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Kalyan Sahai Vs. Firm LachhminaraIn Shambhulal - Court Judgment

LegalCrystal Citation
SubjectContract
CourtRajasthan High Court
Decided On
Case NumberCase No. 78 of 1949
Judge
Reported inAIR1951Raj11
ActsPartnership Act, 1932 - Sections 69; Code of Civil Procedure (CPC) , 1908 - Sections 34 and 100; Evidence Act, 1872 - Sections 61 and 65; Interests Act, 1939 - Sections 1; Contract Act, 1872 - Sections 73; Sale of Goods Act, 1930 - Sections 61
AppellantKalyan Sahai
RespondentFirm LachhminaraIn Shambhulal
Appellant Advocate P.C. Bhandari, Adv.
Respondent Advocate M.M. Sharma, Adv. for Respondent 1
Cases Referred & Sons v. Behari Lal Beni Prasad
Excerpt:
.....in that case that it would not matter if the question of registration was raised for the first time in appeal, as section 69, partnership act, prevents a court from taking cognizance of a suit brought by an unregistered firm in the same way as a court shall not take cognizance of a suit barred by limitation, and it was further remarked in the judgment that to hold that because as a result of ignorance or mistake objection was not taken by the defendant in the suit, so the provisions of law can be flouted, would be to frustrate the intention of the legislature clearly expressed. ' stringent provision like section 69(2) must be strictly construed. 775) does not help the case of the appellant, because it has clearly been held in that case that a point relating to section 69(2),..........that the defendants had a partnership firm at ranoli which used to deal in cloth, and which from time to time took from the plaintiff's firm cloth and cash to the extent) of rs. 1,115-7-0 out of which an amount of rs. 558 was paid to the plaintiff, thus leaving a balance of rs. 557-7-0 against the defendants. the plaintiff added rs. 16 by way of interest to the amount of rs. 557-7-0 and claimed rs. 573-7-0 from the defendants.2. kalyan sahai, one of the defendants, disputed the claim of the plaintiff but bhagwan sahai admitted the claim in full. kalyan sahai alleged that there was no partnership firm of bhagwan sahai and kalyan sahai at ranoli, and that the dealings alleged by the plaintiff did not take place.3. after trying the case the munsif, on 29-4-1947, granted a decree to the.....
Judgment:

Ranawat, J.

1. The firm of Lachhminarain Shambhulal acting through Lachhminarin filed a suit in the Court of the Munsif at Dausa on 20-10-1946, against Bhangwan Sahai and Kalyan Sahai for an amount of Rs. 573-7-0 with the allegations that the defendants had a partnership firm at Ranoli which used to deal in cloth, and which from time to time took from the plaintiff's firm cloth and cash to the extent) of Rs. 1,115-7-0 out of which an amount of Rs. 558 was paid to the plaintiff, thus leaving a balance of Rs. 557-7-0 against the defendants. The plaintiff added Rs. 16 by way of interest to the amount of Rs. 557-7-0 and claimed Rs. 573-7-0 from the defendants.

2. Kalyan Sahai, one of the defendants, disputed the claim of the plaintiff but Bhagwan Sahai admitted the claim in full. Kalyan Sahai alleged that there was no partnership firm of Bhagwan Sahai and Kalyan Sahai at Ranoli, and that the dealings alleged by the plaintiff did not take place.

3. After trying the case the Munsif, on 29-4-1947, granted a decree to the plaintiff and against both the defendants for an amount of Rs. 573-7.0 with future interest at the rate of 4 1/2 per cent. per annum.

4. On an appeal filed by the defendant Kalyan Sahai, the District Judge, Sawai Jaipur, on 31-5-1948, reduced the amount of the decree to Rs. 422-12-0, but increased the rate of future interest to 6 per cent, per annum. Kalyan Sahai has now filed this second appeal against the judgment and decree of the Court of the District Judge, Sawai Jaipur, with the prayer that the decretal amount may be reduced by Rs. 302-4-0.

5. At the time of the hearing of this appeal, the learned counsel on behalf of the appellant has raised the following points: (1) that the suit of the plaintiff is not maintainable by virtue of the provisions of Section 69, Partnership Act. as both the firms of the plaintiff and the defendant were not registered under the Partnership Act, (2) that the lower Appellate Court did not act rightly in interfering with the discretion of the trial Court in the matter of awarding future interest under Section 34, Civil P. C. (3) that the payment of Rs. 250 was held to be proved by both the Courts below on the strength of the evidence of witnesses, but the plaintiff ought to have produced the document alleged to have been written by Kalyan Sahai, and under Section 61, Evidence Act, oral evidence was not admissible for the purposes of proving this payment. According to the appellant, the finding relating to the payment of Rs. 250 was based on evidence which was not admissible in evidence according to law, and (4) that the plaintiff failed to prove the existence of any contract or any custom or usage for the payment of interest on the sums due from the defendants. Rs. 52-4-0 which were allowed to the plaintiff by way of interest should be deducted from the amount of the decree.

6. Section 69(1), Partnership Act is as follows:

'No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.'

7. This suit was filed on behalf of the firm Lachhminarain Shambhulal against the partnership firm of Bhagwan Sahai Kalyan Sahai, and it is urged on behalf of the plaintiff that Lachhminarain in his statement has admitted that the firm of the plaintiff was a partnership firm but it may be pointed our, that nowhere in the Courts below did the defendant question the fact of registration of the two firms A new point has now been raised in this second appeal to the effect that the plaintiff firm and the firm of the defendants were not registered, and it is urged on this account that the suit was not maintainable by virtue of the provisions of Section 69, Partnership Act. Whether a firm is registered under the provisions of the Partnership Act or it is not so registered is a question of fact, and unless this fact is enquired into and decided, the restrictions regarding filing of suits under Section 69, Partnership Act, cannot be invoked by any of the parties to the suit in second appeal. The learned counsel for the appellant has put reliance on Firm Lokramdas Chatomal v. Tharumal A. I. R. (26) 1939 Sind 206: (I. L. R. (1939) Kar. 765), Goverdhandass v. Abdul Rahman, A.I.R. (29) 1942 Mad. 634 : (I. L.R. (1942) Mad. 775). Firm Lokramdas Chatomal v. Tharumal, A.I.R. (26) 1939 Sind 206: (I. L. R. (1939) Kar. 765) is & case which does not deal with the question whether a question of fact can be agitated for the first time in second appeal. In that case, the first appellate Court remanded a suit for a finding on the question whether the plaintiffs were barred under Section 69, Partnership Act, from instituting the suit on the ground of want of registration under the provisions of the Partnership Act. In appeal it was contended that the Appellate Judge had no power to remand the suit for a finding on this issue because whether a firm was or was not registered or whether the persons suing were shown in the register of firms as partners were all questions of fact which had not been raised on the pleadings and it was held in that case that it would not matter if the question of registration was raised for the first time in appeal, as Section 69, Partnership Act, prevents a Court from taking cognizance of a suit brought by an unregistered firm in the same way as a Court shall not take cognizance of a suit barred by limitation, and it was further remarked in the judgment that

'to hold that because as a result of ignorance or mistake objection was not taken by the defendant in the suit, so the provisions of law can be flouted, would be to frustrate the intention of the Legislature clearly expressed.'

Therefore the Court went; on to state that 'it was right in allowing to be taken or himself taking the objection under Section 69, in appeal.' This decision does not deal with the provisions of Rs. 100 and 101, Civil P. C., and is therefore not of much assistance in the present case. A Courts of first appeal can go into questions of fact. and it was therefore proper for the first appellate Court to determine all those questions of fact which were necessary for the right decision of the case. In a second appeal, the parties are not at liberty to agitate any questions of fact which were not so agitated in the lower Courts. Pure points of law can however be taken afresh. A mixed question of law and fact cannot be taken for the first time in second appeal.

8. In Goverdhandas v. Abdul Rahiman, A. I. R. (29) 1942 Mad. 634 (I. L. E. (1942) Mad. 775). it has been held as follows:

'The point under Section 69(2) as to non-registration of a firm being one of law can be raised for the first time in appeal, if all the facts necessary for its determination are on the record.' 'There is a distinct provision in the Limitation Act that a Court is bound to dismiss a suit on the ground of limitation if it finds the suit to he barred whether a plea of this kind had been raised On behalf of the defendants or not. No such provision, however, exists in the Partnership Act, and therefore the Court is not bound to dismiss a suit on the ground of non-registration of the firm suo motu if no plea had been raised by any of the defendants to the suit.' 'Stringent provision like Section 69(2) must be strictly construed. The provisions of Section 69(2) can only be attracted to a suit that was instituted either by or on behalf of the firm that is to say ex facie it purports to be filed either by or on behalf of the firm or even in the interests of the firm, bat this must be clear from the plaint itself and must not in any case depend on the liability of a plaintiff to restore the benefit that he has received out of that suit to the firm of which he is a partner eventually.'

9. The decision in Goverdhandas v. Abdul Rahiman, A. I. R. (29) 1942 Mad. 634: (I. L. R. (1942) Mad. 775) does not help the case of the appellant, because it has clearly been held in that case that a point relating to Section 69(2), Partnership Act, can be raised for the first time in appeal only if all the facts necessary for its determination are on the record. According to this ruling, the plaintiffs can take up this point only when all the facts necessary for the application of Section 69(2) are on the record, but in the present case it is conceded by the learned counsel for the appellant that the point relating to registration of the partnership firms was never raised by any of the parties in the Courts below, and it cannot be now said that any of the firms of the parties are registered or not. Under these circumstances, an objection under Section 69(2), cannot be raised by the appellant, because facts necessary for the decision of this law point cannot be said to be on the record of this case.

10. In Mahomed Ali v. Kondho Rayaguru, A.I.R. (32) 1945 Pat. 286: (220 I. C. 217), it has been held as follows:

'Whether the firm was or was not actually registered under the Partnership Act, is a mixed question of fast and law and the point can not be raised for the first time in second appeal. Since it is the defendant who intends to contest the performance of the condition precedent viz , the legislation of the firm and if the point is not raised in the pleadings the question is not at all before the Court.'

11. A similar view has been expressed in Mahomed Ibrahim, & Sons v. Behari Lal Beni Prasad, A. I. R (25) 1938 Lah. 96: (175 I. C. 16), wherein it was held that where in a suit by a firm the defendant does not deny registration and no reference to registration or non-registration is made in the evidence, the firm can assume that this objection had not been taken and a suit cannot be dismissed on the ground that the registration was not proved.

12. The defendants having failed to take the point regarding registration of the plaintiff's firm under the provisions of the Partnership Act, cannot now agitate the question of the suit being not maintainable by virtue of Section 69, Sub-clause (2), as this is a mixed question of law and fact and cannot be taken, for the first time, in second appeal under the provisions of Sections 100 and 101, Civil P. C.

13. Under Section 84, Civil P. C, it is left to the discretion of a Court to award interest pendente lite or future interest in oases of money decrees where the decree is for the payment of money. The Court of first appeal was not right in interfering in the exercise of the discretion of the trial Court without good reasons. The first appellate Court has not given any reasons for changing the rate of interest allowed by the trial Court.

14. The fact regarding payment of Rs. 250 was in issue and both the Courts below have found in favour of the plaintiff. The document, which is said to have been written by Kalyan Sahai, is said to have been lost, or misplaced by Laxminarain P. W. 1 in his statement. It was therefore not improper for the trial Court to admit other evidence relating to it. Moreover the fact of the payment of Rs. 250 did not form part of the contents of that document, but was independent of it. That document was merely a piece of evidence which can throw some light on this fact. It was stated that by that document Kalyan Sahai requested the plaintiff firm to send through Narain, a servant of Kalyan Sahai an amount of Rs. 250, and Narain has come in the witness box and has stated that he gave that document to Lachhminarain and obtained a sum of as. 250 from him which he delivered to Kalan Sahai The Courts below relied upon the evidence of Narain and Lachhminarain on this point and found in favour of the plaintiff. The oral evidence relating to the fact of payment of Rs. 250 was therefore not inadmissible into evidence for want of the production of the document written by Kalyan Sahai requesting Lachhminarain to advance him a sum of Rs. 250.

15. As regards interest claimed by the plaintiff, the learned counsel for the respondent has relied on the provisions of the Jaipur Interest Act, Section 61, Sale of Goods Act and Section 73, Contract Act. It may be pointed out that under the provisions of the Interest Act, the Court may allow interest on debts or sums certain which are payable by an instrument in writing from the time when the amount becomes payable, where time is fixed for payment, or where no time is fixed, from that date on which the demand of payment is made in writing giving notice to the debtor that interest will be claimed. In the present case, the learned counsel for the respondent has conceded that there were mutual giving and taking of goods and money between the firms of the parties, but there was no date fixed for the payment of the prices of the goods or for the return of the moneys advanced to each other, nor was there any notice of demand served on the opposite party to make payment of the out standings and in default to claim interest. Under these circumstances, the plaintiff cannot claim any interest from the defendants because no date was fixed for the payment of the out standings, nor was there any notice served claiming interest thereon. Similarly, interest can be claimed by way of damages under Section 73 only when there is a contract for the payment of money on a specified date which is not the case here. As no date for the payment was fixed, there can be no question of the payment of interest by way of damages under Section 73, Contract .Act. The same is the position with the provisions of Section 61, Sale of Goods Act. For the very reasons the plaintiff is not entitled to get any interest under Section 73, Contract Act or Section 2, Interest Act, he cannot claim interest under Section 61, Sale of Goods Act. It is necessary for payment of interest under Section 61, Sale of Goods Act, that the date of the payment must be certain. In the present case, even though certain goods were sold by the firm of the plaintiff to the defendants, there was no agreement for the payment of their price on a fixed date. The plaintiff firm is therefore not entitled to get interest from the defendants. The amount of interest allowed by the lower appellate Court is Rs. 52-4-0 which should be reduced in the decree of the Court below.

16. In conclusion it may be stated that the decree of the Court below that be reduced by Rs. 52-4-0 and the future rate of interest shall be 4 1/2% per annum instead of 6% pet annum.

17. This appeal is partially allowed and the. decree of the Court below shall be amended as aforesaid. No order as to costs.


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