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Montari Industries Ltd., New Delhi Vs. Sri Tirumala Venkateswara Agencies, Bhimavaram and Others - Court Judgment

LegalCrystal Citation
SubjectCommercial;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberA No. 1030 of 1993
Judge
Reported in2000(1)ALD504
Acts Code of Civil Procedure (CPC), 1908 - Sections 86 and 87-B - Order 21, Rule 50 - Order 30, Rules 1, 2 and 4; Transfer of Property Act, 1882 - Sections 58; Stamp Act, 1899 - Sections 36; Indian Partnership Act, 1932 - Sections 4
AppellantMontari Industries Ltd., New Delhi
RespondentSri Tirumala Venkateswara Agencies, Bhimavaram and Others
Appellant Advocate Mr. D.V. Reddy, Adv.
Respondent Advocate Mr. C. Bhananjaya, Adv.
Excerpt:
.....is whether the whole suit abates in the absence of legal representatives of the deceased 5th defendant who died during the pendency of the suit, it is now well settled that under order xxx, rule 1 read with rule 4 of cpc, a suit can be filed against a firm and a decree can be obtained against the assets of the firm including the shares of the deceased partner in the assets of the firm without impleading the legal representatives of the deceased partner......are collectively called afirm, and the name under which their business is carried on is called the firm name, see section 4 of the indian partnership act, 1932. order 30 rule 1 of the code of civil procedure enables two or more persons claiming or being liable as partners and carrying on business in india to sue or to be sued in the name of the firm of which they were partners at the time of the accrual of the cause of action. rule 1 shows that the individual partners sue or are sued in their collective firm name. rule 2 provides that on disclosure of the names of the partners of the plaintiff firm, the suit proceeds as if they are named as plaintiff's in the plaint. rule 6 provides that the persons sued in the firm name must appear individually in their own names. a suit by or in the.....
Judgment:
ORDER

S.V. Maruthi, J

1. This is the plaintiff's appeal against the judgment and decree in OS No.134 of 1988 dated 20-1-1993 passed by the Subordinate Judge, Bhimavaram. The plaintiff M/s. Montari Industries Limited, New Delhi, filed the said suit for recovery of Rs.5,06,565-76 ps. with interest at 18% p.a. from 1-10-1988 till realisation and for costs.

2. It is not necessary to refer to the averments in the plaint and in the written statement in extenso for the purpose of disposing of this appeal. Suffice to say that the plaintiff is a company incorporated at New Delhi and is a manufacturer of pesticides and insecticides. The 1st defendant is a partnership firm with defendants 2 to 5 as its partners. The 1st defendant is a dealer in fertilisers and pesticides and purchases pesticides and insecticides from the plaintiff for the purpose of retail shop. The 1st defendant purchased the goods from the plaintiff and failed to pay the amount and became due to the tune of Rs.6,67,342.80 by 31st August, 1987. The plaintiff stopped further supplies and in a meeting held on 20-6-1987 at Secunderabad between the Managing Partner of the defendants' firm and the plaintiff, an agreement was reached under which the defendants' firm has to return the unsold stock to the tune of Rs.3,67,413.61 ps. and pay an amount of Rs.6,67,342.80 ps. after giving credit to the miscellaneous payments. Pursuant to the said agreement, the 1st defendant issued post dated cheques. The 6th defendant agreed to be the mediator and defendants 2 to 5 agreed to deposit their title deeds in respect of their personal agricultural lands and house sites as well as other properties to the tune of Rs.8,00,000/- with the 6th defendant and to create a 1st charge on the said properties in favour of the plaintiff. It was also agreed that in case of default for payment of any instalment, the title holders of the properly shall sell the property and clear the amount due to the plaintiff. The defendants failed to honour the agreement. They deposited the title deeds of boiled rice mill units in the name and style of Sri Tirumala Srinivasa Paddy Boiling Plant, Peda Kapavaram, Akividu taluk, belonging to the 2nd defendant directly with the plaintiff. The plaintiff issued notices on 11-2-1988 and 16-3-1988 drawing the attention of the 1st defendant to the amount due and the 1st defendant promised to hypothecate the landed property ofdefendants 2 to 5 by 18-4-1988. However, the 1st respondent had not honored the agreement. The plaintiff, therefore, requested the Manager of the Canara Bank, Bhimavaram, to invoke the bank guarantee to the tune of Rs. 1,00,000/- issued by the 1st defendant in favour of the plaintiff. Thus, an amount of Rs.4,12,415.20 ps. towards the principal amount and Rs.94,150.50 towards interest as on 30-9-1988 became due from the defendants 1 to 5 to the plaintiff.

3. Pending disposal of the suit, the 5th defendant died and his legal representatives were not brought on record. Defendants 1 and 2 filed a written statement which was adopted by defendants 3 and 4. The defendants denied their liability under the agreement.

4. On the basis of the respective pleadings, the Subordinate Judge framed as many as 9 issues. The plaintiff examined PW1 while the defendants examined PWs.1 to 9. The plaintiff marked Bxs.A1 to A8, the defendants marked Exs.Bl to B10 and for witnesses Exs..X1 to X22 were marked. On the basis of the respective pleadings and the evidence, both oral and documentary, the trial Court dismissed the suit on the ground that Ex.A3 under which the defendants have given an undertaking to pay the amounts on 31-8-1987 is a bond and cannot be looked into for want of stamp duty and registration though it was admitted in the evidence. It was held that the suit is abated as the legal representatives of the 5th defendant were not brought on record. Aggrieved by the same, the plaintiff filed the present appeal.

5. Hereinafter the parties will be referred to as the appellant and the respondents.

6. The learned Counsel Sri D. V. Reddy appearing for the appellant contended that the suit is not abated and is maintainableas under Order XXX Rule 1 read with Rule 4 of CPC, a suit can be filed in the name of the firm and without impleading the legal representatives of the deceased partner. The Counsel submitted that Ex.A3 is admissible in evidence as it is only an undertaking given by the partners undertaking to repay the amount and though it is stated in the said undertaking that the respondents are depositing the title deeds of the partners in respect of their agricultural lands and house-sites worth Rs.8-00 lakhs, the documents were not actually deposited. Therefore, it is neither a bond nor a mortgage. Hence, stamp duty or registration is not required. While the learned Counsel for the respondents Sri V.L.N.G.K. Murthy contended that when a suit is filed impleading all the partners and a decree is sought for against all the partners, the suit abates in the absence of the legal representatives of the deceased partner. He also submitted that the document is inadmissible in evidence it is a mortgage deed.

7. The question, therefore, is whether the whole suit abates in the absence of legal representatives of the deceased 5th defendant who died during the pendency of the suit, It is now well settled that under Order XXX, Rule 1 read with Rule 4 of CPC, a suit can be filed against a firm and a decree can be obtained against the assets of the firm including the shares of the deceased partner in the assets of the firm without impleading the legal representatives of the deceased partner. The only embargo is that the decree holder cannot proceed against the personal properties of the deceased partner on record. In this context, we may refer to the judgment of the Supreme Court in Maharani Mandalsa Devi v. M. Ramnarain Private Limited, AIR 1965 SC 1718, wherein it was held as follows:

'......The persons who are individuallycalled partners are collectively called afirm, and the name under which their business is carried on is called the firm name, see Section 4 of the Indian Partnership Act, 1932. Order 30 Rule 1 of the Code of Civil Procedure enables two or more persons claiming or being liable as partners and carrying on business in India to sue or to be sued in the name of the firm of which they were partners at the time of the accrual of the cause of action. Rule 1 shows that the individual partners sue or are sued in their collective firm name. Rule 2 provides that on disclosure of the names of the partners of the plaintiff firm, the suit proceeds as if they are named as plaintiff's in the plaint. Rule 6 provides that the persons sued in the firm name must appear individually in their own names. A suit by or in the name of a firm is thus really a suit by or in the name of all its partners, see : Rodriguez v. Speyer Brothers, 1919 AC 59, : [1961]1SCR982 . So also a suit against the firm is really a suit against all the partners of the firm. In Western National Bank of City of New York v. Perez, Triana and Company (1891-1 QB 304 at p.314), Lindley, LJ., said:

'When a firm's name is used, it is only a convenient method of denoting those persons who compose the firm at the time when that name used and a plaintiff who sues partners in the name of their firm in truth sues them individually, just as much as if he had set out all their names'.

.....Again, take a case where thecreditor of a film institutes a suit against a firm and one of its partners at the time of the accrual of the cause of action is dead at the time of the institution of the suit. The suit against the firm is really a suit against all the partners who were its partners at thetime of the accrual of the cause of action, including the dead partner. Order 30, Rule 4 of the Code of Civil Procedure enables the creditor to institute the suit against the firm in the firm name without joining the legal representative of the deceased partner. The suit is, therefore, competent but no suit can be instituted nor can a decree be obtained against a dead person. The decree passed in such a suit will, therefore, bind the partnership and all the surviving partners, but will not affect the separate properly of the deceased partner. In Ellis v. Wadeson (1899) 1 QB 714 at p.718, Romer, LJ observed:

'Now consider the question of death. Suppose a partner dies before action brought, and an action is brought against the firm in the firm's name. The dead man is not a party to the action, so far as his private estate is concerned, for a dead man cannot be sued, though the legal personal representative of a dead man can be sued in a proper case. In that case the action would be an action solely against the surviving partners..... If the legal personal representatives of a deceased partner are not added expressly as defendants, and the action is brought against the firm in the firm's name, then judgment can only be obtained as against the surviving partners and be enforced against them and against the partnership assets.'

The above illustrations show that a suit may be brought under the provisions of Order 30 of the Code of Civil Procedure against a firm of which a partner is not capable of being sued or being adjudged a debtor, and in such a suit a decree enforceable against the other partnersand the partnership assets may be passed. Now, in the instant case, respondent No. 1 sued the firm of Jagatsons International Corporation under the provisions of Order 30 of the Code of Civil Procedure. The assets of the firm as also all its partners jointly and severally are liable to satisfy the debt of the firm. Even the Maharaja of Sirmur is jointly and severally liable for the debts of the firm: only the institution of a suit against him without the consent of the Central Government is barred by Section 86 read with Section 87B of the Code of Civil procedure. As the suit was instituted without the requisite consent of the Central Government, no decree could be passed in the suit against the Maharaja of Sirmur. But the suit against the firm other than the Maharaja of Sirmur was competent, and a decree could be passed against the firm other than the Maharaja of Sirmur, and such a decree could be executed against the partnership property and against the other partners by following the procedure of Order 25, Rule 50 of the Code of Civil Procedure.'

8. As regards the question whether Ex.A3 is a mortgage deed or Bond, it is necessary to refer to the terms under Ex.A3. Under this document, the defendants undertook to pay an amount of Rs.6,67,342.20 ps. by means of DDs in 5 instalment - 1st instalment of Rs. 1-00 lakh to be paid before 15-9-1987, 2nd instalment of Rs.50,000/- before 31-10-1987, 3rd instalment of Rs.1-00 lakh before 30-11-1987, 4th instalment of Rs.2-00 lakhs before 31-12-1987 and the balance amount in the 5th instalment before 31-1-1988. They further agreed to pay interest at 18% per annum on the total amount outstanding from 1-9-1987 till the entire principal amount is cleared. The document is signed by all thedefendants. On the 2nd page, it is recited that they are depositing the title deeds of the partners in respect of their agricultural lands and house sites and other properties wortli approx., Rs.8-00 lakhs with one Mr. P. Subba Raju, Managing Partner of M/s. Montari Industries Limited, New Delhi creating 1st charge in favour of M/s. Montari Industries Limited, by way of security of the principal amount outstanding which can be sold by the owners and proceeds credited to M/s. Montari Industries Limited. It also enables the said Subba Raju to dispose of the properties in default of payment of instalments by the partners. Two witnesses have also signed alongwith the partners. From the evidence we find that the documents of title deeds mentioned in Ex.A3 are not with the plaintiff, but with the mediator, a third party. Since the documents are not deposited actually, Ex.A3 cannot be said to be a mortgage by deposit of title deeds. When once it is not a mortgage by deposit of title deeds, the question of stamp duty and registration does not arise.

9. The next question is whether Ex.A3 is a Bond. Under the Indian Stamp Act, 1899 a bond is defined under Section 2(5). The relevant portion of the definition reads as follows:

'(b) Any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another'

From a reading of the definition it is clear that an instrument under which a person obliges to pay money to another and which is attested by a witness is a bond and the said payment is not to order or bearer. The 1st part of the document viz., Ex.A3 prima facie establishes that it is a bond though under the 2nd part the parties state that they are depositing the title deeds which in fact has not been done. It is an undertaking given by the partners to paythe money attested by witnesses and, therefore, it is a bond. We affirm the view of the learned Subordinate Judge that Ex.A3 is a bond. Further, the document was admitted in evidence. When once the document is admitted and marked in evidence, it cannot be questioned at a later stage on the ground that the instrument has not been duly stamped and the natural consequences of that admission which has become final must also follow. It is to open to the Court to say that though the document is marked as an exhibit in a case, it would not look into it an it would not make use of it in the appreciation or would not allow a decree to be passed on such document. (Refer Alagappa v. Narayanan, AIR 1932 Mad. 765; Vishram Arjun v. I. Shankaraiah, AIR 1957 AP 784; Javer Chand v. Pukhraj Surana, : [1962]2SCR333 .

10. The judgment in P. Narasimhaswamy Patrudu v. Bank of Baroda, : AIR1982AP240 , is not relevant to the facts of the present case as in the said case the document was not admitted at all in the evidence.

11. From the above, it follows that the suit does not abate and Ex.A3 is admissible in evidence. The appeal is allowed and the impugned judgment is set aside and the matter is remanded to the trial Court with a direction to dispose of the suit within 6 months from the date of receipt of records and a copy of this judgment. The Court fee is directed to be refunded and the cost will abide the result of the suit.


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