Partnership requires an existing business; promoters of a proposed company are not partners, and section 69 will not bar recovery.

A partnership arises only where there is an agreement to share profits of an existing business carried on by or for all concerned. An arrangement to associate for forming a company, or to become partners only after incorporation, does not itself create a partnership. On the facts stated, the company was never floated, so the parties remained promoters of a proposed company rather than partners in a managing agency business. Because no partnership existed, section 69 of the Partnership Act did not bar the recovery claim, and the deposited money could be sought back outside the statutory bar.

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Issues: (i) Whether the parties were partners in a managing agency business within the meaning of the Partnership Act, and (ii) whether the suit for recovery was barred by section 69 of the Partnership Act.

Issue (i): Whether the parties were partners in a managing agency business within the meaning of the Partnership Act.

Analysis: A partnership can arise only where there is an agreement to share profits of a business actually carried on by all or any of the persons concerned acting for all. An arrangement to associate for the formation of a company, or to become partners only after the company comes into existence, is not itself a partnership. Since the company was never floated, there was no managing agency business in existence, and the parties stood only in the position of promoters of a proposed company governed by contract, not by partnership law.

Conclusion: The parties were not partners in a managing agency business.

Issue (ii): Whether the suit for recovery was barred by section 69 of the Partnership Act.

Analysis: The bar under section 69 applies only where the claim is one arising from an existing partnership. As no partnership came into existence on the facts found, the plaintiff's claim for return of the deposited money was not a claim for enforcement of partnership rights and was therefore outside the statutory bar.

Conclusion: The suit was not barred by section 69 of the Partnership Act.

Final Conclusion: The appeal was liable to fail because the relation between the parties was that of promoters of a proposed company, not partners in an existing business, and the plaintiff could maintain the recovery claim.

Ratio Decidendi: A partnership requires an existing business carried on by the parties acting for all, and an agreement to become partners only if and when a company is formed does not create a partnership.

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