Illegality of association prevents a suit for accounts where members formed a business group in breach of a prohibitory statute.

An association formed by more than twenty persons for business gain without registration or a charter, in breach of a prohibitory statute, could not invoke the court's aid for a suit for accounts. The statute's public and prohibitory character remained relevant even though the objection was raised late, and the contract of association was treated as illegal. The analogy of an unregistered partnership was rejected because an unregistered firm is not itself illegal, whereas this association was constituted in violation of the governing law. Relief based on transactions of the illegal association was therefore refused, and members had no enforceable claim against each other for accounts or apportionment.

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Issues: Whether a suit for accounts by members of an association formed in contravention of section 4(2) of the Rewa State Companies Act, 1935 was maintainable.

Analysis: The association consisted of more than twenty persons and was formed for carrying on business for gain without registration or a charter from the Durbar, attracting the statutory prohibition in section 4(2). A public and prohibitory statute cannot be excluded from consideration merely because the objection was raised late. Where the contract of partnership itself is illegal, members cannot invoke the court's aid to obtain accounts and enforce rights arising from the illegal association. The analogy of the Partnership Act was held inapplicable because an unregistered firm is not illegal, whereas the association here was formed in breach of a prohibitory provision.

Conclusion: The suit for accounts was not maintainable and the preliminary objection succeeded against the appellants.

Final Conclusion: Relief based on the transactions of an illegal association was refused, and the appeal failed.

Ratio Decidendi: A court will not enforce rights arising out of an association or partnership that is illegal under a prohibitory statute, and members of such an illegal association have no remedy against each other for accounts or apportionment in respect of its transactions.

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