SHADI LAL v. NAGIN CHAND & ORS.
Citation: [1973] 2 S.C.R. 598; 1972 INSC 250
Court: Supreme Court of India
Bench: A.N. RAY , D.G. PALEKAR, M. HAMEEDULLAH BEG, S.N. DWIVEDI
Judgment date:
Case summary
1972 INSC 250. Supreme Court of India judgment dated 1972-10-09. SHADI LAL v. NAGIN CHAND & ORS. Read the judgment and case details on LawSphereX.
Judgment text
600 SUPREME COURT REPORTS [1973] 2 S. C. R. SHAD! LAL . A \'. NAGIN CHAND & ORS. October 9, 1972 IA. N. RAY, D. Ci.. PALEK. AR, M. H. BEG AND s. N. DWIVEDI, JJ. J PaJ'111ership-Allotn1etrt of quot" hy Go1·ernn1ent-Dissolution of par111t. •rship hip the three partner> brothers carried on hosiery business separately. Each is entitled to ask for quota of woollen yarn in accordance with the provisions of the Woqllen Yarn Control Order. The grant of quota is within the power and discretion of the Textile Commissioner. The quota which is granted to an applicant is in his individual busines~ right and it is his property. If the partnership had continued the partners would have been entitled to quota as partners. The fact that quota is granted in the name of Jain Bodh Hosiery does not con- J) vert the quota into a partnership asset. The business name belongs to the appellant under the deed of dissolution.
It was said by counsel for the respondents that the past per- -~ formance during the years 1956 to 1959 was important because during the partnership the quota was earned by joint Jabour. Therefore, after separation it was said that the quota to Jain Bodh Hosiery was given to three persons. This contention is unsound The appellant after dissolution carried on business in the name of Jain Bodh Hosiery. He is entitled to apoly f'or quota in that business name. Quota that is granted in that business name is his separate prooerty. Neither Nagin Chand nor Ramesh Chand has any proprietary right in that quota. It must be recognised that quota attaches to the owner of a business at the roint of time the quota is granted. It is the business at the relevant time which . obtains quota. Therefore, quota enures to the benefit of the bm1ness. Quota was not and could not be an asset of the partnership. Assets are divisible among partners. Quota could not be divid-ed.
Quota is a matter of privilege and the grant of. it lies with the Textile Commissioner. Quota is a licence for a particular time for a part! cular quantity. Quota is worked out by getting the raw matenal represented by the Quota . . I I It was said by counsel for the respondents that the aopellanc was obtaining quota on the basis of the oerformance of the oart-nershio. business durin~ the relevant material years. If the appellant claims on that basis and the Textile Commissioner allots quota I ' on that basis it lies within the power of the Commissioner to allot the quantity he thinks fit and proper. If the respondent by virtue of his individual busine>s is entitled to make an application for grant that application will merit its own consideration. The relevant merits and demerits of the appellant or of the respondents will be a matter for the relevant authorities granting quota. The respondent claimed I /3rd share of the appellant's quota.
The respondent has no proprietary claim to the appellant's quota. The appellant's quota is not an asset in the items of partnership. I A fortiori it is not an acquired asset of the partnersh:p. The High Court was in error in decreeing the suits on the consideration that the respondent was entitled ·to l /3rd quota. ,. A declaration can be founJed only on a legal right. The respon- ' dent has none. The appeals are therefore accepted. The judgment of the High Court is set aside. The suits are dismissed. In view of the fact that there is no order as to costs in the High Court parties will pay and bear their own costs. V. P. S. Appeals allowed.
Source: Supreme Court eSCR. Dataset: Dattam Labs, CC BY 4.0. Text extracted automatically; compare with the source PDF for layout and accuracy.