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Madan Mohan Sureka Vs. Bhavani Cinema and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberSuit No. 59 1972
Judge
Reported inAIR1974Cal6
ActsCode of Civil Procedure (CPC) , 1908 - Order 37, Rules 2 and 3
AppellantMadan Mohan Sureka
RespondentBhavani Cinema and ors.
Advocates:Somnath Chatterjee, Adv.
DispositionApplication allowed
Cases ReferredBunarsee Dass v. Gholam Hossein
Excerpt:
- .....no. 2, (i e., the petitioner. georgina may narayan) and the defendant no. 3 are partners of the firm bhavani cinema cooch bihar. 7. a suit under order xxxvii or the code of civil procedure must be a suit 'upon the hundi.' the resort to summary procedure is wholly at the option of the plain-tin', but this procedure does not prevent the plaintiff from bringing the suit on the hundi in the ordinary manner. if the plaintiff takes the resort to this procedure, he will get certain advantage which will appear from order xxxvii, rule 2. sub-rule (2). the defendant in such case shall not appear or defend the suit unless he obtains leave from the judge to appear and defend. in default of obtaining leave to defend the suit, the allegations in the plaint shall be deemed to be admitted and the.....
Judgment:
ORDER

S.K. Hazra, J.

1. This is an application by the defendant No. 2, Georgina May Narayan for leave to enter appearance and to defend this suit filed by the plaintiff under Order XXXVII of the Code of Civil Procedure. The suit is for principal amount of Rs. 50,000/- and for interest amounting to Rs. 16,769.98 on Hundies from the respective due dates. The claim of the plaintiff Madan Mohan Sureka for the same amount is based on five Hundies for Rs. 10,000/- each, all dated February 1, 1969. Each of the Hundies is drawn by Martin John Sarkies, partner of Bhavani Cinema, Cooch Bihar. The drawee is M. J. Sarkies and the holder is the plaintiff Madan Mohan Sureka. The drawee, the holder, the amount and the dates of the Hundies are all same.

2. In the petition, the petitioner Georgina May Narayan has taken several points. Some are points of facts and some are points of law. She states that service of summons of the suit was made on her in her personal capacity and as such she cannot be sued under Order XXXVII of the Code of Civil Procedure. She also states that no notice of dishonour of the Hundies was given to her at all. Her case is that no sum either of Rs. 50,000/- or any part was received by her or by her business of Bhavani Cinema, Cooch Bihar, nor was the said sum or any part thereof lent by the plaintiff to the said Bhavani Cinema or to her. In the petition she states certain facts. Her husband was late Maharaja Jagdippendera Narayan Bhup Bahadur of Cooch Bihar. There was a cinema situate at Cooch Bihar called 'Bhavani Cinema.' She was doing business as exhibitor of films in Bhavani Cinema. The defendant No. 3 was entrusted with the administration of the said cinema. She says that she signed several papers and documents in blank upon representation of defendant No. 3 that these would be necessary for the smooth running of the said Bhavani Cinema. Her case is that defendant No. 3 failed to render accounts of the administration of Bhavani Cinema entrusted to him by her. Claims began to emanate from third parties or alleged third parties on the basis of commitments made by defendant No. 3 purporting to act as partner of Bhavani Cinema. One of such claims is in a pending suit, No. 245 of 1971, filed by some creditors of the defendant No, 3 through the same attornies as those acting for the plaintiff. She says that this suit has been filed in consequence of conspiracy of the plaintiff and defendant No. 3 to defraud the petitioner. She also says that there was no consideration for the alleged instrument and no credit of the same appears in the books of the Bhavani Cinema or in control of the defendant No. 3 nor was it necessary for the business to borrow the said sum from the plaintiff or anybodyelse. She says that she had good defence to the suit.

3. On March 15, 1972 the plaintiff, Madan Mohan Sureka filed an affidavit-in-opposition denying and disputing the claim of the petitioner to enter appearance and defend the suit. The case of the plaintiff is that he was supplied with the copy of the deed of partnership between the petitioner and the defendant No. 3 and it was on the basis of the said deed of partnership dated 20th May, 1967 that the transactions in suit took place. In any event, the plaintiff stated that the petitioner at all material times re-presentated that she was a partner of defendant No. 1 and the dealings and transactions in the suit took place on the basis of such holding out or representation. A letter dated November 3, 1971 by B. M. Bagaria, Solicitor for the plaintiff is annexed to the affidavit. This letter is addressed to the firm 'Bhavani Cinema', Cooch Bihar and to the petitioner and also to M. J. Sarkies, defendant No. 3 herein. In this letter it is stated that it is undersood that the petitioner and the defendant No. 3 M. J. Serkies were at all material times partners of the said firm, M/s. Bhavani Cinema, Cooch Bihar. It also stated that on February 1, 1969 Madan Mohan Sureka lent and advanced a sum of Rs. 50,000/- for the purpose of the business. In acknowledgment of the said loan of Rupees 50,000/- the said Bhavani Cinema, Cooch Bihar drew and executed five diverse hundies in favour of the plaintiff, Madan Mohan Sureka. Each of the said hundies has been accepted by M. J. Sarkies, defendant No. 3. On the respective dates of maturity of the said Hundies each of them was duly presented to the said M. J. Sarkies for payment and the same was dishonoured by non-payment. Notices of dishonour of the said hundies were given to the said Bhavani Cinema, Cooch Bihar immediately thereafter. In this letter the plaintiff's Solicitor stated that unless the amount of loan is paid with interest, suit will be instituted against Bhavani Cinema, the petitioner and M. J. Sarkies. On December 17, 1971 Victor Mosses and Company Solicitors for the petitioner addressed a letter to B. M. Bagaria Solicitor for the plaintiff stating that they were awaiting for detailed instructions from their client, namely, the petitioner. In this letter it is stated that no admission was made with regard to the statement and allegations made in the said letter of the Solicitor for the plaintiff. Thereafter on or about January 31, 1972 this suit was instituted by the plaintiff under the summary procedure prescribed in Order XXXVII of the Code of Civil Procedure.

4. This matter came up for hearing before me on August 23. 1972. After hearing the matter, when I was going to deliver the judgment, the learned Counsel for the plaintiff asked for leave to file further affidavit dealing with the affidavit-in-reply failed on behalf of the petitioner. I granted such leave.

Thereafter on January 5, 1973, the plaintiff filed another affidavit. In the further affidavit the plaintiff has annexed a copy of the Deed of Partnership between the petitioner and defendant No. 3. It is also stated that the petitioner filed an affidavit on August 17, 1971 in Suit No. 245 of 1971 where the petitioner has accepted that she is a partner with the defendant No. 3 of the firm 'Bhavani Cinema.' It also appears that defendant No. 3 has also filed an affidavit on April 28, 1972 in which he stated that there was no partnership with the defendant No. 2 in respect of Bhavani Cinema although at one time there was negotiation for the same. On January 5, 1972 an affidavit-in-reply was filed not by the petitioner herself but by one Dewan Rahunlal as duly constituted Attorney of the petitioner. In this affidavit it is stated that numerous blank papers were signed by the petitioner without adequate care. It is also stated that the document dated 21st June, 1967 had been one of those in which the defendant' No. 3 has obtained the signature of the petitioner in an incomplete or blank document. It is denied that there was any partnership between the petitioner and the defendant No. 3.

5. The question shortly is, whether 1 should grant leave to the petitioner to enter appearance and defend the suit. In other words, the question is whether the petitioner has raised a triable issue. A question of law also arises in this matter: As the plaintiff has chosen to institute the suit under the summary procedure prescribed in Order XXXVII of the Code of Civil Procedure not only against the persons whose names appear on the Hundies but also against the petitioner, whose name does not appear on any of the Hundies either as drawer or as acceptor, the question is whether the plaintiff can take resort to procedure under Order XXXVII, Civil P. C. against the petitioner.

6. In the first paragraph, the plaintiff stated that the defendant No. 2, (i e., the petitioner. Georgina May Narayan) and the defendant No. 3 are partners of the firm Bhavani Cinema Cooch Bihar.

7. A suit under Order XXXVII or the Code of Civil Procedure must be a suit 'upon the Hundi.' The resort to summary procedure is wholly at the option of the plain-tin', but this procedure does not prevent the plaintiff from bringing the suit on the Hundi in the ordinary manner. If the plaintiff takes the resort to this procedure, he will get certain advantage which will appear from Order XXXVII, Rule 2. Sub-rule (2). The defendant in such case shall not appear or defend the suit unless he obtains leave from the Judge to appear and defend. In default of obtaining leave to defend the suit, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree for a principal sum due on the instrument and interest on it and under Sub-rule (3), a decree passed in thisrule may he executed forthwith. Since the name of the petitioner does not appear either as a drawer or acceptor, and on the face of the Hundi, it does not appear that the petitioner has signed as partner of the firm the cause of action in the suit is based not only on the Hundies. but on the statement that the petitioner is partner of the firm. Prima facie, I am of the view that this question whether the petitioner is a partner of the firm is a question of fact which has to be decided at the trial of the suit and cannot be deemed to be admitted. In the premises, in my view as the plaintiff filed the suit on the summary procedure laid down in Order XXXVII of the Code of Civil Procedure, bis suit must be only against the persons whose names appeal on the Hundies.

8. With regard to this point Mr. Somnath Chatterjee, learned Counsel, appearing for the plaintiff placed before me a passage appearing in Lindlay on The Law of Partnership, 12th Edition, p. 226 which read as follows:

'(c) Bills of Exchange and Promissory Notes.

Bills and Notes.

Although an ordinary contract not under seal entered into by an agent for an undisclosed principal, is binding on that principal when discovered, and he can be sued upon it, the same rule does not apply to bills of exchange and promissory notes, for subject to the qualification that the name of a firm is equivalent to the name of all the person liable as partners in it, no person whose name is not on a bill or note is liable to be sued upon it. In order therefore that a bill or note may be binding on a firm, the name of the firm or the names of all its members must be upon it, and if the names of one or more of the partners only are upon it, the others will not be liable to be sued upon the instrument, whatever may be their liability as regards the consideration for which it may have been given.'

9. As I read the above passage, it seems to me that the learned author say that no person whose name is not on the bill or note is liable to be sued upon it. However, the question of legal liability of a partner for debts of a firm is a different mattes altogether because, the name of the firm is equivalent to the name of all persons liable as partners of the firm.

10. Mr. Chatterjee then referred to another passage in Lindlay on the Law of Partnership 12th Edition, at the same page which runs thus;

'Bills in name of firm.

A bill drawn, endorsed or accepted in the name of the firm is considered as bearing the names of all the persons who actually of ostensibly compose the firm at the time it name is put to the bill, and consequently all those persons including the dormant partners and persons estopped from denying that they are partners, may be sued upon the bill.'

11. The above observation of the learned author is based or Section 23 (2) of the English Bill of Exchange Act, 1882 (see foot note) Mr. Chatterjee did not place to me any Indian decision on the point or any corresponding section in the Negotiable Instruments Act (Act XXVI of 1881).

12. Mr. Chatterjee cited AIR 1930 PC 23S, (Moti Lal ., Cawnpore). The head note of the case runs as follows :

'A partner in a mercantile firm has authority to draw and accept bills on behalf of the firm, and even if such implied authority has been expressly cancelled but such cancellation is not brought to the knowledge of the discounting banks, the discounting banks are entitled to recover against the other partners.'

13. As to the implied authority of a partner in a mercantile firm to draw and accept a bill on behalf of the firm. Mr. Chatterjee relied on the Privy Council in Bunarsee Dass v. Gholam Hossein reported in (1869) 13 Moo Ind App 358 = 13 Suth WR 29 (PC) which is referred to in the said decision reported in AIR 1930 PC 238. In (1869) 13 Moo Ind App 358 (PC) the law has been stated thus :

'The proposition of law applicable to these facts is well known and indisputable, Every one of the partners in a mercantile firm of ordinary trading partnership is liable upon a bill drawn by a partner in the recognized trading name of the firm, for a transaction incident to the business of the firm, although his name do not appear upon the face of the instrument, and although he be a sleeping and secret partner.'

'In order to take a case out of these principles of the general law, it must be shown that the holder of the bill knew at the time he received it that the transaction was the private affair of a single partner.'

14. The principle of law laid down by the Privy Council is well-settled and well recognised; but so far as this application is concerned the point is whether the plaintiff can take recourse to summary procedure under Order 37 of the Civil P. C. and file a suit under Order 37 against a person whose name does not appear in the hundi. This is quite a different matter.

15. Sections 19 and 22 of the Partnership Act have also been referred to. With regard to the proposition of law that a partner has implied authority to bind the firm in course of the business, the position of law seems to be clear. If the plaintiff files a suit against the firm and all partners of the firm stating that all partners are liable on a hundi, this will be a suit under usual procedure and the defendant can appear and defend the suit. But if a suit is filed on a hundi and procedure under Order 37 is invoked; only the persons whose name appeal in the hundi, can be sued upon.

16. On the merits of the case, Mi. D. K. De, learned counsel for the petitionerhas taken several points. He stated, (a) no notice of dishonour vas given to hi client, namely, the petitioner; (b) there was no consideration for the Hundies; (c) the question of partnership has been disputed by his client and (d) the Hundies which are annexed to the summons which was served upon his client do not show that the Hundiec were 'accepted' by the drawee.

17. Mr. Somnath Chatterjee for the plaintiff has pointed out that there are certain affidavits filed by the petitioner which show that she hac admitted the partnership. But on this point the petitioner's case is that she had signed some blank papers which might have been used to convert the same into a partnership. There is nothing tc show that notice of dishonour has beer, given to the petitioner as partner of the firm. The petitioner stated that no consideration was received by the firm. There is no reply by the plaintiff saying how and when consideration was paid. These are important questions of fact, the truth of which has to be decided on evidence.

18. In view of the defence raised by the petitioner I do think that I can disallow the prayers of the petitioner in this application. In any event, under the fact of this case, in my view, a triable issue has been raised.

19. In the premises, I will grant unconditional leave to the petitioner to enter appearance and defend the suit.

20. Cost of this application including the reserved cost will be the cost in the suit.

21. The petitioner will file the written statement by April 9, 1973. Cross order for discovery of documents by April 12, 1973; inspection forthwith thereafter.

The suit will appear in the appropriate prospective list on May 7, 1973.

22. Liberty to mention for an early date of hearing.

23. Certified for counsel.


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