RAMAGYA PRASAD GUPTA & ORS. versus MURLI PRASAD & ORS .

RAMAGYA PRASAD GUPTA & ORS. versus MURLI PRASAD & ORS .

Even if the partnership was void under the Electricity Act, all partners who contributed money for purchase of the undertaking are entitled to be compensated in proportion to their shares as per the last partnership deed, under section 65 of the Contract Act, after discharging liabilities, and respondent's exclusive claim fails.

Parties
Appellant: Ramagya Prasad Gupta & Ors.; Respondent: Murli Prasad & Ors.
Jurisdiction
India
Judgment Date
11 April 1974
Procedural Posture
Civil Appeal / Appeal From Patna High Court Reversing Trial Court; Supreme Court Decision
Outcome
Appeal allowed; judgment and decree of the High Court reversed.
Legal Topics
Void Agreements, Res Judicata, Recovery Under Void Contracts, Partners' Rights in Case of Void Partnership
Contract Law Electricity Law Partnership Law Void Agreements Res Judicata Recovery Under Void Contracts Partners' Rights in Case of Void Partnership

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Parties

Ramagya Prasad Gupta & Ors.

Appellant

Murli Prasad & Ors.

Respondent

Procedural Posture

Civil Appeal / Appeal From Patna High Court Reversing Trial Court; Supreme Court Decision

Legal Issues

  1. 1 Whether the appeals are barred by res judicata in view of dismissal of earlier connected appeals
  2. 2 Whether first respondent is entitled to the entire compensation money to the exclusion of other partners

Ratio Decidendi

Even if the partnership was void under the Electricity Act, all partners who contributed money for purchase of the undertaking are entitled to be compensated in proportion to their shares as per the last partnership deed, under section 65 of the Contract Act, after discharging liabilities, and respondent's exclusive claim fails.

Court Disposition

Appeal allowed; judgment and decree of the High Court reversed.

Orders

  • Suit No. 94 of 1956 dismissed with costs.
  • First respondent Murli Prasad not entitled solely to full compensation money; all named in the partnership deed of 31 August 1950 (or their legal heirs/assignees) are entitled to shares in proportion, after satisfaction of outstanding liabilities.