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DhuliaAmalnerMotorTransportLimitedvRaychandRupsiDharamsi
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BombayHighCourt
10October1951

DhuliaAmalner Motor Transport Limited


v
Raychand Rupsi Dharamsi and Others
CaseNo:SecondAppealsNos.805and829andCivilApplicationNo.1155of1949
Bench:D.V.VYAS
Citation:1951IndlawMUM27,[1952]22CompCas306
VYAS,J.

These appeals arise out of an appellate decision of the Civil Judge (Senior Division) with appellate
powersatDhuliabywhichhedisposedoftwoappeal,namely,AppealsNos.144and145of1943,
which had arisen out of suits Nos. 82 and 63 respectively of 1942. In Appeal No, 144 of 1943 the
learnedJudgeofthelowerappellateCourtsetasidethejudgmentanddecreeofthetrialCourtand
granted a declaration that the partnership firm known by the name of the DhuliaAmalner Motor
Owners' Union had not been dissolved but had merely changed its name to the DhuliaAmalner
Motor Transport, Limited. He allowed an option to the plaintiff and his colleagues, the minority
membersofthepartnershipfir,ofpayingasharecapitalofRs.800eachwithinterestat6percent.
fromFebruary21,1942,onwardand

"participating in the income and profits obtained by the DhuliaAmalner Motor


Transport,Limited,uptothedateofthedecree."
On the plaintiff failing to make the option, the appellate decree directed the accounts of the Dhulia
AmalnerMotor,Transport,Limited,tobemadeonthebasisofthesaidcompany
"making such profits as may be attributable to the use of the permit, furniture,
goodwill, etc., of the Union."The learned Judge went on to say :" for either sort of
accountsapreliminarydecreefortakingaccountsbyaCommissionerispassed."

In the other appeal (No. 145 of 1943) which arose out of Suit No. 63 of 1942 the learned Judge
directed a preliminary decree to be drawn up for taking accounts of the plaintiff's share in the
DhuliaAmalnerMotorsOwners'UnionfromJuly22,1941,uptothedateofthesuit.Theplaintiffin
thesaidsuit(defendantNo.13oftheothersuitno.82of1942)wasalsogivenanoptiontobecome
ashareholderofthelimitedcompanyonpaymentofRs.800togetherwithinterestat6percent.per
annum from February 21, 1942, onwardNow, the facts from which these appeals have arisen may
briefly be stated : Originally individual bus owners used to ply their buses on hire on the Dhulia
AmalnerrouteandtheAmalnerMarwadroute.Thatusedtobedoneunderthesuperintendenceof
the District Superintendent of Police. In due course the Regional Transport Authorities were
establishedforthevariousregionsandthecontrolandsupervisionoverthebusesplyingonhirein
the various regions passed to the respective Regional Transport Authorities. The two routes in
question the DhuliaAmalner route and the AmalnerMarwad route were situated within the
jurisdictionoftheRegionalTransportAuthority,Nasik.Acertainamountofcorrespondenceensued
betweentheRegionalTransportAuthority,Nasik,andthemanagerofthemotorservicewhichused
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toplybusesoftheindividualbusownersontheabovementionedroutes.Exhibits148,149and146
are amongst some of the letters which passed between the two. The Regional Transport Authority
strongly recommended the formation of collective bodies in preference to individual enterprise for
carryingonthepassengertransportbyroads.UltimatelyonNovember8,1940,apartnershipfirm
consistingof17partnersandknownbythe name of the DhuliaAmalner Motor Owners' Union was
formed.ItwasregisteredonNovember11,1940.ThepartnershipdeedisExhibit167.Inthewords
ofthelearnedtrialJudgethetermsofthesaidpartnershipwere

"Itwasoneofthefundamentaltermsofthepartnershipagreement(Exhibit167)that
thedisputebetweenthepartnersinterseweretobedecidedbyatwothirdmajority,
witharight toappealtoanindependent tribunal of three persons to be appointed by
the Union from time to time. The individual owners of the buses were to remain the
ownersandwereliabletospendforanyrepairstotheirbusies,orforsuchspareparts
and accessories as were necessary to maintain their buses in a roadworthy condition.
Suchwasinbrieftheconstitutionoftheunion..........TheUnionhaddecidedtorunten
busesatatime.Aftereveryoneofthetenbuseshadmadeonetripandatouringcar
hadcompletedtworeturntripsontheseroads,'acircle'wassaidtobecomecomplete
and after 4 or 5 such circles, accounts were made and the income distributed among
thepartners.OutoftheearningsaReserveFundattherateofoneannaperrupeewas
setapartandoutofthiscollectiononehalfwastoremainastheReserveDundforthe
Unionandtheotherhalfwastogotowardsthepaymentbywayofremuneration.Two
ownersofcarsweretoattendfordutyattheDhuliaandtheAmalnerstands....."
Itistoberememberedthatitwasapartnershipatwill.Withinashorttimedifficultieswereexperienced
intheworkingofthepartnershipbusinessand,onJuly23,1941,whatMr.Kotwalfortheappellantcalls
akararnamawaspassed.ThatdocumentisExhibit166.Itdescribesitselfasakararnamabutinfactisa
letterwhichwaswrittenby13partnersofthefirmtothemanagerofthefirm
Therein,amongstotherthings,itwassuggestedinthiskararnamathatinfuturethepartnershipfirm
should not be carried on in accordance with the partnership deed, that the said partnership deed
should be cancelled and that a private limited company should be formed. Thereafter a notice,
Exhibit 136 dated August 19, 1941, was sent out to the members of the Union for convening a
generalmeeting.OnAugust24,1941,thegeneralmeetingwasheld.Itwasattendedbytenoutof
the seventeen partners of the firm and an important resolution which was unanimously passed by
thememberspresentwasresolutionNo.4whichstatedamongstothers

Inthatasakararnamasignedbythemajorityofthepartnersofthefirmhadbeenreceivedbythe
manager of the firm suggesting dissolution of the partnership, enquiries should be made and
information collected on the subject of the formation of a private limited company, whereafter the
necessarypermissionoftheRegionalTransportOfficershouldbeobtainedandstepsshouldbetaken
to form a private limited company as quickly as possible. It is to be noted at this stage that if we
turntotheresolutionthereisnothingtoshowthattheplaintiffandhiscolleagueswhoconstituteda
minorityofthemembersofthepartnershipattendedthisgeneralmeeting.Ifweturntothenotice
Exhibit136bywhichthismeetingwasconvened,wefindagainthesignaturesthereonofthosewho
had received the notice in token of the receipt. A curious circumstance in this connection is that
whereasthesignaturesofallthememberswhoconstitutedthemajorityintheUnionwerewrittenin
ink,onlytheallegedsignaturesoftheplaintiffandhiscolleaguesaretobefoundinpencil.Whereas
alltheothersignaturesaretobefoundatthefootofthenotice,itself,thefiveallegedsignaturesof
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theplaintiffandhiscolleaguesaretobefoundonthereverseofthenotice.Theleastthatmaybe
saidaboutthesefeaturesisthatthecircumstancesofthesefivesignaturesonlybeinginpenciland
appearingonthereverseisasuspiciouscircumstance.Itiscategoricallyallegedbytheplaintiffthat
this notice was never received by himOn a careful consideration of the above mentioned
circumstancesIamnotreallysatisfiedthattheplaintiffandhiscolleagueswhowereinaminorityin
thepartnershipfirmonthequestionofitsdissolutiondidreallyknowthatageneralmeetingwasto
be convened on August 24, 1941, and I think it was therefore that they could not attend that
meeting. This aspect of the case will have an important bearing when we shall proceed to the
consideration of the question whether the resolution passed at the meeting of August 24, 1941,
could amount to a statutory notice within the meaning of S. 43 of the IndianPartnershipAct. The
next general meeting of the partnership firm was held on December 25, 1941, and the pertinent
resolution was resolution No. 1 which stated that immediate steps should be taken for making a
valuationofthebusesandfortakingpossessionofthebuses.ThenextgeneralmeetingoftheUnion
washeldonJanuary5,1942,anditiscontendedfortheappellantthatitwasanimportantmeeting.
My attention was drawn to resolution No. 1 which was passed then and which stated : that a
company was to be formed, the buses were to be handed over to the company after making the
valuationandsharesweretobeissuedonthebasisofthesaidvaluation.Itmaybenotedthatthis
meetingwasattendedbyallthepartnersofthefirm.Elevenpersonswereinfavouroftheresolution
and five remained neutral. Those who remained neutral of the Union, which was referred to in the
argumentsintheseappeals,washeldonJanuary31,1942,andresolutionNo.3whichwaspassed
thenissaidtobeanimportantone.Itstatedthatthereservefundshouldbedistributedamongst
thepartnersofthefirmandaccountofthebusinessofthefirmshouldbemadeuptoJanuary31,
1942, and the amounts should be distributed to the partners according to their shares. On these
facts regard being had to the kararnama Exhibit 166 dated July 23, 1941, the notice Exhibit 136
datedAugust19,1941,andtheresolutionspassedatthegeneralmeetingsdatedAugust24,1941,
December25,1941,January5,1942,andJanuary31,1942,itiscontendedbyMr.Kotwalforthe
appellant that the partnership firm had ceased to do its business from January 31, 1942, onward,
i.e.,thefirmwasdissolvedfromthatdateandtheprivatelimitedcompanyhadbegunitsbusiness
from February 1, 1942(3) Mr. Purshottam for the respondents who constitute a minority section in
thepartnershipfirmhasstrenuouslycontendedthatthepartnershipfirmhasnotbeendissolvedbut
isstillcontinuing,thattherequisiteprocedureforthedissolutionofapartnershipasprescribedbyS.
40and43oftheIndianPartnershipActwasnotfollowed,thatthebusinesswhichwasdonebythe
privatelimitedcompanywasthesamebusinesswhichwasdonebytheprivatelimitedcompanywas
thesamebusinesswhichwasdonebytheUnionandthatthecompanywasreallythesameentityas
theUnionbutunderadifferentname.RelyingonS.37oftheIndianPartnershipActMr.Purshottam
hascontendedthatthemajoritysectionofthepartnershipfirmareusingtheartificialcreationofthe
company as their agent for doing the business with the property of the partnership firm and are
therefore liable to render to the minority section an account of the profits made by them and
attributabletotheuseofthesharesoftheminoritysectioninthepropertyofthefirmwhichisused
by them (majority section). In the alternative Mr. Purshottam has relied on S. 67 of the Indian
TrustsAct and has contended that as the majority section of the members of the partnership firm
who have promoted the private limited company were trustees of the partnership property and as
they had wrongfully employed the said trust property in doing a business of their own under the
nameoftheartificiallycreatedcompany,theywereliabletorenderaccountstotheminoritysection
oftheprofitsmadebytheminthebusinessdoneunderthenameofthecompany

HISLORDSHIPagreedwiththeviewofthelearnedJudgeofthelowerappellatecourtthattheUnion
(partnershipfirm)wascontinuingtoexistandwasneverdissolved.Althoughonthequestionofthe
allegeddissolutionoftheUnionwhichgoesbythenameoftheDhuliaAmalnerMotorOwners'Union
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my decision is thus against the appellant, it is impossible to confirm the decree of the lower
appellatecourtwhichisbasedonacompleteignoranceofthelegalappellatecourtwhichisbasedon
acompleteignoranceofthelegalposition.ItisignoranceoflawembodiedinthestatutetheIndian
Companies Act to say that the difference between the Union and the private limited company in
thiscaselaymerelyinthechangeofnamefrom"theDhuliaAmalnerMotorOwners'Union"to"the
DhuliaAmalner Motor Transport Limited." The fundamental basis, which was a wrong basis of the
decreepassedbythelowerappellatecourtwasasthoughthebusinessdonebytheUnionorelse
thedecreeforaccountswhichhasbeenpassedwouldbeamanifestlyabsurddecree.Now,itistobe
noted that the limited company, in substance and in form, was 'not' the same entity as the Union
withmerelyachangedname.Thecompanyhasadistinctentityofitsown,quitedifferentfromthe
entityoftheUnionandtheentitiesoftheshareholders,andthebusinesswhichwasdonebyitwas
notthesamebusinessaswasdonebytheUnion,nowwasitacontinuationofthesamebusiness.It
was not the business of its shareholders either. What happened in this case was this : After the
partnership firm worked its way for sometime, some of the partners, i.e., defendants nos, 1 to 12
anddefendantNo.15,formedaprivatelimitedcompany,whichtheycoulddounderthelaweven
while the partnership continued to be a running concern. Such of the partners of the Union, who
formedalimitedcompany,soldbethecompanytheirbuseswhichwerethereforebeingusedbythe
UnionUnderthetermsofthepartnershipdeed(videCl.6ofExhibit167)itwasperfectlycompetent
toapartnertoselltoathirdpersonhisbusorbuseswhichhehadgiventotheUnion.Thecompany
wasthesaidthirdpersontowhomdefendantsNos.1to12anddefendantNo.15whowerepartners
in the Union, sold their buses after withdrawing them from the Union. Now, if two parties fall out,
howcanofthemcallupontheothertorendertoittheaccountsofabusinessdonebyathirdparty
? The buses, with which the company was doing its business, were the property of its own. They
werenotthepropertyoftheUnion.TheywereneverthepropertyoftheUnion.TheUnionhadonly
theuseofthem.Theproprietaryinterestinthemhadalwaysbelongedtosuchpartnersaswerethe
owners thereof before the Union was formed. The said buses had become the property of the
company by purchase from defendant No. 15, to whom it was open under the partnership
agreement to sell their buses to any person they liked after withdrawing their use from the
partnership firm. Therefore it is a crux of the matter to remember (1) that the buses which the
company was plying were not the property of the partnership firm, nor the property of any of the
partners of the firm, nor the property of the shareholders, but the property of the company itself
(2)thatthebusinessofthecompanywasnotthebusinessoftheUnionand(3)thatthecompany
wasacorporatebodywhoseentitywasentirelydifferentfromtheentitiesofisshareholdersorthe
entitlesoftheUnionanditsmembers.Suchbeingthepositioninlawwhichthelearnedjudgeofthe
lower appellate Court failed completely to appreciate, how can one set of partners to render
accounts of a business done by a third person altogether, and yet that is what in substance and
effecthasbeendonebythedecreeofthelowerappellateCourtNow,itisawellsettledprincipleof
lawthatalimitedcompanyhasadistinctentityofitsown,whichiscreatedbythestatute,inthis
casetheIndianCompaniesAct.IfweturntotheIndianCompaniesAct,S.23thereoflaysdown

"(1) On the registration of the memorandum of a company, the registrar shall certify
under his hand that the company is incorporated, and in the case of the limited
companythatthecompanyislimited

(2) From the date of incorporation mentioned in the certificate of incorporation, the
subscribersofthememorandum,togetherwithsuchotherpersonsasmayfromtimeto
time become members of the company, shall be a body corporate by the name
contained in the memorandum, capable forthwith of exercising all the functions of an
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incorporated company, and having perpetual succession and a common seal, but with
suchliabilityonthepartofthememberstocontributetotheassetsofthecompanyin
theeventofitsbeingwoundupasismentionedinthisAct."

It is thus clear that a limited company is a body corporate which has an entity of its own, with a
perpetualsuccessionandasealofitsown

It is contended for the plaintiff Raychand Rupsi Dharmsi Shet that the private limited company's
name"theDhuliaAmalnerMotorTransportLimited"ismerelyanaliasfor"theDhuliaAmalnerMotor
Owner'sUnion",thatinrealitythecompanyisnodifferentconcernandisnotadifferententityfrom
theUnionitselfandthatthebusinesswhichwasdonebythecompanywasthesameaswasdoneby
the Union, and on that basis he was asked for certain declarations and injunctions and also for
accountsofthebusinessdonebythecompanyandforashareintheprofitsmadebythecompany
andattributabletotheuse,bythecompany,ofthevehicles,etc.,which,saystheplaintiff,arethe
property of the Union which has not been dissolved. Now, in Salomon v. Salomon & Co. LORD
HALSBURY,L.C.,inhisaddresstotheHouseofLordssaid

"My Lords, the important question in this case, I am not certain it is not the only
question,iswhethertherespondentcompanywasacompanyatallwhetherintruth
that artificial creation of the legislature had been validly constituted in this instance
andinordertodeterminethatquestionitisnecessarytolookatwhatthestatuteitself
has determined in that respect. I have no right to add to the requirements of the
statute, nor to take from the requirements thus enacted. The sole guide must be the
statuteitself

Now,thatthereweresevenactuallivingpersonswhoheldsharesinthecompanyhas
notbeendoubted.AstotheproportionateamountsheldbyeachIwilldealpresently
butitisimportanttoobservethatthisfirstconditionofthestatuteissatisfied,andit
followsasaconsequencethatitwouldnotbecompetenttoanyoneandcertainlynot
tothesepersonsthemselvestodenythattheywereshareholders

Still less is it possible to contend that the motive of becoming shareholders or of


making them shareholders is a field of inquiry which the statute itself recognises as
legitimate

Iamsimplyheredealingwiththeprovisionsofthestatute,anditseemstometobe
essential to the artificial creation that the law should recognise only that artificial
existencequiteapartfromthemotivesorconductofindividualcorporators.Insaying
this,Idonotatallmeantosuggestthatifitcouldbeestablishedthatthisprovisionof
the statute to which I am adverting had not been complied with, you could not go
behind the certificate of incorporation to show that a fraud had been committed upon
the officer entrusted with the duty of giving the certificate, and that by some
proceedinginthenatureofscirefaciasyoucouldnotprovethefactthatthecompany
had no real legal existence. But short of such proof it seems to me impossible to
disputethatoncethecompanyislegallyincorporateditmustbetreatedlikeanyother
independent person with its rights and liabilities appropriate to itself, and that the
motives of those who took part in the promotion of the company, are absolutely
irrelevantindiscussingwhatthoserightsareliabilitiesare....Icanonlyfindthetrue
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intentandmeaningoftheActfromtheActitselfandtheActappearstometogivea
company a legal existence with, as I have said, rights and liabilities of its own,
whatever may have been the ideas or schemes of those who brought it into
existenceEither the limited company was a legal entity or it was not. If it was, the
businessbelongedtoitandnottoMr.Salomon.Ifitwasnot,therewasnopersonand
nothingtobeanagentatallanditisimpossibletosayatthesametimethereisa
companyandthereisnot."

Now,withgreatrespect,theseareveryweightlyobservationswhichestablishbeyondanydoubtthe
fact that the DhuliaAmalner Motor Transport Limited (the private limited company) was an
independent person in the eye of law, a legal entity, and the business of plying motor buses on
DhuliaAmalner route and AmalnerMarwad route belonged to it and not to its shareholders. Here
also, the sole guide for determining whether the Union and the company are the same entity or
differententitiesisthestatuteitself,namely,theIndianCompaniesAct,andallthatwehavegotto
seeiswhetherthe"artificialcreationofthelegislature",i.e.,thecompany,wasvalidlyconstitutedor
not. Here also, it is not disputed that several actual living persons are holding shares in the
company. We are not concerned with the proportionate amounts held by each, but the important
pointisthatthefirstconditionofthestatuteissatisfied,anditwouldbefutileforanyonetodeny
that some of the partners of the partnership firm are shareholders in the company. The plaintiff
alleges dishonesty of motive against defendants Nos. 1 to 12 and defendant No. 15 who were
responsible for promoting the company, but the motive for becoming shareholders is not a filed of
inquiry which is recognised as legitimate by the Indian Companies Act. The law recognises the
existence of the company, quite irrespective of the motives, intentions, schemes or conduct of the
individual shareholders. There is no allegation whatever in this case that any fraud had been
committedupontheofficerwhogavethecertificateofregistrationofthecompanyandthereforethe
followingobservationsofLORDHALSBURYarparticularlyappropriate

"....... But short of such proof (i.e., proof of fraud in getting the certificate of
registration) it seems to me impossible to dispute that once the company is legally
incorporated it must be treated like any other independent person with its rights and
liabilities appropriate to itself, and that the motives of those who took part in the
promotionofthecompanyareabsolutelyirrelevantindiscussingwhatthoserightsand
liabilitiesare."

AshisLordshipputittersely

" Either the limited company was a legal entity or it was not. If it was, the business
belongedtoitandnottoMr.Salomon.Ifitwasnot,therewasnopersonandnothing
to be an agent at all and it is impossible to say at the same time that there is a
companyandthereisnot."

There is thus no substance in the argument urged for the plaintiff that those who promoted an
artificial creation in the shape of this company did so to employ the said creation as an agent for
theirownbusiness.Thereisalsonoforceintheplaintiff'scontentionthatthereisacompanyinthe
sensethatthemajoritysectionofthepartnersofthepartnershipfirmareemployingitasanagent
todotheirownbusinessandthatthereisnocompanyinthesensethattheentityoftheUnionand
thecompanyisthesamewithonlyachangeinthename.AsLordHalsburysaid,youcannotsayat
thesametimethatthereisacompanyandthereisnot

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In Ramkanai Singh v. Mathewson, a patni lease actually granted was challenged and one of the
groundsofthechallengewasthatthetransactionwhichwassanctionedwasatransactionofagrant
of a patni lease to Robert Watson & Co., in other words, to a firm of individual men, and not to
Robert Watson & Co., Limited, i.e., a different and incorporated persona. In considering that
objectiontothegrantofthepatnileasetheirLordshipsofthePrivyCouncilobserved

"Thisdemandscarefulconsideration.Thereisthistobesaidfortheobjection,thatthe
personinthelattercase(i.e.,inthecaseofRobertWatson&Co.,Limited)isdifferent
fromthepersonaintheformer(i.e.,inthecaseofRobertWatson&Co.,)andthata
changeinthelesseeorpatnidaroughttobetreatedasachangeinessentials."

Ontheauthorityofthisdecisionalso,therewouldbenodifficultyinholdingthatthepersonaofthe
companyisdifferentfromthepersonaofthepartnershipfirm(Union),inotherwordsthecompany
is a persona altogether different from the partners in the firm or from the shareholders who
promotedthecompany.Itisathirdperson

InE.B.M.CompanyLtd.v.DominionBank,alsoitwasheld

"The distinction should be clearly marked, observed and maintained between an


incorporated company's legal entity and its actions, assets, right and liabilities on the
onehand,andtheindividualshareholdersandtheiractions,assets,rightsandliabilities
ontheotherhand."

It is thus clear that the legal entity, actions, assets, rights and liabilities of the company are quite
differentfromthoseoftheindividualshareholders.Thebusinessofplyingmotorbusesontheroutes
inquestionandtheassetsofthesaidbusiness(buses,etc.)belongsthustothecompanyandnotto
theshareholders.Thatbeingso,onthetwosetsofpartnersintheUnionfallingoutonanyquestion
one set cannot call upon the other set, who may have promoted a limited company, to render
accountsofthebusiness,whichisneitherthebusinessofthefirstsetofpartnersnorthebusinessof
thesecondsetofthem,butisthebusinessofthecompany,athirdpersonaltogether

Mr.PurshottamfortheplaintiffhasreferredthecourttoS.37oftheIndianPartnershipAct,S.67of
theIndianTrustsAct, certain observations at pages 444 and 448 of Aggarwala's Indian Trusts Act
and decisions in Ahmed Musaji Saleji v. Hashim Ebrahim Saleji, and Ramlal Thakursidas v.
LakhmichandMuniram.Inmyopinion,however,thereferencestotheabovesectionsandauthorities
arealtogetherbesidethepoint.S.37ofthePartnershipActcanobviouslynotapplytothefactsof
this case for the simple reason that the business of the company is not the business of the
shareholderswhoarepartnersinthepartnershipfirmandarealsothepromotersofthecompany.It
is impossible to say in this case that the business which is done by the company is the business
whichcertainofthepartnersofthepartnershipfirmaredoingwiththepropertyofthefirmorthat
the profits which accrue from the business are the profits of the abovementioned partners or the
firmattributabletotheuse,bythem,ofthepropertyofthefirm.S.67oftheIndianTrustsActalso
hasnorelevancehere,sincethereisnoquestionatallofanytrustorfiduciaryrelationshipbetween
the company and the minority section of the partners in the firm (plaintiff and his colleagues
defendants Nos. 13, 14 and 16) and no question at all of any breach of trust by the companyIn
AhmedMusajiSalejiv.KashimEbrahimSaleji,onwhichMr.Purshottamhasrelied,itwasobserved
bytheirLordshipsofthePrivyCouncil
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"......Itiswellsettledthatincertaincases,whenonthedissolutionofafirmoneofthe
partnersretainsassetsofthefirminhishandswithoutanysettlementofaccountsand
applies them in continuing the business for his own benefit, he may be ordered to
accountfortheseassetswithinterestthereon,andthisapartfromfraudormisconduct
inthenatureoffraud."

Theseobservations,weightyastheyarewithgreatrespect,havenorelevanceinthepresentcase.
Inthefirstplace,thisinnotacaseinwhichthedissolutionofthefirmhastakenplace.Secondly,
this is not a case in which any of the partners of the Union are continuing the business, with the
assetsofthatfirm,fortheirownbenefit.Thereishardlyanyneedtorepeatthatthebusinessofthe
privatelimitedcompanyisitsownandcouldnotbecalledthebusinessofanyofthepartnersofthe
partnership firm. Clearly, therefore, the decision in Ahmed Musaji v. Hashim Ebrahim, has no
applicationtothefactsofthiscase

The next case which was relied upon by Mr. Purshottam was the case of Ramlal Thakursidas v.
LakhmichandMuniram,andIfailtounderstandhowthisdecisioncouldpossiblyapplyinthepresent
instance.Itwasacasewherethesurvivingpartnersofafirm,intheabsenceofarepresentativeof
a deceased partner, adjusted the partnership accounts and agreed to hand over a portion of the
partnershippropertytooneofthepartnersincompromiseofhisclaim,andthepartnerwhoseclaim
was so agreed to be compromised prayed for a dissolution of the firm upon the basis of such
compromiseitwasheldthatarepresentativeofthedeceasedpartnerwasanecessarypartytothe
suit,anditwasfurtherobservedthatsurvivingpartnersweretreatedastrusteesofthepartnership
propertyforthebenefitoftherepresentativeofadeceasedpartnerandanagreemententeredinto
bysuchsurvivingpartnersintheabsenceoftherepresentativeofthedeceasedpartnerwhichwas
inconsistentwiththenatureofsuchtrusttodealwiththepartnershipassetsonlybywayofsale
wouldnotbespecificallyenforced.ThereisnoquestioninthiscaseofdefendantsNos.1to12and
defendant No. 15 employing the company as their agent for doing business as trustees of the
partnershippropertyforthebenefitoftheremainingpartnersofthepartnershipfirm.Thatbeingso
thedecisioninRamlalThakursidasv.LakhmichandMuniram,isbesidethepointforthepurposeof
theseappealsAtpage444ofAggarwala'sIndianTrustsActwefindthatthisiswhatisstated

"If a trustee pay trustmoney into a bank to the account of himself, not in any way
earmarkedwiththetrust,andalsokeepprivatemoneyofhisowntothesameaccount,
theCourtwilldisentangletheaccount,andseparatethetrustfromtheprivatemoney,
and award the former specifically to the cestui que trust. In the case of a person
occupying a fiduciary position, although not an express trustee, as a factor or agent,
thesameruleisequallyapplicable"

HereagainitistobenotedthatdefendantsNos.1to12anddefendantNo.15aspromotersofthe
company and shareholders thereof did not occupy any fiduciary position in relation to the plaintiff
and defendants Nos. 13, 14 and 16 and therefore also the observations relied upon by Mr.
Purshottamwouldnothelphim

For the abovementioned reasons, although I am in agreement with the conclusion of the learned
Judge of the lower appellate Court that the partnership firm has not been dissolved in this case, I
findmyselfunabletoconfirmthejudgmentanddecreeofthelearnedJudge
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The plaintiff has no legal right, and cannot sue, for accounts of the business done by the Dhulia
Amalner Motor Transport Limited. If he has any remedy at all, and I am expressing no opinion on
that point, against any of the partners of the firm for breaches, if any, of the terms of the
partnershipagreement,thatremedyistosueindamagessuchpartnersasmayhavecommitteda
breach of the terms of the agreement. But surely the remedy is not to sue an altogether third
person, an independent person, namely, the company, for accounts of the business done by it, a
business which does not belong to any of the members of the partnership firm and does not also
belong to any of the shareholders of the company. In these circumstances, therefore, Appeal No.
805of1949isallowed,althoughIhold,onaquestionoffact,thatthepartnershipfirmknownasthe
DhuliaAmalner Motor Owner's Union has not been dissolved. On the question of costs, I think it
would be proper to make no order as to costs in this appeal, since on a point on which a very
considerableamountofargumentwasadvancedbybothsides,namely,apointofallegeddissolution
ofthepartnershipfirm,theappellanthaslost

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