P L D 1961 (W (PLP)

(c) that a partner, other than the partner suing, is guilty of conduct which is likely to affect prejudicially the carrying on of the business, regard being had to the nature of the business ; (d) that a partner, other than the partner suing, wilfully or persistently commits breach of agreements relating to the Management of the affairs of the firm or the conduct of its business, or otherwise so conducts himself in matters relating to the business that it is not reasonably practicable for the other partners to carry on the business in partnership with him ; (e) that a partner, other than the partner suing, has in any way transferred the whole of hit interest in the firm to a third party, or has allowed his share to be charged under the pro visions of rule 4 ) of Order XXI of the First Schedule to the Code of Civil Procedure, 1908, or has allowed it to be sold in the recovery of arrears of land‑revenue or any dues recover able as arrears of land‑revenve due by the partner ; (f) that the business of the firm cannot be carried on save at a loss ; or (g) on any other ground which renders it just and equitable that the firm should be dissolved."

9. Section 11 of the Partnership Act, which provides for the determination of rights and duties of partners, by agreement between them, has been made subject to the provisions of Partner ship Act, meaning thereby that no such agreement can override the provisions of the Partnership Act, but would be subordinate to it. No limitation, however, is placed on the power conferred by section 31 of the Act, on a partner to retire from the partnership, by agreement with the other partners,‑ but this does not mean that B such an agreement between them can override any other provisions, of the Partnership Act, specially those of section 44, which permit a Court to dissolve a firm under. certain conditions. Sections 32 and 44 of the Act being both independent provisions of law, one cannot override the other and hence, the argument of the learned counsel for the appellants to the effect that an agreement entered into between the partners, permitting one of them to retire, would take away the power of the Court to dissolve such a partnership under section 44 of the Act,, has no force.

10. The learned counsel for the appellants relying on a case of the Allahabad High Court, as Smt. Dropadi v. Bankey Lal and others (1), contended that such an agreement can take away the Court's power to dissolve a partnership. At page 551 of this reported judgment, after discussing the various authorities on this subject, their Lordships observed as follows :‑ "In our opinion, section 11, Partnership Act, has deliberately been so worded by the Legislature as to make it clear that the relationship of the partners shall be determined by the contract between them, subject of course to the, provisions of the Act it seems to us that the case before us*is governed by the decision of their Lordships of the Privy Council in 3 1 A 200 ; where their Lordships had laid down that it is open to partners to enter into an agreement by which they renounce their right of dissolution." In my opinion the interpretation placed on the Privy Council case referred to in this case is not correct and, as I will presently show, their Lordships of the Privy Council did not express the opinion that it was open to the partners to enter into an agreement to renounce their right to claim dissolution of a firm. Learned counsel for the respondent referred to a case of the Madras High Court, as Vali Venkataswami and others v. Gannabathulla Venkata swami (2), in which, after discussing the Allahabad case, as well as two cases decided by their Lordships of the Privy Council, the Court came to the conclusion that the power conferred by section 44, on a Court, to. order dissolution cannot be taken away by agreement between the partners, nor can they, deprive them selves of such a right by an agreement. At page 11 of this reported judgment, the Court observed as follows :. "But the principle enunciated by the Judicial Committee in my opinion is clear and unambiguous. It is to tneeifectthat the right to seek dissolution through Court is not based on contract but is based on statute, and, therefore, the contract cannot override the right conferred by the statute . . . . . . . . . . . . . ~ In my opinion, therefore, when the Legisl iture enacted section 11 it must have been aware of the decision in A I R 1917 P C 116 and must have deliberately introduced the expression `subject to the provisions of the Act' with a view to make it clear that the right under section 44 cannot be taken away by the contract between the partners." The Allahabad and Madras cases are both based on the views expressed by their Lordships of the Privy Council, but those views have not been interpreted, in the two authorities in a like manner. It would, therefore, be necessary to find out what was decided by their Lordships of the Privy Council.

11. In the first case as Cowasjee Nanabhoy v. Lallbhoy Vullu bhoy and others (3), I do not find any observation to the effect that partners could, by agreement, deprive a Court of law of the power to order dissolution of a partnership or themselves of their (1) A I R 1939 All. 548 (2) A I R 1954 Mad. 9 (3) 1 Bom. 468 right to sue for this purpose. At page 474 of this reported judgment, their Lordships observed as follows :‑ "So, even putting it in the light most favourable for Cowasjee that the partnership was originally intended to exist at least during the time of his life, it remains to be shown that there is any provision in this agreement from which it can be fairly inferred that his co‑partners relinquished the right which they would have of applying to the Court for winding up the business if it could not be carried on at a profit, or, in the event of their exercising this right, undertook to pay him compensation Their Lordships, after giving their best attention to the whole of this agreement, have come to the conclusion that by no fair and reasonable intendment can it be inferred that the partners relinquished their right of dissolving or applying to have the company dissolved under the circumstances mentioned, or that they agreed, if they did exercise this right, to pay Cowasjee compensation." The question as to whether such an agreement was valid and binding on the partners and whether it could deprive the Court of the power to order dissolution of a partnership was not discussed in this reported judgment and, therefore,it is not understood how the learned Judges of the Allahabad High Court came to the con clusion that their Lordships of the Privy Council "have laid down that it is open to partners to enter into an agreement by which they renounce their right of dissolution." Even if there had been any doubt about the views of their Lordships the same was set at restin their subsequent decision as Rehmatunnissa Begum and others v. Price and others (1). At page 118 of this reported judgment their Lordships observed ~as follows :‑ "A partner's claim to . a decree for dissolution rests, in its origin, not on contract, but on his inherent right to invoke the Court's protection on equitable grounds, in spite of the terms in which the rights and obligations of the partners may have been regulated and defined by the partnership contract No man can exclude himself from the protection of the Courts, and yet, if the view of the Appellate Bench is to prevail, this is what the Nawab has done, for a decree for dissolution would be the protection appropriate in the circumstances of this case." The view of their Lordships, which has been clearly expressed in this case, was that the power conferred‑on a Court of law to order dissolution of a firm cannot be taken away by agreement between the parties. No doubt, both the cases decided by the Privy Council did not deal with the question of retirement of one of the partners, in accordance with the agreement between them, and dealt with the power of the Court to order dissolution before the expiry of the period for which the partnefship had been entered into, but the view of their Lordships, was clearly expressed and leaves no room for doubt that the power of the Court to order dissolution, under certain circumstances, cannot be taken away by agreement between the parties. Whether that power is to be (1)AIR1917PC116‑ exercised during, or after, the period for which a partnership was entered into, or whether that power is to be exercised, in the presence of an agreement between the partners enabling one of them to retire, would not be very material, because whatever might be the factual position, the power of the Court to order dissolution would still be there.

12. In view of these clear authorities, I am of the opinion, that even if the parties had agreed that any of them would be at liberty to retire, by giving notice of this fact, and would not have recourse to litigation for having the partnership dissolved, the power of the Court to order dissolution remained. unaffected, nor was the right of the partners to claim dissolution taken away by l such an agreement. The contention raised by the learned counse ll for the appellants is, therefore, overruled.

13. The next question requiring decision is whether the Courts below were justified in exercising the power conferred b) section 44 of the Partnership Act and ordering dissolution of the firm. That order was based on three grounds. Firstly, that the Managing Director was guilty of misconduct in so far as he hac been utilizing the assets of the partnership for his personal needs, C secondly, that although the partnership was carried on for more than two years not a pie in the shape of profits, was paid to the financing partner, namely, Haji Muhammad Yasin respondent and thirdly, that the relations between the parties having become straind, on account of criminal litigation, it was just and equitable to dissolve the firm. In my opinion, these findings were based on good and sufficient evidence and cannot be successfully challenged in this appeal. Maulvi Muhammad Yasin appellant, when he appeared as a witness, admitted that he has been using the money of the firm, for his personal needs, but added that that money was debited to his own account. When it was alleged by Maulvi Muhammad Yasin himself that the firm was running at a loss, he had no justification for taking money, from the capital money for utilizing on his personal needs. It was also admitted by him that for more than four years, during which the partner,,hip business was carried on, not s single pie, on account of profits, was paid to Haji Muhammad Yasin respondent. It‑ was further admitted by him and some of the witnesses, that a case of dacoity was regis tered against Abdul Karim respondent and security proceedings were also taken against the parties. In these circumstances clauses (c), (f) and (g) of section 44 of the Partnership Act were rightly held applicable to this case and, hence, the Courts below were justified in ordering dissolution of the firm.

14. The learned counsel for the appellants referred to a case of the Lahore High Court as Ram Singh v. Ram Chaad (1), i n which it was held that a partner who is himself guilty of misconduct was not entitled to sue for dissolution of partnership. There is no quarrel with this proposition of law, but the appellants have not been able to establish by production of reliable evidence, that Haji Muhammad Yasin respondent was guilty of misconduct. On the other band, it is an admitted fact that a sum of Rs. 70,000 was invested by him in the partnership business and that in spite, ' (1) I L R 1 Lab. 6 of such a huge investment, he was not allowed Co take any effective part in the management, nor was he paid anything in the shape. of profits. The authority relied upon by the learned counsel for the appellants is, therefore, of no help to him.

15. The learned counsel for the appellants also referred to page 508 of the English and Empire Digest, Volume 36, para graph 1742, which is worded as follows :‑ "By Partnership Act, 1890, the Court may decree a dissolution of partnership when the business can only be carried on at a loss : Held, this means that there must be a practical impossi bility of profit, and if there are special circumstances to which the loss can be attributed, the Court cannot infer impossibility of profit." On the basis of this authority, it was contended that as the firm had to incur huge expenditure, in the beginning, for making certain kacha roads, and as after two years the Company was granted route permits for pucca roads, there was every prospect of the firm earning profits, if this litigation had not been started. There is nothing on the record of this case to indicate that during the two E years when the firm had been plying motor vehicles on pucca roads, it was earning profits. On the other hand, the appellants' case, as set out in the written statement, was that during the whole of the period of four years no profits were earned by the firm. This being the position the authority relied upon by the learned counsel is of no help to the appellants.

16. The learned counsel for the respondent referred to a case of the Privy Council as Rahmat‑un‑Niassa Begum and others v. Price and others (1), in which it was held that when it was esta blished that a partnership business could not be continued without a loss, the Court has jurisdiction in the exercise of its sound discretion, to order its dissolution, though the partnership was not terminable at will.

17. For reasons given above, I am of opinion that the Courts below acted rightly in ordering dissolution of the firm.

18. With regard to the matter of accounts the learned, counsel for the appellants contended that as accounts had been rendered from time to time, in the meetings of the firm, of which minutes were kept, the respondents could not sue for the purpose. No doubt, in some of the meetings attended by the partners accounts were produced by the Managing Director, but the pro duction of accounts would not amount to rendering of accounts, t nor is there anything before me on which I can give a finding that the accounts produced before the Commissioner were the very accounts which had been produced in the various meetings. Ln any, case, as the accounts were not complied and no balance‑sheet wasl drawn up, it cannot be said that the accounts were duly rendered to the partners. Reference, in this connection may be made to a case of the Lahore High Court, as Firm of Kirparam Brij Lall v. Firm of Sukh Dev Bakhsh (2), in which it was held that where a partner withheld the annual profits of a concern from a member of the firm, the partner excluded coidd bring a suit for accounts (1) 22 C W N 601 (2) A I R 1922 Lab. 195 t and for his share of the profits. Reference may also be made to a case of the Nagpur High Court as Radhikaprasad Dani v. Nandkumar t Laxman Prasad and others (1), in which it was held that a unilateral presentation of a statement of accounts, by one side, would not amount to an adjustment of accounts between two parties.

19. Keeping in mind the views expressed in these cases and the facts of this case, I am of opinion that the Courts below were justified in passing against the respondents (a decree) for rendition of accounts.

20. Lastly, the learned counsel for the appellants contended that as during a period of one year, one AbdurRazzaq, a Mukhtar i‑Am of Haji Muhammad Yasm was working as Manager of the partnership firm, at least, accounts for that period should not have been ordered to .be rendered. In advancing this argument, the learned counsel overlooked the fact that Maulvi Muhammad Yasin continued to hold the office of the Managing Director even during the period when Abdur Razzaq was working as the Manager. Being a mere employee of the company, Abdur Razzaq could not have had effective control over the affairs of the concern and hence, on this ground alone, the Managing Director could not escape the liability of rendering acccounts for a part of the period.

21. As to the contention that without determination of the respective shares of the partners in the profits of the business, no preliminary decree, for accounts, could be passed and that it was obligatory for the trial Court to first determine the shares of the partners, in the profits, as required by Order XX, rule 15 of the Civil Procedure Code, much need not be said. As stated above, according to the terms of tfie agreement of the partnership one' fourth of the profits was to be taken by Maulvi Muhammad Yasin and out of the remaining three‑fourths, one‑half was to be taken by all the partners, in equal shares, and the remaining half by them in proportion to the investments made. Without going into the accounts, it is not possible to give a finding on the question as to G how much money was invested by each of the six partners, because the appellants claim to have invested some money in the business. After the accounts of the parties have been gone into and the Commissioner appointed by the trial Court submits a report, it would be possible to determine the shares of the parties in the profits. This would be done before the final decree is passed in the case. In my opinion, the trial Court, in passing the preliminary decree in terms of Order XX, rule 15 of the Civil Procedure Code, without determining the respective shares of the partners in the profits, did not violate this provision of law and, therefore, the validity of the decree cannot be challenged on any such ground.

22. No other point was urged by the learned counsel for the appellants. For reasons given above, this appeal, being without any force, is hereby dismissed with costs. A. H. Appeal dismissed.