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Sunkara Ratha Doss Vs. Epari Kopils and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in46Ind.Cas.191
AppellantSunkara Ratha Doss
RespondentEpari Kopils and ors.
Cases ReferredKarri Venkatareddi v. Kollu Narasayya
Excerpt:
partnership - pro-note executed by one partner in favour of another, suit on, maintainability of, conditions of--negotiable instruments act (xxvi of 1881), section 32, liability under. - .....business of the partnership has practically ceased, no transaction having taken place since the settlement of accounts which resulted in the plaint promissory note.3. all that is being done is the collection of outstandings. there can, therefore, be no injustice to 1st defendant in enforcing his liability for the suit amount, for there is nothing more due to him and his share of the stock in trade is in his hands. i, therefore, think that plaintiff is entitled to a decree upon the plaint note. apart from this view of the case it is questionable whether the 1st defendant can evade his liability under the negotiable instrument unless he can show that it is a nullity.4. in this second appeal plaintiff does not press his claim against defendants nos. 2 to 4. he will, therefore, have a.....
Judgment:

Phillips, J.

1. This is a suit on a pro-note executed by one partner (1st defendant) in favour of another partner (plaintiff), and it has been dismissed by the District Judge on the ground that the partnership is still subsisting and that the debt should be included when the accounts are finally settled. I think he is wrong in his view of the law, for the correct principle has been enunciated in Karri Venkatareddi v. Kollu Narasayya 1 Ind. Cas. 384 that if the account sought is in respect of a matter which, though arising out of the partnership business or connected with it, does not involve the general taking of accounts the Court will as a rule give the relief sued for, and will now a--days refuse to interfere only in those oases in which a partial settlement would work injustice to the other partner.

2. In the present case the business of the partnership has practically ceased, no transaction having taken place since the settlement of accounts which resulted in the plaint promissory note.

3. All that is being done is the collection of outstandings. There can, therefore, be no injustice to 1st defendant in enforcing his liability for the suit amount, for there is nothing more due to him and his share of the stock in trade is in his hands. I, therefore, think that plaintiff is entitled to a decree upon the plaint note. Apart from this view of the case it is questionable whether the 1st defendant can evade his liability under the negotiable instrument unless he can show that it is a nullity.

4. In this second appeal plaintiff does not press his claim against defendants Nos. 2 to 4. He will, therefore, have a decree against the 1st defendant and the family property of defendants Nos. 1 and 5 with costs throughout, but the second appeal is dismissed against defendants Nos. 2' to 4 with costs.

Krishnan, J.

5. I agree to the order proposed by my learned brother. This is a suit on a negotiable instrument and unless that instrument can be treated as an escrow or nullity, the maker is bound to pay according to its tenor and the fact that the. maker is a partner of the payee is no defence under the Negotiable Instruments Act (Act XXVI of 1881). There is no ground here to treat the loan as an-escrow as it was executed for money found due on a settlement of account;

6. Even apart from the note the plaintiff has a cause of action on the settlement itself; the fact that there may be an unsettled account between the parties is insufficient to restrain a suit on that cause of action; see observations in Ramnath Gagoi v. Eitambar Deb Gosawami 31 Ind. Cas. 480 and the English oases cited there. The rules governing such actions are laid down in Karri Venkatareddi v. Kollu Narasayya, 1 Ind. Cas. 384 : 4 M.L.T. 456. It is only if the taking of a partial account works an injustice that such partial accounts will be disallowed even when there is no settlement of account. In the present case there is no likelihood of the taking of any further accounts reducing in any way the liability Of the 1st defendant for the suit amount. In these circumstances it seems to me that the bare fact that the firm has not been formally dissolved yet is no answer to plaintiff's suit, even treating it as a suit on the settled account. The firm has stopped business and the parties have settled their liabilities inter se.

7. The note being found to be genuine and there being no ground that it was not for fall consideration, plaintiff is entitled to a decree as sued for against the 1st defendant and his family property. I would, therefore, reverse the decree of the lower Courts as against defendants Nos. 1 and 5 and give plaintiff decree as sued for with costs throughout against the 1st defendant and his family properties, 5th defendant, though not a mater of the note, is 1st. defendant's son and it was not urged that the family property in his hands was not liable.

8. This second appeal is not argued against defendants Nos. 2 to 4 and I agree it should be dismissed with costs against them.


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