Partnership contribution, not loan, barred money recovery; proper remedy lay in accounts, not a simple suit.

A sum advanced in connection with proposed partnership ventures was treated as capital contribution, not a simple loan, so it was not recoverable as a money claim. Property brought into the common stock of partners became partnership property, and no registered conveyance was required to give effect to the Ice Factory arrangement. The territorial jurisdiction objection failed because it was not taken at the proper stage and no failure of justice was shown. The plaintiff could not maintain the suit as framed; the proper remedy was a suit for rendition of accounts rather than recovery of the amount by money decree.

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Issues: (i) Whether the sum advanced by the plaintiff was a loan recoverable in a suit for money, or was adjusted as capital contribution in the partnership undertakings; (ii) whether a registered document was necessary to give effect to the arrangement regarding the Ice Factory property and whether the contract failed for want of such document; (iii) whether the objection to territorial jurisdiction could be raised in appeal; and (iv) whether the plaintiff could maintain the suit as framed and recover the amount in the present form.

Issue (i): Whether the sum advanced by the plaintiff was a loan recoverable in a suit for money, or was adjusted as capital contribution in the partnership undertakings.

Analysis: The pleadings and evidence did not support a simple loan transaction. The amount was advanced in connection with the proposed partnership ventures, and the materials showed that the parties ultimately treated the plaintiff as a partner in the Ice Factory and grain business. The sum of Rs. 41,500/- was therefore adjusted as the plaintiff's share capital rather than retained as a debt.

Conclusion: The amount was not recoverable as a loan, and the plaintiff failed on the claim as framed.

Issue (ii): Whether a registered document was necessary to give effect to the arrangement regarding the Ice Factory property and whether the contract failed for want of such document.

Analysis: Under Section 14 of the Indian Partnership Act, property brought into the common stock by the partners becomes partnership property. No registered conveyance is necessary for a partner to contribute land or immovable property as capital of a partnership. The arrangement was already concluded, and there was no basis to treat the absence of a later registered document as a failure of the contract. There was also no clear refusal to execute such a document or communication of repudiation by either side.

Conclusion: No registered document was necessary, and the contract did not fail on that ground.

Issue (iii): Whether the objection to territorial jurisdiction could be raised in appeal.

Analysis: The objection was covered by Section 21 of the Code of Civil Procedure. Since the jurisdiction issue was not pursued at the proper stage and no failure of justice was shown, the appellate challenge on this ground was not maintainable.

Conclusion: The territorial jurisdiction objection failed.

Issue (iv): Whether the plaintiff could maintain the suit as framed and recover the amount in the present form.

Analysis: The plaintiff was not entitled to recover any amount as a simple money claim because the transaction was found to be one of partnership contribution. On that footing, the proper remedy would have been a suit for rendition of accounts. The reference to Section 4 of the Bihar Money-Lenders (Regulation of Transactions) Act, 1939 did not alter the result, because the claim itself was found not to be a loan claim.

Conclusion: The suit as framed was not maintainable for recovery of the amount.

Final Conclusion: The defendants succeeded in appeal, the decree under challenge was set aside, and the plaintiff was left to pursue, if so advised, a suit for accounts rather than a money decree on the present pleadings.

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