Thavasamuthu Nadar vs Balaguruswamy Nadar and Others

In my judgment, the injunction applied for ought to have been granted as prayed and must be granted pending the appeal. The principle is a

principle of general application that, where a business of any kind is being wound up by the Court or otherwise, the business being the property of

more than one person carried on as partners, co-owners, members of a joint family, or, otherwise during the winding up persons who were the

members of the concern are not allowed to enter into a competition so as to interfere with the successful winding up of the concern.

That is the principle of the English law to be found enunciated in Clegg v. Fishwick (1849) 1 Mac. & G. 294, and the leading case of Fox

Mackreth, Pitt v. Macherth (1789-91) 2 Cox. 158 and it is fully discussed in Lindley on Partnership, p. 370, and is recognised in Sections 88 and

90 of the Indian Trusts Act. In this case the joint family owned, among other things, a very large Abkari business and, as part of that business, the

family had for many years had what he described as the Abkari monopoly in Travancore and Cochin.

The joint family became divided in status and a partition suit was brought, and Messrs. Fraser and Ross were appointed Receivers for getting in

all the assets of the family and the winding up of the family affairs. In the course of the winding up, they thought fit as being in the interest of the

family to apply for a renewal of the Abkari contract with the Travancore and Cochin States.

The first defendant, who has not been to any great extent assisting the Receivers and has quite definitely and frankly taken up his stand in saying

that he is not going to allow his name to be used by the Receivers, or to help the Receivers in any way in getting the contract renewed, because he

proposes to apply in his own name and attempt to get it for himself. That is a direct interference with the Receivers. It is directly contrary to the

interests of the family as a whole. He is supported in his attitude by his younger brothers. They are not as he is, in the employment of the Receivers

or of the business, but they say, too, that they desire to enter into competition with the Receivers in attempting to obtain this, contract.

In my judgment, that cannot be allowed. If, as is submitted on their behalf, the Receivers are unnecessarily, in the winding up, prolonging the

carrying on of the contract, and if it is not desirable in the winding up that they should obtain and carry out one or other of the contracts, the

members of the family have got their rights to make a proper application to the Court. But the Court in this case having considered the question has

come to the conclusion that it was a proper step in the winding up of the concern, for Messrs. Fraser and Boss as Receivers to apply for a renewal

of these contracts.

I see no reason for interfering with the decision of the Court on the point. That being so, it must follow that the injunction asked for to restrain

interference with them in getting the contracts must be granted. I would point out that there is no difference in law in this matter between the

granting of an injunction and the taking of steps after the contract has been obtained by ordering the transfer of the contract from the late member

of the concern to the Receivers, whereas in the case where the intention is clear on the part of the defendants, as has been in this case, the Courts

can restrain by injunction. The principle on which the Court acts is the same in both the cases. If, while this Receivership lasts, the first defendant or

other defendants who are supporting him bad obtained this contract in their name, it would have been clear that they held it for the Receivers.

The appeal will be admitted and the printing dispensed with. There will be an interim injunction pending the appeal on the same terms, and on

the same grounds as if we had reversed the learned Judge''s judgment. Costs of this application will be costs of this appeal.

Ramesam, J.

I agree. I would only add that in respect of the second and third respondents for whom Mr. Radhakrishnayya appears, though Section 88 of the

Indian Trusts Act may not apply because they are not agents or servants of the concern. Section 90 applies because they are co-owners. It might

at first appear, as urged by Mr. Ridhakrishnayya, that it is somewhat unfair to prevent the second and third respondents from trying their own luck

with the Travancore and Cochin States, but they had the advantage of being born in a rich family and the disability which the law imposes is merely

a compensating disadvantage.