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2005 DIGILAW 789 (AP)

Nichenametla Subramanyam v. G. Ananda Rao

2005-08-22

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( 1 ) HEARD Shri P. Veera Reddy, learned counsel representing appellant- defendant No. 2. ( 2 ) SHRI P. Veera Reddy, the learned counsel representing the appellant- defendant No. 2, would contend that D. W. 1 had clearly deposed that though the partnership had been there, the partnership, in fact, had not commenced the business and even otherwise, in the light of the specific stand taken by the defendant No. 2 in the suit (D. W. 1) and also in the light of Section 22 of the indian Partnership Act, the appellant-defendant No. 2 cannot be fastened with the liability on the strength of Ex. A. 1. The learned counsel had taken this Court through the pleadings of the parties and also the findings recorded in this regard. ( 3 ) HEARD the learned counsel. ( 4 ) NONE represents the respondents. ( 5 ) THE suit is filed for recovery of Rs. 30. 740/- as against both the defendants on the strength of a promissory note dated 29. 11. 1980 executed by the defendant No. 1 as partner of M/s. Nichanametla Kumaraswamy Subramanyam for rs. 20,000/- payable with interest at 18% per annum and claimed at the same rate of interest with costs of the suit. It was stated in the plaint as hereunder:-" The defendants are partners in M/s. Nichenametla Kumara Swamy subramanyam a registered firm carrying on cotton business at Proddatur and other places. Defendant No. 1 as a partner of the above firm borrowed on 29. 11. 80 a sum of Rs. 20,000/- for firm s business and agreed to repay the same with interest at 18% p. a. and executed a promissory note on behalf of the firm in his hand at Cuddapah in favour of the plaintiff. Thus as partners of the firm the defendants 1 and 2 are liable to pay the above pronote amount. On 26. 11. 1981 the first defendant paid a sum of Rs. 3680/- towards interest to the plaintiff and endorsed the payment in his own hand on the same day as partner of the firm on the reverse of the pronote. Again on 15. 11. 1982 first defendant paid rs. 3600/- towards interest to the plaintiff and endorsed the same in his own hand as a partner of the firm on the reverse of the pronote. Again on 28. 11. 1983 the first defendant paid Rs. Again on 15. 11. 1982 first defendant paid rs. 3600/- towards interest to the plaintiff and endorsed the same in his own hand as a partner of the firm on the reverse of the pronote. Again on 28. 11. 1983 the first defendant paid Rs. 3840/- towards interest and Rs. 5000/- towards Principal amount to the plaintiff and endorsed the same in his own hand on the third page of the pronote as a partner of the firm. As on 28. 11. 1983 the balance due on the pronote was Rs. 15000/ -. Again on 12. 11. 1986 the defendant paid a sum of Rs. 200/- to the plaintiff and endorsed the same on the third page of the pronote as a partner of the firm. The payments made by the first defendant as a partner of the firm binds the second defendant also as he is a partner of the firm. The defendants are due Rs. 15000/- towards of the firm. The defendants are due Rs. 15000/- towards Principal from 28. 11. 83 being the balance of Principal amount after deducting Rs. 5000/- towards principal which was acknowledged by the first defendant on the third page of the pronote. This acknowledgment for the balance of the pronote amount by the first defendant binds the second defendant also as partner of the firm. Plaintiff made several demands for the payment of Rs. 15000/- with interest. The defendants failed to pay the same. So on 21. 10. 88 the plaintiff issued a notice demanding the defendants to pay the balance of Rs. 15000/- with interest. First D. 1 received the notice but failed to pay the amount with interest and also failed to give reply. D. 2 s notice was returned as the addressee is not in town. This endorsement made by the post man is in collusion with the second defendant who evaded to take the notice. The plaintiff again issued an advocate s notice on 6. 11. 89 demanding the defendants to pay the balance of pronote amount of rs. 15000/- with interest. But the defendants neither paid the amount nor gave any reply. " ( 6 ) THE defendant No. 1 had not contested the suit. The plaintiff again issued an advocate s notice on 6. 11. 89 demanding the defendants to pay the balance of pronote amount of rs. 15000/- with interest. But the defendants neither paid the amount nor gave any reply. " ( 6 ) THE defendant No. 1 had not contested the suit. Appellant herein- defendant No. 2 filed Written Statement admitting that he is a partner of the firm, but, however, pleaded that it is not correct to state that the said partnership was carrying on cotton business at Proddutur and other places. It was further pleaded that:-"indeed no such business was even indulged in by the said firm and the said firm was ever since its registration was dormant. This defendant is not aware of the said debt. But it is false and invented for the purpose of this suit to state that this defendant has borrowed the said sum for purpose of partnership business. This defendant is not aware of the payments made by the 1st defendant. It is not correct to state that the payments made by the 1st defendant would save limitation of the pronote as against this defendant also. Because the defendant is not aware of the signatures in the pronote nor this defendant has joined with the 1st defendant in making payments and endorsement. Therefore the suit liability is confined to only 1st defendant. It is not correct to state that the 2nd defendant has managed to return the notice sent to him by plaintiff. It is the plaintiff that has stage-managed the notice. At no point of time the plaintiff demanded this defendant. " ( 7 ) ON the strength of the pleadings of the parties, the following issues were settled:-i) Whether D. 2 is not liable to discharge the pronote Debt? ii) Whether the payments made by D. 1 do not bind D. 2 also? iii) To what relief? ( 8 ) ON behalf of the plaintiff, plaintiff examined himself as P. W. 1 and exs. A. 1 to A. 10 were marked. On behalf of the defendant No. 2, he had examined himself as D. W. 1. ( 9 ) EX. A. 1 is the promissory note dated 29. 11. 1980 executed by defendant No. 1 as partner of M/s. Nichanametla Kumaraswamy Subramanyam in favour of the plaintiff. Exs. A. 2, A. 3, A. 4 and A. 5 are the endorsements, Ex. On behalf of the defendant No. 2, he had examined himself as D. W. 1. ( 9 ) EX. A. 1 is the promissory note dated 29. 11. 1980 executed by defendant No. 1 as partner of M/s. Nichanametla Kumaraswamy Subramanyam in favour of the plaintiff. Exs. A. 2, A. 3, A. 4 and A. 5 are the endorsements, Ex. A. 6 is the Office copy of the notice issued by the plaintiff s Advocate, Ex. A. 7 is the Postal acknowledgment, Ex. A. 8 is the Office copy of the notice issued by the plaintiff s Advocate, Ex. A. 9 is the Returned registered cover with acknowledgment and Ex. A. 10 are the postal receipts. ( 10 ) ON appreciation of evidence, the learned Judge came to the conclusion that in view of the recitals of Ex. A. 1 and also in the light of the evidence of d. W. 1, both are liable to pay the amount and decreed the suit with costs with future interest at 12%per annum. Aggrieved by the, same the present Appeal has been preferred. ( 11 ) IN the light of the submissions made by the learned counsel, the following points arise for consideration in this Appeal. 1) Whether the appellant-defendant No. 2 also is liable to discharge the amount due under the promissory note-Ex. A. 1 in the facts and circumstances?2) If so, to what relief the parties are entitled? ( 12 ) POINT No. 1:-"the respective pleadings of the parties had already been referred to supra. The suit was filed on the strength of a promissory note executed by the defendant No. 1 as partner and on a careful reading of Ex. A. 1 it is clear that the defendant No. 1 executed the promissory note as a partner. He had signed it as a partner and it was also shown as a partner just adjacent to the revenue stamps. Apart-from this aspect of the matter, even in the body of Ex. A. 1, the partnership firm had been referred to and subsequently it was recited that the amount was being borrowed for the purpose of business. P. W. 1 deposed about these aspects. It may be appropriate to have a look of the evidence of D. W. 1 in this context to appreciate the defence. A. 1, the partnership firm had been referred to and subsequently it was recited that the amount was being borrowed for the purpose of business. P. W. 1 deposed about these aspects. It may be appropriate to have a look of the evidence of D. W. 1 in this context to appreciate the defence. D. W. 1-defendant No. 2 deposed that the defendant No. 1 is his brother and he is not aware of the plaintiff and in the year 1965 defendant No. 1 started a business in the name and style of nichanametla Kumaraswamy Subramanyam and Company and they started the firm to do business but they had not started the business and they did not borrow any amounts in the name of the firm and he never signed on behalf of the firm and they had been living separately since two years at different places and he is not concerned with the borrowings of the defendant No. 1from the plaintiff and he does not know about the borrowings of the defendant No. 1 from the plaintiff and the payments made by him. He came to know about the suit debt, only after receipt of summons from the Court. In the cross-examination this witness deposed that the defendant No. 1 is his elder brother and he is the Managing partner of the firm and he is also one of the partners of the firm along with the defendant No. 1 and no doubt he denied the suggestion that they have been doing cotton business in the name of the firm. In the cross-examination certain other particulars relating to knowledge about Subbarayadu and the plaintiff being the son of Subbarayhadu and other aspects had been elicited. " ( 13 ) THE main contention raised is that, in view of Section 22 of the Indian partnership Act the appellant-defendant No. 2 cannot be fastened with liability. ( 14 ) IT is pertinent to note that the recitals of Ex. A. 1 are clear and categorical. There is an admission made by D. W. 1 that the defendant No. 1 was the Managing Partner of the firm at the relevant point of time. The fact that the firm came into existence is not in serious dispute, and D. W. 1 had not taken steps to examine defendant No. 1. A. 1 are clear and categorical. There is an admission made by D. W. 1 that the defendant No. 1 was the Managing Partner of the firm at the relevant point of time. The fact that the firm came into existence is not in serious dispute, and D. W. 1 had not taken steps to examine defendant No. 1. Be that as it may, the fact remains that the partnership firm came into existence and these are the brothers and incidentally the partners of the firm and in the light of the admission made by D. W. 1- defendant No. 2 that the defendant No. 1 was the Managing Partner of the firm at the relevant point of time, it can be taken, in the light of the clear recitals of Ex. A. 1, that he had executed Ex. A. 1 on behalf of the firm representing yet another partner too. Hence, the appellant-defendant No. 2 cannot escape the liability, especially in the light of the admissions made by him as D. W. 1 and also the clear recitals in Ex. A. 1 and also the Managing Partner-defendant No. 1 signing the promissory note as partner specifically. Hence, the findings recorded by the learned Judge need not be disturbed in any way and the same are hereby confirmed. ( 15 ) IN the light of the findings recorded as above, the Appeal is devoid of merits and, accordingly, the same shall stand dismissed. In the facts and circumstances of the case, no order as to costs.