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1980 DIGILAW 82 (RAJ)

Ghisulal v. Hazi Mohammed

1980-02-07

K.D.SHARMA

body1980
K.D. SHARMA, J—This is a civil second appeal under section 100 C.P.C. against the judgment and decree of the Additional District Judge, Sirohi, dated 19-4-1969 by which the decree and judgment of the Munsif Bali dated 12.10.1968 decreeing the suit of the plaintiff for Rs. 760/- with costs and pondente lite and future interest at the rate of Rs. 6/- per cent per annum was confirmed. 2. The relevant facts giving rise to this second appeal may by briefly described as follows:— 3. Haji Mohammed plaintiff-respondent instituted a suit against the partners of Mahendra Boot House, namely, Somaram, Bagaram, and Ghisulal in the court of Munsif Bali for recovery of a sum of Rs. 760/-. The averments in the plaint were that the defendants were partners in a firm under the name and style Mahendra Boot House situated at Bali. The firm used to deal in leather, shoes and hardware. On 23-1-1964 Somaram partner of the firm secured a loan of Rs. 658/- from the plaintiff for business of the firm i.e. payment of the price of pieces of leather and executed a promissory note for this amount in favour of the plaintiff along with a receipt of money. Somaram defendant No. 1 further agreed to pay interest on the principal amount at the rate of Rs. 12/- per cent per annum. According to the plaintiff, the loan was secured by Somaram for the partnership business and so all the partners were liable for payment thereof to the plaintiff, Later on the firm was dissolved with effect from 18-11-1964 and the loan secured by Somaram remained unpaid. Hence the plaintiff served a notice on the partners of the firm on 22-3-1965 asking them to pay off the loan along with interest at the stipulated rate The defendants failed to make any payment in response to the demand notice given to them by the plaintiff. Hence the plaintiff brought a suit for recovery of Rs. 760/- against them. 4. The defendants appeared in the Court of Munsif in response to the summonses issued in the suit. The defendants Nos. 1 and 2 admitted the claim of the plaintiff for Rs. Hence the plaintiff brought a suit for recovery of Rs. 760/- against them. 4. The defendants appeared in the Court of Munsif in response to the summonses issued in the suit. The defendants Nos. 1 and 2 admitted the claim of the plaintiff for Rs. 760/- and further pleaded that the firm Mahendra Boot House was dissolved on 18-11-1964 on account of sickness of its partner defendant No 1 and the assets and liabilities of the firm were transferred to Gheesulal partner-defendant No. 3 who alone is, therefore, liable to pay off the suit money to the plaintiff Ghisulal resisted the suit of the plaintiff on the ground that he was not a partner of the firm Mahendra Boot House which was a joint Hindu Family Firm consisting of defendants Nos. 1 and 2 and that he did not secure any loan of Rs. 658/- from the plaintiff on 23-1-1964. If the amount of Rs. 658/-has been secured on credit by defendants Nos. 1 and 2 from the plaintiff and if they have executed any pronote or receipt for that amount they alone are responsible for making payment thereof. Ghisulal raised an additional plea in his written statement that defendants Nos. 1 and 2 secured a loan of Rs. 1500/-from him on 1-5-1960 and executed a promissory note for that amount in his favour but later on the defendants Nos. 1 and 2 could not pay off this debt. Heace they assured him (Ghisulal) that the latter would have one and a half share in the business of the firm. Thereafter the monetary condition of the defendants Nos. 1 and 2 went bad to worse and the business of the firm received a set back so they conspired together to shift the entire liability on Ghisu Lal for loans of the firm and in pursuance of the said conspiracy colluded with the plaintiff and caused this suit to be brought against him i.e. Ghisulal also. 5. Upon pleadings of the parties the learned Munsif framed as many as five issues in the suit which when translated into English read as follows:— (1) Whether Somaram defendant No. 1 executed a promissory note on 23-1-1964 in favour of the plaintiff? (2) If so whether defendants Nos. 2 and 3 also are liable for the debt on the basis of the promissory note. (2) If so whether defendants Nos. 2 and 3 also are liable for the debt on the basis of the promissory note. (3) Whether the firm Mahendra Boot House was a partnership firm of the defendants and whether it has been dissolved and all its assets and liabilities have been taken upon himself by the defendant No. 3. (4) Whether the defendant No. 3 is entiteld to get compensatory costs of Rs. 100/- from the plaintiff under section 35A C.P.C. (5) Relief? The learned Munsif recorded the evidence of the parties on the aforesaid issues and decided issues Nos. 1 and 2 in favour of the plaintiff. As regards issue No. 3 the finding of the learned Munsif was that the plaintiff could proceed against the defendants as well as against the firm but as the firm has been dissolved the partners thereof are still personally liable to the plaintiffs for the suit amount. Issue No. 4 was decided against defendant No. 3. Consequently, the learned Munsif decreed the suit of the plaintiff for Rs. 760/- with costs and pondente lite and future interest at the rate of Rs. 6/- per cent per annum from 20-5-1965 upto the date of realisation. 6. Aggrieved by this decree and judgment Ghisulal defendant No. 3 preferred an appeal in the court of Additional District Judge, Sirohi who by his judgment dated 19-4-1969 dismissed the appeal and confirmed the decree and judgment of the trial court As against this judgment Ghisulal has come up in second appeal. 7. Neither the respondents nor their learned counsel has appeared in this Court although notices of the appeal were duly served on the respondents. The appeal was, therefore, heard exparte. 8. I have carefully perused the record and heard Mr. H.M. Lodha learned counsel for the appellant. 9. At the out set I may observe that Mr. H.M. Lodha has not challenged the finding of both the courts below regarding the appellant being a partner of the firm Mahendra Boot House. He has confined his arguments in this appeal to one point only, namely, that the appellant was not liable for the amount secured on credit by Somaram defendant No. 1 from the plaintiff respondent No. 1 because there is no indication in the promissory note executed by Somaram that he was making the firm liable and thereby excluding his personal liability for payment of the loan. According to the submission of Mr. H.M. Lodha learned counsel for the appellant, the name of the firm to be charged upon a promissory note which is a negotiable instrument must be disclosed in such a way in the pro note as to indicate that the pronote was executed by its agent or partner for or on behalf of that firm. In support of his above contention Mr. H.M Lodha relied upon the following authorities: — Jankidas vs. Sir Kishan Pershad(l), P.R.M.P.R. Perchippa vs. Muni-yandi (2), Punjab United Bank Ltd. vs. Mohammed Hussain (3), Srinivasayya vs. Nagappa (4), Sitaram vs. Chimandas (5), Hiralal vs. Ratanlal (6), Madan-gopal vs. Narsingdas & Sons (7), and Ramanujulu vs. Narasimhulu (8). I have carefully gone through the authorities cited above and considered the submission of Mr. H.M. Lodha. The only point for consideration in this appleal is whether both the courts below were justified to hold the appelant liable for the amount secured on credit by Somaram from the plaintiff by way of execution of the promissory note Ex 1. As stated earlier the appellant way a partner in the firm Mahendra Boot House along with Somaram and Bagaram. From a bare perusal of the promissory note Ex. 1 and the receipt Ex. 2 it is obvious that they were not executed by the appellant in favour of the plaintiff. Both the courts below arrived at a conclusion that the promissory note was executed by one of the partners of the firm i.e. Somaram for and on behalf of the firm and so the other partners also were liable on the pro note. In my opinion, the courts below committed an error in coming to the above conclusion. The reason is that Somaram one of the partner of firm Mahendra Boot House executed promissory note Ex. 1 describing himself as proprietor Mahendra Boot House Bali. It is nowhere written in the promissory note Ex. 1 that Somaram executed or signed the pro rote on behalf of or for the firm, namely, Mahendra Boot House Bali. A mere description of Somarams position such as Mahendra Boot House Bali ke proprietor Somaram vald Motaji" does not clearly indicate that the promissory note was really executed by a partner of the firm for or on behalf the said firm. A mere description of Somarams position such as Mahendra Boot House Bali ke proprietor Somaram vald Motaji" does not clearly indicate that the promissory note was really executed by a partner of the firm for or on behalf the said firm. The firms name must be disclosed in some such manner that upon, fair interpretation of the promissory note it must appear that the firm was the real person liable upon the pro note. Unless the firms name is not disclosed in some such manner, the other partners in the firm cannot be held liable on the pronote. In Jankidas vs. Sri Kishan Pershad (supra) their Lordships of the Privy Council have observed as follows:— "It is of the utmost importance that the name of a person or firm to be charged upon a negotiable document should be clearly stated on the face or on the back of the document so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand. It is not sufficient that the principals name should be "in some way" disclosed, it must be disclosed in such a way that on any fair inter-pretation of the instrument his name is the real name of the person liable upon the instrument." In the case before their Lordships of the Privy Council the drawer of the Hundi signed it describing himself beneath his signatures as Acting Superintendent of the Private Treasury of His Excellency Sir Maharaja, the Prime Minister of H.H. Niiam In their Lordships opinion such a description was a description of drawers position and was not sufficient to bind the Maharaja because the Hundi was not signed in such a form as was necessary for an agent signing on behalf of a principal. The aforesaid authority of the Privy Council was later on followed in a number of referred to above cases. 10. Applying this principle to the present promissory note Ex. 1 I am clearly of the view that the description such as Mahendra Boot House Bali ke proprietor Somaram vald Otaji given by Somaram executant in the promissory note Ex. 1 was a mere description of his position and was not indicative of the fact that the promissory note was executed by him for or on behalf of the firm Mahendra Boot House of which he was a partner. 1 was a mere description of his position and was not indicative of the fact that the promissory note was executed by him for or on behalf of the firm Mahendra Boot House of which he was a partner. I may further observe that Somaram failed to sign the promissory note in such manner as to indicate that he was not thereby incurring personal liability on the pronote. He merely put his signatures to the promissory note as Somaram Motaji Bali, Mahendra Boot House Bali. It, therefore, follows that Somaram alone was liable on this pronote which upon fair interpretation thereof does not appear to have been executed by him for or on behalf of the firm. The name of the firm Beneath his signatures on the pronote is nothing but a description of his position or address. The execution of promissory note in such form does not bind the other partners of the firm. This aspect of the case was not considered by both the courts below. Hence I have no hesitation in holding that the appellant was not liable for payment of the sum secured by Somaram from the plaintiff after executing a pro-note Ex. 1 and the receipt Ex 2 in favour of the latter. The second appeal filed by Gheesulal is, therefore, accepted and the decrees and judgments of both the courts below are set aside and the plaintiffs suit is dismissed in toto. As the appeal has been disposed of on a point of law, no order as to costs.