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S. Vellaya Gounder Vs. R. Venkatesa Chettiar and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai High Court
Decided On
Reported in(1968)2MLJ101
AppellantS. Vellaya Gounder
RespondentR. Venkatesa Chettiar and anr.
Cases ReferredPandiri Veeranna v. Grandhi Veerabhadraswami
Excerpt:
- .....partner because such acknowledgment is done in the ordinary course of the partnership business. in fact, the circumstances of that case were that the partner who was sought to be made liable as a result of the acknowledgement made by the other partner had, on an earlier occasion, accepted his personal liability for the whole of the amount. this, apparently, was the circumstance which the bench was content to consider as a circumstance which shows that the partner acknowledging on the subsequent occasion had the authority to acknowledge on behalf of the other partner.3. in the present case, it is the third defendant who has been signing exhibit a-3 the account book all through and nowhere has the first defendant signed. wallis, c.j., in his referring judgment in pandiri veeranna v......
Judgment:

A. Alagiriswami, J.

1. The first defendant in the suit and the third defendant were partner in a venture, and they had dealings with the plaintiff. The accounts were periodically settled, and signed by the third defendant alone. The suit was filed within three years of the last of such settlements signed by the third defendant, but beyond a period of three years in respect of anything which could show that the first defendant had acknowledged liability. The trial Court held that in the circumstances the acknowledgment by the third defendant could not save limitation as against the first defendant. But the appellate Court took a different view, allowed the appeal in part and decreed the suit as against the first defendant also. The first defendant is the appellant before this Court.

2. The lower appellate Court took into consideration the wording of the acknowledgment signed by the third defendant in Exhibit A-4 and thought he purported to sign the acknowledgment on behalf of both himself and the first defendant. I do not think that this circumstance alone is enough to enable the acknowledgment by the third defendant to save limitation in respect of the claim as against the first defendant. Section 21 (2) of the Indian Limitation Act says:

Nothing in Sections 19 and 20 renders one of several joint contractors, partners, executors of mortgagee chargeable by reason 'only of a written acknowledgment signed or of a payment made by, or by the agent of, any other or others of them.

The earlier view of this Court in Balasubramania Pillai v. S.V.R.R.M. Ramanathan Chettiar I.L.R. (1909) Mad. 421 and Shaik Mohideen Sahib v. Official Assignee of Madras I.L.R. (1912) Mad. 142 seems to have been that where one partner signs an acknowledgment it was necessary in order to bind the other partner, to have direct evidence that the partner acknowledging had been authorised by the other partner to acknowledge it on his behalf. These two decisions of this Court were considered by the Bench which came to consider the case reported in Pandiri Veeranna v. Grandi Veerabhadraswami alias Veerabhadurudu : (1918)34MLJ373 as not being in consonance with the view taken by other Courts in India as also the views taken by Courts in England where the provisions are substantially the same as in India. The matter was therefore referred to a Full Bench and the Full Bench has held that direct evidence of a specific authority to give acknowledgments is quite unnecessary and such authority may be inferred from the surrounding circumstances, though it is of course quite beyond our province (the province of this Court) to indicate what circumstances could be deemed sufficient to warrant the inference. The Full Bench made it clear that Section 21 (2) amounts to saying that if you have no more than a written acknowledgment signed by one defendant the fact that the other defendant is his partner cannot affect the latter's liability. They also referred to the general principle of law embodied in Section 251 of the Contract Act that partners are the agents of one another and that their acts done in the ordinary course of the partnership business bind the partnership. All the same, they had not based their decision on the fact that an acknowledgment by one partner would bind another partner because such acknowledgment is done in the ordinary course of the partnership business. In fact, the circumstances of that case were that the partner who was sought to be made liable as a result of the acknowledgement made by the other partner had, on an earlier occasion, accepted his personal liability for the whole of the amount. This, apparently, was the circumstance which the Bench was content to consider as a circumstance which shows that the partner acknowledging on the subsequent occasion had the authority to acknowledge on behalf of the other partner.

3. In the present case, it is the third defendant who has been signing Exhibit A-3 the account book all through and nowhere has the first defendant signed. Wallis, C.J., in his referring judgment in Pandiri Veeranna v. Grandhi Veerabhadraswami alias Veerabhadurudu : (1918)34MLJ373 had pointed out that in the decision in Shaik Mohideen Sahib v. Official Assignee of Madras I.L.R. (1912) Mad. 142 it was expressly decided that the fact of a partner being left in management of a business did not give rise to a presumption that he was authorised to sign acknowledgments and to the fact that he had pointed out in K.R.V. Firm v. Seetharamiswami (1914) 25 M.L.J. 501 : I.L.R. 37 Mad. 146 that a different view has been taken by other Courts in India and also apparently in England. However, the Full Bench did not proceed on the footing that the fact that a partner being left in management gave rise to a presumption that he was authorised to sign acknowledgments. The decision in the above Full Bench case cannot therefore, help the respondent in this case. There are no circumstances available in this case as were available in the case reported in Pandiri Veeranna v. Grandhi Veerabhadraswami alias Veerabhadurudu : (1918)34MLJ373 to show that the acknowledging partner had the authority to acknowledge on behalf of the silent partner. The result is that the conclusion of the lower appellate Court that the mere fact that the third defendant purported to sign on behalf of the first defendant also was enough to show that the suit as against the first defendant also is in time is not correct in law. The Second Appeal is, therefore, allowed and the decree of the trial Court will be restored. There will however be no order as to costs the appeal in this suit. Leave granted.


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