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1995 DIGILAW 91 (PAT)

Laxami Narayan Rice Mills v. State Bank Of India, Deoghar

1995-02-10

A.N.TRIVEDI

body1995
Judgment 1. Title (Mortgage) Suit No. 138 of 1986 was filed by the State Bank of India, plaintiff-opposite party, against Laxami Narayan Rice Mill, a partnership firm and its partners Sri Kailash Kumar Khowala and Sri Ram Avtar Khowala which is pending in the Court of Subordinate Judge-V, Deoghar. 2. During the pendency of the suit defendant No. 3 Sri Ram Avtar Khowala died on 18-9-1991. It is claimed on behalf of the petitioners that defendant No. 2, through the other partner of the firm, had duly intimated the fact of the death of defendant on 1-10-1991 to the plaintiff-bank, yet no steps were taken for substitution of the legal heirs of the deceased defendant No. 3 and again on 16-3-1992 information regarding the death of defendant No. 3 was sent to the plaintiff-bank yet again no steps were taken for substitution. 3. It appears that defendants 1 and 2 appeared in the court below on 16-2-1994 after substituted service by publication and filed a petition on 24-5-1994 under O. 22, R. 4 read with S. 151 of the Code of Civil Procedure stating that the suit as a whole has abated on account of non-substitution of the heirs of deceased defendant No. 3. It was stated in that petition that intimation regarding the death of defendant No. 3 had been given by the other partner to the plaintiff on 18-9-1991 and all the heirs of deceased defendant are not on record. 4. It was claimed that the firm was not registered and as such provisions of O. 30, R. 4 of the Code of Civil Procedure will not apply. 5. The trial Court by the impugned order dated 14-6-1994, after considering the submissions made by learned counsel for the parties and material on record, held that defendant No. 1 is a firm and defendant No. 2 Kailash Kumar Khowala and defendant No. 3 Ram Avtar Khowala were the two partners, out of whom defendant No. 3 Ram Avtar Khowala died. The trial Court by the impugned order dated 14-6-1994, after considering the submissions made by learned counsel for the parties and material on record, held that defendant No. 1 is a firm and defendant No. 2 Kailash Kumar Khowala and defendant No. 3 Ram Avtar Khowala were the two partners, out of whom defendant No. 3 Ram Avtar Khowala died. Submission made by learned counsel for the defendants before the trial Court that O. 30, R. 4 of the Code of Civil Procedure (hereinafter referred to as the Code) is not attracted to the facts of the case as defend ant No. 1 is not a registered firm was rejected and it was held by the trial Court that O. 30, R. 4 applies even if the firm is not registered and in view of the provision contained in O. 30, R. 4 of the Code death of a partner and non-substitution of his legal representatives or heirs would not result in abatement of the suit and consequently rejected the application. 6. Defendants 1 and 2 being aggrieved by the impugned order dated 14-6-1994 have filed this civil revision application. 7. Learned counsel for the petitioners in support of his submission that R. 4 of O. 30 of the Code is not attracted to the facts of the instant case as the firm is an unregistered firm and failure to bring on record the heirs and legal representatives of the deceased partner would result in abatement of the suit as a whole has relied upon a decision of the Allahabad High Court in M. S. Pearl Sound Engineering V/s. M/s. Pooran Chand, AIR 1975 All 207, in which it was held (at pp. 208209 of AIR) :- "Rule 1 of Order XXX of the Code of Civil Procedure enables any two or more persons claiming or being liable as partners and carrying on business in India to 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. It provides a new and convenient mode of describing in a suit two or more persons claiming or being liable as partners. The partners may adopt this method and bring the suit in their firm name. So also they may be sued in their firm name. It provides a new and convenient mode of describing in a suit two or more persons claiming or being liable as partners. The partners may adopt this method and bring the suit in their firm name. So also they may be sued in their firm name. A firm is a compendious collective name for the individual members who constitute the firm. When a suit is instituted by or against a firm it is in reality a suit by or against all the partners of the firm. The firm name stands for all those persons who were its partners at the time of the accruing of the cause of action. In other words, the effect of using the name of the firm is to bring all the partners before the Court. This enabling provision contained in Rule 1 of Order XXX does not, however, do away with the traditional method of bringing a suit by or against the partners individually. The partners may not choose to file the suit in the name of their firm.They may file the suit in their individual names either in conjunction with the firm or without the firm as one of the partners. Such a suit would not be a suit under Rule 1 of Order XXX, C.P.C. inasmuch as under Rule 1 the partners may sue or be sued in the name of their firm. When the partners sue or are sued in their individual names only, (and which would be quite legal) the provisions of Rule 1 are not invoked. So also would be the case when the partners sue or are sued in conjunction with their firm. When a suit is filed impleading the firm as well as all its partners the impleadment of the firm is unnecessary and the firm as a party is merely a surplusage inasmuch as the persons whom it stands for, are themselves impleaded in their individual names as partners. Such a suit cannot be said to have been filed in accordance with Rule 1 of Order XXX, C.P.C. To such a suit the applicability of Order XXII is not excluded. Rule 4 of Order XXX applies where two or more persons sue or are sued in the name of a firm under the provisions of Rule 1 of Order XXX. Rule 4 of Order XXX applies where two or more persons sue or are sued in the name of a firm under the provisions of Rule 1 of Order XXX. In other words, the provisions of Rule 4 would not be attracted if the suit is not filed under Rule 1 of Order XXX. Rule 4 dispenses with the requirement of joining as a party to the suit the legal representatives of a deceased partner, whether he had died before the institution or during the pendency of the suit provided that the suit had been filed under Rule 1 of Order XXX, C.P.C. When two or more persons sue or are sued in their individual names as partners either in conjunction with or without the firm, aid of Order XXX, C.P.C. is not taken and to such a suit Rule 4 of that order would, therefore, not apply. Hence; where a suit is filed by or against two or more persons in their individual names as partners in conjunction with the firm or without the firm and any of them dies during the pendency of the suit, it would be necessary to join the legal representatives of the deceased as party to the suit." "In the absence of the legal representatives of the deceased-respondent the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree. The effect of the abatement of an appeal is that the decree between the appellant and the deceased-respondent becomes final and the appellate Court cannot, in any way, modify that decree directly or indirectly." 8. In the Allahabad decision Mohan Lal Agrawal, plaintiff No. 2 obtained a decree from the first appellate Court against the defendant-appellant and since the legal representatives of Mohan Lal Agrawal had not been substituted in the Second Appeal before the High Court the decree in favour of Mohan Lal Agrawal became final and since the decree passed by the appellate Court was a joint decree in favour of all the plaintiffs and was indivisible inasmuch as it proceeded on a ground common to all the plaintiffs. Interests of surviving Respondents 3 to 6 and the deceased Respondent No. 2 were joint and indivisible and the success of the appeal would lead to the passing of a decree which would be inconsistent and contradictory to the decree which had become final with respect to the same subject-matter between the appellant and the deceased Respondent in a suit for ejectment from the premises and for recovery of arrears of rent and mesne profits. 9. Learned counsel for the plaintiff-Bank submitted that in the petition filed by the petitioners before the trial court it had not been stated that the defendant No. 1 is an unregistered partnership firm and it was only during the course of argument that such a submission was made and despite the fact that the plaintiff-Bank had made an application before the trial Court, copy of which has been annexed by the petitioners as Annexure 2 to the Civil Revision Application, praying that defendant No. 2 be directed to disclose before the trial Court the name of other partner/s inducted in place of Ram Avtar Khowala and/or his legal heirs so that, if necessary, steps may be taken for impleadment of those partners, if any. 10. In Upper India Cable Co. V/s. Bal Kishan, (1984) 3 SCC 462 : ( AIR 1984 SC 1381 ) the Supreme Court considered the question that if the suit is instituted against the firm and partners are impleaded as proper parties, in the event of death of a partner so sued, would the suit or appeal, as the case may be, abate if heirs and legal representatives of the deceased partner are not substituted within the prescribed period of limitation and held that (at p. 1382 of AIR):- "There is a two-fold answer to this question. Order XXX, Rule 4 provides that notwithstanding anything contained in Sec. 45 of the Indian Contract Act, 1872 where two or more persons are sued in the name of the firm under the enabling provisions of Order XXX, and any such person dies whether before the institution of the suit or during the pendency of any suit, it shall not be necessary to join the legal representatives of the deceased as a party to the suit. Secondly death of a proper party would have no impact on the suit more so where on death of a partner the partnership may stand dissolved or heirs do not desire to join the firm." Observation made by the Supreme Court in the following passages further explains the position (Para 9, at p. 1382 of AIR) :"Turning to the face of this case, we are concerned with the suit as it was framed and instituted. In the suit for eviction firm was impleaded as the tenant and the deceased partners were impleaded as merely proper parties which would tantamount to making them formal parties. No relief of any kind was prayed for against them in their personal capacity. The decree for eviction would operate against the firm according to the plaintiff himself because the firm was the tenant.""Therefore, we posed a question to the learned counsel for the respondent whether on the death of a proper party whose heirs and legal representatives are not substituted and when no relief was claimed against such a party would the suit or appeal abate more so when the parties against whom relief is claimed is very much there and is prosecuting its appeal. Learned counsel for the respondent had no specific reply to this question except saying that "if the firm is abolished and some new firm is created the plaintiff may not take any notice of it". We are at a loss to understand "abolition are creation of firms"."The position boils drown to this that two of the partners who were appellants along with the firm in the second appeal before the High Court died pending the appeal. It is nobodys case that the heirs and legal representatives of the deceased partners joined the firm or they were entitled to be taken in as partners in place of the deceased partners as partners in the firm. Therefore, the question to be answered is whether on the death of two of the proper or formal parties impleaded in their capacity as partners by the plaintiff along with the firm, in absence of substitution of heirs and legal representatives the appeal abates? The answer is in the negative. Therefore, the question of substituting heirs and legal representatives of the two proper formal parties does not arise and the death has no impact on the proceeding. The appeal cannot abate. The answer is in the negative. Therefore, the question of substituting heirs and legal representatives of the two proper formal parties does not arise and the death has no impact on the proceeding. The appeal cannot abate. Therefore, the High Court was in error in disposing of the appeal as having abated."In the order passed by the trial Court, a Full Bench decision of this Court in Jagannath Singh V/s. Smt. Singhashan, 1984 BBCJ 163 was considered where the following questions."(I) When some of the heirs of the deceased party are already on record and the rest of the heirs are not substituted, whether the proceeding becomes defective and abate or whether by application of the principle of representation by the heirs on record, the proceeding does not abate"? "(II) Whether the answer to the first question is of universal application or is dependent on certain conditions, if so, what are the conditions?were answered thus :- "When one of more heirs of the deceased defendant or respondent are on record, then the estate is fully represented in the suit or the appeal, as the case may be, and the suit or the appeal will not abate for not bringing on record the other left out heirs.This will also include a case where some of the heirs at their own initiative are brought on the record of the case. Such heirs, who applied for bringing on record, would represent the entire estate.It may also include a case where through oversight or on account of such doubt as to who the heirs are, any heir is left out to be brought on record, still the estate of the deceased is fully represented by the heirs brought on record. Such heirs, who applied for bringing on record, would represent the entire estate.It may also include a case where through oversight or on account of such doubt as to who the heirs are, any heir is left out to be brought on record, still the estate of the deceased is fully represented by the heirs brought on record. The left out heirs may subsequently apply to be brought on record but there will be no abatement.The aforesaid propositions are, however, qualified by the following exceptions :- (i) Where the heirs on record collude with the plaintiffs or the appellants.(ii) Where a special case could have been put forward by the left out heirs and they did not get an opportunity to present such cause in the proceeding and(iii) Where there is an act of deliberate omission to include an heir while bringing the other heirs on record which may be said to be mala fide.It is further held that where one or more of the heirs of deceased defendant or respondent are on record, or they are already before the Court in another capacity, but the left out heirs were not brought on the record and no formal application was made showing them as heirs and legal representatives of the deceased, still the estate of the deceased would be represented by the heirs on record and the decision will bind not only the heirs on record, but the entire estate including those not brought on record unless the case comes under any of the exceptions mentioned above. However, it will be open to the heirs on record to point out that they do not represent the interest of other heirs and in that case it becomes the duty of the plaintiff or the appellant, as the case may be to make diligent and bona fide enquiry of bringing other heirs on record in accordance with law. However, it will be open to the heirs on record to point out that they do not represent the interest of other heirs and in that case it becomes the duty of the plaintiff or the appellant, as the case may be to make diligent and bona fide enquiry of bringing other heirs on record in accordance with law. But if no such objection is taken, then after the decision it will be deemed that there has been abandonment of technical plea of abatement.These exceptions may not be taken as exhaustive." 11 In the present case it is neither the contention of learned counsel for the petitioners nor is it pleaded in the Civil Revision that besides defendant No. 2 there is somebody else who has been inducted as a partner in the firm or the other heirs and legal representatives left behind by the deceased defendant No. 3 have been admitted as partners or that the defendant No. 2 does not represent the interest of the other heirs, if any. 12. In view of the decisions of the Supreme Court and Full Bench of this Court the contention that non-substitution of the heirs or legal representatives of the deceased partner in the circumstances results in the abatement of the suit has to be rejected. 13. It is evident that defendant No. 2 is the son of the deceased defendant No. 3 and the estate of defendant No. 3 is adequately represented by defendant No. 2 and it further appears that no partner has been inducted in the firm, accordingly the suit would not abate on account of non-substitution as claimed by the petitioners. 14. There is thus no merit in the Civil Revision Application. It accordingly fails and is rejected with costs. .Revision dismissed.