K. Viswanathan vs Nanakchand Gupta and another

Ramaswami, J.—This is a frivolous and vexatious application arising in C. S. No. 29 of 1951 and purporting to be filed under Madras Act

V of 1954. The background for this application can be gathered from the following head note in Viswanathan v. Namakchand Gupta 67 L.W. 562

disposed by the learned Chief Justice and Venkatarama Ayyar, J. :

Where a person entered into a contract of partnership with another for the purpose of carrying on the business of a cinema and obtained a license

in his name individually and one of the clauses of the license provided that the licensee shall not assign, sublet or otherwise transfer the license nor

shall he allow any other person during the period of the currency of the license to exhibit films in the licensed premises, the partnership must be held

to be illegal in so far as it related to the business which was the subject matter of the license on account of the carrying on of the business without a

license in the name of the partnership, but only in the name of one of the partners.

There can be a partnership only if there is some business to be carried on under it where there is no business to be done there can be no question

of a partnership. The existence of a business is a sine quo non of a partnership. Mere co-ownership of a property does not amount to partnership

though when utilized in business it may become partnership property. Where the only business contemplated under an agreement was the running

of a theatre as a cinema house and that was illegal, the entire partnership must be held to be illegal, and declared void a Ramaswami, J., b initial. If

a suit is laid under S. 39 of the Specific Relief Act for cancellation of an instrument which is either void or voidable the Court can require the

plaintiff under S. 41 to make such compensation as the justice of the case may require, as part of the adjudication.

Where the plaintiff prayed for a declaration that a partnership deed entered into by him is void and for an injunction restraining the defendant from

interfering with his rights in the business as its sole proprietor, bating his claim on the ground that the carrying on of the business with a license

obtained in his own name individually, would be contrary to law; Held in substance the suit is for cancellation of the deed of partnership and in the

interests of justice the plaintiff should be directed as part of the adjudication that the instrument is void, that he should repay all the amounts

received by him from the defendants on account of the partnership.

The present application has obviously been filed to delay and defeat the decree-holder from realizing the fruits of his decree and the short point

for determination is whether this application lies. If it lies undoubtedly the motive with which the petition has been filled would be irrelevant. I have

not to determine to quote the language of Lord Fry in another compaction Reeves v. Butcher (1891) 2 Q.B. 509 whether the plea set up is

handsome or conscientious but whether it in good in law. The successful misuse of the Act and the garnering of benefit by the wholly undeserved

and the un-contemplated of the framers of the Act is comparable to the plea of limitation or plea of gaming and wagering which may be used to

defend a party who is not necessarily in default of any sort; Breton v. Woodward (1941) I. K. B. 680. If it does not lie it would show that it is

nothing more than a frivolous and vexatious application illustrating once more the dictum of the Privy Council that the woes of an Indian litigant

begin only after obtaining the decree.

The scope of the application of S. 3 of the Act has been indicated in Rahman Bivi v. Aysa Bivi 67 L. W. 752 disposed of by a Bench of this

Court composed of Govinda Menon and Chandra Reddy, JJ. It was held therein :

Section 8 of the Act prohibits the entertainment of a suit or application for execution of a decree for payment of money passed in a suit for the

recovery of a debt and lays emphasis on the nature of the suit. To bar an execution petition under S. 3 or to set aside such proceedings it is

necessary that the decree should have been passed in a suit for the recovery of money and it is the character of the suit that determines the

applicability of S. 3. Where a compromise decree was passed in an administration action which is in effect a suit for partition, the fact that

ultimately a party was required to pay a sum of money in adjustment of shares will not convert the suit into one for the recovery of the money and

the provisions of S. 4 of the Act cannot be invoked in such a case.

Bearing these principles in mind if we examine the facts of this case it will be evident that this Act has no application whatsoever. The suit in this

case was filed by the plaintiff for a declaration that the partnership formed by the plaintiff with the defendants for running a theatre called Chitra

Talkies on partnership basis was void ab initial. The trial Court refused to grant the declaration. But the appellate Court passed a decree that the

plaintiff could have the declaration on condition that all moneys received by the plaintiff should be restored to the defendants with interest and that

till such restitution was made the defendants should have a charge over all the assets of the partnership. This condition has obviously been added as

a measure of equity. The appellate Court also found that the true position of the parties was that they were co-owners in respect of all the assets of

the theatre and as the parties were not agreed as to the actual amount liable to be restored by the plaintiff, the suit was referred to the Official

Referee who after full enquiry has now found that the balance amount liable to be restored by the plaintiff was about Rs. 44,400 for principal which

with interest up-to-date of final decree would amount to more than Rs. 60,000. The decree was a conditional one because unless the amount was

restored, the plaintiff cannot claim the benefit of the declaration. The amount thus repayable by the plaintiff by way of restitution is nothing more

than compensation for obtaining the declaration asked for by the plaintiff. On this, it follows that the amount advanced by the respondents for the

partnership were not borrowings by the plaintiff nor a debt repayable by the plaintiff and consequently this is not a suit for recovery of a debt and

the decree passed by the appellate Court does not amount to a decree passed for recovery of a debt. Therefore this is not a case of a ''debt''

contemplated in S. 2 (b) of the Act, viz,, any sum of money which a person is liable to pay under a contract, express or implied, for consideration

received, including rent in cash or kind which a person is liable to pay or deliver in respect of the lawful use and occupation of land. S. 3 bars only

a suit for recovery of a debt so defined or application for the execution of a decree for the payment of money passed in a suit for recovery of a

debt so defined. This application is therefore plainly incompetent and is hereby dismissed with costs.