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T. Mohamed Yusuf and ors. Vs. Khan Bahadur Muhammad Sadulla Badsha Sahib and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported in(1929)57MLJ344
AppellantT. Mohamed Yusuf and ors.
RespondentKhan Bahadur Muhammad Sadulla Badsha Sahib and ors.
Cases ReferredMathuradas Canji v. Ebrahim Fasulbhoy I.L.R.
Excerpt:
- - but he will have to state in his plaint that he is unable to give any better description of the defendants than1 that. as regards service of summons in such cases, order 30, rule 3 prescribes the procedure, that it may be served (a) upon any one or more of the partners, or (b) at the principal place at which the partnership business is carried on within british india upon any person having at the time of service the control or management of the partnership business there, as the court may direct, and such services shall be deemed good service upon the firm so sued, whether all or any of the partners are within or without british india......representatives of such deceased person in respect of assets in their possession belonging to the deceased partner?2. before the enactment of act v of 1908, the procedure that was generally adopted in indian courts in respect of suits against firms was to have the names of the members of the firm set out in the plaint and to have them or one of them personally served with a summons. in the case reported in yeknath babaji v. gulabchand kahanji (1863) 1 bom. h.c.r. 85 forbes, westropp and tucker, jj., held thatthe suit being instituted against the firm, the names of the members of the firm should have been mentioned in the plaint, and that they, or one of them, should have been personally served with a summons if within the jurisdiction.3. sir barnes peacock, chief justice, and hobhouse,.....
Judgment:

1. The question that has been referred for the opinion of the Full Bench is

Where a decree is passed against the partnership in its firm name and the plaintiff at the time of filing his suit knew that a person who was afterwards discovered to be a partner was dead, but did not know that he was a partner, can execution be issued against the legal personal representatives of such deceased person in respect of assets in their possession belonging to the deceased partner?

2. Before the enactment of Act V of 1908, the procedure that was generally adopted in Indian Courts in respect of suits against firms was to have the names of the members of the firm set out in the plaint and to have them or one of them personally served with a summons. In the case reported in Yeknath Babaji v. Gulabchand Kahanji (1863) 1 Bom. H.C.R. 85 Forbes, Westropp and Tucker, JJ., held that

the suit being instituted against the firm, the names of the members of the firm should have been mentioned in the plaint, and that they, or one of them, should have been personally served with a summons if within the jurisdiction.

3. Sir Barnes Peacock, Chief Justice, and Hobhouse, J., in the case reported in Koylash Chunder Roy v. Edward Ellis (1867) 8 W.R. 45 observed as follows:

In the case of an unincorporated or unregistered company, the proper course would be to sue the individual members of the company in the same way as the individual members of any other firm, not being incorporated or registered, would have to be sued. But: it appears that the plaintiff does not know of what persons the company is composed. If that is so, we are of opinion that he might sue the company by the name of the Bengal Indigo Company', the name under which they are carrying-on their business, and contracted with him, if at all. But he will have to state in his plaint that he is unable to give any better description of the defendants than1 that. The suit will then proceed against that company, and any property belonging to the firm will be liable to be taken in execution if a decree be obtained.

4. In Macpherson's 'Procedure of the Civil Courts of the Fast India Company,' published in 1850, it is stated that

it there be a demand against a partnership, all the partners must be before the Court and if any of the partners liable to the demand are dead, their representatives ought to be parties.

5. Under Section 74 of Act XIV of 1882,

if the defendants are partners and the suit relates to a partnership transaction or to an actionable wrong in respect of which relief is claimable from the firm, the service may be made, unless the Court directs otherwise, either, (a) on one defendant for himself and for the other defendants, or (b) on any person having the management of the business of the partnership at the principal place of such business.

6. Subject to that exception, the section states that

when there are more defendants than one, service of the summons shall be made on each defendant.

7. Order 5, Rule 11 of the present Civil Procedure Code (V of 1908) enacts that

Save as otherwise prescribed, where there are more defendants than one, service of the summons shall be made on each defendant.

8. Thus according to the procedure followed by the Indian Courts; in a suit against an unincorporated company the names of all the individual members must be given in the plaint. The practice of English Courts was different, and there such a partnership or firm may sue or be sued by its usual designation. When the new Civil Procedure Code was passed, opportunity was taken to permit of a similar procedure being followed in cases of suits by and against firms and Order 30 was inserted which proceeded on the lines of Order 48-A of the rules of the Supreme Court.

9. Thus an alternative procedure was prescribed, of which parties could in their option take advantage. In suits against firms, if the plaintiff be so minded, he could sue any two or more persons claiming or being liable as partners and carrying-on business in British India in the name of the firm of which such persons were partners at the time of the accruing of the cause of action. The plaintiff in such cases is not bound to disclose the names of partners in the plaint. As regards service of summons in such cases, Order 30, Rule 3 prescribes the procedure, that it may be served (a) upon any one or more of the partners, or (b) at the principal place at which the partnership business is carried on within British India upon any person having at the time of service the control or management of the partnership business there, as the Court may direct, and such services shall be deemed good service upon the firm so sued, whether all or any of the partners are within or without British India. There is a proviso to rule 3 which enacts that in the case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit the summons shall be served upon every person within British India whom it is sought to make liable. Further when the suit is filed as aforesaid against a firm if any of the persons sued in the name of a firm should happen to die whether before the institution or during the pendency of any suit it shall not be necessary to join the legal representatives of the deceased as a party to the suit.

10. The procedure in case of suits against firms has been thus simplified, following the English practice.

11. When the question is how such decrees against firms can be executed, the Code lays down the general rule in Order 21, Rule 50, viz., that such decrees can be executed against any property of the partnership; but that 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.

12. These being the general principles laid down by the Code regulating the procedure to be followed in suits against firms and the mode of executing such decrees, we may refer to the special facts found in the particular case in which reference to the Full Bench has been made. A decree for money was passed against the firm of Haji Sheik Mira Sahib and Company for Rs. 6,453. It was conceded that Haji Badrudeen Sahib was a partner in the defendant's firm, but he was dead before the suit was instituted. The plaintiff-decree-holder applied under Order 21, Rule 50, Sub-clause (2) for leave to execute the decree against the legal representatives of the deceased Badrudeen Sahib. The question is whether the decree-holder is entitled to have such leave.

13. It is contended that the decree-holder is entitled to cause the decree to be executed not only against persons referred to in Sub-rule (1), Clauses (b) and (c) of Order 21, Rule 50, but that he is also entitled to have the decree executed against any other person as being a partner in the firm; and it was argued that the circumstance that the person who was a partner in the firm was dead at the time of the application could be no bar to the decree-holder being granted leave for execution as claimed, and that the only question which the legal representatives could raise would be whether the deceased was a partner in the firm or not. On the other hand it was urged on behalf of the legal representatives that the Civil Procedure Code has only followed the procedure prescribed by the rules of the Supreme Court, and that under the English rules, where a partner dies before action and a decree is obtained against the firm alone in the firm name, the private estate of the deceased partner is not liable to be proceeded against in execution.

13. Having considered the provisions of Order 21, Rule 50 and Order 30, Rules 1 to 5, and also the corresponding provisions of Order 48-A of the rules of the Supreme Court, we are of opinion that the decree-holder is not entitled to claim leave to execute the decree against the personal properties of the deceased partner in the hands of his legal representatives. When the partnership is a going concern and the partners are sued in the name of the firm the summons is to be served as laid down in the first portion of Order 30, Rule 3; but in the case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit the summons shall be served upon every person within British India whom it is sought to make liable. Order 30, Rule 3 of the Civil Procedure Code is thus relevant only when the question of the service of a summons is concerned, and questions relating to execution of decree against firms have to be decided with reference to Order 21, Rule 50. It is admitted that neither Clause (b) nor Clause (c) of rule SO, Sub-rule (1) applies to the present case. In our opinion, neither can Sub-rule (2) of rule 50 apply to the present case. According to the wording of the Sub-rule (2), it would apply only when the decree is sought to be executed against any person as being a partner in the firm. Here it is not contended that the legal representatives against whom the decree is sought to be executed were ever partners in the firm; so that unless the person against whom leave to execute the decree is asked is alleged to be a partner in the firm, Sub-rule (2) cannot be invoked by the decree-holder. As observed by Benson and Sundara Aiyar, JJ., in Sahib Thambi v. Hamid I.L.R.(1911) M.414 : 22 M.LJ. 109.

The general rule of law is that in suits where one person is allowed to represent others as defendant in a representative capacity any decree passed can bind those others only with respect to the property of those others which he can in law represent and no personal decree can be passed against them, although the parties on record eo nomine may he made personally liable. The principle is recognized in England in partnership suits in Order 48-A, Rule 8, Judicature Act which lays down that where a judgment or order is against a firm, execution may issue only against any property of the partnership so far as partners who are not individually served and those who have not appeared are concerned.

14. In England it has been held that if one of several partners dies before action is brought and the plaintiff seeks, in suing, the firm, to make the deceased partner's private estate liable, he must add as defendant the personal representative of such deceased partner. (See the Annual Practice, 1928, pages 840 and 841). In Ellis v. Wadeson (1863) 1 Bom. H.C.R. 85 Romer (1899) 1 Q.B. 714 Lord Justice, delivering the judgment of the Court of Appeal observed at page 718:

Now consider the Question of death. Suppose a partner dies before action brought, and an action is brought against the firm in the firm's name. The dead man is not a party to the action so far as his private estate is concerned, for a dead man cannot be sued, though the legal personal representatives of a dead man can be sued in a proper case. In that case the action would be an action solely against the surviving partners. At common law, if a creditor sued joint debtors and one died, the survivors only could be sued. Since the Judicature Act, undoubtedly, in the case of a partnership liability, the creditor might now join in one action the surviving partners, and the legal personal representatives of the deceased partner, but the latter would have expressly to be added as defendants. If the legal personal representatives of a deceased partner are not added expressly as defendants, and the action is brought against the firm in the firm's name, then judgment can only be obtained as against the surviving partners and be enforced against them and against the partnership assets. I may mention that the reason why the partnership assets can be reached is because, notwithstanding the dissolution by death, the surviving partners for many purposes have authority continued to them to bind the dead man's interest in the partnership assets, for the authority of partnership extends to enable the surviving partners, in case of dissolution by death, to wind up the affairs of the partnership, to pay the partnership debts, to defend claims against the partnership, and so forth: sec Liudley on Partnership, 5th Ed., pp. 217, 218 and 587.

15. Evidently it was not the intention of the Indian Legislature to depart from the above statement of law in England since we do not find any such indication in the provisions of the Civil Procedure Code. No doubt Order 30, Rule 4 is new and there is no corresponding provision in the English rules, but Rule 4 only gives the legal representatives a right to apply to be made a party to suits in the name of firms. It has been enacted in the Code evidently, to obviate difficulties that might otherwise be suggested, having regard to the provisions of Section 45 of the Indian Contract Act. But it does not in our-opinion enable a decree-holder to claim the right now claimed by him before us.

16. The case before us is not the case of a partner dying after suit. The deceased partner in the case before us had no opportunity of contesting the suit, neither had the legal representatives of the deceased partner any such opportunity. If the decree-holder's contention regarding Order 21, Rule 50 be accepted, then the only question that could be decided in an inquiry under that sub-rule being whether a particular person was a partner or not, no other contentions relating to the suit could be raised or tried at the instance of the legal representatives. The correctness of a decree could not be impugned in execution proceedings. The legal representatives would thus be deprived of all defence to the suit. The other surviving partners could not have any right to represent a deceased partner except as regards partnership properties. Thus the contention of the decree-holder involves manifest injustice to the estate of the deceased partner and unless there be anything in any enactment compelling us to uphold that contention, it seems to us that we should avoid such a conclusion if possible. It thus being clear that so far as the private estate of the deceased partner is concerned, there has been no representation in the suit, the legal representatives of the deceased partner so far as the personal estate of the deceased is concerned could not be held in any way to be bound by the decree obtained by the plaintiff against the firm. In our view if the legislature wanted to go further than the English practice on the point, it would have made Sub-rule (2) of Order 21, Rule SO clear on the point; and having regard to the decision of the Court of Appeal in the case of Ellis v. Wadeson (1899) 1 Q.B. 714 given on the corresponding provisions of the English Rules (which are practically the same as the provisions of the present Civil Procedure Code), we think that the contention of the decree-holder should be disallowed. No suit can be instituted against a dead person and a plaint filed against a dead person is a nullity, 'even when the suit is instituted bona fide and in ignorance of the death of the defendant.' See Veerappa Chetty v. Tindal Ponnen (1907) I.L.R. 31 M. 86: 1907 17 M.L.J. 551 (per Wallis and Miller, JJ.) and In re Aruna-chalam Chalam (1915) 2 L.W. 828 it cannot be said that in the present case there were any' valid proceedings in which the personal estate of the deceased Badrudeen Sahib could be said to have been represented in law. The question has not been discussed in either of the cases reported in Jivraj v. Bhagvandas : AIR1923Bom66 or Motilal v. Chandmal : AIR1923Bom66 nor have the English decisions been referred to therein. We agree generally with the more recent decision of the Bombay High Court reported in Mathuradas Canji v. Ebrahim Fasulbhoy I.L.R.(1927) B. 986. No doubt the learned Judges there remarked that the firm concerned in that case had been dissolved to the knowledge of the plaintiff before the institution of the suit by reason of the death of a partner. But for the reasons already given we think that the circumstance that the plaintiff had no knowledge of the death of a partner before the institution of the suit does not make any difference on the question now before us, and unless the legal representatives had been made parties to the suit, the personal estate of the partner who died prior to the institution of the suit, in the hands of the legal representatives, could not be made liable in execution of a decree obtained against the firm, and the plaintiff in such a case is not entitled to apply for leave under Order 21, Rule 50(2).

17. The new provisions introduced in the Civil Procedure Code of 1908 are only enabling provisions which may be taken advantage of by a plaintiff who wishes to institute suits against firms. There are some advantages undoubtedly in following that procedure, but at the same time there are some disadvantages also as the case before us emphasises. The language of Order 21, Rule 50(2) in terms applies only to a person who is alleged to be a partner and does not apply to legal representatives of a partner who was dead before the plaint was filed. The scope of that sub-rule cannot be enlarged by reference to the rule of service prescribed by Order 30, Rule 3. Sub-rule (4) of Order 21, Rule 50 is very clear, that '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'. A reference to the rules of the Supreme Court makes it reasonably clear that in execution of a decree obtained against a firm as such, the separate property of a partner who was dead at the date of the issue of the writ cannot be proceeded against in execution; and in our opinion that seems to be the law which is sought to be reproduced in the provisions of the present Civil Procedure Code. The plaintiff as soon as he ascertained the facts would have applied to amend his claim by adding the personal representatives of the deceaesd partner. He did not choose to do so, and preferred to take his chance on the point of law.

18. The answer to the question referred to us is accordingly in the negative.


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