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Krishnabai Vs. Varjivandas Jagjivandas - Court Judgment

LegalCrystal Citation
SubjectContract ;Family
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 1026 of 1926
Judge
Reported in(1930)32BOMLR201
AppellantKrishnabai
RespondentVarjivandas Jagjivandas
Excerpt:
.....both these witnesses i am satisfied that their testimony on this point is not reliable and should not be accepted, 7...........was merely a munim or servant of the firm and the acknowledgment binds only the then owner of the firm-lambadas. the signature of defendant no. 2 on the acknowledgment does not state that it is on behalf of the new firm. apart from any knowledge nanabhaoo may have possessed regarding the partition and the new constitution of the firm there is nothing in the signature to indicate that defendant no. 2 had not executed the acknowledgment on behalf of the original firm which was then liable for the debt. it is clear, in my opinion, that at this date nanabhaoo could not have known of the partition and the subsequent ownership of the business as being that of lambadas alone. in that event he would probably have insisted upon defendant no. 2 signing the acknowledgment in his personal capacity.....
Judgment:

Mirza, J.

1. The plaintiff as the executrix and legal representative of her husband Nanabhaoo Mahapure deceased claims from the defendants a sum of money lent and advanced by the deceased to a business firm carried on in the name of Jamnadas Brothers in which the defendants at the date of the loan were interested as partners or as members of a joint and undivided Hindu family. Defendant No. 1 has filed no written statement and relies only on the legal defence of limitation as being a bar to the suit. Defendant No. 3 is the Official Assignee, being the assignee of the estate and effects of Lambadas Jagjivandas who has been adjudicated an insolvent, He does not defend the suit. Exhibit B shows that the monetary dealings between the plaintiff's husband and the firm of Sha. Lambadas Brothers commenced on 3 February 2, 1922, when the plaintiff's deceased husband lent and advanced to the firm a sum of Bs. 600. On May 3, 1922, he advanced to the firm a further sum of Rs. 3,000 in respect of which the firm passed to him a receipt Exhibit C. Exhibit 0 was signed in the firm's name by defendant No. 1. The firm of Sha. Lambadas Brothers issued to the plaintiff's husband a book in the nature of a Samadaskat book in which debit and credit entries were made from time to time in respect of the money dealings between the parties. Exhibit B comprises all the entries contained in this book,

2. The firm was started about thirty years ago by Jagjivandas who was the father of the defendants. In his life-time his eldest son Lambadas assisted him in the business which was that of chemists and druggists. On the death of Jagjivandas, Lambadas managed the business, his two brothers defendants Nos. 1 and 2 being then at school. Defendants Nos. 1 and 2 on leaving school joined Lambadas and were actively participating in the management of this firm. They wore members of a joint and undivided family at this date and wore conducting the joint family business as such when the loan transactions took place. It is not shown that there were any other coparceners belonging to the joint and undivided family besides the throe brothers. It is conceded that all three brothers would be personally liable in respect of the suit claim if the claim is in time.

3. By a deed of partition executed on November 23, 1922, the three brothers came to a partition among themselves. Thereafter Lambadas as sole owner continued the firm in its old name of Jaomadas Brothers. No public notice was given of the dissolution of the original firm or of the three brothers having come to a partition whereby the assets and liabilities of the original firm together with its name and goodwill were assigned to Lambadas only. Defendant No. 2 after the partition worked in the firm on a salary of Rs. 100 per mensem. On November 9, 1923, accounts were made up between the plaintiff's deceased husband and defendant No. 2 purporting to act on behalf of the firm of Jamnadas Brothers. Defendant No. 2 signed an acknowledgment as 'Sha. Lambadas Brothers the handwriting of Nandlal Jagjivandas ' acknowledging Rs. 3919 as being the then balance claimable on making up the accounts. This acknowledgment is part of Exhibits.

4. Mr. Bhagvati contends that the plaintiff's claim is barred by limitation and the acknowledgment signed by defendant No. 2 does not save it from being time-barred. He has urged that at the date of the acknowledgment defendant No. 2 was merely a Munim or servant of the firm and the acknowledgment binds only the then owner of the firm-Lambadas. The signature of defendant No. 2 on the acknowledgment does not state that it is on behalf of the new firm. Apart from any knowledge Nanabhaoo may have possessed regarding the partition and the new constitution of the firm there is nothing in the signature to indicate that defendant No. 2 had not executed the acknowledgment on behalf of the original firm which was then liable for the debt. It is clear, in my opinion, that at this date Nanabhaoo could not have known of the partition and the subsequent ownership of the business as being that of Lambadas alone. In that event he would probably have insisted upon defendant No. 2 signing the acknowledgment in his personal capacity in addition to that of Munim of the new firm.

5. Section 264 of the Indian Contract Act provides that persons dealing with a firm will not be affected by a dissolution of which no public notice has been given unless they themselves had notice of such dissolution. If this section were applicable to a joint family firm, the continuance of the firm in cases where persons have dealt with the firm, e.g., by obtaining an acknowledgment of a previously existing debt must be assumed. Mr. Bhagvati has relied on the case of Premji Ludha v. Dossa Doongersey I.L.R. (1886) 10 Bom. 358 The facts of that case were materially different from the case here. The firm there had been dissolved to the knowledge of the son who probably was regarded as the agent of his mother who was the creditor. The son himself was a partner in the dissolved firm and had, in spits of his knowledge of the dissolution, signed the acknowledgment in favour of his mother with a view to give her a fresh starting point against his late partners in respect of limitation. The arguments in the case were confined to the consideration whether such acknowledgments can give a fresh starting point for limitation. The question whether the creditor had express or implied notice of dissolution was not discussed. But the facts proved were such as to lead the Court reasonably be assume that the creditor had knowledge of the at the date of the acknowledgment, In my opinion the case governs its own facts and is not applicable to the present case.

6. Mr. Bhagvati has also relied upon the evidence of defendant No. 2 and of the witness Dossabhai Rustomji Karai as showing that the deceased husband of the plaintiff had at the date of the acknowledgment knowledge of the partition between the brothers and of the dissolution and re-constitution of the firm. Where an allegation is made against a deceased person to the detriment of his estate Courts of law would scrutinize it carefully before accepting it as correct. From the demeanour of both these witnesses I am satisfied that their testimony on this point is not reliable and should not be accepted,

7. Mr. Bhagvati has further contended that the provisions of Section 264 of the Indian Contract Act are not applicable to a Hindu joint family. In this case the three brothers were active members of the firm and were carrying on its business together. In my judgment there is no material difference between an ordinary partnership firm and a Hindu joint family firm consisting of adult coparceners who actively conduct the business of the firm.

8. The conclusion I have come to is that the acknowledgment being signed by defendant No. 2 in the name of the original firm is binding upon him as a partner of that firm. It is binding also upon defendant No. 1 and the insolvent represented here by defendant No. 3 as the original firm must be deemed to have continued and defendant No. 2 to have authority as partner to bind his late partners along with himself by the acknowledgment.

9. Decree as prayed against defendants Nos. 1 and 2 and against defendant No. 3 to the extent of the assets in his hands only.


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