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international Continental Caoutchoue Compagnie Vs. Mehta and Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1927Cal758
Appellantinternational Continental Caoutchoue Compagnie
RespondentMehta and Co.
Cases ReferredVithaldas v. Hansraj A.I.R.
Excerpt:
- .....is that the plaintiff firm, under order 30, rule 3, obtained leave to serve and served three persons as partners, it having been decided that under that rule the directions of the court must be obtained as to the method of service to be followed. if the method prescribed in each particular case is followed and service is so effected, then prima facie there has been service upon the firm. i apprehend that in this case, in so far as any partner who has not entered appearance under protest has been served, there has been service upon the firm.4. on the 17th march 1927 an appearance was entered by mr. j.m. rakshit as attorney, on behalf of the defendant bhagatram vadra. that appearance was made under protest as this defendant denied that he was a partner of the firm. on the 12th april.....
Judgment:

Buckland, J.

1. It has frequently come to my notice that there is widespread misconception as to the correct course to be followed, where a suit is filed under Order 30, Civil P.C., against a firm, by persons who have been served as partners, but who deny that they are partners. The question arises in a practical form when such persons file, as is often done, written statements on their own behalf in no way putting forward a defence to the suit, but denying that they are partners. In some instances I have found as many as three such written statements simultaneously on the record. The case eventually comes to trial with some person or other defending the suit on behalf of the firm and with other written statements on the record on behalf of the persons who have entered appearance under protest denying that they are partners. Or, as I have also found, there are written statements by such persons, but none on behalf of the firm, with the result that the hearing of the suit which is undefended is delayed, as by reason of such written statements it is treated as a defended suit, though no partner has appeared. This is not in conformity with the latter part of Order 30, Rule 8.

2. This in my opinion is entirely irregular, and accordingly I took the opportunity when this case appeared in the list for directions a week ago of adjourning it for the purpose of having the matter argued in order to make an attempt to put the procedure on a more correct basis.

3. I shall presently give such directions in this case as may be necessary. The position at present is that the plaintiff firm, under Order 30, Rule 3, obtained leave to serve and served three persons as partners, it having been decided that under that rule the directions of the Court must be obtained as to the method of service to be followed. If the method prescribed in each particular case is followed and service is so effected, then prima facie there has been service upon the firm. I apprehend that in this case, in so far as any partner who has not entered appearance under protest has been served, there has been service upon the firm.

4. On the 17th March 1927 an appearance was entered by Mr. J.M. Rakshit as attorney, on behalf of the defendant Bhagatram Vadra. That appearance was made under protest as this defendant denied that he was a partner of the firm. On the 12th April a written statement was filed on behalf of Bhagatram Vadra in which he only says that he has no knowledge of the allegations in the plaint and he denies that he is a partner. This is an instance of what I have just referred to.

5. Order 30, Rule 6 provides:

Where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but all subsequent proceedings shall, nevertheless, continue in the name of the firm.

6. This means that though such persons may file different written statements, they may not do so on their own behalf but must file them on behalf of the firm. Should they do that the plaintiff will be obliged to show that not one of the defences prevents a decree being made against the firm : Ellis v. Wadeson [1899] 1 Q.B. 714.

7. As regards persons who claim to be members of the firm, their position is provided for by Rule 8, which, incidentally it may be observed, only applies when service purports to have been effected under Order 30, Rule 3(a). That rule says:

Any person served with summons as a partner under Rule 3 may appear under protest, denying that he is a partner, but such appearance shall not preclude the plaintiff from otherwise serving a summons on the firm and obtaining a decree against the firm, in default of appearance where no partner has appeared.

8. The effect of that rule, as affecting the proceedings against the firm, is that where a person who has been served as a partner under Rule 3, appears under protest, the service on him as service on the firm is a nullity. The plaintiff should therefore begin again and effect service upon the firm in accordance with Rule 3, unless it has already been otherwise effected, as for instance, by service on some other person as a partner who has not entered appearance under protest. This is in accordance with the opinion expressed by the learned Chief Justice in Charry v. Pohoomal Bros : AIR1926Bom585 , where he observed that the effect of such appearance under protest is merely to nullify the service altogether as regards the defendant firm and that the plaintiff may then disregard the appearance under protest and proceed again in his endeavours to serve summons in accordance with the provisions of Rule 3.

9. The foregoing does not, however, dispose of the question when or how, as regards a defendant who has entered appearance under protest denying that he is a member of the firm, that issue can be decided.

10. In Weir & Co. v. McVicar & Co. [1925] 2 K.B. 127, Atkin, L.J., observed:

The effect of such an appearance is specially provided for by the rules, which say that a person so appearing is to take no further part in the action with which he is not concerned until after judgment has, upon a proper service on some other person, been recovered against the firm, and then, but not till then, he is entitled to have it determined whether he is a partner or not.

11. The point was considered in Charry v. Pohoomal : AIR1926Bom585 , in which it was said that the plaintiff, after he ha3 obtained judgment

may apply under Order 21, Rule 50, for leave to issue execution against the person who had appeared under protest, when if the liability is still disputed, the Court may order the liability of such person to be tried and determined in any manner in which any issue in a suit may be tried and determined.

12. As to that there is no question; Order 21, Rule 50, is quite clear on the point.

13. The learned Chief Justice then referred to another alternative. He adds:

Or the plaintiff may wish to challenge at once the denial of the person served as a partner that he was a partner. If so, he should take out a summons to strike out the appearance entered on the ground that the party appearing is a partner in the firm sued or was a partner at the time the cause of action accrued, or in the alternative to strike out of such appearance the denial of partnership. An order may then be made directing an issue to be triad to determine the question of partnership.

14. In another case Vithaldas v. Hansraj A.I.R. 1921 Bom. 48 the same learned Chief Justice, after alluding to the course last mentioned, also suggested that there was a third alternative, namely that the parson who had entered appearance under protest had a right to ask the Court to have the question decided whether or not he is a partner in the defendant firm, the ground being that it appeared to the learned Chief Justice that it is contrary to the principles of equity that any person should be liable to have a claim of this kind hanging over him without being able to ask the Court to decide one way or the other whether or not he is liable to the claim.

15. In the case with which I am concerned no such question has yet arisen, for the learned Judge, in considering the procedure which may be adopted by the plaintiff or the defendant, indicated that in either case a summons should be taken out by the party who desires to have the question determined, which would involve the trial of the issue before the suit was heard on its merits. Until such a summons has been taken out no such question arises. It is not necessary, therefore, until the point comes before the Court in a concrete form, to express any definite opinion as to whether or not the law and practice admit of either of these courses being followed. I may, however, observe that it is not contemplated by Order 30, while Order 21, Rule 50 provides a definite procedure whereby the issue can be determined before any execution can go against the person who has entered appearance under protest. As I read the passage from his judgment which I have quoted, Atkin, L.J., seems to have taken the view that the question could only be determined after judgment. There is also the practical aspect of the matter, that the effect might be to delay the hearing of a suit which otherwise was undefended, or time and money might be thrown away in deciding the issue before the hearing of the suit if it were ultimately dismissed. The question may have, to be determined hereafter, and any view which I may have expressed is open to reconsideration should occasion arise.

16. It is, however, clear, and for the present purpose it suffices to say that a person who has been served as a partner under Order 30, Rule 3, and entered appearance under protest, is not entitled to file a written statement on his own behalf denying that he is a partner.

17. It follows from what I have said that the written statement filed by Bhagatram Vadra must be taken off the file. The result, therefore, is that there is no written statement in the suit, which consequently is undefended, and the only directions necessary are that it will appear in the undefended list next Monday. It further follows from the foregoing that any proceedings taken as between the plaintiff company and Bhagatram Vadra after the filing of the written statement must also be treated as a nullity.


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