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TMI Blog1929 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... commendation of defendants 8 and 9, who carried on business in Nasirabad Cantonment, under the name of Bhaniram Chhote Lal and under a letter dated Asarh Badi 9 Sambat 1978, corresponding to 29th June 1921, and on their standing sureties thereunder, the plaintiffs supplied various articles to defendants 1 to 7, that retrogressive interest at 12 annas per cent. and commission at 8 annas per cent. were settled between the parties and that upon an account ₹ 6,586-4-3 principal and ₹ 1452-9-3 as interest were due to the plaintiffs from the defendants. 3. Roormal and Ram Kishen who were defendants 1 and 2 admitted the plaintiffs' claim but contended that they had purchased various goods from the plaintiffs on their own responsibility. They denied that defendants 3, 5, 6 and 7 were partners in the firm styled Kishori Lal Bhagwati Prasad. They also denied that defendants 8 and 9 ever stood sureties for them or the other defendants and they finally pleaded that Rameshar, defendant 3, who was the own brother of Roormal defendant 1 and son of Balkishen, defendant 2, had been taken in adoption by one Ladu Ram and had nothing to do with the joint family of defendants 1, 2 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aikuntha Nath De [1914] 12 A.L.J. 79, the question now raised was not the question in issue. All that was decided in this case was that where property was purchased in the name of a junior member of a joint Hindu family, the criterion was to consider the source from which the purchase money was paid and in the absence of evidence to prove that the junior member had any separate funds, the presumption was clear and decisive that the property was acquired by the joint family and was not the self-acquisition of the junior member. In Bandhu Ram v. Chintaman Singh A.I.R. 1922 P.C. 215, the same rule of law was reiterated in different words and a bond held in the name of the managing member of a joint Mitakshara Hindu family was presumed to be the joint property of the family in the absence of evidence to the contrary. Their Lordships observed in this case that where the evidence on both sides was somewhat meagre, the presumption in favour of joint ownership was not displaced. Jagan Lal v. Mathura Prasad [1917] 39 I.C. 498 is a decision of the late Court of Judicial Commissioners of Oudh and rests upon the same rule. The ordinary presumption of the Hindu law is that property acquired, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. It follows from this that the matter has got to be determined in each case with reference to the evidence produced therein and that no presumption necessarily arises either as a matter of law or of logic that the other members of the family should be deemed to be partners in the firm by reason of an individual member of the family entering into a contract of partnership with strangers. The same view is endorsed by Mukerji, J, but in different words Where a person lends his name to a partnership contract, he is a person constituting the total number of partners. Behind his back there may be a joint Hindu family or he may be representing a firm consisting of himself and several other members. In either case, so far as the other partners are affected, the party joining in the contract is the only person with whom they are concerned. The share owned by the individual member may have to be, in the case of a partition in the family or dissolution of partnership, divided among certain parties. But that fact cannot affect the other members in the partnership in question. In this view the party joining constitutes only one person and not more than one person. 9. This observation l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who had agreed to combine their property and skill in the business of purchasing and selling cloth at a profit, dividing the profits among themselves in certain proportions. Whatever may be the rules which govern an encestral joint Hindu family partnership they cannot, in our opinion, affect a firm such as that which we have before us in this case. 12. In Kharidar Kapra Co. Ltd. v. Daya Kishan, a Bench of this Court endorses the view laid down by the Madras High Court in the Full Bench case of Gangaya v. Venkataramiah [1917] 41 Mad. 454. In the latter case the following rule has been enunciated: It is wall settled that a contract of partnership between a member of joint family and a stranger does not make every member of the joint family which the managing member represents a partner so as to clothe him with all the rights and obligations of a partner as defined in Section 239, Contract Act. 13. In Vadi Lal Lallubhai v. Shah Kushal [1903] 27 Bom. 157, it was held that: Although a person carrying on business is a coparcener in a joint family, it does not necessarily follow that all his coparceners are his partners in that business, entitled with him to its right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hindu law that a business carried on by the head of a Hindu family although started by himself for the first time, is, without anything more being shown, the joint business of the family. I do not think that there is any such absolute presumption. In order that a presumption may arise it must be shown that the other members participating in the conduct of the business or its profits or by a long course of acquiescence treated it as a business in which all the coparceners were interested. 17. Phillips, J., did not share his views. He says: No doubt the provisions of the Indian Contract Act must be read together with the provisions of the Hindu law, for the coparcenary of a joint Hindu family is of such a nature that it must modify to a certain extent some of the provisions of the Indian Contract Act in regard to partnership but this is no ground for contending that such provisions are not to be applied, as far as are consistent with Hindu law to the partnership constituted by a joint family business. 18. He was of opinion that given a joint family with the nucleus of ancestral property the presumption of Hindu law was that the property acquired by the manager of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to him it is a voluntary contract between two or more persons for joining together their money, goods, labour and skill or either of them or all of them upon an agreement that the gain or loss shall be divided proportionately between them and having for its object the advancement and protection of a fair and open trade. An agreement to share the loss is not a necessary ingredient of partnership under the Indian Contract Act. An agreement is essential for the creation of partnership under the Indian Contract Act. 21. No evidence is forthcoming in this case that defendants 3, 5 and 7 entered into such an agreement with the other persona against whom the decree has been passed by the Court below. The agreement to constitute a partnership may be express or may be implied. A presumption in favour of such an agreement may be raised from the conduct of the parties, from their mutual dealings and from the surrounding circumstances but there is no presumption in law that a member of a family entering into a partnership with certain persons who are strangers to the family is doing so in a representative or vicarious capacity. If a liability is sought to be fastened upon the other me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was conceded that as between the members of an undivided family and the co-parcener who enters into a contract of partnership for the benefit of the family they will be entitled to call upon him to account for the profits earned by him from the partnership and to share in such profits, but this will not place them in any position of direct contractual relationship with the other partners of the firm, even though the entire assets at the joint family might be available to the creditors of the family in certain circumstances. 24. Similarly in the case of Baldeo Das v. Manek Chand [1901] Bom. L.R. 144 Jenkins, C.J., remarked that under certain circumstances the rest of the members of the family may claim the benefit arising from the business carried on by one of their number, but until this is done, or until the business is in some way adopted as an asset of the joint family, it would be contrary to principle to fasten on the other members any liability for the debts of that business, and therefore, the creditor who advances such a claim must show that the business carried on by an individual member has by some such method become the business of the family or is carried on for it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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