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Harbhogowandas Purushothamdas Vs. C. Narayana Iyengar and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 53 of 1949-50
Judge
Reported inAIR1952Kant116; AIR1952Mys116
ActsPartnership Act, 1932 - Sections 19
AppellantHarbhogowandas Purushothamdas
RespondentC. Narayana Iyengar and anr.
Appellant AdvocateM. Sadananda Swamy, Adv.
Respondent AdvocateNittom Sreenivasa Rao and ;K.R. Gopivallabha Iyengar, Advs.
Excerpt:
.....the claim against defendant 2 has to fail. 17' it has been clearly laid down that a bill of exchange or a promissory note will not be binding on a firm unless the name of the firm or names of all its members appear on the instrument......that a bill of exchange or a promissory note will not be binding on a firm unless the name of the firm or names of all its members appear on the instrument. the executant in that case described himself in the body of the pronote and while signing it as a partner of another. yet it was held that the partner was not liable. in 'dutton v. marsh', (1871) 6 q.b. 361, the pronote bore the seal of a company of directors of which they were the executants and they described themselves as such in the instrument. nevertheless, the company was held to be not liable and the seal of the company did not affect it. as lord buckmaster expressed in 'sadasuk janki das v. kishen pershad', 46 ind. app. 33 (p-c.)'it is not sufficient that the principal's name should in some way be disclosed; it must be.....
Judgment:

1. This appeal arises from a suit on two hundies dated 30-1-1945 against three defendants the first being described as a firm and the others as its partners. Defendant 3 the executant of the hundies was ex parte and the decree passed against him remains unquestioned. The dispute in the case centred on the liability of defendant 2. He denied the existence of any partnership between him and defendant 3 and contended that in view of the execution of the hundies by defendant 3 in his individual capacity the claim against any one else is untenable. The learned Subordinate Judge rejected these pleas and decreed the suit against all defendants but on appeal by defendant 2 the decree passed against him was set aside. The plaintiff appeals.

2. The liability of defendant 2 depends on his having been a partner or his holding out to be a partner on the date of the hundies and defendant 3 having signed the hundies on behalf of the firm. If there was no firm in existence, as a matter of fact, no liability can attach to defendant 2 by defendant 3 professing to sign the hundies in any capacity. Even if there was a firm of which defendant 2 was partner, he would not be liable on the hundies signed by defendant 3 in his individual capacity. There is no reference in the hundies to defendant 3 being a partner and the undertaking to repay the amount is expressed to be his. The seal bears only the name of defendant 3 and this cannot by itself suggest or indicate the existence of a firm of that name. Assuming that defendants 2 and 3 were partners, since there is nothing to show that defendant 3 purported to bind the firm, the claim against defendant 2 has to fail. In '17 Mys. C. C. R. 17' it has been clearly laid down that a bill of exchange or a promissory note will not be binding on a firm unless the name of the firm or names of all its members appear on the instrument. The executant in that case described himself in the body of the pronote and while signing it as a partner of another. Yet it was held that the partner was not liable. In 'Dutton v. Marsh', (1871) 6 Q.B. 361, the pronote bore the seal of a company of directors of which they were the executants and they described themselves as such in the instrument. Nevertheless, the company was held to be not liable and the seal of the company did not affect it. As Lord Buckmaster expressed in 'Sadasuk Janki Das v. Kishen Pershad', 46 Ind. App. 33 (P-C.)

'It is not sufficient that the principal's name should in some way be disclosed; it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bill'.

'Sitaram Krishna v. Chimandas Fatehchand', 52 Bom. C40 was also a case in which the firm of which the executant of a Hundi was a member was held to be not liable though the executant described himself as managing proprietor of the firm. Emphasis was laid in this case on the use of the personal pronoun 'I' in the body of the instrument. The same considerations should govern the present one and in view of the absence of any words to imply that the hundies were executed for and on behalf of the firm, defendant 2 is entitled to seek exemption from liability.

3. This is sufficient to dismiss the appeal as the result cannot be different even if defendant 2 was a partner of defendant 3. It may however, be mentioned that the alleged partnership between defendants 2 and 3 for which the admission of defendant 2 in a letter addressed to the Indian Bank is relied upon had come to an end as intimated to the Bank in a subsequent letter prior to the date of the hundies. Whatever may be the value of the statements made to the Indian Bank, these cannot help the plaintiff to impute liability to defendant 2 on the score of his 'Holding out' to be a partner, as it is not alleged that Defendant 2 said or did anything in relation to plaintiff, to induce a belief in him that defendants 2 and 3 were partners.

4. There is no reason to interfere with thedecision of the learned District Judge. Theappeal is dismissed with costs.

5. Appeal dismissed.


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