Bajrang Dal Mills v. Jaichandlal Kishorilal and others
1977-07-26
N.B.NAIK
body1977
DigiLaw.ai
JUDGMENT - N.B. NAIK, J.:---This is an appeal against the order of the learned Civil Judge Senior Division, Aurangabad dated 9th July, 1975, whereby he dismissed the application made by the appellant original petitioner to set aside the ex parte decree in Special Civil Suit No. 37 of 1971, passed on 29th September, 1973. The facts giving rise to this appeal are briefly these. On 9th October, 1971, Special Civil Suit No. 37 of 1971 was filed by the respondent No. 1 firm against five defendants to recover Rs. 31,000/- and odd. At the request of the plaintiff summons were sent to the defendant by registered post, acknowledgement due. Exhibit 12 is a summon which was sent to the 2nd defendant therein viz. the present appellant describing him "as M/s. Bajrang Dal Mills, a registered partnership firm carrying on its business at Sadulpur, District Churu (Rajasthan)". The acknowledge receipt shows that somebody received it on 14th January, 1972. Similarly summons to the 3rd and 5th defendants were also sent by registered post, acknowledgement due and they were served and there is no dispute about that. The 4th defendant was deleted. On 17th September, 1973, a consent decree was passed against the 1st defendant alone for a sum of Rs. 12,400/-. The suit proceeded ex parte against the other defendants. On 29th September, 1973, as requested by the plaintiffs application Exhibit 51, an ex parte decree for only the balance of Rs. 18,880/- was passed against the 2nd, 3rd and 5th defendants. On 22nd October, 1973, the 2nd defendant which is a registered partnership firm filed Miscellaneous Application No. 88 of 1973 for setting aside the ex parte decree. It is enough to state that the ground on which the ex parte decree was sought to be set aside was that the petitioner the original 2nd defendant firm was not duly served as required by the provisions of Order 30, Rule 3 of the Code of Civil Procedure. It was further contended that the alleged acknowledgement receipt concerning the alleged service of the summons on the firm is forged, and that, that is not the signature of any person concerned with the management or control of the business of the firm.
It was further contended that the alleged acknowledgement receipt concerning the alleged service of the summons on the firm is forged, and that, that is not the signature of any person concerned with the management or control of the business of the firm. While admitting that the 3rd and 5th defendant were served by describing them as the partners of the 2nd defendant firm, it was contended that in fact the 3rd and 5th defendant have ceased to have any connection with the affairs of the firm since 1969 and that they were staying far away from the place of the partnership business and that they have altogether ceased to take any interest in the business of the firm. The application was resisted by the plaintiff by its written statement Exhibit 26. The plaintiff firm contended that the petitioner firm was duly served with the suit inasmuch as the summons was received by the person in charge of the affairs of the firm at that time. It was further alleged that the service of the summons on the two partners viz. defendant 3 and 4 as partners of the firm is more than sufficient compliance with the provisions of law contained in Order 30 of the Civil Procedure Code. When the matter was called on for hearing one Punamchand, who claims to be the managing partner of the appellant firm gave evidence in support of his contention that the summons Exhibit 12 was not at all served on any person concerned with the management of the firm and he further wore that the 3rd and 5th defendants were not concerned with or interested in the management of the firm of the original 2nd defendant. No evidence was led on behalf of the plaintiff. The learned Civil Judge took note of the fact that the summons issued to the 2nd defendant was received by somebody whose identity was not at all revealed. In other words, he did not rely upon that service as a proper service of the summons on the 2nd defendant. He however took the view that the service of the summons on the 3rd and 5th defendants who were described in the summons as partners of the 2nd defendant firm was sufficient compliance with the provisions of Order 30, and, therefore, he held that the 2nd defendant firm was duly served.
He however took the view that the service of the summons on the 3rd and 5th defendants who were described in the summons as partners of the 2nd defendant firm was sufficient compliance with the provisions of Order 30, and, therefore, he held that the 2nd defendant firm was duly served. Consistently with that view he dismissed the application to set aside the ex parte decree. It is the correctness of the said order which is challenged by the original 2nd defendant petitioner by this appeal. Mr. Agarwal, learned Advocate appearing for the appellant has assailed the order of the learned Civil Judge by pointing out that the learned Judge has misconstrued the provisions of Order 30, R. 3 and Order 30, Rule 5 of the Civil Procedure Code. Mr. Kanade, learned Advocate for the respondent original plaintiff has, however, supported the reasoning of the learned Civil Judge and has submitted that since defendants 3 and 5 were served as partners of the 2nd defendant firm, it was sufficient compliance with the requirements of Order 30, Rules 3 and 5 of the Civil Procedure Code. Order 30, Rule 1 provides that any two or more persons claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct. Order 30, Rule 2(1) provide that--- "Where a suit is instituted by partners in the name of their firm, the plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant, forthwith declare in writing the names and places of residence of all the persons constituting the firm on whose benefit the suit is instituted".
Order 30, Rule 2(1) provide that--- "Where a suit is instituted by partners in the name of their firm, the plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant, forthwith declare in writing the names and places of residence of all the persons constituting the firm on whose benefit the suit is instituted". Sub-rule (3) of Rule 2 of Order 30, provides that --- "Where the names of the partners are declared in the manner referred to in sub-rule (1), the suit shall proceed in the same manner, and the same consequences in all respects shall follow, as if they had been named as plaintiffs in the plaint : Provided that all the proceedings shall nevertheless continue in the name of the firm". Order 30, Rule 3 which is material our purpose is to this effect :--- "Where persons are sued as partners in the name of their firm, the summons shall be served either--- (a) upon any one or more of the partners, or (b) at the principle place at which the partnership business is carried on within India upon any person having, at the time of service, the control or management of the partnership business there, as the Court may direct; and such service shall be deemed good service upon the firm so sued, whether all or any of the partners are within or wtihout India : XX". Order 30, Rule 5 which is also relevant provides as under :--- "Where a summons is issued to a firm and is served in the manner provided by Rule 3, every person upon whom it is served shall be informed by notice in writing given at the time of such service, whether he is served as a partner or as a person having the control or management of the partnership business, or in both characters, and in default of such notice, the person served shall be deemed to be served as a partner". (Emphasis supplied.) The above provisions will show the suit could be filed by or against the firm without even mentioning the names of the partners of the firm.
(Emphasis supplied.) The above provisions will show the suit could be filed by or against the firm without even mentioning the names of the partners of the firm. But then when it comes to service of summons of the suit filed against a firm, Order 30, Rule 3 lays down that the summons shall be served either (a) upon any one or more of the partners or (b) at principal place at which the partnership business is carried on upon any person having at the time of service, the control or management of the partnership business there, as the Court may direct. It is such service which shall be deemed good service upon the firm so sued, whether all or any of the partners are within or without India. It is only when a summons is issued to a firm and is served in the manner provided by Rule 3 that the provisions of Order 30, Rule 5 are attracted. Let us examine the facts of the instant case. A perusal of the plaint would show that while describing the plaintiff firm after mentioning the plaintiff firm as "M/s. Jaichand Kishorilal, a registered partnership firm carrying on its business at Jalna, District Aurangabad", care has been taken to add as "though its partner Manikchand son of Jaichandal, aged 31 years, occupation business, resident of New Mondha, Jalna, District Aurangabad". So also the 1st defendant firm has been described as "Ramswaroop son of Madumal, aged 52 years occupation business, owner and proprietor of the concern styled as "Gundoomal Ramswaroop" at Naya Bazar, Delhi No. 6". But the plaint proceeded to describe the 2nd defendant, the only description of the 2nd defendant which is given is as under : "M/s. Banhrang Dal Mills, a registered partnership firm carrying on its business at Sadulpur, District Churu (Rajasthan)". It would thus appear that although care was taken to describe the plaintiff firm and the 1st defendant firm as through its partner and owner respectively, when it came to the question of describing the 2nd defendant firm, there is no mention of the name of any manager or managing partner or partner. It is true that 2nd, 4th and 5th defendants whose names were mentioned in their individual capacity have been described as partners in the registered firm of defendant No. 2.
It is true that 2nd, 4th and 5th defendants whose names were mentioned in their individual capacity have been described as partners in the registered firm of defendant No. 2. Btu so far as the description as partners in the registered firm of defendant No. 2. But so far as the description of the 2nd defendant is concerned, there is no mention of any partner or managing. Partner, this description is important for the simple reason, that Court must known on whom the service of the summons for the firm must be effected as provided by Order 30, Rule 3 I have gone through the record of the case and there is nothing to show that the plaintiff ever requested the Court for serving the summons on the 2nd defendant firm on any named partner or partners or on any named persons as being in the control and management of the partnership business, with the result when the summons Exhibit 12 was sent by registered post, the 2nd defendant was only described as "M/s. Bajrang Dal Mills a registered partnership firm carrying on its business at Sadulpur, District Churut (Rajasthan)". Even the address on the acknowledgment receipt is to the same effect. Therefore, so far as the service of summons Exhibit 12 is concerned, undoubtedly it is not served upon any partner of the firm. As regards the question as to whether it is served on any person having control or management of the partnership. It is not at all the case of the plaintiff that it was sought to be served on any person having control or management of partnership. In fact there is no such mention either on the summons or on the acknowledgement receipt. The result, therefore, is so far as the requirements of Order 30, Rule 3 are concerned, this so called service of summons on an undisclosed and unidentified person as observed by the learned Civil Judge himself, is not at all a service as provided by Order 30, Rule 3 of the Civil Procedure Code. In fact the learned Civil Judge has rightly not relied upon this service as service upon the 2nd defendant firm.
In fact the learned Civil Judge has rightly not relied upon this service as service upon the 2nd defendant firm. On the other hand as observed earlier, the learned Civil Judge has taken the view that since the 3rd and 5th defendants were in fact served with the summons of suit and the summons on record show that they were described as partners of the 2nd defendant firm, that was perfect compliance with a valid service as required by Order 30, Rule 3 of the Civil Procedure Code. That again as I have earlier observed is also the submission of Mr. Kanade. Now the summons which were served on defendant Nos. 3 and 5 have described them by their individual names with the addition "partner in the registered partnership firm of defendant No. 2" It is significant to note that they are also party defendants to the suit in their own right, as partners. This is not a case where the 2nd defendant firm alone was a party defendant and the Court had directed at the instance of the plaintiff as required by Order 30, Rule 3 to serve the summons of the defendant firm on the said partners as partners of the said firm. In fact the summons which were issued and served on the 3rd defendants were not at all issued in the name of the 2nd defendant firm. Actually as the things stand the 2nd defendant is mentioned as a party defendant and the 3rd and 5th defendants have been also mentioned in their individual capacity as partners of the firm of the 2nd defendant. Having regard to these facts and having regard to the further facts that apart from the fact that the plaintiff never asked for the service of the summons on the defendant firm by having recourse to the provisions of Order 30. Rule 3 and the fact that the summonses were served on defendant Nos. 3 and 5 who were already party defendants albeit described as partners of the 2nd defendant firm and they were not issued in the name of the 2nd defendant it would follow that the said summons on the 3rd and 5th defendants were not all issued to the firm of the 2nd defendant as required by the provisions of Order 30. Rule 3 of the Civil Procedure Code. That being the position the provisions for Order 30.
Rule 3 of the Civil Procedure Code. That being the position the provisions for Order 30. Rule 5 have no application whatsoever. On the facts of the case therefore and on a plain construction of the provisions of Order 30, Rules 3 and 5, it would follow that the 2nd defendant firm viz. the present appellant which has admittedly 8 partners cannot be said to have been duly served as required by the provisions of Order 30,Rule 3 of the Civil Procedure Code. The learned Civil Judge, therefore, in my opinion, was not right when he took the view that because of the service of the summons on the 3rd and 5th defendants, the 2nd defendant was duly served. Mr. Agrawal has drawn my attention to the judgment in (Ganeshlal Ramkumat v. Jhangiram Lilaram)1, 75 Bom.L.R. 760. In that case the learned Judge has observed that under Order 30, Rules 3 and 5 read with Order 5. Rule 21-A of the Civil Procedure Code, 1908, is a case of a suit filed against a firm in its firm name, the summons must be addressed to the firm in the name of the firm in which it is sued under Order 30, Rule 1 of the Code. To the extent of that observation it would appear that it accords with the view I have taken about the interpretation of Order 30, Rule 3, Civil Procedure Code. Mr. Kanade, the learned advocate for the plaintiff respondent has drawn any attention to the decisions of the Supreme Court and also of the Mysore High Court. The first decision of the Supreme Court relied upon by him is the case of (Gambhir Mal Pandiya v. J.K. Jute Mills)2, A.I.R. 1963 S.C. 243. The second decision of the Supreme Court relied upon by him is reported in (Gajendra Narain Singh v. Johrimal Pralhad Rai)3, A.I.R. 1964 S.C. 581. In my opinion, none of these rulings could be of assistance to the plaintiff respondent.
The second decision of the Supreme Court relied upon by him is reported in (Gajendra Narain Singh v. Johrimal Pralhad Rai)3, A.I.R. 1964 S.C. 581. In my opinion, none of these rulings could be of assistance to the plaintiff respondent. In Gambhir Mals case, in paragraph 7, the Supreme Court having observed the Order 30, deals with procedure in suits against firm in the firm name and Order 21, Rule 50, with the execution of decrees against firms, and after setting out the substance of Order 30, has observed in paragraph 8 as under : "From the above analysis, it is clear that a plaintiff need sue only the firm, but if he wants to bind the partners individually he must served them personally, for which purpose he can get a discovery of the names of partners of the firm. Persons served individually may appear and file written statements but the proceedings go on against the firm only. They may however, appear and plead that they are not partners or were not partners when the cause of action arose. But even if no other partner appear, there may be a decree against the firm if the firm has been served with the summons. The gist or Order 30 thus is that the action proceeds against the firm, and the defence to the action by persons admitting that they are partners is on behalf of the firm." ( Emphasis supplied). After considering several decisions of the Queens Bench and the Kings Bench and the decisions of the High Court in India including our own, Their Lordships have observed as under in paragraph 19 of the judgment : "........As we have pointed out, Order 30 of the Code permits suits to be brought against firms. The summons may be issued against the firm or against persons who are alleged to be partners individually. The suit, however, proceeds only against the firm. Any person who is summoned can appear, and prove that he is not a partner and never was; but if he raises that defence, he cannot defend the firm. Persons who admit that they are partners may defend the firm, take as many pleas as they like but not enter upon issues between themselves. When the decree is passed, it is against the firm.
Persons who admit that they are partners may defend the firm, take as many pleas as they like but not enter upon issues between themselves. When the decree is passed, it is against the firm. Such a decree is capable of being executed against the property of the partnership and also against two classes of persons individually. They are (1) persons who appeared in answer to summons served on them as partners and either admitted that they were partners or were found to be so, and (2) persons who were summoned as partners but stayed away. The decree can also be executed against persons who were not summoned in the suit as partners, but R 50(2) of O. 21. gives them an opportunity of showing cause and the plaintiff must their liability." Reading therefore paragraphs 8 and 19 of the judgment in Gambhir Mals case it would appear that there could be a decree against the firm only if the firm has been served with the summons. It is only for executing a decree against individual partners as distinguished from their interest in the assets of the firm that personal service at the stage of the suit is contemplated. In Gajendra Narain Singhs case also the Supreme Court discussed the provisions of Order 30 and Order 21 R. 50 of the Civil Procedure Code. That was a case where the summons had in fact been issued against the defendant firm of M/s. Tirhut Umbrella Works and that summons was served upon one Gajendra Narain as a partner of the defendant firm. The service of the summons, therefore, was duly effected as required by the provisions of Order 30, Rule 3(a) of the Civil Procedure Code. In the Mysore case reported in (Chief Engineer, Southern Army, Poona v. Lt. Col. Harikiratsingh)4, A.I.R. 1960 Mysore 205 in a petition to set aside an ex-parte decree against a firm passed after notice to the firm, the petitioner who was a partner of the firm contended that he was not bound by the decree. The Court held that in such a case the notice on the firm is certainly notice on the partner also and that fact disentitled him from asking the Court to set aside the decree. It would, therefore, appear that in none of the three cases relied upon by Mr. Kanade, the question which arises for my decision arose.
The Court held that in such a case the notice on the firm is certainly notice on the partner also and that fact disentitled him from asking the Court to set aside the decree. It would, therefore, appear that in none of the three cases relied upon by Mr. Kanade, the question which arises for my decision arose. They were all cases where the summons were in fact properly issued in the name of the firm and were served on the firm as required by the provisions of Order 30, Rule 3 of the Civil Procedure Code. In the instant case as we have pointed out, though one of the summons viz. Ex. 12 was issued to the firm of the 2nd defendant, service of the same has not been held proved by the trial Court and it has not been contended before me that summons should be deemed to have been served on the firm of 2nd defendant. On the other hand what was contended before the trial Court with success and is also contended before me by Mr. Kanade is that the summons which were sent to the 3rd and 5th defendants, describing them as partners of the 2nd defendant should be held to be summons which were issued and served as required by the provisions of Order 30, Rules 3(a) and 5 of the Civil Procedure Code. It is not possible to accede to that submission for the reasons already indicted. The result, therefore is that the 2nd defendant firm has not at all been duly served and that being the view which I have taken the ex parte decree passed against the 2nd defendant shall have to be set aside. The next question which arises for consideration is whether having regard to the proviso to Order 9, Rule 13 of the Civil Procedure Code, the decree should be set aside only as against the 2nd defendant or against 3rd and 5th defendants as well. While it is argued by Mr. Kanade that in any event the decree cannot be set aside against the 3rd and 5th defendants as they have not even made an application for setting aside the ex parte, it is submitted by Mr. Agrawal and Mr.
While it is argued by Mr. Kanade that in any event the decree cannot be set aside against the 3rd and 5th defendants as they have not even made an application for setting aside the ex parte, it is submitted by Mr. Agrawal and Mr. Kulkarni that since the 3rd and 5th defendants are sought to be held liable by reason of their being the partners of the 2nd defendant firm and on no other ground when the decree as against the second defendant firm is set aside, it should follow as a matter of course, that the ex parte decree against the 3rd and 5th defendants also must be set aside . Now the Proviso to Order 9, Rule 13 is to the effect : "Provided that where the decree is of such a nature that it cannot be set aside as against such defendent only it may be set aside as against all or any of the other defendants also." Now in the instant case, the plaintiffs case is that the 2nd defendant firm which admittedly consists of 8 partners was liable for the suit amount. After the consent decree for Rs. 12,400/- was passed against the 1st defendant by an application Ex. 51 the plaintiff requested that a decree may be passed against other defendants viz. 2nd , 3rd and 5th defendants who were proceeded ex parte only for the balance of Rs. 18,880/-. It is not at all the case of the plaintiff that defendant Nos. 3 and 5 are liable otherwise than in their capacity as partners of the firm of the 2nd defendant. It is true that a decree passed against them individually would enable the plaintiff to proceed not only against their interest in the partnership property but also against their own property. But then, in any event their liability would be the liability of the firm of the 2nd defendant and it could not be a paise more or less than the liability of the firm of the 2nd defendant. It should therefore follow that while setting aside the decree as against the 2nd defendant firm of which the 3rd and 5th defendants are two of the eight partners of that firm, the decree must be set aside against them also.
It should therefore follow that while setting aside the decree as against the 2nd defendant firm of which the 3rd and 5th defendants are two of the eight partners of that firm, the decree must be set aside against them also. The next question to be considered is as to whether having regard to the provisions of Order 9, Rule 13 of the Civil Procedure Code, which provide inter alia that the Code shall make an order setting aside the decree upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit, the 2nd defendant should be put to terms. I think on the facts and circumstances of this case, since the ex parte decree has got to be set aside on the ground that the 2nd defendant has not been duly served as required by the provisions of Order 30, R. 3, although two of its partners viz. 3rd and 5th defendants were in fact served with the summons of the suit, it could not be disputed that it is pre-eminently a fit case where the Court should put the 2nd defendant to terms. While Mr. Kanade submits that the 2nd defendant should be directed to deposit the entire amount of Rs. 18,880/- Mr. Agrawal for the appellant submits that since it is the plaintiffs own case that only Rs. 23,000/- were deposited by the plaintiff firm with the 1st defendant for and on behalf of the 2nd defendant and since the plaintiff has already secured a consent decree against the 1st defendant for Rs. 12,400/-, having regard to the normal practice of asking the party to deposit about half the amount claimed in the suit even in summary suit while giving conditional leave to defend. I might direct the 2nd defendant to deposit an amount not exceeding Rs. 6,000/-. On the facts of this case, I think that I should direct the 2nd defendant to deposit Rs. 10,000/-. In the result, I pass the following Order :--- The appeal is allowed and the order of the trial Court dated 9th July, 1975 is set aside and the ex parte decree passed against 2nd, 3rd and 5th defendants in Special Civil Suit No. 37 of 1971 on 29th September, 1973 is set aside subject to the following terms and conditions.
"The 2nd defendant firm should deposit in the Court of Civil Judge, Senior Division, Aurangabad, an amount of Rs. 10,000/- on or before 30th September, 1977 and file its written statement (if any) on or before the 15th October, 1977. It is also open to the defendants 3 and 5 to file their individual written statements (if any) on or before 15th October, 1977. In the event of failure of the 2nd defendant to deposit the amount of Rs. 10,000/- on or before 30th September, 1977, this appeal shall stand dismissed. After the deposit of the amount on or before 30th September, 1977, if no written statement is filed by 15th October, 1977, the Court shall immediately proceed to dispose of the suit in accordance with the law." In the circumstances for this case there shall be no order as to costs of this appeal and the Misc. Application giving rise to this appeal inspites of the fact that this appeal is being allowed. The above order is passed in the presence of Mr. Kanade for the plaintiff 1st respondent, Mr. Agrawal for appellant 2nd defendant and Mr. S.B. Kulkarni for Mr. A.V. Savant for the 3rd and 5th defendants, and therefore, no notice to the parties is required to be served by the lower Court. -----