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2001 DIGILAW 517 (KER)

Town Investments v. Subramanian

2001-09-25

A.LEKSHMIKUTTY

body2001
JUDGMENT : A. Lekshmikutty, J. Against the decree and judgment in O.S. No. 56 of 1989 on the file of the Sub Court, Thrissur, this appeal is preferred by the plaintiff. The plaintiff is a firm registered under the Indian Partnership Act and signatory to the plaint, being a partner of the firm, is competent to sue on behalf of the firm. The defendants had borrowed a sum of Rs.50,000/- from the plaintiff firm and had executed a demand promissory note in favour of the plaintiff firm on 7.2.1983 agreeing to repay the same with interest at 12% per annum. Out of the said amount, the defendants have repaid a sum of Rs.2,500/- on 22.11.1984 and another sum of Rs.500/- on 5.2.1986. The balance amount is due from the defendants. Despite of repealed demands the balance amount was not paid. Since an amount of Rs.500/- was paid on 5.2.1986 by the defendants, and the same was endorsed on the back side of the demand promissory note, the suit is not barred by limitation. The suit is filed for recovery of a sum of Rs.74,422/- with interest at 12% per annum. 2. The defendants filed written statement admitting the execution of Ext. A1 promissory note. But denies the allegation that he had repaid only an amount of Rs.13,000/- towards the transaction. The first defendant paid an amount of Rs.43,000/- out of the loan transaction. An amount of Rs.30,000/- was paid in March 1984 in two occasions. All the payments made by the defendants had been effected through the second defendant, a partner of the plaintiff firm. No receipts have been given to the defendants towards repayment but the payments were credited in the account books of the plaintiff. The plaintiff may be directed to produce the account books maintained by the firm. On receipt of the notice, defendants contacted the plaintiff and therefore, he did not send any reply to the plaintiff’s notice. The allegation that the firm is registered under the Indian Partnership Act is denied. The plaintiff cannot sue against the second defendant. The interest claimed is excessive. 3. The third defendant filed a separate written statement contending that the first defendant was made to believe that he had paid an amount of Rs.33,000/- to the plaintiff. The loan was obtained for the purpose of the first defendant and the third defendant is only a surety. The interest claimed is excessive. 3. The third defendant filed a separate written statement contending that the first defendant was made to believe that he had paid an amount of Rs.33,000/- to the plaintiff. The loan was obtained for the purpose of the first defendant and the third defendant is only a surety. If the amount is not recoverable from the first defendant, then only the plaintiff is entitled to proceed against him. 4. On the basis of the above pleadings, the court below has raised 4 issues. The evidence in this case consists of the oral testimony of PW-1, DW-1 and Exts. A1 to A3. The court below after evaluating the evidence, dismissed the suit. Aggrieved by the said decree and judgment passed by the lower court, this appeal is filed by the plaintiff. The only question for determination is whether the plaintiff is entitled to recover the amount claimed in the plaint. The execution of Ext. A1 promissory note is admitted by the defendants. According to the plaintiff, out of Rs.50,000/- advanced to the defendants, the first defendant had repaid only a sum of Rs.12,500/- on 22.11.1984 and another sum of Rs.500/- on 5.2.1986. Exts. A2 and A3 are the day book for the period from 2.4.1984 to 15.6.1988 and promissory note ledger of the plaintiff from 27.7.1981 to 15.9.1985 respectively. It is submitted by the learned counsel for the appellant that since the loan transaction was admitted by the defendants, the burden is on the defendants to prove the discharge. But no evidence is adduced by the defendants to prove that an amount of Rs. 43,000/- was paid towards the loan transaction. But the lower court without considering the actual issue involved in this case dismissed the suit. 5. It is submitted by the learned counsel for the defendants that the suit itself is not maintainable. There is nothing on record to show that the firm is a registered one. Under S. 69(2) of the Indian Partnership Act, the suit will not lie. Under S. 69(2) of the said Act, a suit is validly instituted by or on behalf of the firm against any third party, only if two conditions are fulfilled (l) the firm must be registered and (2) the persons suing are or have been shown in the Register of Firms as partners in the firm. Under S. 69(2) of the said Act, a suit is validly instituted by or on behalf of the firm against any third party, only if two conditions are fulfilled (l) the firm must be registered and (2) the persons suing are or have been shown in the Register of Firms as partners in the firm. The scope and ambit of the provisions of the Rules 1 and 2 of O. 30 of the Civil Procedure Code is different from the provisions of S. 69(2) of the Partnership Act. The provisions contained in Rr. 1 and 2 are procedural, whereas the provisions of S. 69(2) are substantive and create a bar at the threshold of the filing of a suit by or on behalf of a firm if the conditions mentioned therein are not fulfilled. The averments in the plaint would not show that the suit is filed for and on behalf of the other members of the firm. Further there is nothing on evidence to show that the person who signed the plaint is a member of the firm. The firm is not a legal entity but is only a collective or compendious name for all the partners. So, if a suit to enforce a right arising from a contract is to be instituted by a firm against a third party, the firm would be the plaintiff. If the suit is to be instituted on behalf of a firm, the partner or partners who wants to institute the suit on behalf of the firm would be the plaintiff. But, in both the cases the suit would in effect be by or on behalf of all the partners of the firm. In the present suit, no such averment is made. In the absence of any averments the court below has rightly found that the suit is not maintainable. 6. Ext. A1 promissory note is executed on 7.2.1983. The specific case of the defendants is that out of the amount advanced, the first defendant has repaid an amount of Rs.43,000/- as early as in March, 1984. In the written statement itself he has requested for production of the accounts book maintained by the firm, Ext. A2 day book relates to the period from 2.4.1984 to 15.6.1988. The specific case of the defendants is that out of the amount advanced, the first defendant has repaid an amount of Rs.43,000/- as early as in March, 1984. In the written statement itself he has requested for production of the accounts book maintained by the firm, Ext. A2 day book relates to the period from 2.4.1984 to 15.6.1988. The defendants have filed I.A. 645 of 1991 for directing the plaintiff to produce the account books, ledger and day book for the year from 1983 March onwards. The petition was allowed and the plaintiff was directed to produce those documents. Ext. A2 is the day book for the period from 2.4.1984 to 16.6.1988, Ext. A1 is the ledger. PW1 examined to this case is alleged to be the Manager-cum-partner of the plaintiff firm. He deposed before Court that Exts. A2 and A3 were written by him by his own hand. It is significant to note that the day book in respect of the disputed period was not produced by the plaintiff. According to the defendants if the day book of 1984 March is produced, it can be seen that the amount paid by the defendant was credited therein. The court below has drawn adverse inference against the plaintiff regarding the discharge. As observed by the learned counsel, the relevant entry pertaining to Ext. A1 would be seen from page 84 of Ext. A3. It is stated in the plaint that an amount of Rs.12,500/- was repaid on 22.11.1984. But the entry in Ext. A3 would show that only Rs.10,000/- was paid on 22.11.1984. Therefore, Ext. A3 cannot be relied upon. It is not a properly maintained document. The corresponding entry in Ext. A2 is also seen struck off and rewritten. At the time of examination, no explanation was offered by PW1 in respect of the same. Since the suit is not maintainable, the plaintiff is not entitled to get a decree for recovery of the balance amount. There is no reason to set aside the judgment passed by the lower court. There is no merit in the appeal and it is dismissed.