Achhru Ram, J.
1. This order shall also dispose of Civil Misc. Nos. 46 and 48 of 1948 in Civil Original No. 1 of 1948.
2. The three petitions oat of which these proceedings have arisen have been filed by the New Bank of India Limited for issue of directions in relation to the accounts of some of the customers in carrying out the scheme of management sanctioned by this Court.
3. The petition in civil Misc. No. 44 of 1918 relates to the account of the firm Banwari Lal Dwarka Parshad. There is a debit balance of Rs. 2,277-15 6 in the overdraft account of the aforesaid firm. The question on which directions of this Court are sought is whether a sum of Rs. 97-3-9, the credit balance in the savings account of Mata Din, the minor son of Banwari Lal, a partner in the said firm, can be set off against the debit balance in the account of the firm.
4. The petition in civil Misc. No. 46 of 1048 relates to the accounts of two firms, namely, the firm Chandulal-Onkar Mal impleaded as respondent 1 and the firm Rajkarandas Onkar-mal impleaded as respondent 2. Respondents 6 to 10, namely, Onkar Mai, Dwarka Prasad, Chandu Lal, Prabhu Dayal and Banwari Lal are partners in the firm Chandulal Onkar Mai. Respondents 3 to 7, namely, Rajkaran Das, Rup Chand, Karari Mai, Onkar Mai and Dwarka Parshad are partners in the firm Rajkarandas. Onkarmal. Thus respondents 6 and 7 are common to both the firms. There is a debit balance of Rs. 28,262-1-9 in the account of the firm Chandulal-Onkar Mal, while there is a credit balance of Rs. 10,048-10-3 in the account of the second firm. The question is whether the whole or any portion of this credit balance can be set off against the debit balance of the firm respondent 1.
5.. In civil Misc. No. 48 of 1948 directions are sought in respect of the account of the firm known as Daulat Ram Krishen Mohan, of which the partners are Krishen Mohan and Daulat Ram respondents 2 and 3. There is a debit balance of Rs. 28,651-0-6 in the account of the firm while there is a credit balance of Rupees-4,334-3-1 in the account of Krishen Mohan respondent 2, and the question is whether the amount of this credit balance can be set off against the debit balance in the firm's account.
6. Section 46, Provincial Insolvency Act, the-rule contained wherein is applicable to proceedings in winding up and, therefore, to the-present proceedings, provides that where there have been mutual dealings between an insolvent and a creditor proving or claiming to prove a debt under the Act, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of the account, and no more, shall be claimed or paid on either side respectively.
7. It is well settled that a debt due to joint creditors cannot be set off against a separate debt due from one of the joint creditors. The rule of law embodied in Section 46 is identical with the rule of English law as applied to proceedings in bankruptcy and in winding up. In Middleton v. Pollock (1875) 44 L.J. Ch. 618, Teasel, M.R. dealing with the subject made the following observations:
I do not know of any right or the joint creditors to get off as against the joint owner the several debt of one of the joint creditors.
8. More recently in In re Pennington and Owen Ltd. (1925) 1 Ch. 825 the same rule was laid down. A set-off can, however, be allowed where the person having the sole account can show that he is solely interested in the balance in the joint account or that the amount standing in the joint names really belongs to him. This was the view taken in In re Willis Percival and Co. (1879) 12 Ch. D. 491, and more recently in Hirschorn v. Evans (1938) 2 K.B. 801. In A.S.S.R. St. Veerappa Chettiar v. J.V. Pirrie and Anr. A.I.R. 1940 Mad. 436, Venkataramana Rao, J. followed the above English authorities and held that although where there is an amount payable by A in his individual account and an amount payable to A and B in their joint account, the two accounts cannot be set off, yet if it can be shown that, though the account is in the name of A and B, A is solely entitled to the amount, a set-off must be allowed, it being in each case a question of fact whether the amount due in the ostensible joint account really belongs to only one of the persons in whose name the account stands. This proposition of law was reaffirmed by the same learned Judge later in Section E. Panikar v. Travancore National and Quilon Bank Ltd. A.I.R. 1942 Mad. 351.
9. However, debt due to one of two or more persons can be set off against the sum due from them where their liability is joint as well as several. This was the view taken in Stephens ex parte (1805) 8 R.R. 75 Gentle, J. applied this rule in D. Sundaravardan v. Narasimhachari A.I.R. 1940 Mad. 266 to the case of a surety who with the principal was jointly and severally liable for the amount of the debt, and held that where a surety whose obligation is to pay to the company the debts of another person, himself has money owing to him by the company in a separate dealing or transaction, the moneys due to the surety on the one hand and from him to the company on the other are mutual dealings as contemplated by Section 46, Provincial Insolvency Act, and he has the right to set off against his indebtedness to the company the moneys due to him.
10. According to Section 25, Partnership Act, every partner is liable jointly with all the other partners, and also severally, for all acts of the firm done while he is a partner. The liability of all the partners for a debt due from the partnership being joint and several, it follows that any sum due to one of the partners in a firm from a company in liquidation can be set off against the debt due to such company from the firm. In the matter of Travancore National and Quilon Bank Ltd. (in Liquidation), I.S. and C. Machado, firm v. Cyril Gill, Stanley Goodwin and Sydney Albert Bindon, Official Liquidators and Anr. A.I.R. 1941 Mad. 654 Venkataramana Rao, J. applied this rule and held that although a joint debt and a several debt cannot be set off against each other, yet a debt which is joint and several being capable of being set off against a several debt and the members of a partnership incurring a debt being jointly and severally liable, the amount due to one of the partners can be set off against the amount due from the partnership itself. He, however, pointed out that the converse of this proposition is not true and that amount due to the firm cannot be set off against the separate debt of one of the partners.
11. In In re Pennington and Owen Ltd. (1925) 1 Ch. 825, to which reference has been made above, the correctness of the above rule was recognised, but in view of the rule of English law as laid down by the House of Lords in Kendall v. Hamilton (1879) 4 A.C. 504 that during a partner's life his liability is only joint and not several, debts due to an individual partner were not allowed to be set off against debts due from the firm.
12. The judgments of the High Court of Lahore in Alliance Bank of Simla Ltd. v. Mohan Lal A.I.R. 1927 Lah. 228 and Simla Banking and Industrial Co. Ltd. Ambala City v. Mt. Bhagwan Kaur A.I.R. 1928 Lah. 316 on which reliance was placed by the learned Counsel for the Bank do not lay down any contrary rule. In Alliance Bank of Simla Ltd. v. Mohanlal A.I.R. 1927 Lah. 228 a person had a personal account with the Bank on which he had overdrawn. He was also interested in another account which was in the name of the firm of which he was a partner although he alone operated on that account. This latter account was in credit. On the Liquidators of the Bank suing him for the amount due under his personal account he claimed to set off against the plaintiffs' claim the amount due to him by the Bank under the account in the firm's name. The set-off was, however, disallowed for the obvious reason that the amount due to the firm was jointly due to all the partners constituting the firm.
13. In Simla Banking and Industrial Co. Ltd. v. Mt. Bhagwan Kaur A.I.R. 1928 Lah. 316 the Bank had issued a fixed deposit receipt for Rs. 500, in favour of Mt. Bhagwan Kaur and her son Raghunandan Singh, the amount being payable to either or survivor. Raghunandan Singh had obtained an overdraft from the Bank. The Bank credited the amount due under the fixed deposit receipt to the overdraft account of Raghunandan Singh and on Mt. Bhagwan Kaur demanding payment informed her of the action taken by it and refused to pay. Mt. Bhagwan Kaur thereupon brought an action against the Bank for the recovery of the amount due under the fixed deposit receipt. It was held that the Bank could not appropriate the money due to Mt. Bhagwan Kuar and her son Raghunandan Singh towards the debt due by Raghunandan Singh alone.
14. Applying the above rules to the facts of the three cases requiring decision, I am of the view that in civil Miscellaneous No. 44 of 1948 the sum of Rs. 97-3-9 representing the credit balance in the savings account of Mata Din, the minor son of Banwari Lal, one of the partners in the firm Banwari Lal Dwarka Prasad, should be set off against the amount due from the firm. Mata Din being the minor son of Banwari Lal and there being nothing to indicate that he has any separate funds of his own the presumption may well be made that the money deposited in the savings account in his name was his father's money. Such money does not become the property of the ostensible depositor but must be treated as the property of the father.
15. On the same grounds in civil Miscellaneous No. 48 of 1948 the sum of Rs. 4334-3-1 representing the credit balance of Krishna Mohan, one of the partners in the firm Doulat Ram Krishan Mohan, should be set off against the debit balance of Rs. 28,651-0-6 in the account of the firm Daulat Ram Krishan Mohan.
16. However, in civil Miscellaneous No. 46 of 1948 no set off can be allowed. Only two partners fare common to the two firms. The amount which is jointly due to the partners of the firm Rajkarandas Onkarmal cannot in view of the rule of flaw indicated above be set off against the debt due from the firm Chandulal Onkarmal although it we out of the partners in the first firm may be jointly and severally liable for this amount.
17. I give directions to the petitioner Bank in these three cases accordingly. There will be mo order as to the costs of this petition.