LexSETH BADRI PRASAD AND OTHERS versus SETH NAGARMAL AND OTHERS
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\ (1) S.C.R. SUPREME COURT REPORTS 769 SETH BADRI PRASAD AND OTHERS v. SETH N AGARMAL AND OTHERS ' (JAFER IMAM, s. K. DAS and J. L. KAPUR, J"J.) Maintainability of Suit-Unregistered company-Suit 'by mem- bers for accounts-New point-Rewa Companies Act, z955, s. 4(2) -Indian Partnership Act, z932 (IX of z932), s. 69(3)(a). When cloth control was introduced in Rewa State, ~5 cloth dealers of BudQ.ar, including the thirteen appellants, formed themselves into an Association to collect the quota of clqth to be allotted to them and to sell it on profit. The Association func- tioned through a President and a pioneer worker; they kept accounts and distributed profits. After cloth had beeri decon- trolled and the work of the Association had come to an end, the appellants filed a suit against the first respondent for rendition of accounts for a portion of the period that he had been President of the Association and for realisation of the amount fo~nd due with interest. The suit was decreed by the trial Court but was, on appeal, dismissed by the Judicial Commissioner. In appeal before the Supreme Court, the first respondent raised, for the first time, a preliminary objection that the suit was not main~ainable as the Association consisting of more than 20 persons was not registered as required by s. 4(2) of the Rewa State Companies Act, 1935, and that consequently the members of the Assqciation had no remedy against each other in respect of its dealings and transactions. The appellants objected to the. raising of tl;i.e new plea and contended that, nevertheless, the suit was maintainable. Held; that the suit was not maintainable. In view of s. 4(2) of the Act the Association was illegal. The reliefs claimed for rendition of accounts in enforcement of the illegal contract of partnership necessarily implied recognition by the Court tliiat the Association existed of which accounts were to be taken The Court could not assist the plaintiffs in obtaining their s~are of the profits made by the illegal Association. U. Sein Pov. U. Phyu, (1929) I.L.R. 7 Rang. 540, not ;i.pplic- able. Held further, that the new point ought to be allowe<l to be raised. The question was a pure question of law and did not require the investigation of any facts. The objection rested on the provisions of a public statute which no court could exclude from its consideration. Surajmull Nargoremull v. Triton Insurance Company Ltd., (1924) L.R. 52 I.A. 126; Sri Sri Shiba Prasad Singh v. Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, followed. The analogy of s. 69(3)(a) of the Indian Partnership Act, 1932, did not apply, an under that Act an unregistered firllll was 97 Dec~mbar 9. 770 SUPREME COURT REPORTS [1959] Supp r958 not illegal. Besides, the suit was not one for accounts of a - dissolved firm but of an illegal Association which was in existence Seth Barlri Prasad at the relevant time. and Others Y. Seth Nagarmal and Olliers CIVIL APPELLATE JURISDICTION: Civil Appeal No. 125 of 1955. Appeal from the judgment and decree dated Novem- ber 20, 1951, of the former Court of Judicial Com- missioner, Vindhya Pradesh, in Civil First Appeal No. 47 of 1951, arising out of the judgment and decree dated June 4, 1951, of the Court of Additional Di8trict Judge, Umaria, in Civil Original Suit No. 17/19/17 of 1950. Sardar Bahadur, for the appellants. Achhru Ram, B. C. Misra and P. K. Chakravarty, for the respondents. 1958. December 9. The Judgment of the Court was delivered by s. K. Das J. S. K. DAS, J.-This is an appeal on a certificate granted by the erstwhile Judicial Commissioner of Vindhya Pradesh, which is now part of the State of Madhya. Pradesh. On behalf of respondent no .. 1, Na.gar Ma.I, who was defendant no. 1 in the suit, a preliminary objection has been taken to the effect that the suit was not maintainable by reason of the provi- sions of s .. 4 of the Rewa State Companies Act, 1935, and the appeal filed by the plaintiffs must, therefore, be dismissed. As this preliminary objection was not taken in any of the two courts below, learned counsel for the appellants wanted time to consider the point. Accordingly, on October 28, 1958, we adjourned the hearing of the appeal for about a month. The appeal was then heard on November 27, 1958. As we are of tho opinion that the preliminary objec- tion must succeed, it is necessary to state the facts only in so far as they have a b
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