Hindu joint family counted as one person where members were only sub-partners, not direct contractual partners.

For Section 4(2) of the Companies Act, 1913, a Hindu joint family was treated as one "person" where the members were bound only through a family arrangement and did not stand in direct contractual relation with outsiders. The definition of "person" in the General Clauses Act, 1897 was held not to control that provision. The analysis distinguished an actual partnership of individual members from a joint family structure in which the managing member contracts for the family and the other members are only sub-partners inter se. The practical effect was that the agreement could not be invalidated simply by counting all family members separately; the true contracting parties had to be identified.

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Issues: Whether a Hindu joint family constituted one "person" for the purposes of Section 4(2) of the Companies Act, 1913, and whether the agreement required registration on the footing that more than 20 persons were partners.

Analysis: The definition of "person" in the General Clauses Act, 1897 was held not to govern Section 4(2) of the Companies Act, 1913. The reasoning distinguished between an actual partnership entered into by individual members of a joint family and a family arrangement operating under Hindu law, where the managing member represents the family but the other members are not in direct contractual relation with the outside parties. In the latter case, the individual members were treated only as sub-partners inter se, and the joint family was to be counted as one person for the statutory purpose.

Conclusion: The agreement could not be invalidated merely by counting all members of the joint families as separate persons. The matter was sent back for a finding on how many of the 48 individuals were actual partners to the agreement.

Final Conclusion: The appellant succeeded in obtaining a remand because the decisive factual question of the true contracting parties was left open for determination by the trial court.

Ratio Decidendi: For the purpose of Section 4(2) of the Companies Act, 1913, members of a Hindu joint family are not necessarily separate persons where they are bound only through a family arrangement and occupy the position of sub-partners rather than direct contractual partners.

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