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TMI Blog1995 (10) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... d into a partnership and carried on the said business partnership from 1954 to 1992. But the plaintiff, Gurmukh Singh, had gone to the United States of America in 1972, and he was there for about 10 years. When he came back he found that the defendants had opened a separate bank account and instead of crediting the sales proceeds in the partnership account in the Canara Bank, they were depositing the amounts in the account opened in their name. They were not also allowing him to participate in the management of the business. They were also not giving him any share in the profits of the said business and prevented him from entering into the partnership business premises and, therefore, he has come to the court with this suit. The claim of the plaintiff is resisted by the defendants and it is the contention of the defendants that after the plaintiff had gone to the USA in 1972, the plaintiff had obtained American citizenship and from June, 1977, plaintiff, Gurmukh Singh, had ceased to be an Indian citizen and he had obtained citizenship of the USA. The plaintiff, Gurmukh Singh, was prevented by the provision of law from carrying on any business in India in view of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff is not entitled to get the preliminary decree as on the said date of the suit, the partnership was not in existence. Thus, it is contended on behalf of the defendants that the suit in question is not tenable and, consequently, there is no question of passing any preliminary decree in the suit. Therefore, in view of the contentions raised by the plaintiff and the defendants the issues which arise for my consideration and my findings thereon for the reasons thereon are as under: Issue Finding 1.Whether the partnership between the plaintiff and the defendants stand dissolved in view of the provisions of the Foreign Exchange Regulation Act, 1973? No. 2.Whether a preliminary decree for dissolution of the partnership is to the passed in the suit? Yes 3.What order and decree as per the order. As per final order. It must be stated at the outset that inadvertantly, I. A. No. 3670 of 1995 is wrongly typed as an application under Order 20, rule 6. It seems that there is a mistake in quoting Order 20 instead of Order 12 of the Code of Civil Procedure. It is settled law that the court has to consider the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly could not be a partner though the karta of the Hindu undivided family could become a partner and the loss and profits which are incurred by the karta could be of the Hindu undivided family of which he is the karta but that does not mean that Hindu undivided family is a partner in the partnership. The question of considering as to whether a Hindu undivided family could be a partner or not is considered by the Supreme Court in the case of Kshetra -Mohan Sannyasi Charan Sadhuhhan v. CEPT [1953] 24 ITR 488 and the following principles are laid down (headnote): "A Hindu undivided family is included in the expression 'person' as defined in the Income-tax Act as well as the Excess Profit Tax Act but it is not a juristic person for all purposes. When two kartas of two Hindu undivided families enter into a partnership agreement, the partnership is properly described as one between the two Hindu undivided families. But in the eyes of the law, it is a partnership between two kartas and all the members of the families do not ipso facto become partners. There is, however, nothing to prevent the members of one Hindu undivided family from entering into a partnership with individual membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the defendants is that in view of the provisions of the Foreign Exchange Regulation Act, 1973, the partnership in question, stands dissolved. Therefore, in order to consider that contention of theirs we have to go to the provisions of the Foreign Exchange Regulation Act, 1973. But before referring to the said provisions of the Foreign Exchange Regulation Act, 1973, it is necessary to mention here that the partnership between the plaintiff and the defendant had already come into existence and that the said partnership was carrying on the business of running a petrol pump and selling and disbursing petroleum products since the year 1963. It is also an admitted fact that the said business is continued at the same terms, viz. till this date. The provisions of the Foreign Exchange Regulation Act, 1973, have come into force on January 1, 1974. Thus, the said Act has come into existence when the partnership of the plaintiff and defendant No. 1 was already in force and the said partnership was carrying on the business and when the plaintiff, Gurmukh Singh, had not obtained American citizenship and had not ceased to be an Indian citizen. At the cost of repetition, it must be mentioned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the application subject to such conditions, if any, as the Reserve Bank may think fit to impose or reject the application: Provided that no application shall be rejected under this clause unless the parties who may be affected by such rejection have been given a reasonable opportunity for making a representation in the matter. ( d ) Where an application is rejected by the Reserve Bank under clause ( c ), the person or company (including its branch) concerned shall discontinue such activity or close down the branch, office or other place of business established for the carrying on of such activity, as the case may be, on the expiry of a period of ninety days or such other later date as may be specified by the Reserve Bank from the date of receipt by such person or company (including its branch) of the communication conveying such rejection. ( e ) Where no application has been made under clause ( a ) by any person or company (including its branch), the Reserve Bank may, by order, direct such person, or company (including its branch) to discontinue such activity or to close down the branch, office or other place of business established for the carrying on of such activity, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a commerce or trade by a non-resident Indian or a foreigner and it does not intend to create a bar for all types of business activity. Therefore, in the circumstances, it seems that the Reserve Bank of India thought it proper not to take any action under sub-section (3) of section 29 of the Foreign Exchange Regulation Act, 1973. If no action was taken by the Reserve Bank of India under sub-section (3) of section 29 and if it has not issued either an order or direction to the plaintiff to close down the said partnership business then the continuation of the said business would not become illegal under the provisions of section 29. It must be mentioned here that the business in partnership by a non-resident Indian was started before he became a non-resident Indian and continued before the said Act came into force. Therefore, the said business cannot become an illegal business if no permission is obtained from the Reserve Bank of India., The learned advocate for the defendants has cited before me the case of Mohrilal v. Ballabh, AIR 1967 Raj 280. In that case, a partnership firm carrying on business of tobacco was not holding any licence but only one partner of the said partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner appointed by this court in this suit to sign the cheque on his behalf alongwith defendant No. 2 while withdrawing amount from the bank, but the bank has not accepted the said authorisation given by the plaintiff and, therefore, defendant No. 2 has moved this application and he is seeking permission of this court to allow him alone to sign the cheque to withdraw the amount, but in view of the disputes between the plaintiff and the defendants and in view of the preliminary decree passed by me today, it would not be proper and just to allow defendant No. 2 alone to sign the cheque and withdraw the amounts from the bank. I would, therefore, hold that in view of the consent and authorisation given by the plaintiff, the cheques for withdrawal of the amount should be jointly signed by the Local Commissioner, Shri B. B. Gupta, advocate, appointed in this suit and defendant No. 2, Shri Suchcha Singh Anand. I, therefore, pass the following order: "The withdrawal cheques are to be signed hereinafter for withdrawing the amount from the bank account, jointly by defendant No. 2, Shri Suchcha Singh Anand and Local Commissioner, Shri B. B. Gupta, advocate, and the Kashmiri Gate branch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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