Case: Ramagya Prasad Gupta and Others and Braham Prasad Gupta and Others Vs. Shri Murli Prasad

2. A few facts are necessary to be stated. The Chapra Electric Supply Works Limited had a licence from the Government of Bihar for the electrification of the Chapra town. In 1944 the Company went into voluntary liquidation and the concern was put up for sale by public auction by the Liquidator. On 15.9.1944 one Murli Prasad gave the highest bid and with the consent of the State Government the concern was purchased by Murli Prasad. By a notification datedMurli Prasad became the sole licensee.3. The case was that for the purposes of purchasing the concern and to carry on the business some five persons entered into a partnership onThe partners were (1) Murli Prasad, (2) Ajodhya Prasad, (3) Partnership on(4) Gharbharan Sah and (5) Nand Kishore Prasad.4. In August 1950 the above partnership was dissolved and the business was taken over by a new partnership consisting of 10 partners. In the reconstituted partnership Nand Kishore Prasad was dropped and the remaining four partners of the old partnership were joined by (5) Ramsaran Sah Gupta. (6) Ramagya Prasad, (7) Brahmdeo Prasad, (8) Dharnidhar Prasad (9) Chandreshwar Prasad and (10) Kamleshwar Prasad. On account of theof the partnership the individual shares were also refixed. The above Ramagya Prasad was entrusted with the management of the concern.5. OnParasnath Prasad filed suit No. 68/1954 for the dissolution of partnership and rendition of accounts. To this suit the remaining 9 partners or their heirs were made parties. Parasnath claimed that in his own right under the partnership agreement he was entitled to one anna, a 3 pies share. had been sold in a public auction and purchased by one Thakur Prasad. Thakur Prasad was, therefore, made a party to the suit as Defendant No. 10.6. During the pendency of the suit, proceedings for the appointment of Receiver etc. were commenced and seeing that the concern was not functioning in a proper manner the State Government stepped in, revoked the licence and took over the concern. The State Government also deposited in court Rs. 3/lakhs as compensation. The suit, thereupon, virtually became a suit for rendition of accounts till the date of deposit of the amount and for determining the share of each of the partners in the amount so deposited.7. The suit was vehemently contested. Murli Prasad, who was defendant No. 8, claimed that he was the sole owner of the business and licensee from the Government and the rest of them had no lawful interest in the same in view of the provisions of the Electricity Act.8. In the court of the suit three brothers viz. Kuldip Narain, Jagdish Narain and Kedarnath applied to the court that they had an interest in the partnership suit and should be made party defendants. They alleged that Parasnath, the plaintiff, was not entitled in his own right to the whole of the share of 1 anna but that he was a partner on behalf of the joint family of which they also had been members. They alleged that Parasnath was entitled to only a 6 pies share while the three of them were entitled to 2 pies share each. They further contended that Thakur Prasad, defendant no. 10 had not really purchased the 3 pies share of the plaintiff Parasnath and, therefore, the 1 anna share of Parasnath was liable to be divided only between Parasnath and themselves. Since a dispute was raised, they were added as defendants 12, 13 and 14. Lagdish Narain, with whom we are principally concerned, was defendant no. 13. It would appear from the judgment of the Trial Court (see paragraphs 12 and 70 to 74) that Parasnath, the plaintiff, had contended in the first instance that defendants 12 to 14 had no interest in the share of 1 anna owned by him though later, at the time of the hearing he admitted that they were entitled to a 6 pies share. He, however, insisted that the sale of 3 pies share in favour of defendant no. 10, Thakur Prasad, was not nominal and thus, supported Thakur Prasads case that he was entitled to a 3 pies share. Defendants 12 to 14, however, contested this. In other words, there was a real contest in the suit between the plaintiff Parasnath and defendant No. 10 Thakur Prasad, on the one hand, and defendants 12 to 14, on the other.9. Having regard to the above contest the Trial Court raised issue No. 11 which is as followsis the share of plaintiff and defendants 1 to 15 in the partnershipa detailed consideration of the evidence the Trial Court negatived the contention of Murli Prasad that he was the sole proprietor of the concern. The court held that the business was owned by a partnership. Accordingly, a preliminary decree was passed on February 10, 1959 in which the respective shares of the various partners or their heirs were declared and an account was ordered. The plaintiff Parasnath was declared to be the owner of a 6 pies share and defendants 12 to 14 were held to be entitled to the remaining 6 pies share out of the 1 anna share claimed by Parasnath. Thakur Prasads claim to the 3 pies share was negatived.11. From the above judgment and decree it was Murli Prasad alone who appealed to the High Court. That was Civil Appeal No. 161/1959. To this appeal Parasnath and the rest of the defendants were made respondents. The High Court accepted Murli Prasads contention that he was the sole licensee of the business and the partner could not claim a lawful interest in the same. Accordingly, the decree of the Trial Court was set aside and the suit of Parasnath was dismissed.Parasnath did not come in the appeal to this court. But two other partners have filed two separate appeals. Civil Appeal 1711 of 1967 is filed by Ramagya Prasad to whom the Trial Court had given 4 annas and 3 pies share in the partnership. Civil Appeal No. 1985 of 1968 is filed by Brabamdeo Prasad to whom the Trial Court had given a 2 annas share. These appeals were filed in 1967 and 1968 respectively and it is to be noted that Jagdish Narain, who was defendant No. 13 in the Trial Court, was made a party.13. Jagdish Narain who is respondents Nos. 17 and 19 respectively in the above two appeals died onHis legal heirs have not been brought record and it is the case of Murli Prasad, who is one of the respondent in these appeals, that the appeals have abated as a whole or are otherwise incompetent.

Court's reasoning:
14. In order to make the statement of relevant facts complete we may also refer to certain other proceedings though the question now involved does not arise in those proceeding. When Civil Suit No. 68/1954 was pending, Murli Prasad filed a suit for a declaration that he was the sole proprietor of the concern and the others could not claim any legal interest. That suit was suit No. 94/1956. Since the suit involved the same issue as in Civil No. 68/1954, that suit was heard along with suit No. 68/1954. Since the Trial Court held that the partnership was legal it decreed suit No. 68/1954 and dismissed Murli Prasad suit No. 94/1956. Murli Prasad, therefore, had to file two appeals one from the Order passed in suit No. 68/1954 and the other from the Ordered dismissal of suit No. 94/1956. The appeal to the High Court from suit No. 68/1954 was Civil Suit 161/1959 already referred to and the appeal from suit No. 94/1956 was Civil Appeal No. 160/1959. Since the High Court accepted Murli Prasads contention, the trial courts decree in Suit No. 68/1954, had to be set aside and Murli Prasads suit for declaration, Suit No. 94/1956, that he was the full owner decreed. From the latter decree two appeals have been filed one by Ramagya Prasad and the other by Brahamdeo Prasad. Civil Appeal 1711/1967 is by Ramagya Prasad and Civil Appeal No. 1985/68 is by Brahamdeo Prasad. We are not concerned with these two appeals at this stage because Jagdish Narain had not been made a party to the Original Suit filed by Murli Prasad nor had he applied to be made a party. Consequently Jagdish Narain does not and did not figure in the appeals from the decree passed in Suit No. 94/1956.It was contended on behalf of the appellants that there is no bar to proceeding with the appeals inspite of the legal heirs of deceased Jagdish Narain not having been brought on record. ln the first place, it was contended that though Jagdish Narain is dead he is fully represented because he was a member of the joint family of which Parasnath was the Manager and since Parasnath is a respondent in these appeals it was not necessary to bring the personal heirs of Jagdish Narain on record. Secondly it was contended that Jagdish Narain was not himself a partner in the partnership and since a stranger to the partnership is not entitled to join a party to the suit his omission in appeal is not fatal.Admittedly Jagdish Narain was not a party to the partnership deed of 1950 and whatever interest he had as a member of the joint family of which Parasnath was the Manager he could look up only to Parasnath for his interest. It may be that he was permitted to be made a defendant in the suit. He was merely a proper party to the suit and not a necessary party and since he was not a necessary part to the suit, it was submitted, he cannot claim to be a necessary party to the appeal.20. We do not think that there is any substance in either of the two contention. So far as the first contention is concerned it is true that Parasnath represented the joint family when the partnership had come into existence but much water had flown under the bridge thereafter. Jagdish Narain and his two brothers Kuldip and Kedar had applied to be made parties to the suit on the ground that they had separated not only amongst themselves but also from Parasnath. There was an award dt.and on the basis of the award a compromise decree was passed onThe suit had been filed in 1954 and at the time of the suit, Parasnath, the plaintiff in the suit, was no longer the karta of the family and could not represent the interest either of Jagdish Narain or his two brothers Kuldip and Kedar. As a matter of fact, as already shown in the narrative of facts, they raised a serious contest to the suit of Parasnath on the ground of conflict of interest and the Trial Court had held in their favour. Parasnath did not appeal against the decree and even in the present appeals the share of Jagdish Narain and his two brothers as awarded by the Trial Court is not challenged. In fact they have asked that the decree in favour of Murli Prasad given by the High Court be set aside and the decree of the Trial Court be restored. Under these circumstance, it will be wrong to say that in the present appeals the interest of deceased Jagdish Narain is fully represented by Parasnath or anybody else.21. As to the second contention that Jagdish Narain was not a necessary party to the suit and, therefore, to this appeal, it is enough to say that such a contention is no longer permissible. Jagdish Narain and his two brothers contested the suit filed by Parasnath for dissolution and rendition of accounts. Initially they were not made parties but they applied to the court and were made parties as defendants 12 to 14. Parasnath did not admit, in the first instance, that defendants 12 to 14 had any interest in the subject matter of the suit. He claimed that he had supplied his own funds to the partnership and had, therefore, become a sharer in the partnership to the extent of 1 anna. At the hearing, however he agreed that the other members of the family, namely, defendants Nos. 12 to 14 were together equally entitled with him to a share. There was, however, a second point of contest and that had to be decided on the merits. Parasnath had alleged that a 3 pies share out of his 1 anna share had been sold in public auction and purchased by Thakur Prasad, defendant No. 10 and hence Thakur Prasad was entitled to a 3 pies share. Defendants 12 to 14 challenged this sale alleging the sale was nominal in favour of Thakur Prasad and that, as a matter of fact, the 3 pies share which was sold in auction had been purchased on behalf of the joint family itself. This plea was accepted by the Trial Court which negatived the case of Parasnath and Thakur Prasad that the latter was entitled to a 3 pies share of 1 anna of Parasnaths 1 anna share. The whole share of 1 anna of Parasnath in the partnership was divided between Parasnath, the plaintiff, and defendants 12 to 14 half and half. From this finding after consent, Parasnath did not appeal at all Therefore, the decree passed by the Trial Court as to the share of Parasnath, on the one hand, and defendants 12 to 14 including Jagdish Narain, on the other, became final and in these circumstances it would be impossible to say these Jagdish Narain was just proper party to the suit. Indeed if Jagdish Narain and his two brothers (defendants 12 to 14) had not applied to the court to be made party, defendants there could be no doubt at all that Parasnath would have been entitled to claim the full one anna share in the partnership suit and it would have been open to defendants 12 or 14 to make their claim against Parasnath in an independent Suit proceeding. But when in the suit defendants 12 to 14 were made parties and after contest between them and Parasnath their share has been awarded to them as against Parasnath it would be idle to say that for the purposes of the appeal defendants 19 to 14 would not be necessary parties. There are two ways of looking at it would it be possible for defendants 12 to 14 to file a separate suit against Parasnath or thein the partnership ? could Murli Prasad, whose claim to the whole of the subject matter of the suit had been negatived, have filed an appeal without making defendants 12 to 14 parties to the appeal ? The answer could only be in the negative. Having successfully claimed relief against Parasnath in the partnership suit and obtained it from the court, the decision would be final between them and defendants 12 to 14 would not be able to claim the same relief against Parasnath in a separate suit. Similarly Murli Prasad who was awith defendants 12 to 14 could not have obtained relief without filing an appeal to which defendants 12 to 14 were made parties. Therefore it is quite clear that though in theory it may be possible to contend that, as a matter of law, defendants 12 to 14 including Jagdish Narain need not have been made parties in the partnership suit the very fact that their claim to relief against Parasnath in the partnership suit has been granted with a view to make a complete adjudication between the parties to the suit would make defendants 12 to 14 necessary parties in any appeal filed by a party aggrieved by the decision of the Trial Court. In fact they were madein Appeal No. 161/1959 to the High Court filed by Murli Prasad and even in the present appeals. That was on the basis that they were necessary parties to the appeal in view of the Trial Courts decree which gave them a substantial share in the subject matter of the partition suit. For the purpose of the appeals (Civil Appeal 1711/67 and the Civil Appeal 1985/68 arising out of Parasnaths Civil Suit 68/1954) we must proceed on the footing that Jagdish Narain (Original Defendant No. 13) had been declared to have a share in the partnership assets in his own rights.22. And now thequestion is whether the appellants who, in these appeals, have asked for the restoration of the decree of the Trial Court can be permitted to proceed with these appeals without deceased Jagdish Narain being represented.We think that the law on the point is quite clear; it was held as far back as in 1887 that suit brought for partnership accounts after a necessaryhas been omitted, is liable to be dismissed. See : Ramdoyal vs. Junmenjoyregard to the clear position of law in this respect the failure to bring on record the heirs or legal representatives of deceased Jagdish Narainone of the sharers in the subject matter of the suit must inevitably lead to the dismissal of the appeals. That brings the case squarely in the second test referred to in the decision of this Court in Nathu Rams case referred to above.23. In all such cases even the first test would be satisfied. There is a High Court decree which says that neither deceased Jagdish Narain nor anybody else was entitled to share in the subject matter as against Murli Prasad who is held to be sole proprietor of the business. If the present appellants were to succeed it would lead to the Courts coming to a decision that the deceased Jagdish Narain was entitled to a share in the subject matter of the suit as against Murli Prasad and the other alleged partnersa decision which would be in conflict with the decision of the High Court and will be contradictory to it has become final with respect to the subject matter between Murli Prasad and the deceased respondent.24. In view of the position discussed above it must be held that the appeals cannot be proceeded with and must be dismissed. No order as to costs.