1956 (11) TMI 43 - HC - Indian Laws

Court affirms sale of goodwill includes tenancy rights, stresses locality in goodwill determination. Failure to contest sale voids claims.

Dulaldas Mullick And Ors. Versus Ganesh Das Damani And Ors.

Dulaldas Mullick And Ors. Versus Ganesh Das Damani And Ors. - AIR 1957 Cal 280 Issues Involved:1. Whether the goodwill of the business included the plaintiff's monthly tenancy rights.2. Whether the sale of goodwill and movable properties by the Sheriff was valid.3. Whether the plaintiff's right to occupy the shop room was retained after the sale.4. Whether the plaintiff followed the correct procedure to contest the sale.Issue-wise Analysis:1. Whether the goodwill of the business included the plaintiff's monthly tenancy rights:The essential point for determination was whether the goodwill in the present case included the right of the plaintiff as a monthly tenant to occupy the said shop room. The court analyzed the sale proclamation and orders of sale, which expressly stated that the goodwill of the business of D. Mullick & Co. at 46/A, Netaji Subhas Road, was sold as a going concern. The court concluded that goodwill in this case must necessarily include the monthly tenancy of the shop room. The court reasoned that separating the custom from the shop room would reduce the goodwill to mere nothing, as the attribute of locality is a significant part of the goodwill in the business of an ordinary trader or dealer.2. Whether the sale of goodwill and movable properties by the Sheriff was valid:The court examined the sale proclamation dated 1-2-1949 and the relevant orders directing the Sheriff to sell. The sale proclamation and the orders from Mr. Justice Majumdar and Mr. Justice Banerjee clearly indicated that the goodwill of the business, along with the movable properties, was to be sold as a going concern. The court found no substance in the appellant's contention that the sale conditions were inappropriate for movable property, as the sale had become final, and any irregularities should have been contested by an application under Order 21, Rule 90, Civil P.C., which the appellant did not make.3. Whether the plaintiff's right to occupy the shop room was retained after the sale:The court rejected the appellant's argument that the judgment-debtor's right as a monthly tenant to occupy the shop room was not included in the sale. The court emphasized that the goodwill of the business, which included the right to occupy the shop room, was sold. The court noted that the sale price of Rs. 8,100 far exceeded the value of the furniture and stock-in-trade, indicating that the tenancy right was included in the sale. The court concluded that the sale of goodwill in this case included the monthly tenancy right or whatever right of occupation the plaintiff had in the shop room.4. Whether the plaintiff followed the correct procedure to contest the sale:The court observed that the appellant did not apply to set aside the sale under Order 21, Rule 90, Civil P.C., which would have been the appropriate procedure to contest any alleged irregularities in the sale. The court noted that the appellant's failure to follow this procedure meant that the sale could not be set aside, and the arguments against the validity of the sale were without substance.Conclusion:The court dismissed the appeal with costs, affirming that the sale of the goodwill of the business included the plaintiff's monthly tenancy rights and that the sale conducted by the Sheriff was valid. The court emphasized the importance of locality in determining the goodwill of a business and concluded that the plaintiff's right to occupy the shop room was part of the goodwill sold. The appellant's failure to contest the sale through the appropriate legal procedure further invalidated their claims.