Summarize the following court judgment. Appeal Nos. 38 and 39 of 1964. Appeals from the judgment and order dated April 10	 1961 of the Madhya Pradesh High Court in Miscellaneous Civil Case No. 63 of 1961. C. K. Daphtary	 Attorney General	 R. Ganapathy Iyer and R. N. Sachthey	 for the appellant (for both the appeals). N. D. Karkhanis	 Rameshwar Nath	 section N. Andley and P. L. Vohra	 for the respondent (in both the appeals). The Judgment of the Court was delivered by Subba Rao	 J. These two appeals by certificate arise out of the judgment of the High Court of Madhya Pradesh	 Jabalpur	 in Miscellaneous Case No. 63 of 1961 from a reference under section 66(2) of the Indian Income tax Act	 1922	 made by the Income tax Appellate Tribunal	 Bombay. To appreciate the contention of the parties the following genealogy will be useful: Kalooram Todi : : : : Govindram Gangaprasad (d. in January 1943) (d. in 1933) : : : : : Bachhulal : : : : : : Madanlal (predeceased his Nandlal Babulal father) (d. 9 12 1945) (b. 25 1 1935) : : Jankibai Banarsibai : : : : Radheyshyam (predeceased Venkatlal his father) (b. 13 12 1931) : : Shantibai : : Vishwanath (adopted) (b. 13 4 1941) 490 After the death of Kalooram Todi	 his two sons by name Govindram and Gangaprasad constituted a joint Hindu family which owned extensive property in Jaora State and a sugar mill called "Seth Govindram Sugar Mills" at Mahidpur Road in Holkar State. In the year 1942 Bachhulal filed a suit for partition against Govindram and obtained a decree therein. In due course the property was divided and a final decree was made. We are concerned in these appeals only with the Sugar Mills at Mahidpur Road. After the partition Govindram and Bachhulal jointly worked the Sugar Mills at Mahidpur Road. After the death of Govindram in 1943	 Nandlal	 the son of Govindram	 and Bachhulal	 as kartas of their respective joint families	 entered into a partnership on September 28	 1943 to carry on the business of the said Sugar Mills. Nandlal died on December 9	 1945	 leaving behind him the members of his branch of the joint family	 namely	 the three widows and the two minor sons shown in the genealogy. After the death of Nandlal	 Bachhulal carried on the business of the Sugar Mills in the name of "Seth Govindram Sugar Mills". For the assessment year 1950 51	 the said firm applied for registration on the basis of the agreement of partnership dated September 28	 1943. The Income tax Officer refused to register the partnership on the ground that after the death of Nandlal the partnership was dissolved and thereafter Bachhulal and the minors could be treated only as an association of persons. On that footing he made another order assessing the income of the business of the firm as that of an association of persons. Against the said orders	 two appeals one being Appeal No. 21 of 1955 56 against the order refusing registration and the other being Appeal No. 24 of 1955 56 against the order of assessment were filed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed both the appeals. In the appeal against the order of assessment	 the Appellate Assistant Commissioner exhaustively considered the question whether there was any partnership between the members of the two families after the death of Nandlal and came to the conclusion that in fact as well as in law such partnership did not exist. Two separate appeals	 being Income tax Appeal No. 8328 of 1957 58 and Income tax Appeal No. 8329 of 1957 58	 preferred to the Income tax Appellate Tribunal against the orders of the Appellate Assistant Commissioner were dismissed. The assessee made two applications to the Tribunal for referring certain questions of law to the High Court	 but they were dismissed. Thereafter	 at the instance of the assessee the High Court directed the Tribunal to submit the following two questions for its decision and it accordingly did so: "(1) Whether on the facts and in the circumstances of the case	 the status of the assessee	 "Seth Govindram Sugar Mills	 Mahidpur Road	 Proprietor Nandlal Bachhulal	 Jaora"	 is an Association of Persons or a firm within the meaning of Section 16(1)(b) of the Income tax Act. " 491 "(2) Whether the order of the Appellate Tribunal is illegal on account of the Tribunal having committed an error of record and having omitted to consider the relevant material in the case. " The High Court	 for reasons given in its judgment	 held on the first question that in the assessment year 1949 50 the status of the assessee was that of a firm within the meaning of section 16(1)	(b) of the Income tax Act and on the second question it held that the Tribunal misdirected itself in law in reaching the conclusion that the parties could not be regarded as partners. The present two appeals are preferred against the said order. At the outset we must make it clear that the question of registration could not be agitated in these appeals	 as that question was not referred to the High Court. We shall	 therefore	 only consider the points raised by the questions referred to the High Court and held by the High Court against the appellant. Indeed	 the only effective question is whether during the assessment year 1950 51 the assesee was a firm or an association of persons. The first question raised by the learned Attorney General is that on the death of Nandlal the firm of Seth Govindram Sugar Mills was dissolved and thereafter the income of the said business could only be assessed as that of an association of persons. To appreciate this contention some more necessary facts may be stated. The deed of partnership dated September 28	 1943	 was executed between Nandlal and Bachhulal. It is not disputed that each of the said two partners entered into that partnership as representing their respect;	 joint families. Under cl. (3) of the partnership deed	 "The death of any of the parties shall not dissolve the partnership and either the legal heir or the nominee of the deceased partner shall take his place in the provisions of the partnership" The question is whether on the death of Nandlal his heirs	 i.e.	 the members of his branch of the family	 automatically became to partners of the said firm. The answer to the question turns upon section 42 of the (Act 9 of 1932). the material	part of which reads: "Subject to contract between the partners a firm is dissolv ed by the death of a partner. " While for the appellant the leaned Attorney General contended that section 42 applied only to a partnership consisting of more than two partners	 for the respondent Mr. Karkhanis argued that the section did not impose any such limitation and that on its terms it equally applied to a partnership comprising only two partners. It was argued that the contract mentioned in the over riding clause was a contract between the partners and that	 if the parties to the contract agreed that in the event of death of either of them his successor would be inducted in his place	 the said contract would be binding 492 on the surviving member. On the death of one of the partners	 it was said	 his heir would be automatically inducted into the partnership	 though after such entry he might opt to get out of it. This conclusion the argument proceeded was also supported by section 31 of the Partnership Act. Section 31 of the Partnership Act reads: "(1) Subject to contract between the partners and to the provisions of section 30	 no person shall be introduced as a partner into a firm without the consent of all the existing partners." Converting the negative into positive	 under section 31 of the Partnership Act if there as a contract between the partners	 a person other than the partners could be introduced as a partner of the firm without the consent of all the existing partners. A combined reading of sections 42 and 31 of the Partnership Act	 according to the learned counsel	 would lead to the only conclusion that two partners of a firm could by agreement induct a third person into the partnership after the death of one of them. There is a fallacy in this argument. Partnership	 under section 4 of the Partnership Act	 is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Section 5 of the said Act says that the relation of partnership arises from contract and not from status. The fundamental principle of partnership	 therefore	 is that the relation of partnership arises out of contract and not out of status. To accept the argument of the learned counsel is to	 negative the basic principle of law of partnership. Section 42 can be interpreted without doing violence either to the language used or to the said basic principle. Section 42(c) of the Partnership Act can appropriately be applied to a ' partnership where there are more than two partners. If one of them dies	 the firm is dissolved; but if there is a contract to the contrary	 the surviving partners will continue the firm. On the other hand	 if one of the two partners of a firm dies	 the firm automatically comes to an end and	 thereafter	 there is no partnership for a third party to be introduced therein and	 therefore	 there is no scope for applying cl. (c) of section 42 to such a situation. It may be that pursuant to the wishes of the directions of the deceased partner the surviving partner may enter into a new partnership with the heir of the deceased partner	 but that would constitute a new partnership. In this light section 31 of the Partnership Act falls in line with section 42 thereof. That section only recognizes the validity of a contract between the partners to introduce a third party without the consent of all the existing partners: it presupposes the subsistence of a partnership; it does not apply to a partnership of two partners which is dissolved by the death of one of them	 for in that event there is no partnership at all for any new partner to be inducted into it without the consent of others. There is a conflict of judicial decisions on this question. The decision of the Allahabad High Court in Lal Ram Kumar vs 493 Kishori Lal(1) is not of any practical help to decide the present case	. There. from the conduct of the surviving partner and the heirs of the deceased partner after the death of the said partner	 the contract between the original partners that the partnership should not be dissolved on the death of any of them was inferred. Though the partnership there was only between two partners	 the question of the inapplicability of section 42(c) of the Partnership Act to such a partnership was neither raised nor decided therein. The same criticism applies to the decision of the Nagpur High Court in Chainkarcin Sidhakaran Oswal v Radhakisan Vishwnath Dixit(2). This question was directly raised and clearly answered by a Division Bench of the Allahabad High Court in Mt. Sughra vs Babu(3) against the legality of such a term of a contract of partnership consisting of only two partners. Agarwala	 J.	 neatly stated the principle thus: "In the case of a partnership consisting of only two partners	 no partnership remains on the death of one of them and	 therefore	 it is a contradiction in terms to say that there can be a contract between two partners to the effect that on the death of one of them the partnership will not be dissolved but will continue . . Partnership is not a matter of status	 it is a matter of contract. No heir can be said to become a partner with another person without his own consent	 express or implied. " This view accords with that expressed by us earlier. In Narayanan vs Umayal(4). Ramachandra lyer J.	 as he then was	 said much to the same effect when he observed thus: ". . . if one of the partners died	 there will not be any partnership existing to which the legal representatives of the deceased partner could be taken in. In such a case the partnership would come to an end by the death of one of the two partners	 and if the legal representatives of the deceased partner joins in the business later	 it should be referable to a new partnership between therein." But Chatterjee J.	 in Hansraj Manot vs Messrs. Gorak Nath Pandey(5) struck a different note. His reasons for the contrary view are expressed thus: "Here the contract that has been referred to s the contract between the two partners Gorak Nath and Champalal Therefore	 it cannot be said that the contract ceased to have effect because a partner died. The contract was there. There was no new contract (1) A.T.R. 1946 All. 259. (2) A.T.R.1956 nag. 46 (3) A.I.R. 1952 All. 506	 507. (4) A.I.R	 1959 Mad. 283	284. (5) 	 264. (N)4SCI 5 494 with the heirs and there was no question of a new contract with the heirs because of the original contract	 and by virtue of the original contract the heirs become partners as soon as one of the partners died. . . As soon as there is the death	 the heirs become the partners auto matically without any agreement between the original Partners by virtue of the original agreement between the Partners while they were surviving. there is no question of interregnums. As soon as the death occurs the right of somebody else occurs. The question of interregnums does not arise. The heirs become partners not because of a contract between the heirs on the one hand and the other partners on the other but because of the contract between the original partners of the firm. " With great respect to the learned Judge	 we find it difficult to appreciate the said reasons. The learned Judge seems to suggest that by reason of the contract between the original partners	 the heirs of the deceased partner enter the field simultaneously with the removal by death of the other partner from the partnership. This implies that the personality of the deceased partner projects into that of his heirs	 with the result that there is a continuity of the partnership without any interregnums. There is no support either on authority or on principle for such a legal position. In law and in fact there is an interregnums between the death of one and the succession to him. We accept the view of the Allahabad and Madras High Courts and reject the view expressed by Nagpur and Calcutta High Courts	 The result of the discussion is that the partnership between Nandlal and Bachhulal came to an end on the death of Nandlal on December 9	 1945. The next question is whether after the death of Nandlal a new partnership was entered into between the representatives of the two branches of the families	 i.e.	 Nandlal 's and Bachhulal 'section Before we consider this question it is as well that we advert to incidental questions of law that were raised. One is whether the widow of Nandlal could under Hindu law be a karta of the joint Hindu family consisting of three widows and two minors. There is conflict of view on this question. The Nagpur High Court held that a widow could be a karta: see Commissioner of Income tax	 C. P. & Berar vs Seth Laxmi Narayan Raghunathdas(1); Pandurang Dahke vs Pandurang Gorle(2)	 The Calcutta High Court expressed the view that where the male members are minors and their natural guardian is the mother	 the mother can represent the Hindu undivided family for the purpose of assessment and recovery of taxes under the Income tax Act: see Sushila Devi Rampurla vs Income tax Officer(2); and (3) 495 Sm. Champa Kumari Singhi vs Additional Member	 Board of Revenue	 West Bengal(1) The said two decisions did not recognize the widow as a karta of the family	 but treated her as the guardian of the minors for the purpose of income tax assessment. The said. decisions	 therefore	 do not touch the question now raised. The Madras and Orissa High Courts held that coparcenership is a necessary qualification for the managership of a joint Hindu family and as a widow is not admittedly a copartner	 she has no legal qualifi cations to become the manager of a joint Hindu family. The decision of the Orissa High Court in Budhi Jena vs Dhobai Naik(2) followed the decision of the Madras High Court in V.M.N. Radha Ammal vs Commissioner of Income tax	 Madras(2) wherein Satyanarayana Rao J.	 observed: "The right to become a manager depends upon the fundamental fact that the person on whom the right devolved was a copartner of the joint family Further	 the right is confined to the male members of the family as the female members were not treated as copartner though they may be members of the joint family. " Viswanatha Sastri J.	 said: "The managership of a joint Hindu family is a creature of law and in certain circumstances	 could be created by an agreement among the copartner of the joint family. Coparcenership is a necessary qualification for managership of a joint Hindu family. " Thereafter	 the learned Judge proceeded to state: "It will be revolutionary of all accepted principles of Hindu law to suppose that the senior most female member of a joint Hindu family	 even though she has adult sons who are entitled as copartner to the absolute ownership of the property	 could be the manager of the family . . . . She would be the guardian of her minor sons till the eldest of them attains majority but she would not be the manager of the joint family for she is not a copartner. " The view expressed by the Madras High Court is in accordance with well settled principles of Hindu law	 while that expressed by the Nagpur High Court is in direct conflict with them. We are clearly of the opinion that the Madras view is correct. Another principle which is also equally well settled may be noticed. A joint Hindu family as such cannot be a partner in a firm	 but it may	 through its karta enter into a valid partnership with a stranger or with the karta of another family. This Court in Kshetra (1) (2) A.I.R. 1956 Orissa 6. (3) 	 230	 232	 233. 496 Mohan Sanyasi Charan Sadhukhan vs C.E.P.T.(1) pointed out that when two kartas of different families constituted a partnership the other members of the families did not become partners	 though the karta might be accountable to them. The question	 therefore	 is whether after the death of Nandlal the representatives of the two families constituted a new partnership and carried on the business of the Sugar Mills. Admittedly no fresh partnership deed was executed between Banarsibai	 acting as the guardian of the minors in Nandlal 's branch of the family and Bachhulal. It is not disputed that partnership between the representatives of two families can be inferred from conduct. Doubtless the accounts produced before the income tax authorities disclosed that Bachhulal was carrying on the business of "Seth Govindram Sugar Mills Ltd." in the same manner as it was conducted before the death of Nandlal. Therein Kalooram Govindram and Gangaprasad Bachhulal were shown as partners	 Govindram having 10 annas share and Bachhulal having 6 annas share. There were separate current accounts for the two parties. The Appellate Assistant Commissioner	 who examined the accounts with care	 gave the following details from the accounts ason November 1	 1948: Joint capital account of Kalooram Govindram and Gangaprasad Bachhulal in the ratio of 10 : 6 Rs. Credit balance 10	78	660 Current Accounts: Gangaprasad Bachhulal Do. 10	46	797 Kalooram Govindram Do. 8	30	348 Profit & Loss Account Debit balance 14	01	669 No profit or loss was adjusted to the current account of the parties. Thereafter the accounts were closed as on 31 3 1950	 when the capital account was squared up by transferring that much loss from the profit and loss account and balance in the profit and loss account was transferred in the ratio of 10:6 to the current accounts of the two parties. Thus the profit and loss account showed: Net debit balance including current Rs. year 's loss 17	51	992 Loss set off against capital account 10	78	666 . . . . Rs. 6	73	326 Transferred to partners ' accounts: Messrs. Kalooram Govindram 4	20	829 Messrs. Gangaprasad Bachhulal 2	52	497 6	73	326 . . . . Balance Nil (1)[1954] S.C.R. 497 The accounts only establish that Bachhulal was doing the business of Govindram Sugar Mills Ltd. But Banarsibai 's name was not found in the accounts. If she was a partner	 her name should have found a place in the accounts. Not a single document has been produced on behalf of the assessee which supports the assertion that Banarsibai acted as a partner or was treated by the customers of the firm as a partner. There is not a little of evidence of conduct of Bachhulal	 Banarsibai or even of third parties who had dealings with the firm to sustain the plea that Banarsibai was a partner of the firm. Indeed	 the conduct of the parties was inconsistent with any such partnership between Banarsibai and Bachhulal. After the death of Nandlal	 Banarsibai and Shantibai applied to Jaora District Court for the appointment of guardians to look after the properties and the persons of the two minors; and on January 21	 1946	 four persons other than these two widows were appointed as guardians of the minors. If Banarsibai was acting as a guardian of the minors representing the family in the business	 she would not have applied for the appointment of others as guardians. On October 4	 1952	 a partnership deed was drawn up between Bachhulal on the one hand and the minors represented by the said four guardians on the other. If Banarsibai was the representative of the family in the business	 this document would not have come into being Banarsibai also had no place in another partnership deed which was executed on March 27	 1953	 between Venkatlal represented by the aforesaid guardians and Bachhulal. The evidence	 therefore	 demonstrates beyond any reasonable doubt that Banarsibai was nowhere in the picture and that Bachhulal carried on the business of the Sugar mills on behalf of the two families. Nor is there any evidence to show that from 1943 till the assessment year the guardians of the minors appointed by the District and Sessions Judge	 Jaora	 in 1946 representing the minors entered into a partnership with Bachhulal. The partnership deeds of 1952 and 1953 were subsequent to the order of assessment and they contain only self serving statements and they cannot	 in the absence of any evidence	 sustain the plea of earlier partnership. Indeed	 the guardians were only appointed for the properties situated within the jurisdiction of the District Judge	 Jaora	 and they could not act as guardians in respect of the properties outside the said jurisdiction. If they were acting as partners with Bachhulal	 their names would have been mentioned either in the accounts or in the relevant documents pertaining to the business. The conflicting version given by the assessee in regard to person or persons who actually represented the family in the partnership in itself indicates the falsity of the present version. It must	 therefore	 be held that the Court guardians did not enter into a partnership with Bachhulal. But	 Venkatlal became a major on December 13	 1949	 i.e.	 during the accounting year 1949 50. On October 17	 1951	 an application for registration was received by the Income tax Officer 498 signed by Venkatlal and Bachulal who are shown as partners representing their respective joint families. The return of income submitted along with the application for registration was signed by Venkatlal on August 29	 1951. After Venkatlal became a major	 there was no obstacle in his representing his branch of the family	 in the partnership. Indeed	 it was conceded in the High Court that there was a partnership from December 13	 1949	 when Venkatlal	 attained majority. Having regard to the said circumstances and the concession	 we must hold that from December 13	 1949	 the business was carried on in partnership between Venkatlal	 representing his branch of the family	 and Bachhulal	 representing his branch of the family. In the result we set aside that part of the finding of the High Court holding that the partnership business was carried on by the representatives of the two families after the death of Nandlal	 but confirm the finding to the extent that such a partnership came into existence only after December 13	 1949. In this view	 we answer the two questions referred to the High Court as under: (1)For the assessment year 1950 51 the status of the	 assessee was that of a firm within the meaning of section 16 (1)(b) of the Income tax Act	 1922. (2)The Tribunal misdirected itself in law in reaching the conclusion that the parties could not be regarded as partners. In the result the appeals are dismissed. But as the respondent failed in its main contentions	 the parties will bear their own costs in this Court. Appeals dismissed.

A joint Hindu family consisting of two branches owned a sugar mill. After partition	 the two kartas entered into a partnership in 1943	 to carry on the business of the sugar mill. The two partners represented the respective joint families	 and the partnership deed provided that the death of any of the parties shall not dissolve the partnership and either the legal heir or the nominee of the deceased partner should take his place. One of the kartas died in 1945 leaving as members of his branch of the family	 three widows and two minor sons. The other partner continued the business of the sugar mill in the firm name. For the assessment year 1950 51	 the assessee (respondent firm) applied for registration on the basis of the partnership agreement of 1943. The Income tax Officer	 Appellate Assistant Commissioner and the Tribunal held that there was no partnership between the members of the two families after the death of one of the kartas. On a reference to the High Court	 it was held that the partner ship business was carried on by the representatives of the two families after the dent)	 of one of the kartas. In the appeal to this Court	 on the question as 	 to whether during the assessment year 19 50 51	 the assessee	 was a firm within the meaning of section 16(1) of the Income tax Act	 1922	 or an association of persons. HELD: The High Court was wrong in its finding. But	 as a result 	of the concession by the appellant	 that there was a partnership from 13th December 1949	 when one of the minor sons had become a major	 the status of the assessee was that of a firm for the assessment year 1950 51. [498B] A joint Hindu family as such cannot be a partner of a firm	 but it may through its karta enter into a partnership with the karta of another family. [495H] Kshetra Mohan Sanyasi Charan Sadhukhan v	 Commissioner of Excess Profits Tax	 [19541 S.C.R. 268. followed. A widow	 though a member of a joint family	 cannot become its manager. [495B] Commissioner of Income tax	 C.P. & Berar vs Seth Lakshmi Narayan Raghunathdas	 and Pandurang Dakhe vs Pandurang Gorle. I.L.R. overruled. Therefore	 in the instant case	 when one of the kartas died	 the partnership had come to an end. There was no scope for applying section 42(c) of the Partnership Act	 1932	 because	 the section is applicable only to a partnership with more than two partners. In such a case. if one of them dies	 the firm is dissolved	 but if there is a contract to 488 489 the contrary	 the surviving partners will continue the firm. On the other hand	 if there are only two partners and one of them dies	 the firm automatically comes to an end and	 thereafter	 there is no partnership for a third party to be introduced. Section 31	 which deals with the validity of a contract between the partners to introduce a third party into the partnership without the consent of all the existing partners	 presupposes the subsistence of a partnership and does not apply to a partnership of two partners	 which is dissolved by the death of one of them. [492E H] Hansraj Manot vs Messrs	 Gorak Nath Pandey	 	 disapproved. Further	 there was no evidence that the representatives of the two families constituted a new partnership and carried on the business of the sugar mill before 13th December 1949	 when	 it was conceded a new partnership had come into existence.