Illegal partnership remedies restricted; no partition or account against purchaser company, restitution limited and subject to limitation.

Members of a partnership rendered illegal by statute cannot obtain partition or an account of partnership dealings and profits in court; remedies are confined to restitution of subscriptions made before application of funds to the illegal purpose, and such restitution claims are governed by the accrual rule and subject to limitation. Where the business was carried on, profits received, and substantial time has passed since subscription, claims for return of subscriptions are time-barred. No cause of action lies against a purchaser company for partnership assets absent a valid legal foundation for disturbing the sale; accordingly no relief is available against the company.

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Issues: (i) Whether members of an unregistered partnership exceeding twenty persons can maintain a suit for partition or an account of the partnership assets; (ii) Whether the plaintiffs have a cause of action against a subsequently formed private limited company alleged to have acquired the partnership assets; (iii) Whether any claim for return of subscriptions or share money is available to the plaintiffs having regard to limitation.

Issue (i): Whether members of an unregistered partnership exceeding twenty persons can maintain a suit for partition or an account of the partnership assets.

Analysis: The judgment analyses the established rule that partnerships illegal under the statutory prohibition cannot be the basis for court-ordered dissolution or for taking accounts of partnership dealings and profits; authorities recognising limited remedies (such as recovery of subscriptions before application to the illegal purpose) are considered but distinguished on facts where the business has been carried on and profits received.

Conclusion: Members of an illegal partnership cannot maintain a suit for partition or for an account of partnership dealings and profits; the plaintiffs are not entitled to partition or an account on that basis.

Issue (ii): Whether the plaintiffs have a cause of action against a private limited company alleged to have acquired the partnership assets.

Analysis: The judgment examines privity and the effect of affirming or denying the validity of the sale to the company; if the sale is affirmed the remedy lies only in respect of sale proceeds, whereas if the sale is denied there is no basis for a claim against the company itself.

Conclusion: The plaintiffs have no cause of action against the private limited company; no relief lies against the company in respect of the partnership assets absent a valid legal foundation.

Issue (iii): Whether any claim for return of subscriptions or share money is available to the plaintiffs having regard to limitation.

Analysis: Authorities permitting recovery of subscriptions prior to application to the illegal purpose are considered; however, where the business has long been carried on and subscribers have received profits, and where the claim is brought long after subscription, limitation and the accrual rule preclude relief. The judgment applies the rule that limitation for refund of share money begins on payment.

Conclusion: Any claim for return of subscriptions is barred by limitation on the facts; the plaintiffs cannot succeed on that ground.

Final Conclusion: The appeal is dismissed and the judgment below upholding dismissal of the suit is affirmed, with the effect that no relief is granted to the plaintiffs against the defendants including the fourth defendant company.

Ratio Decidendi: A partnership rendered illegal by statute does not permit members to obtain partition or an account of partnership dealings and profits in court; remedies, if any, are limited to restitution of subscriptions before application to the illegal purpose and are subject to limitation, and no cause of action arises against a purchaser company absent a valid legal foundation.

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