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Pannaji Devichand Vs. Lakkaji Dolaji - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 40 of 1942
Judge
Reported inAIR1943Bom156; (1943)45BOMLR181
AppellantPannaji Devichand
RespondentLakkaji Dolaji
Excerpt:
.....xxi, rule 50-rateable distribution-same judgment-debtor-decree passed against person as partner in firm-decree passed individually against him.;a decree passed against a person as a partner in a firm who appears in the suit and defends it against the firm (o. xxx, rule 6) and a decree passed against him in his individual capacity are to be deemed as having been passed against the same judgment-debtor for the purpose of rateable distribution under section 73 of the civil procedure code, 1908.;administrator general v. sultanalli sushtary (1926) 29 bom. l.r. 396 and radha kanta v. putin krishna, (1937) 42 c.w.n. 310 followed.;balmer lawrie & co. v. jadunath barterjee (1914) i.l.r. 42 cal. 1 and jamiyatram gaurishankar v. umiyashankar pranshankar (1941) 43 bom. l.r. 699..........was served as a partner or as manager, or in both characters, and, in default of such notice, the person served shall be deemed to be served as a partner. under rule 6, where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but all subsequent proceedings shall continue in the name of the firm. lastly, rule 7 provides that where a summons is served in the manner provided by rule 3 upon a person having the control or management of the partnership business, no appearance by him shall be necessary unless he is a partner of the firm sued.3. now, applying these provisions to the facts of the present case, the petitioners impleaded the firm of kapurji by its proprietor and vahivatdar sogaji and the summons was served on sogaji as a.....
Judgment:

Divatia, J.

1. This revisional application arises in a dispute between two rival decree-holders for rateable distribution of certain assets realised in execution. The petitioners obtained a decree against the firm of Kapurji Magniram by its proprietor and vahivatdar Sogaji Ammaji Marwadi, and they filed Darkhast No. 23 of 1937 to execute the decree. Thereafter the opponents obtained a decree against the said Sogaji Marwadi and four other persons in their individual capacities, and filed darkhast No. 176 of 1939 to execute their decree. In the opponents' darkhast certain property belonging to Sogaji was sold and the sale-proceeds thereof were deposited in Court. The petitioners applied for rateable distribution of the assets inasmuch as they had obtained a decree against Sogaji. Their case was that in their suit against the firm of Kapurji, Sogaji was served and had also appeared in his own name. The decree was, therefore, executable personally against Sogaji. That being so, the capacity of Sogaji in both decrees was the same and they were entitled to rateable distribution in the sale-proceeds of his property in the opponents' darkhast.

2. The trial Court rejected the application on the ground that the petitioners would be entitled to rateable distribution under Section 73 only if both the decrees were against the same judgment-debtor; that-the petitioners' decree was against Sogaji in his capacity as a partner of the firm of Kapurji while the opponents' decree was against him in his individual capacity. Thus, although the name was the same, Sogaji occupied different capacities in both the decrees, and therefore Section 73 was inapplicable. In coming to that conclusion the learned Judge relied upon two decisions, one of the Calcutta High Court in Balmer Lawrie & Co. v. Jadunath Barterjee, (1914) I.L.R. 42 Cal. 1 and the other of the Lahore High Court in Sadhu Ram v. Dhanpat Rai-Telu Ram, (1937) I.L.R. 18 Lah. 637 both of which were followed by our High Court in jamiyatram Gaurishankar v. Umiyashankar Pranshankar. : (1941)43BOMLR699 The petitioners had relied upon the decisions in Radha Kanta v. Pulin Krishna, (1937) 42 C.W.N. 310 which had followed the decision of our High Court in Administrator General v. Sultanalli Sushtary. (1926) 29. Bom. L.R. 396 In the opinion of the learned Judge below the case of Administrator General v. Sultanalli Sushtary was distinguishable from the present case, and the decision in Radha Kanta v. Pulin Krishna being opposed to that in Balmer Lawrie & Co. v. Jadunath Banerjee he preferred to follow the latter, especially as it had been followed in Jamiyatram v. Uimyashankar. In order to appreciate the grounds of these decisions, it is necessary to refer to the relevant provisions of the Civil Procedure Code on this point. Under O. XXX, Rule 1, any two or more persons liable as partners may be sued in the name of the firm. Under Rule 3, where persons are sued as partners in the name of their firm, the summons shall be served upon any one or more of the partners, and under Rule 5, where a summons is issued to a; firm and served in the manner provided by Rule 3, every person upon whom it was served shall be informed by notice in writing given at the time of such service, whether he was served as a partner or as manager, or in both characters, and, in default of such notice, the person served shall be deemed to be served as a partner. Under Rule 6, where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but all subsequent proceedings shall continue in the name of the firm. Lastly, Rule 7 provides that where a summons is served in the manner provided by Rule 3 upon a person having the control or management of the partnership business, no appearance by him shall be necessary unless he is a partner of the firm sued.

3. Now, applying these provisions to the facts of the present case, the petitioners impleaded the firm of Kapurji by its proprietor and vahivatdar Sogaji and the summons was served on Sogaji as a partner. Sogaji appeared in the suit and defended it. Thereafter the decree was passed against the firm by its partner Sogaji. Now, O. XXI, Rule 50, provides that where a decree has been passed against a firm, execution may be granted against any property of the partnership, and against any person who has appeared in his own name under Rule 6 or Rule 7 of O. XXX or who has admitted on the pleadings that he is,. or who has been adjudged to be, a partner. In the present case Sogaji appeared in his own name under Rule 6. The result, therefore, was that, under the combined operation of O. XXX, Rule 6, and O. XXI, Rule 50, the decree was executable against the person of Sogaji. That being so, the capacity of Sogaji as a judgment-debtor in the petitioners' darkhast would be the same as that of Sogaji as a judgment-debtor in the opponents' darkhast, and the petitioners, therefore, would be entitled to rateable distribution. This result would follow from the relevant provisions of the Civil Procedure Code apart from authority.

4. The lower Court principally relied upon the decision in Balmer Lawrie & Co. v. jadunath Banerjee. That case is, in my opinion, distinguishable from the present case, because there the decree was obtained against the firm of which the judgment-debtor was a partner but was not shown to be capable of execution against him individually. In other words, as the partner was not served individually in the suit, the decree could not be executed against him personally unless leave was taken under O. XXI, Rule 50, Sub-r. (2). In the present case, however, Sogaji was not only served in the suit but he appeared as a partner and defended it, and therefore, under Sub-r. (1) of Rule 50, execution can be granted against him personally. The next case relied upon by the lower Court is Sadhu Ram v. Dhanpat Rai-Telu Ram. The facts of that case are no doubt similar to those of the present case. It was contended there that the decree obtained against the firm could be executed against the particular partner who had appeared in his own name in the suit in which the decree was passed and had admitted that he was a partner. It was, however, held that rateable distribution could not be allowed in view of the provisions of Section 49 of the Indian Partnership Act, which are similar to those of Section 262 of the Indian Contract Act. The learned Judges there interpreted the provisions of that section as meaning that although a decree against a firm could be executed against a partner appearing in the suit, it could not be executed against his separate property until the debts of the firm had been paid, that the firm's property was not that particular partner's property, nor was the partner's property the firm's, and that the partner's property cannot be made a hotchpot out of which rateable distribution could be made to satisfy both the decrees. With great respect to the learned Judges, it is difficult to see how Section 49 of the Indian Partnership Act could apply to those facts. This section occurs in the chapter relating to the dissolution of a firm, and it says that where there are joint debts due from the firm, and also separate debts due from any partner, the property of the firm shall be applied in the first instance in payment of the debts of the firm, and, if there is any surplus, then the share of each partner shall be applied in payment of his separate debts or paid to him; and that the separate property of any partner shall be applied first in the payment of his separate debts, and the surplus (if any) in the payment of the debts of the firm. In the first place the section would apply only after the dissolution of a firm and not while a decree is obtained against a going firm as in the present case. In the second place, it would apply to different debts-the debt of the firm and the separate debt of the partner. On the facts of the present case and in the Lahore case there were no two different debts, but only one debt created by the decree. There is no question, therefore, of executing the decree against the assets of the partnership before executing it against the separate property of the partner. On the other hand, by virtue of the provisions of O. XXI, Rule 50, the decree could be executed personally against the partner who has appeared in the suit, and there is nothing in that rule to show that personal execution against the partner cannot be taken unless the property of the partnership was exhausted. The provisions of O. XXI, Rule 50, do not seem to have been brought to the notice of the Court. I am unable, therefore, to follow that decision.

5. It is true that both the decisions in Balmer Lawrie & Co. v. Jadunath Banerjee and Sadhu Rant v. Dhanpat Rai-Telu Ram have been followed in the recent decision of our High Court in Jamiyatram v. Umiyashankar. In that case, however, the question was not between a person in his capacity as a partner and his capacity as an individual. But the decree there was obtained against a person individually and another decree against that person as representative of a deceased person, and it was held that the two decrees were not decrees against the same judgment-debtor because he held two different capacities, as his individual capacity was not the same as his capacity as the heir of a deceased person. The decisions in Balmer Lawrie & Co. v. Jadunath Banerjee and Sadhu Ram v. Dhanpat Rai-Telu Ram seem to have been relied upon on behalf of the respondent, and they were cited with approval in support of the proposition that a decree against A in his personal capacity and another against him as heir of a deceased person were not against the same judgment-debtor. To my mind there is a clear distinction between a person in his capacity as the heir of another person and a person who is a member of a firm and who is personally liable by virtue of the specific provisions of O. XXI, Rule 50. This point does not seem to have been brought to the notice of the Court, and the two judgments had been relied upon and cited with approval only for the general proposition that the judgment-debtor would not be the same where he filled two different capacities. I am unable, therefore, to see how the decision in Jamiyatram v. Umiyashankar applies to the facts of the present case. On the other hand, there is an earlier decision of our High Court in Administrator General v. Sultanalli Sushtary, the principle of which would apply to our case. In that case certain partners obtained a money decree in their individual capacities against a person who had also obtained a money decree against the firm composed of those partners. The question was whether the two decrees could be set off against each other under O. XXI, Rule 18, of the Civil Procedure Code, and it was held that they could be set off because the cross decrees were between the same parties. The ratio decidendi of this case applies to the present case, because while under O. XXI, Rule 18, cross decrees must be between the same parties, under Section 73 the judgment debtor must be the same. In other words, the parties should fill the same character. This decision has been followed very recently by the Calcutta High Court in Radha Kanta v. Pulin Krishna. The facts of that case are similar to those in the present case, and in my opinion the reasoning adopted in that decision clearly supports the proposition that where a partner is served and appears in a suit to defend it against the firm, the decree could be executed against him personally, and that therefore he would be the same judgment-debtor in that decree and also in another decree obtained against him personally. This decision is in accordance with the provisions of Os. XXI and XXX which I have cited above. As the judgment-debtor Sogaji fills the same personal character in both the decrees, the petitioners are entitled to rateable distribution in the darkhast filed by the opponents.

6. The order of the lower Court is set aside and the matter is sent back to the trial Court for disposal according to law. The rule is made absolute with costs.


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