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TMI Blog1962 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... was confirmed by the lower appellate court. The defendants appealed. The prior circumstances necessary for a consideration of this second appeal are the following: On February 4, 1955, a deed of partnership was entered into between (1) A.T. V. Suryanarayana Chettiar, (2) A.T V. Ramachandran Chettiar and (3) M. Kolandaiyappan, managing agent, Sri Murugan Oil Industries Ltd., for and on behalf of the said company. The agreement went on to recite that Kolandaiyappan who is the proprietor of another company, M. Kolandaiyappan and Co., conducted and managed in his capacity as managing agent, the Sri Murugan Oil Industries Ltd. In the course of the management of the latter company, it was found that there were no proper facilities for the condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual No. 1 will be entitled to four annas, individual No. 2 will be entitled to four annas and the other 8 annas should be taken by individual No. 3 for and on behalf of Sri Murugan Oil Industries Ltd. The above specific recitals in the partnership agreement are important for the consideration of the principal question of law urged for determination in the second appeal. The defendant urged that the suit partnership was illegal because it contravened section 4 (2) of the Indian Companies Act, 1913, which corresponds to section 11 (2) of the Companies Act, 1956. Section 11 (2) of the Companies Act, 1956, reads: "No company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying on any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 of the Indian Partnership Act which enumerates the circumstances in which a partnership can be dissolved. Its finding is that section 44, clause ( c ), that a partner other than the partner suing is guilty of conduct which is likely to affect prejudicially the carrying on of the business ; section 44, clause ( d ), that the partner other than the partner suing, wilfully or persistently commits breach of agreements; section 44, clause ( f ), that the business of the firm cannot be carried on save at a loss, and section 44( g ), on any other ground which renders it just and equitable that the firm should be dissolved, will apply to the facts of the present case justifying a decree for dissolution. Learned counsel who appeared for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring in the partnership only as an individual. It is important to bear in mind that the partnership was formed after Murugan Oil Industries Ltd. was found not working satisfactorily. It was decided to use the machinery and other valuable assets of that company for running the suit partnership. On account of that fact the company's managing agent joined the suit partnership as an individual. Therefore, it cannot be said that exhibit A-1 involves a partnership between the first two persons mentioned therein, on the one hand, and the body of corporate members, forming the company of Murugan Oil Industries Ltd., on the other. Therefore, on the facts of the case, there can be no doubt that this is not a partnership of more than 20 persons, but i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in number that there is only one of them left; but he and the company will be distinct persons for all that... In all these respects, a corporation is essentially different from an unincorporated partnership. A firm is not a person in the eye of law; it is nothing else than the sum of its individual members. There is no legal entity standing over against the partners, as a company stands over against its shareholders. " We can also add to these features the right of perpetual succession which section 34 confers on a registered company, showing that it is a legal person different from its shareholders, whereas a partnership is only a compendious method of describing its component individuals. The death of a partner dissolves the partnersh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below and with its reasons. But these decisions do not throw any light as to whether a company registered under the Companies Act cannot be regarded as a person, for the purpose of section 4(2) of the Companies Act, 1913, or 11(2) of the Act of 1956, or should be viewed as a group of several persons for that purpose. In Raghunath Prasad v. Lucknow Sugar Works Ltd. AIR [1936] Oudh. 56 the court, after referring to Senaji Kapurchand v. Pannaji Devichand , AIR [1930] PC. 300 observed : " That case can hardly be considered a clear authority for the view that registered companies cannot be taken to be units for the purpose of section 4, Companies Act, as only unregistered firms were under consideration in that case." But after stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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