.  He had acquired the
\ntenancy right in his own name.  He had also been fighting litigation with the
\nsaid Walke for a long time.\n<\/p>\n
\tWe have also noticed hereinbefore clause (8) of the agreement dated
\n01.02.1977.  From the preamble of the deed of dissolution dated 31.03.1977,
\nit is evident that the partnership had been carrying on business inter alia in
\nBidis, Tobacco, Cigarettes etc. under the name and style of ‘M\/s Shreedhar
\nGovind Kamerkar’ situated Haji Habib Chawl, N.M. Joshi Marg, Bombay
\nand a tobacco shop at Harharwala Building, Delisle Road and a tobacco
\ngodown at Rangari Chawl, Maidan, Patra Shed, N.M. Joshi Marg, Bombay
\nbut also ‘Deepak Provisional Store’, Navalkar Building.\n<\/p>\n
\tClause (1) of the said deed of dissolution also refers to ‘Deepak
\nProvisional Store’.  In clause (3) of the said instrument, royalty in relation to
\na hotel, namely, Hotel Ganesh Tea House was assigned to P.G. Kamerkar,
\nRespondent No.2 herein.  In relation to the ‘Deepak Provisional Store’, it
\nwas categorically stated that the matter was pending in the court.  Clause (4)
\nof the said deed of dissolution suggests that the parties intentionally left out
\ndivision of their properties in respect of ‘Deepak Provisional Store’ as also
\n‘Mor Brand Chuna (Lime)’, as litigations were pending.\n<\/p>\n
\tThe very fact that the parties had referred to the business carried out
\nunder the name and style of ‘Deepak Provisional Centre’ at N.C. Kelkar
\nRoad, Dadar, Mumbai, which was not and could not be the subject-matter of
\nthe partnership as the same was entered into in the year 1971 and dissolved
\nin 1977, the admission of the appellant herein that the royalty received from
\nthe said tenanted premises was being deposited in the partnership account
\nassumes significance.  If  the said property was the exclusive property of the
\nappellant, and he had been dealing therewith as the sole owner thereof, the
\nquestion of any reference being made thereto in the deed of dissolution
\nwould not have arisen.  It may be true that in absence of the original deed of
\npartnership dated 01.04.1971 having been brought on records, it is difficult
\nfor the court to arrive at a finding that the same had been originally brought
\nin the stock of the firm.  There is also no direct evidence that the appellant
\nhad brought the same as his investment  in the partnership at the initial stage
\nthereof but it is evident that the same was done  at a latter point of time. An
\ninference in relation thereto must be drawn for the other materials on
\nrecords. The said agreement dated 01.04.1971 having been in dispute, we
\nmay not be decisive.  In a case of this nature, the conduct of the parties
\nassumes significance.  Admission, as is well-known, is the best proof of a
\nclaim.  Section 58 of the Indian Evidence Act states that the facts admitted
\nneed not be proved.  The very fact that the royalty received in respect of the
\nsaid premises was being deposited in the partnership account is a clear
\npointer to show that the same was the property of the partnership.\n<\/p>\n
\tWe may at this juncture also consider the submission of Mr. Lalit, in
\nregard to the applicability of the provisions of Section 15 of the Bombay
\nAct, which reads as under :\n<\/p>\n
\t“In absence of contract to the contrary, tenant not
\nto sub-let or transfer or to give on licence.\n<\/p>\n
\t(1) Notwithstanding anything contained in any law
\nbut subject to any contract to the contrary, it shall not be
\nlawful after the coming into operation of this Act for any
\ntenant to sub-let the whole or any part of the premises let
\nto him or to assign or transfer in any other manner his
\ninterest therein and after the date of commencement of
\nthe Bombay Rents, Hotel and Lodging House Rates
\nControl (Amendment) Act, 1973, for any tenant to give
\non licence the whole or part of such premises.\n<\/p>\n
\tProvided that the State Government may by
\nnotification in the Official Gazette, permit in any area the
\ntransfer of interest in premises held under such leases or
\nclass of leases or the giving on licence may premises or
\nclass of premises and no such extent as may be specified
\nin the notification.\n<\/p>\n
\tIt is not in dispute that the State of Maharashtra had issued a
\nnotification in terms of the proviso appended to Section 15 of the Bombay
\nAct, in terms whereof assignment of a business together with tenancy right
\nwas permissible.  Furthermore,  Section 15 does not contain an absolute bar.
\nIt is subject to a contract to the contrary between the landlord and the tenant.
\nA landlord may also in a given situation by reason of acceptance of rent or
\notherwise from the sub-tenant or assignee may acknowledge the sub-tenancy
\nor  assignment and thus accept him to be his tenant.  It is not a case where a
\nlandlord has brought any suit for eviction of the tenant on the ground that he
\nhad wrongfully assigned his right, title and interest in the tenanted premises
\nin contravention of Section 15 of the Bombay Act and, thus, liable for
\neviction.  We are concerned with a partnership.  Assisgnment of tenancy
\nhaving regard to the statutory provision would not attract Section 23 of the
\nIndian Contract Act.  Even otherwise in a case of  this nature, the said
\nquestion does not arise.\n<\/p>\n
\tIn any event, a transaction may be void so far as landlord is
\nconcerned.  Such a void transaction may not have any effect on the
\napplication of the property towards partnership.   To some extent, the point
\nappears to have been covered by this Court in Arm Group Enterprises Ltd. v.
\nWaldorf Restaurant and Others<\/a> [(2003) 6 SCC 423], wherein this Court
\nopined :\n<\/p>\n
“Mere carrying on by the tenant a partnership business
\nas partner in the leased premises, no doubt, does not per
\nse amount to sub-letting unless it is shown that he
\nwithdrew his control of the leased premises and parted
\nwith the possession of the property and thereby
\nsurrendered his individual tenancy rights in favour of the
\npartnership firm”\n<\/p>\n
\tWe may, in this connection, usefully notice that in ‘Lindley &  Banks
\non Partnership’, 18th Edn., it is stated :\n<\/p>\n
“8-13\tLord Lindley observed that “a partnership may be
\n\tillegal upon the general ground that it is formed for
\n\ta purpose forbidden by the current notions of
\n\tmorality, religion, or public policy”.  On that
\n\tground, he considered that a partnership formed
\n\tfor the purpose of deriving profit from the sale of
\n\tobscene or blasphemous prints or books, or for the
\n\tprocurement of marriages or of public offices of
\n\ttrust, would be “undoubtedly illegal.”\n<\/p>\n
8-14\tIt has already been seen that a partnership between
\n\ta resident British citizen or a resident alien and an
\n\talien enemy is illegal and incapable of creation or
\n\tcontinuation; on the same basis, a partnership
\n\tformed in order to trade with an enemy nation
\n\twould clearly be illegal.  However, since a neutral
\n\tmay lawfully trade with one of the belligerent
\n\tnations, a partnership formed for that purpose
\n\twould be unobjectionable.”\n<\/p>\n
8-16\tEqually, although a statute may appear to prohibit
\n\tcertain activities and impose a penalty for failure
\n\tto observe its provisions, it does not follow that
\n\tconduct which would attract the penalty is
\n\tnecessarily illegal.  If the statute can genuine be
\n\tclassed as prohibitory, as will be the case if the
\n\tpenalty is imposed for the protection of the public,
\n\tthen such conduct will be illegal  Per contra if, on
\n\ta true construction of the statute, the penalty
\n\tmerely represents, as Lord Lindley put it, “the
\n\tprice of a licence for doing that the statute
\n\tapparently forbids”.  Thus, in Brown v. Duncan, it
\n\twas held that a partnership of distillers was not
\n\tillegal, even though one partner carried on
\n\tbusiness as a retail dealer in spirits within two
\n\tmiles of the distillery (contrary to the Duties on
\n\tSprits Act 1823, ss. 132, 133) and was not
\n\tregistered as a member of the firm in the excise
\n\tbooks (as required by the Excise Licences Act
\n\t1825, s. 7).  Lord Lindley did, however, doubt
\n\twhether the statutes in question were properly
\n\tconstrued by the court.\n<\/p>\n
\t\tThe following alphabetical list of businesses
\n\tand professions contains the most important
\n\texample of partnership whose legality is or may be
\n\taffected by statute.”\n<\/p>\n
8-31\tBy virtue of the Financial Services and Markets
\n\tAct 2000, no person may carry on, or purport to
\n\tcarry on, a regulated activity in the United
\n\tKingdom unless he is duly authorized so to do or is
\n\texempt from the provisions of the Act in relation
\n\tto that activity.  Contravention of this general
\n\tprohibition constitutes an offence and any
\n\tagreement made by a person whilst carrying on a
\n\tregulated activity in breach of the prohibition will
\n\tbe unenforceable against the other party.\n<\/p>\n
10.44\tWhat is of greater importance is to ensure that the
\n\toccupation rights of the firm are clearly
\n\testablished where the premises are to remain in the
\n\tsole ownership of one or more of the partners.\n<\/p>\n
\t\tIf a lease in favour of the firm is to be
\n\tgranted, \tthen it must be in writing.  The
\n\ttermination of such a lease may, however, not be
\n\twithout difficulty and its existence may
\n\tconceivably have adverse inheritance tax
\n\tconsequences.\n<\/p>\n
\t\tIf the agreement omits any reference to such
\n\toccupation rights then, in the absence of any other
\n\tevidence, it will not be assumed, merely because
\n\tthe premises are indispensable to the partnership
\n\tbusiness, that they belong to the firm or are subject
\n\tto the firm’s right to (i) a lease or tenancy or,
\n\twhere that is still relevant, (ii) an exclusive licence
\n\tto occupy within the meaning of the Agricultural
\n\tHoldings Act 1986.  It will rather be inferred that
\n\teach individual partner who is not beneficially
\n\tinterested in the premises has been granted a non-
\n\texclusive licence to enter them in order to carry on
\n\tthe partnership business.  Such licence would seem
\n\tto be contractual in nature and might, as a matter
\n\tof implication, not be terminable during the
\n\tcurrency of the partnership, particularly if it can be
\n\tshown that the partnership business can only be
\n\tcarried on from those premises and that the
\n\ttermination of the licences would strike at the
\n\tsubstratum of the partnership  agreement.  In such
\n\tcircumstances the only effective way of
\n\tdetermining the licence would be to dissolve the
\n\tpartnership but, even then, they would prima facie
\n\tcontinue until the winding up is complete.”\n<\/p>\n
\tWe are not oblivious that all properties of the owner may not be
\npartnership property and each case,  thus,  must be determined on the basis
\nof fact materials on record.\n<\/p>\n
\tIn  Dwijendra Nath Mullick and Another v. Rabindra Nath Chatterjee
\nand Others [AIR 1987 Cal 289], it is stated :
\n“18. It is for the partners to determine by agreement
\namongst themselves what shall be the property of the
\nfirm and the quantum of their beneficial interests therein
\ninter se and what shall be the separate property of one or
\nmore of them. If there is no express agreement, then the
\nsource from which the property was obtained, the
\npurpose for which it was acquired, and the mode in
\nwhich it has been dealt with, are to be considered to
\nascertain such intention.”\n<\/p>\n
\tIn Jayalakshmi v. Shanmugham and Others [AIR 1988 Ker 128], it is
\nstated :\n<\/p>\n
“It is not necessary that every partnership for the
\npurpose of its business should own and utilize its own
\npartnership property.  Therefore mere user of a shop for
\nthe business will not make the shop or the tenancy right
\nin it a partnership asset.  Something more is required.  It
\nwas so held by the Supreme Court in Arjun Kanoji
\nTankar v. Santaram Kanoji Tanker (1969) 3 SCC 555
\nalso.”\n<\/p>\n
\tWe, however, in this case are of the opinion that as the usufruct of his
\nlease hold was to be deposited in the partnership account, the same  formed
\nthe part of the assets of the partnership.\n<\/p>\n
\tThe question  as to whether the suit was barred by limitation or not
\nalso must be judged from the aforementioned context.  The cause of action
\nfor the suit was said to have been arisen, as stated by the plaintiff in his
\nplaint in the following terms :\n<\/p>\n
“The plaintiff says that the cause of action arose at the
\nend of July, 1981 when the Defendant No.1 refused to
\nrender accounts and started claiming the partnership
\nbusiness and the partnership premises as his own.”\n<\/p>\n
\tThe question which would, therefore, arise is as to whether running of
\n‘Shree Medico’ without complying with clause 4 of the deed of dissolution
\nwould give rise to a continuous cause of action.  Mere execution of deed of
\ndissolution did not discharge the parties thereto from their rights and
\nliabilities.  The rights and liabilities of the partners in respect of the
\npartnership property  would be discharged only when the firm is finally
\nwound up and the properties of the firm are distributed.\n<\/p>\n
\tSections 50 and 53 of the Act indicate to the said effect.  The partner
\nof a dissolved firm can not only exercise his right under Section 50, he may
\nalso restrain the use of the firm’s name and firm’s property in terms of
\nSection 53 of the Partnership Act.  Section 37 of the Partnership Act
\ndetermines the rights of the outgoing partner in certain cases to avoid shares
\nto subsequent profits.  If the tenancy right was being subjected to any profit
\nby one of the partners, the cause of action arose.  The cause of action for the
\nsuit, therefore, did not perish with the execution of the deed of dissolution on
\n31.03.1977.\n<\/p>\n
\tFor the reasons aforementioned, there is no merit in this appeal.  It is
\ndismissed accordingly.  The parties shall pay and bear their own costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Shreedhar Govind Kamerkar vs Yesahwant Govind Kamerkar And Anr on 12 December, 2006 Author: S.B. Sinha Bench: S.B. Sinha, Markandey Katju CASE NO.: Appeal (civil) 5720 of 2006 PETITIONER: Shreedhar Govind Kamerkar RESPONDENT: Yesahwant Govind Kamerkar and Anr DATE OF JUDGMENT: 12\/12\/2006 BENCH: S.B. Sinha & Markandey Katju JUDGMENT: J U […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-171833","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nShreedhar Govind Kamerkar vs Yesahwant Govind Kamerkar And Anr on 12 December, 2006 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/shreedhar-govind-kamerkar-vs-yesahwant-govind-kamerkar-and-anr-on-12-december-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shreedhar Govind Kamerkar vs Yesahwant Govind Kamerkar And Anr on 12 December, 2006 - 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