Harish Tandon JUDGMENT
Harish Tandon, J.
1. Thoroughly confused and unmerited points have been agitated in this revisional application, as the preliminary point requiring this Court to invest lot of its time to deal with them.
2. The first point of attack before this Court is that the suit as well as the revisional application is not maintainable at the instance of the plaintiffs/petitioners when one of the plaintiffs, who happened to be the partner of a partnership firm showed his intention to retire therefrom. To elaborate the said point, it is further submitted that the resultant effect of a person retiring from the partnership firm and a partner having died are one and the same.
3. The other point, which, according to the learned advocate, strike at the root is that one of the partners having joined a government service cannot continue with the business or in the other words engage himself into a direct or indirect avocation and, therefore, the suit is not maintainable.
4. Before proceeding to deal with the aforesaid points taken before this Court it would be necessary to adumbrate the facts germane from the pleadings of the parties.
5. The plaintiffs/petitioners filed a suit against the defendant Nos. 1 to 5 for declaration that they have a right to continue with the partnership business from the property described in schedule 'A' to the plaint and the defendants have no right, title and interest to interfere and/or obstruct in running the business.
6. Admittedly, the plaintiffs were granted off-shop licence to sale the foreign liquor from the previous premises and applied for shifting the licence to 'A' scheduled property. It is also not in dispute that the competent authority permitted the shifting of the licence, as a result whereof, the partnership business was allowed to be carried on from the other premises, i.e., 'A' scheduled property.
7. The defendant Nos. 1 to 5, who are represented before this Court and have taken those preliminary objections, are admittedly neither the owner of the 'A' scheduled property nor have any semblance of right, title and interest therein.
8. The objection to an application for injunction is taken that permitting to sale the foreign liquor from the 'A' scheduled property shall have a social impact and the authorities could not have permitted the shifting of the licence.
9. Various provisions of the Partnership Act have been placed before this Court to buttress the aforesaid submissions. According to the contesting defendants/opposite parties, the partnership connotes the involvement of more than one person and cannot be carried out by a single person. According to them, the partnership was created by two persons, one of whom have recently joined the service and signifies his intention to retire from the partnership leaving the other partners to remain, ipso facto, leads to dissolution of partnership. In support of the same, reliance is placed upon Section 41(b) of the Indian Partnership Act, 1932 (hereinafter referred to as 'said Act'), which, according to the contesting opposite parties, has relevancy in the present context. Further reliance is placed upon Section 42(c) of the said Act for the proposition that partnership is dissolved on certain contingencies, one of such contingency is the death of a partner, which can be applied in case of retiring partner as well and, therefore, a dissolved firm can neither sue or be sued before the Court of Law and placed reliance upon a judgment of the Hon'ble Supreme Court in case of Commissioner of Income Tax, M.P., Nagpur and Bhandara vs. Seth Govindram Sugar Mills, reported in MANU/SC/0170/1965 : AIR 1966 Supreme Court 24.
10. It is audaciously submitted by the contesting opposite parties that the licence granted by the competent authority was valid till 31st March, 2015 and in absence of any renewal, the plaintiffs cannot continue with the said business.
11. Taking an analogy from the observations made by the Co-ordinate Bench in case of Paul Enterprise vs. State of West Bengal, reported in MANU/WB/0214/2004 : (2004) 4 Calcutta High Court Notes 36, the learned advocate for the opposite party Nos. 1 to 5 would contain that if the licence is granted in contravention to the Rules, it cannot be sustained. Lastly, it is submitted that the Court of Appeal below has correctly set aside the order of injunction and this Court should not interfere therewith.
12. As indicated in opening sentence of this judgment, the submission of the contesting opposite parties is not legally sustainable and the interpretation sought to be given to the relevant provisions is opposed to the settled legal proposition of law.
13. The partnership is a creature of a contract. Two or more individuals can jointly carry on the business in compendium name and there cannot be any restriction in carrying on such business, as such rights are guaranteed under Article 19(1)(g) of the Constitution of India. Sub-clause (2) of Article 19 of the Constitution permits the State to make any law putting reasonable restrictions on exercise of such rights in the interest of the sovereignty and the integrity of India, the security of the State, friendly relations with the Foreign States, public order, decency or morality or in relation to Contempt of Court, defamation or incitement to an offence.
14. A partner has a right to retire or resign from the partnership business and such freedom cannot be curbed and/or curtailed. The partnership, which is an outcome of a contract, binds the contracting parties and such relationships are governed by the said Act. The incidents of the partnership and its genesis has been elaborately discussed by the Hon'ble Supreme Court in case of Seth Govindram Sugar Mills (supra) in the following words:
"There is a fallacy in this argument. Partnership under S. 4 of the Partnership Act, is the relation between the persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Section 5 of the said Act says that the relation of partnership arises from contract and not from status. The fundamental principle of partnership, therefore, is that the relation of partnership arises out of contract and (not) out of status. To accept the argument of the learned counsel is to negative the basic principle of law of partnership. Section 42 can be interpreted without doing violence either to the language used or to the said basic principle. Section 42(c) of the Partnership Act can appropriately be applied to a partnership where there are more than two partners. If one of them dies, the firm is dissolved; but if there is a contract to the contrary, the surviving partners will continue the firm. On the other hand, if one of the two partners of a firm dies, the firm automatically comes to an end and, thereafter there is no partnership for a third party to be introduced therein and, therefore, there is no scope for applying cl. (c) of S. 42 to such a situation. It may be that pursuant to the wishes or the directions of the deceased partner the surviving partner may enter into a new partnership with the heir of the deceased partner, but that would constitute a new partnership. In this light of S. 31 of the Partnership Act falls in line with S. 42 thereof. That section only recognizes the validity of a contract between the partners to introduce a third party without the consent of all the existing partners: it presupposes the subsistence of a partnership: it does not apply to a partnership of two partners which is dissolved by the death of one of them, for in that event there is no partnership at all for any new partner to be inducted into it without the consent of others."
15. The point involved in the above report as could be culled out from paragraph 6 thereof was whether on the death of one of the partners the members of its branch would automatically become the partners of the said firm. While answering the above question, it is held that if the partnership deed provides that the heirs of the deceased partner would be directly treated and/or included in a partnership, such partnership shall not be deemed to have been dissolved, but the position would have been different if the deed does not contain such clause.
16. It is fallacious to accept the submission of the contesting opposite parties that the resultant effect of a partner died in course of a partnership business and a partner intending to retire from the partnership business to be put on the same pedestal. Section 42(c) of the said Act starts with the expression "subject to the contract between the partners" and, therefore, the resultant of the contingencies indicated in the said section is subject to the intention of the parties gathered from the contract entered into for running the partnership business. If the contract is silent as to the effect of such contingencies, Section 42 would automatically operate in the field and shall be the guiding factors.
17. Though the right to retire from the partnership is also recognized in the said Act, but it is not an indefeasible right that the moment the partner shows his intention to retire, the partnership would automatically stands dissolved. Section 32 of the said Act can be noticed in this regard where the retirement can only be recognized either with the consent of all other partners or in accordance with an express agreement of partners or if the partnership is at will, by giving notice in writing to all other partners or intention to retire.
18. The intention is wisdom of the partner, which is not static or the moment the notice is given it cannot be withdrawn subsequently, but the decision and/or intention can subsequently be changed and/or withdrawn by consent of all partners. The conduct of the party is also relevant factor, which may throw light on the intention and the wisdom and/or the decision of the person intending to retire. The moment the so-called partner, who at one point of time intended to retire, joined with the other partner and the partner impliedly withdraws his intention to retire manifesting that he shall continue with the partnership firm.
19. Furthermore, a person who has no right, title and interest in a partnership or in respect of a property, wherefrom the partnership business is operating, cannot take such plea that once one of the partners showed his intention to retire, later on, he cannot wriggle out therefrom and such action would continue to bind the said person. The contesting opposite parties are nothing but the outsiders of the partnership business as well as the property being the subject matter of dispute. Law does not permit any person to take law in his own hand neither entitles him to have the blessings from the Court in the form of injunction.
20. The contingency of death and the contingencies of one of the partners showing intention to retire are different, distinct and by no stretch of imagination an analogy can be drawn to have the similar resultant effect. It is often said that there is nothing certain in life than the death, which cannot be equated with the decision of an individual to retire from the partnership firm.
21. This Court is not able to accept the submission of the contesting opposite parties in this regard.
22. The other preliminary objection that a partner cannot continue with the partnership business after having decided to join the government service because of the embargo under the service condition, the learned advocate for the contesting opposite parties appears to have inspired from the provision contained under the West Bengal Service Conduct Rules, which prohibits a government employee to be engaged in other business either directly or indirectly. It is one thing to say that a person cannot continue with the business at all, but it is different when the service condition prohibits continuance of such business and the consequence thereof is provided therein. If a person in active government service violates any of the service conditions he would expose himself to a penal consequences to be taken by the employer, but it does not automatically invalidate his participation in the business or make such business illegal and invalid. It is a matter between the employer and employee to take action against such employee permitting him to continue with the service or not, which is outside the scope of the instant suit.
23. Furthermore, the objection as to the action of the Excise Authorities are concerned, Section 92 of the Bengal Excise Act, 1909 creates a bar in institution of the suit before the Civil Court and the jurisdiction of the Civil Court has been expressly taken away against anything done or alleged to have been done by the government in pursuance of the said Act. If a person, who cannot sue, challenging such action, if arraigned as a defendant, cannot be permitted to take such defence as the Civil Court is denuded of power to decide such question because of the express bar created under Section 92 of the Bengal Excise Act, 1909.
24. Rule 14 of the West Bengal Excise (Selection of New Sites and Grant of License for Retail Sale of Liquor and Certain Other Intoxicants) Rules, 2003 postulates that the holder of a licence at the existing site shall have to make an application to the Collector for grant of the licence for the next period of settlement before expiry of the period of validity of the licence in prescribed form. Sub-rule (3) thereof makes it clear that pending the said application the licencee shall continue with the business till the factum of refusal is intimated and shall further be liable to pay all dues at the specified rate for the period for which the decision of the competent authority has been delayed.
25. In a rejoinder to the counter affidavit filed by the contesting opposite parties it is clearly averred that an application for renewal of the licence has already been made, though there is no document in support thereof has been annexed. The contesting opposite parties have also not annexed and/or enclosed any documents, which may counter the aforesaid submissions.
26. This Court cannot disbelieve such statement made on oath on the basis of an oral submission made at the Bar that the plaintiffs cannot carry on selling of the liquor at the site unless the renewal is granted. If the rules permit carrying on of the business after making an application within the specified time until refusal is communicated it would not be justified at this juncture to make any comments thereon.
27. Furthermore, it is a matter between Excise Authorities and the plaintiffs, if the business is carried on in absence of any valid licence, which is outside the scope of the present suit.
28. This Court is unable to uphold the observations of the Court of Appeal below that selling of the foreign liquor at the subject property has a social impact. Though not in express terms but the Court impliedly questioned the decision of the Excise Authorities and while refusing to pass an injunction have impliedly interfered with the order of shifting passed by the Excise Authorities despite the bar under Section 92 of the Bengal Excise Act, 1909.
29. This Court, therefore, cannot uphold the order of the Court of Appeal below, which is passed on an extraneous considerations, unconnected and/or unrelated with the issues involved in the suit or in other words beyond the subject dispute and, therefore, cannot be allowed to sustain.
30. The order impugned is, thus, set aside. The order passed by the Trial Court survives.
31. The revisional application is allowed with costs assessed at Rs. 50,000/- to be paid by the contesting opposite parties to be deposited with the State Legal Services Authorities within two weeks from date.
32. In default of the payment of the costs, the State Legal Services Authorities are at liberty to realize the said amount treating the same as decree passed by the Civil Court.
33. It is trite to say that the consideration at the time of granting an ad interim order of injunction is different than passing the temporary injunction after exchange of affidavits by the respective parties.
34. Be it mentioned here that the observations made in the impugned judgment is restricted to an ad interim order of injunction and is mere tentative in nature and shall not have any impact at the time of hearing of the suit.
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