Skip to content


Lalta Parshad and ors. Vs. Babu Parshad and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad
Decided On
Judge
Reported in4Ind.Cas.708
AppellantLalta Parshad and ors.
RespondentBabu Parshad and ors.
Excerpt:
.....to give the acknowledgment and that it is not enough that the court should be satisfied that lala babu prasad had authority to borrow and repay money but that the court must also be satisfied that each one of the partners gave express authority to lala baba prasad to acknowledge the debt. we are quite satisfied on the evidence that lala babu prasad was the manager of the firm with full power to borrow and repay money. it was a part of the duty of the court in the course of the suit to discharge the debts and liabilities of the firm, and in oar judgment the mere fact that the court did not adjudicate on the claim until after the expiration of more than three years, did not render the claim a bad claim against the assets of a firm which was being administered by the court, and we..........has been argued in the present appeal. we are satisfied on the evidence that the defendant no. 1 lala babu prasad was the managing partner of the firm. this matter has not been disputed and we have been referred to no evidence to the contrary. the plaintiffs in a suit which was instituted almost if not quite simultaneously with the present suit, claimed to recover this amount from lala babu prasad personally. in his written statement lala babu prasad whilst he admitted receiving from the plaintiffs another sum of rs. 500, alleged that he had received the amount now in dispute, not in his personal capacity but as the manager of the firm and that the money had been duly spent for its purposes. several letters and in particular the one dated the 5th of august, 1906, which have been given.....
Judgment:

1. This appeal arises out of a suit brought for the dissolution of a partnership alleged to have existed between the plaintiffs and the defendants Nos. 1 to 4. It was subsequently held that a number of other persons were also partners and they were made parties accordingly. The plaintiffs suggested in their plaint that they were entitled not only to a dissolution of partnership but also to the repayment of the sum of Rs. 8,000, on the ground that they had been misled by the defendants or some one or more of them. This sum of Rs. 8,000 is not to be confounded with the item of Rs. 7,509-14-6 which we shall deal with later on. It represented the capital of the plaintiffs in the firm. The Court made a decree for the dissolution of the partnership but it gave no relief to the plaintiffs in respect of the sum of Rs. 8,000 to which we have already referred. After the primary decree for dissolution had been made the plaintiffs on the 22nd Jane, 1906, put forward a claim to the Receiver that they were entitled to the sum of Rs. 8,077-9-9 with interest, not as partners but as creditors of the firm. The Receiver disallowed this claim on the ground that it was barred by limitation and the Court confirmed the view taken by the Receiver.

2. The question whether or not the plaintiffs are entitled to recover this item out of the assets is the question and the only question which has been argued in the present appeal. We are satisfied on the evidence that the defendant No. 1 Lala Babu Prasad was the managing partner of the firm. This matter has not been disputed and we have been referred to no evidence to the contrary. The plaintiffs in a suit which was instituted almost if not quite simultaneously with the present suit, claimed to recover this amount from Lala Babu Prasad personally. In his written statement Lala Babu Prasad whilst he admitted receiving from the plaintiffs another sum of Rs. 500, alleged that he had received the amount now in dispute, not in his personal capacity but as the manager of the firm and that the money had been duly spent for its purposes. Several letters and in particular the one dated the 5th of August, 1906, which have been given in evidence contain clear admissions that Lala Babu Prasad received the money from the plaintiffs who are bankers as manager for the firm. No evidence to the contrary was given. In our judgment these documents are clear admissions by Lala Babu Prasad that he received the amount. The answering respondents, namely, respondents Nos. 18, 20, 23, 26, 28, 30, 33 and 39, allege that Lala Baba Prasad was not an agent within the meaning of Section 19, explanation 2, of the Limitation Act of 1877, and that farther, assuming that Lala Baba Prasad could give a valid acknowledgment, the claim was barred at the time the Court made its decree. On the first point it was argued that the agent must have express authority to give the acknowledgment and that it is not enough that the Court should be satisfied that Lala Babu Prasad had authority to borrow and repay money but that the Court must also be satisfied that each one of the partners gave express authority to Lala Baba Prasad to acknowledge the debt. We think that this would be placing a very narrow construction on Section 19 and would open the door to very serious fraud. It seems to us that if it is admitted that the agent had a power to borrow, it follows of necessity that he had power to acknowledge the debt by either immediately giving a promissory-note or subsequently upon an adjustment of accounts or in any other way in the course of business making bona fide admissions in writing. We are quite satisfied on the evidence that Lala Babu Prasad was the manager of the firm with full power to borrow and repay money.

3. As to the next point namely that the debt was barred at the date of the judgment of the learned Subordinate Judge, we find that the claim was put forward on the 22nd of June, 1906, the Receiver having been appointed on the 14th of March, in the same year. It is quite clear, therefore, that from the date of the appointment of the Receiver and the putting forward of the claim the debt was not barred. It was a part of the duty of the Court in the course of the suit to discharge the debts and liabilities of the firm, and in oar judgment the mere fact that the Court did not adjudicate on the claim until after the expiration of more than three years, did not render the claim a bad claim against the assets of a firm which was being administered by the Court, and we think the learned Judge was wrong in dismissing the claim.

4. It has not been ascertained what is the amount due to the plaintiffs in respect of the item we have bean dealing with. We, therefore, allow the appeal to this extent that we hold that the Court below was wrong in dismissing the plaintiffs' claim on the ground of limitation as to the item of Rs. 7,509-14-6. The case will go back to the Court below with directions to ascertain what sum is due to the plaintiffs in respect of the said item. Having ascertained the amount due, the Court will allow the same to the plaintiffs as creditors and the balance of the assets will then be distributed amongst the several partners as already directed. The appellants will have their costs in this appeal as against respondents Nos. 18, 20, 23, 26, 28, 30, 38 and 39, including fees on the higher scale. The objection by the respondents is not pressed. It is, therefore, dismissed but we make no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //