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C. Satyanarayana and ors. Vs. Kanumarlapudi Lakshmi Narasimham - Court Judgment

LegalCrystal Citation
SubjectCivil;Contract
CourtAndhra Pradesh High Court
Decided On
Case NumberSecond Appeal No. 819 of 1962
Judge
Reported inAIR1968AP330
ActsCode of Civil Procedure (CPC), 1908 - Sections 9 - Order 1, Rule 10 - Order 40, Rule 1; Indian Contract Act, 1872 - Sections 2
AppellantC. Satyanarayana and ors.
RespondentKanumarlapudi Lakshmi Narasimham
Appellant AdvocateS.C. Venkatapathi Raju, Adv. for ;R.V. Subba Rao and ;K. Rama Murthy, Advs.
Respondent AdvocateG. Venkatrama Sastry, Adv.
DispositionAppeal dismissed
Excerpt:
.....procedure, 1908 and section 2 (b) of contract act, 1872 - suit for recovery against partners of firm - firm is dissolved - receiver holding property of firm is not necessary party - decree holder should obtain leave of executing court to execute decree against property in possession of receiver - no permission of court which appointed receiver was necessary. - - importers and exporters, air 1962 andh pra 4-52. far from supporting the contention of the learned advocate for the appellants, that decision distinctly goes against his contention. he was authorised to attend to collections in kirana business by either treating with the debtors or effectively conducting the suits filed and/or which may become necessary to be filed and shall also wind up the affairs of the rice business,..........suit for the dissolution of partnership and accounts filed against the partners of the defendants' firm, a receiver was appointed. he was authorised to attend to collections in kirana business by either treating with the debtors or effectively conducting the suits filed and/or which may become necessary to be filed and shall also wind up the affairs of the rice business, deal with and realise its stocks and pay off claims and seek net values. the receiver is a court officer. his possession is possession on behalf of the true owners. rut, he is not a necessary party to a case where suit for recovery of money is filed against the firm sought to be wound up and in which proceedings the receiver is appointed. as earlier stated, the stage of obtaining leave of the court appointing the.....
Judgment:

1. The defendants have preferred this appeal against the judgment and decree of the Subordinate Judge, Kavali confirming substantially the judgment of the trial Court. The respondent (plaintiff) filed the present suit for recovery of a sum of Rs. 675-9-0 as amount due from the firm of C. Satyanarayana and K. Kotilingam Setty and Company, and its partners It was contended that the 3rd defendant borrowed an amount of Rs. 500 on 25-2-1953 from the plaintiff at Janardanapuram of Kandukur Taluk. Since the amount has not been paid, the suit was laid. Defendants 1, 2, 4 and 5 contended that the 3rd defendant did not borrow any money, and they also pleaded in the alternative that even if the 3rd defendant had borrowed any money, the firm is not liable to pay that amount, nor the other partners are liable.

2.The 3rd defendant in his written statement denied that he ever borrowed Rs. 500 from the respondent. He contended that on that day, i. e. on 25-2-1953 he was not at Janardanapuram, but he was at Madras and that no such transaction took place, He contended alternatively that the transaction took place at Madras and it is the Madras City Civil Court that has got the Jurisdiction, and opt the District Munsiff of Kanigiri. He further pleaded that a Receiver is appointed in a suit Wed for dissolution of the defendants' firm, and unless the Receiver is made a party and the permission of the Court is obtained, the present suit is not maintainable.

3. Upon these pleadings, the learned District Munsiff framed appropriate issues. After recording the evidence adduced by the parties, he held that the suit debt is true. He also found that the suit is maintainable, since in his view, neither the Receiver was a necessary or proper party, nor the permission of the Court was required at the stage of the filing of the suit. Consequently, he decreed the plaintiff's suit.

4. The defendants preferred an appeal to the learned Subordinate Judge, Kavali. The learned Subordinate fudge modified the decree of the trial Court by deleting the extra one pie interest that the plaintiff had charged. In other respects, he confirmed the decree of the trial Court negativing all the contentions raised by the appellants therein.

5. In this second appeal, the view of the learned Subordinate Judge is now assailed.

6. Two contentions were raised before me by Mr. V. P. Raju. It was firstly contended that the District Munsiff, Kanigiri had no jurisdiction to try the suit. This contention was based on Ex. A-3. Ex. A-3 is a letter written from Madras on 25-2-1953 and is signed by C. S. Chetty for C and K. L. and Co. This letter is on the letter-head of the said company which is a firm. On the top of the letter Subject to Madras jurisdiction is printed. It is on this letter that it is contended that even in regard to the present transaction, it is the City Civil Court, Madras which has got jurisdiction, and not the District Mnnsiff at Kanigiri.

7. Both the Courts below have negatived this contention On appreciation of evidence, it was found by the learned Subordinate Judge that the transaction took place at Janardanapuram, and not at Madras as was alleged by the 3rd defendant. It was also found that the letter, Ex. A-3 was written subsequently and 'Subject to Madras jurisdiction' was not one of the terms of the contract in regard to the transaction which took place at Janardanapuram. In view of this finding of fact, I do not think, any question of jurisdiction arises in this case.

8. The learned counsel or the appellants relied upon a Bench decision of this Court in Libra Mining Works v. Baldota Brothers. Importers and Exporters, AIR 1962 Andh Pra 4-52. Far from supporting the contention of the learned Advocate for the appellants, that decision distinctly goes against his contention. In that ease, the term in regard to the jurisdiction was a part of the contract. The term did not appear as it appeared in this case at the top of the letter which was never treated by the parties as part of the contract. Their Lordships in paragraph 16 of their judgment observed:

In considering these remarks, we have to tear in mind the fact that the term that the transaction was subject to Bombay jurisdiction-was printed at the top of the letter-head and it did not form part of the contract. It is in that context that the relevant remarks were made by the learned Judge. We do not think that the learned Judge intended to state as a broad proposition that a clause of that description would not amount to contracting out of the jurisdiction. That this is so is made clear from what the learned Judge says referring to Sheik Dawood Rowther v. South Indian Ry. Co. Ltd., (1944) 1 Mad LJ 489 = MR 1944 Mad 444:

'But that was a case where there was a specific agreement saying that the transhipment was agreed to subject to the tariff rates and that would incorporate the tariff rates into the contract But in the instant case there is only a question of a mere recital on the top of the bill and it cannot be incorporated as a term of the contract'. It is plain that what induced the learned Judge to hold that there was no ouster of jurisdiction was the fact that the alleged contract was contained in a mere recital on the top of the bill and it did not form part of the contract. It looks to us that the learned Judge would have come to a contrary conclusion and held that it would have a different effect if such a term was embodied in the contract itself. The situation is different where it is included in the contract itself'.

9. The real question in such cases is whether the parties agreed as a part of the transaction that any dispute arising out of the transaction would be heard and decided by a particular Court. No single party can impose any term of the contract upon the other, unless it is agreed to by the other party. Merely because the defendants have written a letter on the top of which 'Subject to Madras jurisdiction' is printed, it cannot become a part of the contract unless it is expressly agreed to by the plaintiff. The lower Courts have categorically round that 'Subject to Madras jurisdiction' was not a term of the transaction between the parties. I find, therefore, no substance in the contention and I do not feel any difficulty in rejecting it.

10. The next contention was that the Receiver was appointed in a suit for the dissolution of partnership firm, and unless the Receiver is made a party and permission of the Court is obtained, the suit is not maintainable. I do not find that there is any substance in this contention. In a suit for money against the partners of the firm even where the firm is dissolved, the Receiver holding possession of the firm's property, is not a necessary party. In such cases, if the plaintiff obtains a decree, he can go to the executing Court, obtain the leave of that Court to execute the decree against the properly in possession of the receiver and belonging to the firm, in case, the decree-holder wants to proceed against such property. In cases, however where the property in the hands of the Receiver is intended to be affected by the result of the suit and the possession of the Receiver or the jurisdiction of this Court appointing the Receiver is intended to be interfered with, leave of the Court appointing the Receiver becomes necessary, and the Receiver also becomes a necessary party. That is, however, not the case here. It is a simple money suit filed against the partnership firm and its partners, although the firm, may have been dissolved, but not completely wound up. It is evident from Ex. D-6 that on 27-1-56 in O. S. 130/55 which was a suit for the dissolution of partnership and accounts filed against the partners of the defendants' firm, a Receiver was appointed. He was authorised to attend to collections in kirana business by either treating with the debtors or effectively conducting the suits filed and/or which may become necessary to be filed and shall also wind up the affairs of the Rice business, deal with and realise its stocks and pay off claims and seek net values. The Receiver is a Court officer. His possession is possession on behalf of the true owners. Rut, he is not a necessary party to a case where suit for recovery of money is filed against the firm sought to be wound up and in which proceedings the Receiver is appointed. As earlier stated, the stage of obtaining leave of the Court appointing the Receiver or making the Receiver as party would only arise when the decree-holder seeks to attach the property in the possession of the Receiver. Property in the hands of a Receiver being really the properly in the possession of the Court, is, as a general rule, exempt from judicial process except to the extent permitted by Court appointing such Receiver. In other words, the possession of the Court is not to he interfered with by taking any judicial proceedings against the property in the hands of the Receiver without the permission of the Court. Leave of the Court, therefore, is necessary for execution of a decree by attachment and sale of property in the hands of the Receiver. It would not, in my opinion, however, he necessary merely for the purposes of instituting a suit to recover money from the partners of the firm dissolved.

11. That this position of law is correct, gathers strength from the following decisions in Administrator-General of Madras v. Dasai Gounden, (1911) 10 Ind Cas 673 Wallis. J., held:

'It is not necessary in every case to sue a Receiver as such but where any right is established by a decree in the suit to the property in the hands of a Receiver, then the Court may, on an application by the party in whose favour the right is established, make an order directing the Receiver to satisfy the decree'.

In N. H. Moos v. Abdul Hussain Mulla Tyeballi, AIR 1925 Bom 523, a Bench of the Bombay High Court held:

'Where a money suit is filed against the heirs of a deceased party, whose estate is in the hands of a receiver, the receiver has nothing to do with the satisfaction of the claim, and all that the Court could do would be to pass a decree in favour of the plaintiff against the defendants, as the legal representatives of the deceased. The fact that the plaintiff obtained an Ex Parte order from the Court appointing the receiver, granting him leave to add the receiver is a party does not in any way affect the question whether the Court which hears the suit can grant relief against the receiver. That question would have to be decided on the merits and clearly no decree could be passed against the Receiver. If the decree against the other defendants was not satisfied, and the plaintiff wished to execute against the estate, he would have to go to the Court which appointed the receiver for permission to attach the estate of the deceased in the hands of the receiver'.

12. It is pertinent to note in this connection that the 2nd defendant is the person who has been appointed in the dissolution of partnership suit as the Receiver. Of course, he is not made a party as a Receiver. However, in my opinion, to institute a suit to recover money from the dissolved firm and its partners, no permission of the Court which appointed the Receiver in the suit for the dissolution of such firm, was necessary, nor the Receiver was a necessary party. I therefore, find the second contention also devoid of any substance.

13. Since no other argument was advanced, the second appeal must fail, and is dismissed with costs. No leave.


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