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Issues Involved:
1. Whether the karta of a joint Hindu family, when entering into a contract, does so in his individual capacity or as a representative of the joint family. 2. Whether the right to manage the two companies was a joint family asset post-partition. 3. Validity and enforceability of the agreement dated September 18, 1940. 4. Whether the nomination made by the defendant in favor of plaintiff No. 1 on May 1, 1934, was irrevocable. Issue-wise Detailed Analysis: 1. Karta's Individual Capacity in Contracts: The judgment elucidates that under Hindu law, a karta of a joint Hindu family contracts in his individual capacity rather than as a representative of the joint family. This principle is supported by the case Pichhappa v. Chokalingam (1934)36BOMLR976, where it was established that other family members do not become partners in the business merely because the karta enters into a partnership with a stranger. The only rights coparceners have against the karta are to demand an account of joint family funds used or to file a partition suit. Thus, in this case, the karta's contractual relations with the two companies were individual, and the coparceners had no right to be associated in the management of these companies. 2. Right to Manage as Joint Family Asset: Upon partition in 1935, all joint family properties, including assets in the Lal Mills and Chinubhai Lalbhai and Brothers, Limited, were divided. The right to manage the two companies remained with the defendant as a contractual obligation, not as a joint family asset. The judgment clarifies that the office of managing agent, without any benefits attached, cannot be deemed joint family property. Even if it were considered joint family property, the coparceners could only file a partition suit, not demand participation in management. The defendant was appointed managing agent in his individual capacity, and the right to management was not a joint family asset post-partition. 3. Validity and Enforceability of the Agreement Dated September 18, 1940: The agreement dated September 18, 1940, was acknowledged as valid and binding. However, the court found that specific performance of the agreement was not feasible due to the lack of mutual confidence and trust required for the management of the mills. The agreement involved personal discretion and qualifications, and harmonious relations between the agents were essential. Given the strained relations between the parties, enforcing the agreement would lead to an impasse, making it impractical. Additionally, the agreement lacked mutuality as the defendant could not have specifically enforced the plaintiffs' obligations under it. Furthermore, the agreement was dependent on the volition of a third party (the company), and compelling the company to alter its memorandum without its consent was not permissible. 4. Irrevocability of the Nomination Made on May 1, 1934: The nomination made by the defendant in favor of plaintiff No. 1 to act on his behalf and on behalf of Chinubhai Lalbhai and Brothers, Limited, was argued to be irrevocable. The court concluded that the nomination constituted a sub-agency, which the defendant could revoke. Section 195 of the Indian Contract Act implies the power of revocation in an agent concerning a substituted agent. The court also rejected the argument that the nomination was coupled with an interest under Section 202 of the Indian Contract Act, as there was no specific connection between the authority and the interest. Even if it were an authority coupled with an interest, the contract to continue as an agent would not be specifically enforceable. Conclusion: The court dismissed the plaintiffs' suit, holding that the defendant acted in his individual capacity and not as a karta in managing the companies. The right to management was not a joint family asset post-partition. The agreement dated September 18, 1940, was valid but not specifically enforceable due to lack of mutuality and dependency on a third party's volition. The nomination made in 1934 was revocable by the defendant. The plaintiffs were awarded nominal damages for the breach of the agreement, and the court ordered the defendant to pay the costs of certain issues. The undertakings given by both parties were to be dissolved unless an interim order was obtained by the plaintiffs within a fortnight.
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