Judgment 1. This Civil Revision raises somewhat an interesting point of law, namely, whether a proceeding initiated by the creditor-petitioner in the Insolvency Court can proceed without notice under Sec.19(3) of the Provincial Insolvency Act, 1920 (Act No. V of 1920) to some of the partners of a firm registered under the Partnership Act (Act No. IX of 1932), if such notice has been served on the firm and some of the partners. 2. Ravi Steelways is a firm registered under the Partnership Act, undisputedly, this firm having five partners, namely, K.D. Murarka, Sri Hari Murarka, Murlidhar Murarka, full brother of K.D. Murarka, Sharda Devi wife of Sri Han Murarka and Uma Devi wife of Ranjit Murarka, nephew of K.D. Murarka. M/s. The Industrial Gases (Bihar) Ltd., a company incorporated under the Companies Act filed an Insolvency Petition under Act V of 1920, in the Court of the Judicial Commissioner, Ranchi arraying M/s. Ravi Steelways, K.D. Murarka, Sri Hari Murarka and Ranjit Murarka as debtors opposite parties. Notices under S.19(3) of Act V of 1920 was, undisputedly, served on M/s. Ravi Steelways, K.D. Murarka and Sri Hari Murarka and they appeared in the case and filed written statement alleging, inter alia, that Ranjit Murarka was not a partner of the firm and he had been wrongly joined as one of the judgment debtors. As a plea of non-joinder, it was stated in the written statement that three of the other partners of this firm, namely, Murlidhar Murarka, Sharda Devi and Uma Devi had not been impleaded. The creditor-petitioner filed a petition for amendment which was allowed. The name of Ranjit Murarka was expunged and the names of abovementioned three other partners, namely, Murlidhar Murarka, Sharda Devi and Uma Devi were added. 3. The Insolvency petition had been filed on 12-8-1977 alleging the date of the cause of action as the 4th July, 1977. The names of the three partners abovementioned were added by order No. 38 dated 21-3-1979. There is no material to show whether the creditor-petitioner took any step for issue of notice under Sec.19(3) of the Act on Murlidhar Murarka. But, undisputedly notices under Sec.19(3) of the Act were sent on Sharda Devi and Uma Devi but they could not be served as they were out with the result that there was no valid service of notice on them.
But, undisputedly notices under Sec.19(3) of the Act were sent on Sharda Devi and Uma Devi but they could not be served as they were out with the result that there was no valid service of notice on them. It is at this stage that M/s. Ravi Steelways, the firm and two of its partners, namely, K.D. Murarka and Sri Hari Murarka filed a petition before the Insolvency Court for dismissal of the application on the ground that no notice under Sec.19(3) of the Act was served on the other three partners abovementioned. 4. The matter was heard by the Insolvency Court and by order dated 4-6-1980 and for the reasons stated therein, the petition was rejected giving rise to this Civil Revision at the instance of the firm-debtor and their two partners. 5. This Court has framed Rules called the Provincial Insolvency Rules. Rule 20 of these Rules, which may be found at page 48 of the General Rules and Circular Orders of the High Court of Judicature at Patna, 1954 Vol. 1 (Civil) 1969 Edn. (Malhotra Bros.) states as follows:- "Any notice or petition for which personal service is necessary shall be deemed to be duly served on all the members of a firm if it is served at the principal place of business of the firm within the jurisdiction of the Court, on any one of the partners or upon any person having at the time of service the control or management of partnership business there." Rule 23 of these Rules further provides that : "An adjudication order made against a firm shall operate as if it were an adjudication order made, against each of the persons who at the date of the order is a partner in that firm." 6. Sri S.B. Sinha, learned counsel for the creditor opposite party, conceded that had the three newly added partners been on the record from the initial stage, namely, filing of the Insolvency Petition, service of notice on one partner as envisaged in Rule 20 of the Rules abovementioned would have sufficed. His contention, however, was that Rule 20 of the Rule will have no application to the instant case as the three newly added partners were brought on the record at a subsequent stage beyond the period of limitation. 7.
His contention, however, was that Rule 20 of the Rule will have no application to the instant case as the three newly added partners were brought on the record at a subsequent stage beyond the period of limitation. 7. Certain special features of a partnership firm registered under the Act 9 of 1932 have to be significantly noted. Partnership, according to Sec. 4 of that Act is a relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Sec. 4 further states : that persons who have entered into partnership with one another are called individually partners and collectively a firm and the name under which their business is carried on is called the firm name. Sec.18 of that Act provides : Subject to the provisions of this Act, a partner is the agent of the firm for the purposes of the business of the firm. Coming to the liability of partners for acts of firm, Sec.25 of the Act also states that "Every partner is liable jointly with all the other partners and also severally for all acts of the firm done while he is a partner." 8. The provisions of the Partnership Act will prevail over those of The Provincial Insolvency Act. In view of the special features of a partnership firm constituted under Act 9 of 1932 of the Indian Partnership Act, a creditor petitioner may well be within his rights to institute an Insolvency case against the firm alone, if other conditions stand satisfied. I am supported in my view by a decision of the Supreme Court reported in AIR 1968 SC 1182 (Firm Mukund Lal Veer Kumar V/s. Purushottam Singh) wherein their Lordships of the Supreme Court held that an order of adjudication can be made against the firm in the firms name if the proper conditions are satisfied. 9. Sri S.B. Sinha, learned counsel for the petitioner, invited my attention to certain provisions of Sections 9 and 24 of Act V of 1920 of the Provincial Insolvency Act, 1920 as also to Sec.21 of the Limitation Act in support of his contention that in a case where some of the partners were brought on the record of Insolvency Court subsequently, a notice under Sec.19(3) of the Act on them shall be a must.
It is not possible to accept this contention of Sri Sinha. Section 9(1)(c) referred to by Sri Sinha states that "A creditor shall not be entitled to present an insolvency petition against a debtor unless the act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition". Sec.24(1)(b) of the Act also states "that on the day fixed for the hearing of the petition, or on any subsequent day to which the hearing may be adjourned, the Court shall require proof inter alia, of the fact that the debtor, if he does not appear on a petition presented by a creditor, has been served with notice of the order admitting the petition." Sec.21 of the Limitation Act states, inter alia that "where after institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party". There is a proviso to sub-sec.(1) of Sec.21 of the Limitation Act which runs as follows :- "Provided that where the Court is satisfied that the omission to include a new plaintiff or defendant was due to mistake made in good faith, it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date." 10. Whether the initial Insolvency petition filed on 12th Aug., 1977 was within time is not a matter for consideration in his Civil Revision. The submission of Sri Sinha was that since the three new partners were added much after the period of three months contemplated under Section 9 of the Act, the Insolvency case was liable to be dismissed. Considering the statutory position of partners of a firm vis-a-vis the firm itself, addition of names of the three partners cannot have the effect of introducing a new party on the record nor will it amount to substitution of a new party for the simple reason that the firm itself was on the record. In a case like the instant one, the addition of the three new partners as a party will be regarded merely a clarification of an individual already on the record and as such Sec.21 of the Limitation Act will not be attracted.
In a case like the instant one, the addition of the three new partners as a party will be regarded merely a clarification of an individual already on the record and as such Sec.21 of the Limitation Act will not be attracted. Besides the redeeming provisions of the proviso to Sec.21 of the Limitation Act are also there which has been quoted above. In view of what has been said and discussed above, the contention of Sri Sinha has to be negatived. 11. This is a Civil revision under S.115(1) of the Civil P.C., it cannot be said that the Insolvency Court acted illegally or with material irregularity in exercise of its jurisdiction in passing the impugned order. 12. The result is that this civil revision fails and is dismissed. In the facts and circumstances of the case, however, there shall be no order as to costs.