SRI HARA PRASAD HOTA v. BATLIBOY AND CO. PRIVATE LTD.
1990-10-20
D.P.MOHAPATRA
body1990
DigiLaw.ai
JUDGMENT : D.P. Mohapatra, J. - Shri Ham Prasad Hota who is being pursued in Execution Case No. 87 of 1982 as one of the judgment-debtors filed these revision petitions assailing different orders passed therein by the First Subordinate judge, Cuttack. While Civil Revision No. 294 of 1989 is directed against the order dated 7. 1.1989 by which the learned Subordinate Judge rejected the petitioner's prayer to stay further proceedings of the execution case till disposal of the suit (T. S. No. 702/87) filed by the petitioner. Civil Revision No. 327 of 1989 is directed against the order passed on 2-2-1989 by which the Court directed issue of warrant of arrest against him. 2. Since the case has had a chequered career, it is necessary to state, its factual backdrop leading to the present proceedings. The opp. party No. 1 Batliboy and Co. Private Limited filed. Money Suit No. 3688 of 1969 agamit the opposite party No. Davaloy Trading House, a partnership firm registered under the Indian Partnership Act In the Calcutta High-Court and obtained a decree for realisation of Rs. 1,05,645.85 with interest at the rate of 6 per cent per annum from the date of filing of the suit (9th October, 1969) until realisation, costs etc. The said decree is being executed in the ' aforementioned Execution Case filed by the plaintiff-company against the defendant firm and against opposite party No. 3 Sri Ramnarayan Hota and the petitioner Shri Hara Prasad Hota as its partners.lt appears from the record in the execution case that the petitioner filed objection on 29th January 1986. sating, inter alia, that the suit in question was against the firm' Devaloy Trading House and the decree was obtained against the said firm- that by the date of filing of the suit the objector (petitioner) was not a partner of the firm and therefore the execution case could not proceed against him. It was further stated in the objection that since the decree was only against the firm and the petitioner was not impleaded as a party in the case, the execution case against him was not maintainable and the question of realising the decretal dues from him did not arise. No order appears to have been passed in the order-sheet and none has been brought to my nonce by the counsel for the parties specifically dealing with the objections raised by the petitioner.
No order appears to have been passed in the order-sheet and none has been brought to my nonce by the counsel for the parties specifically dealing with the objections raised by the petitioner. As the record reveals, the decree-hosde proceedmg against the revision petitioner for realisation of the decretal dues by attachment and sale of certain personal properties belonging to him. The Executing Court directed issue of warrant of arrest against the petitioner which was challenged in this Court in Civil Revision No. 504 of 1985. This Court set aside the order and dfrected fie Executing Court to reconsider the matter. On reconsideration, the executing Court by order dated 6-5-1987 again directed issue of warrant stating his reasons for the same Faced with such compelling situation the petitioner filed Title Suit Ho. 762 of 1987 in the Court of the Subordinate Judge (I),. Cuttack to declare that the decree- in Money Suit No. 3688 of 1969 is null and void and not binding against him and consequentially the Execution Case No. 87 of 1982 filed against him is not maintainable. Thereafter he filed an application in the execution case to stay further proceedings till disposal of the above mentioned suit The said application was rejected by the order passed on 7-1-1989 which is being assailed in Civil Revision No. 234 of 1989. Thereafter the further order directing issue of warrant of arrest against the petitioner was passed on 2-2-198) which forms the subject matter of Civil Revision No. 327 of 1989. 3. Shri J. M. Mohanty appearing for the revision petitioner strenuously urged that the execution case is not maintainable against the petitioner since he was neither a partner of the defendant-firm when he suit filled nor was he impeded as such in the suit. It was the furtner Contention of Shri Mohanty that the learned Subordinate judge ought to have applied his mind to this aspect of the case and should have granted stay of further proceedings of the the execution case till disposal of the Title Suit filed by the petitioner in his court. Shri S.C. Sinha appearing for the opposite party No. 1 decree- holder on the other hand contended that the Court of the Subordinate judge being the Executing. Court could not do anything except, taking steps to relise the decretal dues as directed in the decree.
Shri S.C. Sinha appearing for the opposite party No. 1 decree- holder on the other hand contended that the Court of the Subordinate judge being the Executing. Court could not do anything except, taking steps to relise the decretal dues as directed in the decree. According to Shri Sinha, the impugned orders are correct and justified and should not be interfered with. 4. I have carefully perused the order dated 7-1-1989 of the Executing Court Though the challenge raised by the petitioner to the maintability of the execution case against him has been noticed, the matter, in my view has not been properly dealt with. It appears from the order that the point was considered while dealing with the question whether there was any prima facie merit in the suit (T. S. No. 762/87) filed by the petitioner impeaching the decree and the execution case, but as noted earlier, the executing Court did not apply Its mind to the objection raised by the petitioner to the maintainability of the case on the grounds noticed earlier. If the execution case could not proceed against the petitioner it has to be held that there was no justification at all for the executing Court to proceed to realise the decretal dues from him and to take coercive process for that purpose. 5. As noticed earlier, the suit was filed against the partnership firm only. The petitioner had not been impleaded in the suit as a partner of the firm or in any other capacity. But in the execution case he has been impleaded as one of the partners of the firm and a judgment-debtor and his personal properties are sought to be proceeded against for realisation of he dues. 6. For proper appreciation of the matter it is necessary to notice some provisions of the CPC which deal with suits and execution cases relating to partnership firms. Order 30, C. P. C. contains the provisions regarding suits by or against firms and persons carrying on bisiness in names other than their own.
6. For proper appreciation of the matter it is necessary to notice some provisions of the CPC which deal with suits and execution cases relating to partnership firms. Order 30, C. P. C. contains the provisions regarding suits by or against firms and persons carrying on bisiness in names other than their own. Rule 1(1) of Order 30 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. Rule 3 deals with the manner of service of summons where persons are sued as partners in, the name of their firm. Under the proviso to the said Rule it is laid down that in the case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit, the summons shall be served upon every person within India whom it is sought to make liable. Rule 5 of under 30 provides that 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 As provided under Rule 8(1) any person served with summons is a partner under Rule 3. may enter an appearance under protest denying that he was a partner at any material time.
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 As provided under Rule 8(1) any person served with summons is a partner under Rule 3. may enter an appearance under protest denying that he was a partner at any material time. Under Sub-rule (2) of Rule 8 it is laid down that upon such appearance being made, either the plaintiff or the person entering appearance may at any time before the date fixed for hearing and final disposal of the suit, apply to the Court for determining whether that person was a partner of the firm and was liable as such. Sub-rules (3) and (4) of Rule 8 by down that if the. Court holds that he was a partner at the material time, that shall not preclude the person from filing a defence denying the liability of the firm in respect of the claim against the defendant and if the Court on the other hand holds that such parson was not a partner of the firm and was not liable as such, that shall not preclude the plaintiff from otherwise serving a summons on the firm and proceeding with the suit; but in that event, the plaintiff shall be precluded from alleging the liability of that person as a partner of the firm in execution of any decree that may be passed against the firm. 7. The other provision relevant for the present purpose is Order 21, Rule SO, C. P. C. which deals with execution of decree against partner- ship firm. Sub-rule (1) of Rule 50 provides that where a decree has been passed against a firm, execution may be granted (a) against any property of the partnership; (b) against any person who has appeared in his own name under Rule 6 or Rule 7 of Order XXX or who has admitted on the pleadings that he is or who has been adjudged to be, a partner; (c) against any person who has been individually served as a partner with a summons and has failed to appear.
Sub-rule (2) lays down that where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in Sub-rule (1),Clauses (b) and (c), as being a partner in the firm, he may apply to the Court which passed the decree for leave, and where the liability is not disputed, such Court may grant such leave, or where such liability is disputed, may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined. Sub-rule (1) provides that where the liability of any person has been tried and determined under Sub-rule (2), t he order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree. Under Sub-rule (4)) it is laid down that save as against any property of the partnership, a decree against a firm shall not release, render liable or otherwise affect any partner therein unless he has been served with a summons to appear and answer. 8. The provisions of Order 21, Rule 50, C. P. C. have come up for consideration before the Apex Court in several cases. in the case of Tapanmal Chhotamal v. M/s. Kundomal Gangaram and others, reported in AIR 1360 SC 388 the Court held that a decree against a firm can be executed (i) against the property of the partnership, (ii) against any person who his appeared in the suit individually in his own name and has been served with a notice under Rule 6 or 7 of Order 33, CPC, (iii) against a person who has admitted on the pleadings that he is or has been adjudged a partner, or (iv) against any person who has been served with notice individually as a partner but has failed to appear. The decree against the firm can be executed against the personal property of such person. In the case of Gambhir Mal Pandiya Vs. J.K. Jute Mills Co., Ltd., Kanpur and Another, the Court observed : "Order 21, Rule 50(2) deals with executions, but really is a part of the provisions relating to suits against firms contained in Order 20 and must be viewed alongside to get the true meaning of the words The liability of such person.
J.K. Jute Mills Co., Ltd., Kanpur and Another, the Court observed : "Order 21, Rule 50(2) deals with executions, but really is a part of the provisions relating to suits against firms contained in Order 20 and must be viewed alongside to get the true meaning of the words The liability of such person. 'Order 30 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 cannot 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 (sic) 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 Rule 50(2) of Order 21 gives them an opportunity of showing cause and the plaintiff must prove their liability. This enquiry does not entitle the person summoned to reopen the decree. He can only prove that he was not a partner, and in a proper case, that the decree is the result of collusion fraud or the like. But he cannot claim to have other matters tried so to speak between himself and his other partners. Once he admits that-it he is a partner and has no special detence of collusion, fraud etc. the Court must give leave forth- with .The. proper meaning of the words.
But he cannot claim to have other matters tried so to speak between himself and his other partners. Once he admits that-it he is a partner and has no special detence of collusion, fraud etc. the Court must give leave forth- with .The. proper meaning of the words. The liability of such person in Order 21, Rule 50(2) thus is that primarily the question to try would be whether the person against whom the decree is sought to be executed was a partner of the firm, when the cause of action accrued but he may question the decree on the ground of collusion fraud or the like but so as not to have the suit tried over again or to a rise issues between himself and his other partners. It is to be remembered that the leave that is sought is in respect of execution against the personal property of such partner and the leave that is granted or refused affects only such property and not the property of the firm. Ordinarily, when the person summoned admits that he is a partner, leave would be granted unless he alleges collusion, fraud or the like " (Quoted from piaciturn) In the case of Her Highness Maharani Mandaisa Devi and Ors. v. M Ramnarain Private Ltd. and others, reported in AIR 1965 S.C.178 construing the provisions of Order 21, Rule 50(2) CPC, the Apex Court held that where an application is made under Order 21, Rule 50(2) CPC, primarly the question to try would be whether the person against whom the decree is sought to be executed was a partner of the firm when the case of action accrued; but he may question the decree on the ground of "collusion, fraud or the 'like but so as not to have the suit' tried over again of to raise issues between himself and his other partners. The respondent to an application under Order 21, Rule 50(2) is also entitled to raise a plea of special protection under the Law. The respondent may also defend the application on the ground that the decree sought to be executed against him is a nullity. The Madras High Court in the case of A.N. Ranganatha Naidu Vs. Senthamarai and Others, considering the provision held that where the. partners of a firm had not appeared in a suit in their own name under Rule 6 or Rule.
The Madras High Court in the case of A.N. Ranganatha Naidu Vs. Senthamarai and Others, considering the provision held that where the. partners of a firm had not appeared in a suit in their own name under Rule 6 or Rule. 7 of Order 33 and they had not been admitted on the pleadings that they were or were adjudicated to be partners and no summons in the suit had been served on them individually and the decree was obtained only against firm, Order 21, Rule 50(1), Clause (b) or (c) would not apply and the decree could not be executed against partners. 9. From the principles laid down in the decided cases noticed above, it is clear that in a case where execution is levied against a person alleged to be a partner of the firm for realisation of the amount in the decree obtained against the firm only, it has to be ascertained first if the conditions laid down in the provisions of Order 21, Rule 50 read with Order 30, CPC have been satisfied in the case. Such consideration is material and relevant since the question goes to the root of the jurisdiction of the executing Court to proceed' against the person concerned. 10. In the present case, the learned Subordinate Judge his made no attempt to ascertain the above mentioned position. Further, while considering the prayer of the revision petitioner to stay further proceeding in the case till disposal of the suit filed by him, the learned Subordinate "Judge could have also considered this aspect. Unfortunately he has brushed aside the question merely with the observation that a copy of the plaint filed by the revision petitioner is not before him and in his limited capacity as the transferee executing Court he cannot go into these questions. To say the minimum, the learned Subordinate judge did not apply his mind to the question properly. 1 would not like to delve deeper into the matter since all the requisite materials are not available in the record of the execution case and any observation made by me may prejudicially affect either of the parties. I am aware that the execution case has been pending since long arid the decree-holder has not been able to realise the dues.
I am aware that the execution case has been pending since long arid the decree-holder has not been able to realise the dues. The position of law being as discussed earlier in my view, the proper consideration of the point is absolutely necessary to avoid further complications in the proceeding at latter state and in the interest of justice. On careful consideration of the entire matter, I am inclined to direct the executing Court to reconsider the application for stay. 11. In the result, the two revision petitions are allowed, the impugned orders are set aside and the learned Subordinate Judge is directed to reconsider the petition for stay of the execution case and consider maintainability of the execution case in the light of the discussions in this judgment and in accordance with law. There will however be no order for costs of these proceedings. Final Result : Allowed