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Ganga Ram Dhanpat Rai Vs. Mahesh Aggarwal - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 905 of 1983
Judge
Reported inAIR1984Delhi233; 26(1984)DLT12; 1984(6)DRJ244; 1984RLR402
ActsCode of Civil Procedure (CPC), 1908 - Order XXI
AppellantGanga Ram Dhanpat Rai
RespondentMahesh Aggarwal
Advocates: Neeraja Mehra, Adv
Excerpt:
.....liability is not disputed, such court may grant such leave, or, where such liability is disputed may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined. (5) (3) on a plain reading of the foregoing provisions, it is crystal clear that a decree against a firm can be executed against any partner only if he has appeared in his own name under rule 6 or rule 7 of order xxx or who has admitted on the pleadings that he is or has been adjudged to be a partner and also against any person who has been individually served as a partner with a summons and has failed to appear. instant case, can be proceeded against individually if the conditions laid in the sub-rule are satisfied. unfortunately the learned sub-judge..........of the partner other than a partner as is referred to in sub-rule (1) clauses (b) & (c). sub-rule (2) rule 50 in term, lays down that where such liability is disputed the court may order that the liability of such person be tried and determined in any manner which any issue in a suit may be tried and determined. in other words, the decision of the court on the point in issue shall be deemed to be final as if it a decision in the suit itself.(4) in the instant case, nothing has come on the record to suggest even remotely that any of the partners in the judgment debtor no. 1-firm was either arrayed as a defendant in the suit or appeared before the said court in response to any summons issued against the j.d.-firm. no leave of the court, which passed the decree, too seems to have been.....
Judgment:

J.D. Jain, J.

(1) The respondent Shri Mahesh Aggarwal carries on business at Gangtok (Sikkim) under the name and style of M/s. Aggarwal Trading Company as also M/s. Laxmi Stores. On 11th January 1979, he obtained an ex-parte decree for recovery of Rs. 13,637/8OP against (i) M/s. Ganga Ram Dhanpat Rai, 472, Bartan Market, Sadar Bazar, Delhi and (ii) M/s. Assam Bengal Carrying Corporation, 10879, ldgah Road, Nabi Karim, New Delhi. His claim was for damages for the loss of consignments of goods booked by him with Judgment Debtor No. 2 on 14th October 1976 and 18th October 1976. He applied for transfer of the aforesaid decree for. execution to the civil courts at Delhi and the necessary certificate was granted to him on 19th February 1980. Accordingly, he took out execution of the aforesaid decree at Delhi against both the judgment-debtor firms, inter alia, stating that they had not paid anything towards the satisfaction of the decree till then. It appears that the said application was dismissed in default and thereupon he moved a fresh application for execution being Ex. No. 19/83. He, inter alia, asked for execution of the decree against S/Shri Dhanpat Mal Khurana, Sat Pal Khurana and Hans Raj Khurana, all of whom were stated to be partners of J.D. firm-M/s. Ganga Ram Dhanpat Rai. He prayed for arrest and detention of all of them in civil prison after due notice in accordance with law. A notice purporting to be under Order Xxi Rule 37

'FINALLY it has been argued that the decree was passed against M/s. Ganga Ram Dhanpat Rai only and a penal action against the J.D. firm cannot be taken. There is absolutely no substance in the contention. A firm is nothing but a compendious name of its partners. thereforee, the partners would be liable for payment of debts incurred by the firm in ordinary course of its business. They cannot be allowed to escape liability.'

(2) Evidently, the learned Sub-Judge has not taken notice of the provisions embodied in Order Xxi Rule 50 of the Code, which reads as under: '50(1). Where a decree has been passed against a firm, execution may be granted-- (a) against any property of the partnership; (b) against any person who has appeared in his own name Under Rule 6 or Rule 7 of Order Xxx or Who has admitted on the pleadings that he is, or who has been adjudged to be a partner; (c) against any person who has been individually served as a partner with a summons and has failed to appear : Provided that nothing in this sub-rule shall be deemed to limit or otherwise affect the provisions of Section 30 of the Indian Partnership Act, 1982. (2} Where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in Sub-rule (1), clauses (b) and (c), as being a partner in the firm, he may apply to the Court which passed the decree for leave, and where the liability is not disputed, such Court may grant such leave, or, where such liability is disputed may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined. (4) Save as against any property of the partnership, a decree against a firm shall not release, render liable or otherwise affect any partner therein unless he has been served with a summons to appear and answer. (5)

(3) On a plain reading of the foregoing provisions, it is crystal clear that a decree against a firm can be executed against any partner only if he has appeared in his own name under Rule 6 or Rule 7 of Order Xxx or who has admitted on the pleadings that he is or has been adjudged to be a partner and also against any person who has been individually served as a partner with a summons and has failed to appear. Sub-rule (4) further makes it clear that a decree against a firm as such will not affect a partner who has not been served with summons to appear and answer so far as his property other than the property of the partnership is concerned. Obviously, thereforee, the partners in the judgment debtor-firm, in the.instant case, can be proceeded against individually if the conditions laid in the sub-rule are satisfied. Further, leave under Sub-rule (2) of Rule 50 is required when it is proposed to proceed against the individual property of the partner other than a partner as is referred to in Sub-rule (1) Clauses (b) & (c). Sub-rule (2) Rule 50 in term, lays down that where such liability is disputed the Court may order that the liability of such person be tried and determined in any manner which any issue in a suit may be tried and determined. In other words, the decision of the Court on the point in issue shall be deemed to be final as if it a decision in the suit itself.

(4) In the instant case, nothing has come on the record to suggest even remotely that any of the partners in the judgment debtor No. 1-firm was either arrayed as a defendant in the suit or appeared before the said Court in response to any summons issued against the J.D.-firm. No leave of the Court, which passed the decree, too seems to have been obtained. Sub-section (4) of Section 42 of the Code, which has been introduced by Code of Civil Procedure Amendment) Act 104 of 1976, makes it abundantly clear that the power to grant leave to proceed individually against a person other than those referred to in Clauses (b) & (c) of Sub-rule (1) of Rule 50 does note vest in the transferee court to which the decree has been transferred for execution. Thus, it was incumbent upon the decree holder to obtain such leave for proceeding personally against the partners of the J.D.-firm from the Court which had passed the decree and he not having obtained the requisite leave cannot be permitted to proceed against any of the partners in the J.D. firm individually. Hence, the executing court fell into grave error in ordering the arrest and detention in civil prison of the partners in the firm on the short ground that the firm is nothing but a compendious mode of expressing the names of the partners who constitute it. The above mentioned provisions of law, which are mandatory in nature, ought to have been noticed and complied with by the executing court before proceeding against the partners of J.D. No. I individually. Unfortunately the learned Sub-Judge failed to notice these important provisions of law even after objection had been raised by the J.D.

(5) To sum up, thereforee, the impugned order, being bad in law, cannot be sustained. This revision petition is accordingly allowed and the impugned order is set aside. However, no order is made as to costs.

(6) Counsel for the petitioner states, at this stage, that Hans Raj, one of the partners in the J.D. No. 1-firm, has deposited Rs.2,000.00 in cash by way of security. In view of the above order, the security stands released.


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