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Mani Ram Vs. Badri Das-behari Lal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Reported inAIR1933All175
AppellantMani Ram
RespondentBadri Das-behari Lal
Excerpt:
- - this firm failed although there does not seem to have been a formal dissolution of partnership......court has found that this has been acknowledged to be correct by mani ram, and that by signing the letter he promised to pay the sum. the question of whether an unconditional acknowledgment implies a promise to pay is one that has always given difficulty to the courts. in the recent decision of abdul rafiq v. bhajan : air1932all199 , a bench of this court has made some pronouncements on the point, and the bench required from the lower court a decision on the issue of whether the transaction, in the course of which the receipt signed by the defendant was executed, amounted to a fresh contract between the parties for valid' consideration, or whether the receipt was a mere acknowledgment of the amount due as shown by the account. in the present case the letter was signed by mani ram,.....
Judgment:
ORDER

Kendall, J.

1. This is an application for the revision of an order of the Judge of the Small Cause Court of Cawnpore, decreeing the plaintiff's claim for Rs. 960 against the three defendants. The application is made by only one of the defendants, Mani Ram. The facts of the case are not in doubt and may be briefly repeated as follows. The debt which forms the basis of this suit was one which was incurred by the firm of Ram Prasad Ram Gopal, of which the owners were the non-contesting defendants Jagannath and Ram Prasad. This firm failed although there does not seem to have been a formal dissolution of partnership. The present applicant Mani Ram set up with Jagannath and Ram Prasad a new partnership which was called Chaturbhuj Chhedi Lal. He invested money in the new partnership to the extent of Rupees 1,500 which was paid, according to the finding of the Court below, to the plaintiff in liquidation or part liquidation of the debt due from the old firm to the plaintiff. In consideration of this payment he received stock from the old firm which has been valued at Rs. 2,500. The plaintiff has based his suit on the debt due from the old firm in which the applicant was not a partner, but the Court has held him to be liable because he had bought the stock of the old firm and because he acknowledged the outstanding debt on which the plaintiff sues in a manner which, it is argued, implied a promise to pay.

2. The suit is based on the debt due from the firm Ram Prasad Ram Gopal, and even if the new firm had been regarded as the old firm under a different name, Mani Ram would not, under Section 249, Contract Act, have become liable for a debt contracted before he became a partner in it. Mr. Johari has pointed to Section 262, Contract Act, which provides that when there are joint debts due from a partnership the partnership property must be applied in the first instance for payment of debts of the firm. This section however does not provide for a statutory charge on the property, and as there was no charge on the property it is clear that Mani Ram did not become liable for the old debt merely because he purchased the property of the old firm. The argument is however that he rendered himself liable by the acknowledgment made by him in a letter directed to the. plaintiff, the essential part of which has been quoted by the Judge of the Small Cause Court. This letter was one from the firm of Chaturbhuj Chhedi Lal to the plaintiff, and it was signed by Mani Ram. It contains the following passage:

Baqi do hazar charso (sic) dhai anna hamare niche nikle so theelc hai

3. Literally this means that the sum mentioned 'has come out under us' and it is admitted before me that in business terms this means 'is due from us', i.e., from the new firm. The Court has found that this has been acknowledged to be correct by Mani Ram, and that by signing the letter he promised to pay the sum. The question of whether an unconditional acknowledgment implies a promise to pay is one that has always given difficulty to the Courts. In the recent decision of Abdul Rafiq v. Bhajan : AIR1932All199 , a Bench of this Court has made some pronouncements on the point, and the Bench required from the lower Court a decision on the issue of whether the transaction, in the course of which the receipt signed by the defendant was executed, amounted to a fresh contract between the parties for valid' consideration, or whether the receipt was a mere acknowledgment of the amount due as shown by the account. In the present case the letter was signed by Mani Ram, according to his own account, by inadvertence and without the knowledge that the sum named or part of it was due from the old firm. I think it is necessary for the purpose of deciding whether he intended to imply a promise to pay, to consider what must have been in his mind at the time. The written statement shows that he did know that there were debts due to the plaintiff from the old firm, but it has also been found to have been proved that he had paid the plaintiff a sum of Rs. 1,500 in respect of those debts. What reason then could he have had for undertaking the payment of the sum mentioned in the letter? I have already said that there was no obligation on him to pay the debts merely because he had taken over the stock of the old firm. It is very unlikely indeed that he would have made a fresh promise to pay the debts if there was no obligation on him to do so; and as there was no obligation, it does not appear that there could have been any consideration for the implied promise. It is difficult to believe therefore that he signed this letter otherwise than in inadvertence, and in that case I am decidedly not of opinion that it amounts to an unconditional acknowledgment from which a promise to pay can be inferred. In my opinion therefore the decision of the Court below is wrong in law and I allow the application, set aside the decree and order of the lower Court, and direct that the suit as against Mani Ram be dismissed with costs in both Courts.


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