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Gordhandas Keshavlal Vs. Ramchand Banarsidas - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 488 of 1933
Judge
Reported in(1942)44BOMLR120
AppellantGordhandas Keshavlal
RespondentRamchand Banarsidas
Excerpt:
.....38-suit-interpretation-full court-jurisdiction -civil procedure code (act v of 1908), order xxi, rule 50(2)-decree against firm-proceeding under rule-determination of liability of person as partner.;the word 'suit' as used in section 38 of the presidency small cause courts act, 1882, includes a proceeding under order xxi, rule 50(2), of the civil procedure code, 1908, for leave to execute a decree against an alleged partner of a firm against whom the decree has been obtained; and an order passed in such a proceeding can be dealt with in appeal by the full court.;remarks to the contrary in kanji v. jivraj (1930) 32 bom. l.r. 1009, declared obiter.;haji abadi hassan v. besse (1929) i.l.r. 54 bom. 26 : s.c. 31 bom. l.r. 1302, followed.;venkata chandrappa nayanivaru v. venkatrama reddi..........in section 38, that these proceedings should be regarded only as a continuation of the original suit proceedings, and that even if they be regarded as proceedings in execution, still execution proceedings being a continuation of the suit, all such proceedings would fall under the scope of section 38, with the result that the full court would have jurisdiction to entertain the application before it.5. on the other hand, it has been argued on behalf of the opponent that all that order xxi, rule 50, sub-rule (3), says is that an order made in these proceedings is to have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree, and that, therefore, it cannot be said that this order is either an order in a suit or a decree in a suit as if it.....
Judgment:

Divatia, J.

1. This application in revision has been filed by opponent No. 1 who was alleged to be one of the partners in the firm of Messrs. Mangaldas Amratlal against whom a decree had been taken by the present opponent, i.e. the original plaintiff firm of Messrs. Ramchand Banarsidas. After the decree was passed against the firm of Messrs. Mangaldas Amratlal, the present opponent applied to the Court of the Presidency Small Causes Court at Bombay which had passed the decree to execute it against three persons, one of whom was the present petitioner, on the ground that they were all partners in the firm of Messrs. Mangaldas Amratlal. That application was made under Order XXI, Rule 50, of the Civil Procedure Code. All the three persons appeared and contended that they were not partners of the said firm. The learned Judge held that two of them were not partners, but the present petitioner was a partner as he had himself admitted to be such in the vakalatnama which he had signed. The lower Court ordered execution to issue against him as such. Against that order the petitioner filed an application to the Full Court of the Bombay Small Causes Court, but that Court declined to give a rule on the ground that there was no jurisdiction. I may add here that the original decree against the firm was a consent decree as against the firm, but the subsequent proceedings had been contested on behalf of the three persons who were alleged to be partners.

2. As against the order dismissing that application by the Full Court the petitioner has come here in revision, and the only point that arises is whether the Full Court had no jurisdiction to entertain the application for a rule. That question turns upon the construction to be placed on the wording of Order XXI, Rule 50, of the Civil Procedure Code, as read with Section 38 of the Presidency Small Cause Courts Act.

3. It has been urged on behalf of the petitioner that the lower Court was in error in holding that it had no jurisdiction because Order XXI, Rule 50, Sub-ruler (2) and (3), contemplate that where a decree-holder claimed to be entitled to execute the decree against a person who had not appeared in the suit, the Court might order that the liability of such person should be tried and determined in any manner in which any issue in a suit might be tried and determined, and that where the liability of such person has been tried and determined under Sub-Rule (2), the order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. It is contended that this provision read with Section 38 of the Presidency Small Cause Courts Act, which gives power to the Full Court to take cognizance of an application before it, clearly gives jurisdiction to it inasmuch as it says that

where a suit has been contested, the Small Causa Court may, on the application of either party, made within eight days from the date of the decree or order in the suit..., order a new trial to be held, or alter, set aside or reverse the decree or order, upon such terms as it thinks reasonable, and may, in the meantime, stay the proceedings.

4. In other words, the argument is that the proceedings before the Small Cause Court Judge under Order XXI, Rule 50, Sub-rule (2) and (3), were proceedings in a suit in the same sense in which the word 'suit' has been used in Section 38, that these proceedings should be regarded only as a continuation of the original suit proceedings, and that even if they be regarded as proceedings in execution, still execution proceedings being a continuation of the suit, all such proceedings would fall under the scope of Section 38, with the result that the Full Court would have jurisdiction to entertain the application before it.

5. On the other hand, it has been argued on behalf of the opponent that all that Order XXI, Rule 50, Sub-rule (3), says is that an order made in these proceedings is to have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree, and that, therefore, it cannot be said that this order is either an order in a suit or a decree in a suit as if it were an order or a decree, and that therefore the proceedings, although they may be in a suit, did not themselves constitute a suit with the result that Section 38 of the Presidency Small Cause Courts Act, which contemplates only a suit, cannot apply to such proceedings, although it would apply to all the previous stages which would terminate in a decree in the suit.

6. The question, therefore, is in what sense the word 'suit' is used in Section 38, and in what sense is it enacted in Order XXI, Rule 50, Sub-rule (2) and (3), that the orders passed in such proceedings are to be considered as if they were decrees. On behalf of the opponent reliance is placed upon a ruling of this Court in Kanji v. Jivraj : AIR1930Bom412 where although an identical question, viz. as to construction of Order XXI, Rule 50, as read with Section 38 of the Presidency Small Cause Courts Act, is considered, that consideration was based upon an obiter, because the point that arose there was that a partner, who had appeared, denied that he had received any notice of the dissolution of the partnership, and therefore, was not liable. this Court considered that contention, and was of the opinion that the trial Court was right in its finding that the decree-holder was not aware of the fact of the dissolution of the firm, and as stated in the judgment itself, it was not necessary, therefore, to consider the other contention, viz. whether the application to the Full Court could be entertained, because, if the decree-holder was not aware, even though the Full Court had jurisdiction to entertain the application, still the result would be the same. The opinion was however expressed that the proceeding in which leave was applied for to execute the decree under Order XXI, Rule 50, Sub-rule (2), of the Civil Procedure Code, was not a suit within the meaning of Section 38 of the Presidency Small Cause Courts Act, and that opinion was based upon the view that such a proceeding was in the nature of a subsidiary application after the decree was passed and before the decree could be executed against the partner against whom the application was made; the mere fact that the order in such proceedings was to be considered as if it were a decree did not invest such proceedings with the character of a suit, and that, therefore, Section 38 of the Presidency Small Cause Courts Act did not apply; reliance was placed for that view on the case of Venkata Chandrappa Nayanivaru v. Venkatarama Reddi I.L.R. (1898) Mad. 256.

7. On the other hand, there is the decision of this Court in the case of Haji Abadi Hassan v. Besse I.L.R. (1929) 54 Bom. 26 which, though earlier in point of time than the decision in Kanji v. Jivraj, does not seem to have been referred to in the judgment. That decision arose under the Aden Act II of 1864. There the contention was with regard to the nature of the proceeding under Order XXI, Rule 50. The plaintiff had filed a suit against a company through its managing partner and a decree was passed against the firm. Then proceedings were started under Order XXI, Rule 50, against a person on the ground that he was a partner. That person denied that he was a partner. The trial Court found against that contention and held that he was a partner, and that therefore he was liable as such. As provided under the Aden Act, there was an appeal against that decision, and in the course of the appeal the alleged partner applied to the appellate Judge to make a reference to the High Court under Section 8 of the Aden Act. Now, under that section the learned Judge was bound to make a reference to the High Court where the claim was more than Rs. 1,000, as it was in that case, in the course of the hearing of an appeal in any suit, and he expressed the opinion that those proceedings did arise in the appeal from the suit, and that, therefore, the reference was permissible. Accordingly a reference was made to this Court, and at the hearing it was contended that the reference did not lie inasmuch as the appeal in which that reference was made was not in a suit but that it was an appeal from an order passed under Order XXI, Rule. 50. In other words, the contention was the same as was raised in the case of Kanji v. Jivraj, that the proceedings under Order XXI, Rule 50, were not a suit though they were similar to a suit. That contention was over-ruled by this Court, and it was held that Order XXI, Rule 50, Sub-rule (2) and (3), do contemplate that where the liability of a person had been tried and determined under Sub-rule (2), the order made thereunder shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree, that those proceedings did arise out of a suit, and therefore, the appeal was competent with the result that the reference was also competent. In discussing this question this Court observed that if the person who was alleged to have been a partner had been cited in the original suit and if it had been held that he was not a partner, that finding having been in the decree in the suit, he could have appealed and asked for a reference. It appears from the facts that the plaintiff in that case chose to implead the firm as the defendant and not the persons who, according to the plaintiff, were the partners of the firm. It was further held that if the issue as to partnership could not be determined in the suit, it could be determined after the decree against the firm, and that being under Order XXI, Rule 50, the order was to have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. Thus in that case the appeal and the reference were competent. As between the two views expressed in these two cases, I prefer the view adopted in the latter case, and although the point as to the construction of these two provisions of the law as read together has been discussed in the case of Kanji V. Jivraj, that expression of opinion, as it is clearly stated in the body of the judgment, was an obiter, and not necessary for the purpose of the decision in that case. On the other hand;, the latter decision in Haji Abadi Hassan V. Besses was clearly a decision on the construction of Order XXI, Rule 50, and as to whether those proceedings were a suit, and I do not see any reason why the term 'suit' should not have the same meaning in the Aden Act as it would have in the Presidency Small Cause Courts Act. That Act was enacted in 1882 while the provisions of Order XXI, Rule 50, were for the first time enacted in the Civil Procedure Code in 1908, and I do not think that the Legislature contemplated that if a person can dispute his liability as to his being a partner in the suit if he was cited in the suit itself, he would be prohibited from doing so by the mere fact that subsequent to the decree the plaintiff prefers to proceed against him. I think that when the Legislature provided that that order was to be considered as if it were a decree for the purpose of appeal or otherwise, it was clear that there was no bar if a person wanted to proceed against such an order either in appeal or in revision.

8. In my opinion, therefore, Section 38 of the Presidency Small Cause Courts Act would cover proceedings of this kind, and although I am aware of the ruling in Kanji Shivji v. Vasanji Shivji (1928) 31 Bom. L.R. 995 in which it is held that an order in proceedings under Order XXI, Rule 90, is not considered to be a decree and does not fall under Article 164 of the Indian Limitation Act, and although it was held in Bhagvan v. Hiraji : AIR1932Bom516 that an order passed under Order XXI, Rule 50, is an order passed in execution proceedings, still that would not in any way militate against the view which I think is the correct one as held in Haji Abadi Hassan v. Besse. In my opinion the case of Venkata Chandrappa Nayanivaru v. Venkatrama Reddi has no application to a case with the facts as we have here. It is quite true that generally speaking a proceeding which is similar to or in the nature of a suit is not by itself a suit and such proceedings may be regarded as proceedings in a suit though not a suit itself, but it would not necessarily follow, therefore, that an order passed in such proceedings cannot be appealed against as if it were a decree simply because the proceedings are not a suit by themselves although they are expressly made appealable as such. If such a construction is adopted, I think it would nullify the provisions of Sub-rule (3) of Order XXI, Rule 50.

9. The result, therefore, is that in my opinion the Full Court had jurisdiction to entertain this application, and this matter is therefore remanded to that Court. The present rule will be made absolute with costs.


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