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Damodara Shanabhaga Vs. Subraya Pai - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1918Mad387; 43Ind.Cas.217; (1917)33MLJ509
AppellantDamodara Shanabhaga
RespondentSubraya Pai
Cases ReferredSokkanada Mundar v. Sokkanada Vanni Mundar I.L.R.
Excerpt:
- - 319 it was held that if some of a number of partners gave their promissory note for better securing the payment of a debt owing by them and their co-partners and one of the makers of the note was compelled to pay the whole amount of it, he was entitled to sue each of the other makers of the note for his proportion of the sum so paid......from the usual rule.3. as for the cases subbarayadu v. adinarayadu i.l.r. (1991) m. 134 sokkanada vanni mundar v. sokkanada vanni mundar i.l.r. (1904) m. 344 sadhu narayna aiyangar v. ramaswami aiyangar i.l.r. (1908) m. 203, and laban sardar v. cheyen mallick 19 c.w.n. 768, it does not appear in the first case that the partnership had not been dissolved before the suit was brought. subbarayadu v. adinarayadu i.l.r. (1991) m. 134 relies on sedgwick v. daniel (1857) 2 b. & n. 319. the latter was a case (as i have already shown) where only some of the several partners gave a promissory note for an already existing partnership debt. the decision in subbarayadu v. adinarayadu i.l.r. (1991) m. 134 was again the decision of a single though very learned judge. in sokkanada vanni mundar v......
Judgment:

Sadasiva Aiyar, J.

1. The plaintiff is the petitioner. The plaintiff's assignor, Lakshmana Kamthi, and the defendant were partners in trade. The two partners borrowed money from a stranger for the partnership purposes. A decree was passed against both on 2-12-1912 (See Exhibit VI). The plaintiff's assignor alone was arrested and he paid the whole amount (Rs. 66 odd) and he transferred to the plaintiff his alleged right of contribution against the defendant. Hence the plaintiff has brought this suit for obtaining such contribution. The District Munsif dismissed the suit on the ground that, unless there had been a dissolution of partnership between the plaintiff's assignor and the defendant, no claim for contribution could arise between the partners. I do not think that it could be stated that it is an invariable rule of law that no suit against a partner could under any circumstances be maintained for contribution even in respect of a distinct and separate transaction though connected with the partnership business. In Karri Venkata Reddi v. Kollu Narasayya I.L.R. (1908) M. 76, Sir Arnold White, C.J., and Abdur Rahim, J., held 'It has never been a hard and fast rule that the court will not interfere in a dispute between the partners, simply because the dispute relates to a matter connected with the partnership business; and, apart from any technical rules relating to the form of action, the grounds for non-interference would seem to be co-extensive with the inability of the court to give any effective relief, or the inexpediency of giving the relief sought having regard to the essential characteristic of a contract of partnership and the justice of the case.' In Beecham v. Smith (1858) E.B. & E. 442 it was held that if one partner gave to his co-partner a note which bound only the partner who gave it and not the firm, he might be sued by his co-partner thereon, whatever the state of the accounts between the two might be and although the bill or note in question had reference to some partnership transaction; ' for, by giving the bill or note, the demand in respect of which it was given was isolated from the general partnership account'. In Sedgwick v. Daniell (1857) 2 H & N. 319 it was held that if some of a number of partners gave their promissory note for better securing the payment of a debt owing by them and their co-partners and one of the makers of the note was compelled to pay the whole amount of it, he was entitled to sue each of the other makers of the note for his proportion of the sum so paid. But his right to sue the other partners who did not join in making the note has not been established in the English cases in the absence of special circumstances.

2. In the present case, the plaintiff's assignor and the defendant seem to have been the sole partners, and though the plaintiff's assignor was obliged to pay up the whole, I do not think in the absence of special circumstances, the general rule that one partner cannot sue another except for a dissolution and the taking of the general accounts of the partnership need be departed from in this case. I am the more unwilling to do so, because, it seems to have been conceded before the District Munsif in the lower court that if the debt borrowed under the joint promissory note was a partnership debt, the plaintiff's claim was unsustainable. (See paragraph 6 of the judgment). It also appears (See paragraph 9) that the assignment to the plaintiff was made by his assignor in order to get over the difficulty of himself obtaining a decree against his co-partner. The District Munsif was entitled to infer that, if the partnership accounts were taken between the plaintiff's assignor and the defendant, nothing would probably be due to the plaintiff's assignor even after giving credit in his favour to the amount paid by him in satisfaction of the joint promissory note debt incurred for the partnership purposes and that therefore 'the justice of the case' did not require the court to depart from the usual rule.

3. As for the cases Subbarayadu v. Adinarayadu I.L.R. (1991) M. 134 Sokkanada Vanni Mundar v. Sokkanada Vanni Mundar I.L.R. (1904) M. 344 Sadhu Narayna Aiyangar v. Ramaswami Aiyangar I.L.R. (1908) M. 203, and Laban Sardar v. Cheyen Mallick 19 C.W.N. 768, it does not appear in the first case that the partnership had not been dissolved before the suit was brought. Subbarayadu v. Adinarayadu I.L.R. (1991) M. 134 relies on Sedgwick v. Daniel (1857) 2 B. & N. 319. The latter was a case (as I have already shown) where only some of the several partners gave a promissory note for an already existing partnership debt. The decision in Subbarayadu v. Adinarayadu I.L.R. (1991) M. 134 was again the decision of a single though very learned Judge. In Sokkanada Vanni Mundar v. Sohhanada Vanni Mundar I.L.R. (1904) M. 344 a suit for a share of particular assets was brought long after the dissolution, and even in that case, it was laid down that the defendant would be entitled to show that if the general accounts are taken, the plaintiff would be entitled to nothing. Sadhu Narayana Aiyangar v. Ramaswami Aiyangar I.L.R. (1908) M. 203 was also a case which arose after the dissolution of the partnership and it followed Sokkanada Mundar v. Sokkanada Vanni Mundar I.L.R. (1904) M. 344. In the present case, the District Munsif finds (See paragraph 6) that the partnership between the plaintiff's assignor and the defendant has not been dissolved; that is, that it still existed- The jurisdiction of this Court to interfere in revision is a discretionary one, and on this ground also I do not think that this is a fit case under these circumstances for revision. The petition is therefore dismissed with costs.


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