Maniam Hiria Gowder vs Naga Maistry

Rajamannar, C.J.—We have no doubt whatever that the principle underlying the long catena of cases of which it is sufficient to refer to Velu

Padayachi Vs. Sivasooriam Pillai, and K. Viswanathan Vs. Namakchand Gupta and Another, , will apply to this Case, the principle being that ail

agreement of partnership which will entail a transfer of a licence or permit granted by the Government when there is an express provision

prohibiting such a transfer is illegal and void ab initio. The case in K. Viswanathan Vs. Namakchand Gupta and Another, , related to an agreement

of partnership in respect of a cinema business and the decision in Velu Padayachi Vs. Sivasooriam Pillai, arose under the Abkari Act The doctrine

on which these nothings are based is thus explained in K. Viswanathan Vs. Namakchand Gupta and Another, . When a penalty is imposed for

contravention of a provision of law, that can be taken as an indication that the transaction which involves such a contravention is prohibited and

therefore illegal; but when there is no imposition of a penalty, the question whether the contract is illegal should be determined on a consideration of

the purpose behind the legislation. If the provisions are enacted for the purpose of revenue and in the interests of administration, no question of

illegality will arise; but when the provisions are enacted in the interests of the public and promotion of its welfare the contravention of such provision

must be held to be illegal. In the present case Section 59 (1) of the Motor Vehicles Act expressly prohibits transfer of a permit except with the

permission of the transport authority. A partnership in respect of a lorry business which involves a transfer of a permit will therefore be illegal and

void.

In our opinion the decision of the Division Bench in L. P. App. No. 3 of 1946 (C), confirming a judgment of Chandrasekhara Ayyar, J., is not

inconsistent with the rulings referred to above. That was a case of a partnership in salt business and it was pointed out that the relevant rules permit

transfer of the licence, though such transfer may not be operative against the Government except with their consent. The decision of the Court

below was right and the second appeal is dismissed with costs. The fact of the dismissal of the present suit for dissolution of partnership and taking

of its accounts on the ground that it is not sustainable does not mean that the appellant may not have any rights which are enforceable as against the

other partners. Such rights are not affected by the decisions in this appeal.

The Memorandum of Objections is dismissed without costs.