Shanti Lal v. Ram Gopal

Niamatullah, J.:— This is an appeal from an order of the first Additional Sub-ordinate Judge of Moradabad passed on an application for restitution under Section 144 of the CPC. The plaintiff in the suit was Seth Ram Gopal. He sued for dissolution of a partnership in two ginning factories one at Saharanpur and the other at Chandausi, and for partition of its assets. The suit was defended on the ground that the partnership was illegal owing to the fact that there were then 20 shareholders in a factory from the very-beginning. There were two other suits, also brought by Seth Ram Gopal, for dissolution of partnership in respect of two other factories at Chandausi. In each case the principal defendant was Rai Bahadur Mewa Ram. All the three suits were decreed by the Sub-ordinate Judge of Moradabad, but we are concerned only with the suit dealing with the factory at Saharanpur and the old ginning factory at Chandausi.

2. In this case the decree of the Sub-ordinate Judge included the direction that a receiver should be appointed. This order was passed on 10th August 1922. On 23rd August 1922, the parties came before the Court and agreed that the defendant 1, R.B Mewa Eam, should be appointed manager of the factory at Saharranpur and the plaintiff Seth Ram Gopal of the old ginning factory at Chandausi.

3. Clearly this agreement was entered into by the parties in order to avoid the appointment of an outside person as a receiver. Against the decree an appeal was preferred by the defendant and was allowed by a Bench of this Court on 31st May 1926. The two Judges who heard this appeal disagreed, and the point of law on which they disagreed was referred to a third Judge. The decision as stated in the head-note of the report in Mewa Ram v. Ram Gopal(1) is as follows:

“When an association formed for the purposes of gain is unregistered, although under the law it ought to have been registered, and the business of the association has been going on for some years, none of it members can sue in a Court of law for partition of the existing assets.”

4. On this finding the appeal was allowed and the suit was dismissed. The defendant R.B Mewa Ram, had in the meantime died; on 11th November 1926 his adopted son, Lala Shanti Earn, made a petition for restitution under Section 144 of the CPC. He sought inter alia to be put into possession of the old ginning factory at Chandausi, which under the agreement of 23rd August 1922 had been given over to Seth Ram Gopal for management. This is the sole question which is now before us in appeal.

5. The Additional Sub-ordinate Judge gave on this point the following decision:

“Section 144 merely lays down a procedure. The person who seeks its aid must show that he has a substantive right to be restored to possession. Had Mewa Ram been alive, he might have had the right to be restored to possession but his right to possession as a manager did not devolve upon Shanti Lal by right of succession or survivorship.”

6. He accordingly dismissed the application in so far as it sought possession of the old ginning factory at Chandausi and the profits. We do not consider that the view taken” by the learned Additional Sub-ordinate Judge on this question is correct. The relevant portion of S. 144 runs as follows:

“Where a decree is reversed, the Court of first instance shall, on the application of any party entitled to benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or such part thereof as has been reversed.”

7. The decree directed the appointment of a receiver. In pursuance of that order the parties came to an agreement that one factory should be managed by Mewa Ram and the Other by Ram Gopal. The High Court's order sets aside the decree on the ground that the plaintiff could not bring such a suit, thereby setting aside the whole proceedings from the beginning. The only course which could be followed in law for any party whose possession had been interfered with on account of that decree was to apply for restitution under S. 144. Possession of the factory when the suit was brought was with R.B Mewa Ram, and the Additional Sub-ordinate Judge appears to concede that had R.B Mewa Ram been alive, he might have got back possession by way of restitution. But here the Court appears to be in error in supposing that this right would have accrued to R.B Mewa Ram as manager of the property. No doubt, the word “manager” was used in the agreement between the parties on 23rd August 1922, and no doubt, also R.B Mewa Ram defended the original suit saying that he was a partner in the company and the manager of the factory; but the order of this High Court wag that there was no partnership, and we must accept that order as meaning that the possession of R.B Mewa Ram when the suit was brought was not that of a manager of a partnership concern. We need not say what title R.B Mewa Ram possessed. It is sufficient if we say that he was a party in possession. We are of opinion that not only can such a person recover possession by restitution but, where there is no proof that his possession terminated with his death, his son is entitled to represent him after his death. Mr. Dar for the respondent hag argued that there is nothing to show that had Mewa Ram died his son would have succeeded to the management. It may be so; but this waives the question, for we are bound to hold that there was no management as there was no valid partnership of the concern. In our opinion the applicant was entitled to restitution by possession of the old factory in addition to the other reliefs already decreed. He is also entitled to the profits, if any, accruing from the factory during the period of management by the plaintiff. The lower Court has not given a decision as to the amount of profits. We accordingly remand the case under O. 42, R. 23 of the CPC, for disposal of the other questions arising between the parties on the merits. The appellant will get his costs of this appeal in this Court. Future costs will abide the result.

K.N/R.K

8. Order accordingly.