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Katta Venkatannagari Sreenivasayya Vs. Kutagulla Mudda Nagappa by Guardian Mr. C.P. Venugopal (Pleader) and ors. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Reported inAIR1936Mad984; 166Ind.Cas.959; (1936)71MLJ738
AppellantKatta Venkatannagari Sreenivasayya
RespondentKutagulla Mudda Nagappa by Guardian Mr. C.P. Venugopal (Pleader) and ors.
Cases ReferredFirm of Sadasuk Janki Das v. Kishan Pershad
Excerpt:
.....and the seventh defendant were agents of the other partners that they have failed to sign it in such manner as to indicate that they were not to be personally liable on the note......it seems to me that there is another and a more certain method of disposing of this appeal.4. the suit note purports to have been made by the 6th and 7th defendants alone. the body of the note states it to be a 'pronote executed by pedda mallappa, the paldar (which means partner) of kanyapa (who is first defendant) and chinna mallappa', and it is signed by pedda mallappa and chinna mallappa without any further designation.5. no doubt as partners these two persons would be agents of the other partners in matters within the scope of their authority as partners. and, provided they were acting within that authority they would be able to execute promissory notes on behalf of the partners which would be binding on the partnership. but section 28, negotiable instruments act, only relieves an.....
Judgment:

Cornish, J.

1. The appellant before me sued the defendants, eight in number, as members of a partnership upon a promissory note, which he alleged represented a partnership liability.

2. The first Court dismissed the suit upon the ground that defendants 1-5 were not shown to have been members of the partnership on the date of the note and, apparently, against defendants 6-8 on the ground that they having been adjudged insolvents the plaintiff's appropriate remedy against them was in the Insolvency Court. The plaintiff appealed. His appeal was dismissed upon the ground that by reason of the insolvency of defendants 6-8 a suit' against them was barred by Section 28, Provincial Insolvency Act, and was likewise barred against the other defendants though they had not been adjudicated. The, lower appellate Court seems to have taken the view that though the suit might have been maintainable against defendants 1-5 alone, the plaintiff having joined the insolvent defendants as parties Section 28 stood in the way.

3. I do not propose to consider the reasoning of the lower appellate Court, because it seems to me that there is another and a more certain method of disposing of this appeal.

4. The suit note purports to have been made by the 6th and 7th defendants alone. The body of the note states it to be a 'pronote executed by Pedda Mallappa, the paldar (which means partner) of Kanyapa (who is first defendant) and Chinna Mallappa', and it is signed by Pedda Mallappa and Chinna Mallappa without any further designation.

5. No doubt as partners these two persons would be agents of the other partners in matters within the scope of their authority as partners. And, provided they were acting within that authority they would be able to execute promissory notes on behalf of the partners which would be binding on the partnership. But Section 28, Negotiable Instruments Act, only relieves an agent who signs his name to a promissory note from personal liability, if he indicates thereon that he does not intend by signing that note to thereby incur personal liability.

6. Their Lordships of the Privy Council in Firm of Sadasuk Janki Das v. Kishan Pershad (1918) 36 M.L.J. 429 : L.R. 46 IndAp 33 : I.L.R. 46 Cal. 663 have stated:

It is of the utmost importance that the name of a person or firm to be charged upon a negotiable document should be clearly stated on the face or on the back of the document, so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand.

and again,

It is not sufficient that the principal's name should be in some way disclosed, it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bill.

7. Applying this principle to the present note I am clearly of opinion that the description of the sixth defendant as a partner of first defendant would be quite inadequate as a disclosure that this note was executed on behalf of the partnership of which the sixth defendant was a member. I think that he has not only failed to sign it as an agent, but assuming that he and the seventh defendant were agents of the other partners that they have failed to sign it in such manner as to indicate that they were not to be personally liable on the note. It follows that they alone were liable on the suit note. Inasmuch as they had been adjudicated insolvents, no suit was maintainable against them without the leave of the Insolvency Court, and as no such leave was obtained the plaintiff's suit was liable to be dismissed. The appeal fails and is dismissed with costs against respondents 4 and 8.


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