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2008 DIGILAW 1612 (PNJ)

Balwant Singh v. Sant Ram Panna Lal

2008-09-19

RAKESH KUMAR GARG

body2008
Judgment Rakesh Kumar Garg, J. 1. This is defendants appeal challenging the judgment and decree of the lower Appellate Court whereby the suit of the plaintiff/appellant has been decreed by accepting his appeal against the judgment and decree of the trial Court. 2. The plaintiff-respondent filed a suit for recovery against the defendant-appellant and others stating that the defendant-firm was having a mutual running and open account with the plaintiff. After settling the account with the plaintiff on 31.3.1994, a sum of Rs. 2,02,556/- was outstanding against the defendant No. 1 entry of which has been made in the account books of the plaintiff-firm. This debit balance during assessment year 1993-94 was also shown by the defendant-firm in its balance sheet. The plaintiff-firm issued a notice on 23.4.1994 demanding payment of Rs. 2,02,556/- along with interest up to 31.3.1994. After receiving the notice and admitting the accounts to be correct, defendant No. 5 gave a cheque bearing No. 452370 for Rs. 57.500/- on 7.6.1994 which was got encashed through the Punjab National bank, Barnala by the plaintiffs. Another cheque for Rs. 57,500/- had been given by the defendant Guriqbal Singh (defendant No. 3) on 9.6.1994, which was also got encashed and in this way, a sum of Rs. 86,556/- were outstanding against the defendants on 9.6.1994. The defendants have neither paid towards principal amount nor any interest. The customary rate of interest of the market at Barnala is 18% per annum. Thus the present suit for recovery of Rs. 2,45,000/- was filed for which defendants are liable to pay. 3. Upon service, defendant No. 1 filed no written statement. The defendants Nos. 3 and 5 have admitted the claim of the plaintiff. Defendant Nos. 2 and 4 in their joint written statement have contested the suit. It was pleaded that M/s Punjab Cotton Ginning and Oil Mills (defendant No. 1-firm) stand dissolved and does not exist. It was denied that defendant No. 1 firm was having a mutual running and opening account with the plaintiff. It was also stated that no account was settled on 31.3.1994 by the defendants. It was denied that a sum of Rs. 2,02,556/- was outstanding against the firm. It was also pleaded that the suit is barred by limitation and the plaintiff has made false entries and has filed false suit. 4. On the pleadings of the parties, following issues were framed: 1. It was denied that a sum of Rs. 2,02,556/- was outstanding against the firm. It was also pleaded that the suit is barred by limitation and the plaintiff has made false entries and has filed false suit. 4. On the pleadings of the parties, following issues were framed: 1. Whether the plaintiff is entitled to recover suit amount along with interest? OPP 2. Whether the plaintiff has got no cause of action and locus standi to file the suit? OPP 3. Whether this suit is not maintainable in the preset form? OPD. 4. Whether this suit is not within limitation? OPD 5. Whether this suit is hit by principle of Damdupt? OPD 6. Relief. Issue No. 1 was decided against the plaintiff. Issue No. 2, 3 and 5 were decided against the defendants. Under issue No. 4, it was held that the suit was time barred. Hence the trial Court dismissed the suit filed by the plaintiff. 5. Feeling aggrieved, the plaintiffs filed an appeal, which was accepted by the Additional District Judge, Barnala vide impugned judgment and decree dated 14.2.2006. On the issue of limitation, the lower Appellate Court observed as under: I have considered the arguments advanced by the learned Counsel for the parties and carefully gone through the authority of the Honble Apex Court cited on the point of admission by the counsel for the plaintiff. Defendant Nos. 3 and 5 never turned up in the witness box to depose that they have issued cheques on 7.6.1994 and 9.6.1994 from their personal accounts to discharge their personal liabilities. No dissolution deed, no statement of account was prepared to prove that defendant No. 1 firm was dissolved and it was not existing and defendant No. 2 and 4 are not its partners. For the purpose of termination or dissolving of a partnership firm, there must be balance sheet prepared at the time of dissolution of the firm and dissolution deed must be prepared and signed by all the partners. Neither there is any dissolution deed on the file nor any balance sheet of defendant No. 1 has been produced on the file meaning thereby that defendant Nos. 3 and 5 are still partners of defendant No. 1 firm. They have issued cheques on 7.6.1994 and 9.6.1994 to discharge the liability of other loan due towards the defendants. Neither there is any dissolution deed on the file nor any balance sheet of defendant No. 1 has been produced on the file meaning thereby that defendant Nos. 3 and 5 are still partners of defendant No. 1 firm. They have issued cheques on 7.6.1994 and 9.6.1994 to discharge the liability of other loan due towards the defendants. The admission of a co-partner of a registered firm is binding on the other partners as well as on the firm. Learned Counsel for the defendants No. 2 and 4 failed miserably to cite any latest case law in reply to the case law cited by the learned Counsel for the plaintiff of the Apex Court. Thus, in this case, the limitation for filing the suit for recovery will commerce from 7.6.1994. the instant suit was filed on 25.5.1997. It is well within limitation. Accordingly, this issue is decided in favour of the plaintiff and against the defendants. 6. Under issue No. 1, the lower Appellate Court held as under: To prove this issue, the plaintiff firm examined PW2 Surinder Kumar partner of the firm. He has proved on the file, statement of account of the defendants starting from 1987-88 upto 31.3.1994, copies of the account books, Ledger and Bahies, the amount which was due towards the defendants from 1987-88 was carried forwarded in the next every coming year. Moreover, DW1 Balwant Singh though denied his signatures on Ex.P-19 to Ex.P-21 but PW1, Dr. Atul Kumar Singla, Document Expert compared the signatures of Balwant on Ex.P-19 to Ex.P-21 with the specimen signatures taken in the court of Balwant Singh, as well as his signatures on the written statement, power of attorney and gave his detailed report that Ex.P-19 to Ex.P-21 are signed by Balwant Singh. The facts admitted required no proof. Moreover, it is worth while to mention here that present suit has been filed by the plaintiff against defendant No. 12 M/s Punjab Cotton Ginning Mills, Barnala. To my utter surprise, Shri P.K. Bansal, Advocate filed power of Attorney on behalf of defendants No. 2 and 4 but no written statement was filed by defendant No. 1 firm. Defendants No. 2 and 4 filed the written statement in their individual capacity and not as partners of defendant No. 1 firm meaning thereby that defendant No. 1 firm has admitted the case of the plaintiff in its entirety. Defendants No. 2 and 4 filed the written statement in their individual capacity and not as partners of defendant No. 1 firm meaning thereby that defendant No. 1 firm has admitted the case of the plaintiff in its entirety. When the firm, whose defendant Nos. 2 and 4 are partners, has neither filed any written statement nor denied the pleadings of the plaint of the plaintiff, then it leads to the only conclusion that the defendant No. 1 firm has admitted the suit of the plaintiff in totality. The written statement filed by defendant No. 2 and 4 and defendant Nos. 3 and 5 in their individual capacity have no evidentiary value at all, because the pleadings of the plaintiff by the defendant No. 1 firm remained unrebutted and unchallenged. The entries of the account books, cash book, ledger [produced on the file by plaintiff starting from 1987-88 upto 31.3.1994 have proved the amount due towards the defendants. The plaintiff firm is dealing in the business of commission agents in the Grain Market, Barnala. The plaintiff firm is entitled to claim interest as per the prevalent customs and usages in the commercial transactions between the commission agents. So keeping in view the fact that defendant No. 1 M/s Punjab Cotton Ginning and Oil Mills, Barnala has not contested the suit at all of the plaintiff and the written statements of defendant Nos. 2 to 5 in their individual capacity and the evidence of DW1 Balwant Singh, are not sufficient to discard the disbelieve the pleadings and evidence of the plaintiff. Had defendants Nos. 2 and 4 filed the written statement-representing defendant No. 1 firm, men the matter would have been otherwise. No reply came forward from the learned Counsel for defendant Nos. 2 and 4 on this vital point of law. Accordingly, this issue is decided in favour of the plaintiff and against the defendants. 7. Feeling aggrieved against the aforesaid judgment and decree of the lower Appellate Court, the defendant Balwant Singh has filed the present appeal. 8. Learned Counsel for the appellant while challenging the findings of the lower Appellate Court have vehemently argued that the suit for recovery was barred by limitation even as per the case of the plaintiff. Last entry dated 31.3.1994 by which the balance was originally struck was not signed by the appellant. 8. Learned Counsel for the appellant while challenging the findings of the lower Appellate Court have vehemently argued that the suit for recovery was barred by limitation even as per the case of the plaintiff. Last entry dated 31.3.1994 by which the balance was originally struck was not signed by the appellant. The plaintiff did not produce the account books along with the plaint and thus has failed to comply with the provisions of Order 7 Rule 17 and therefore, the suit of the plaintiff was liable to be dismissed and thus, the following substantial questions of law arises for consideration of this Court: 1. Whether the suit of the respondent/plaintiff is within limitation? 2. Whether the suit of the plaintiff is not maintainable as per Section 34 of the Evidence Act? 3. Whether the learned lower Appellate Court erred in law while relying on inadmissible evidence. 9. On the other hand, learned Counsel for the respondents have supported the findings of the lower Appellate Court. It has further been stated by the learned Counsel for the respondents that the arguments raised by the counsel for the appellant are misconceived and are liable to be rejected. 10. I have heard learned Counsel for the parties and perused the record. It is the specific case of the plaintiff-respondent that the balance was struck on 31.3.1994. The contention of the counsel for the appellant that Balwant Singh has not signed the entry dated 31.3.1984 to acknowledge debit due is also wrong. In this regard Dr. Atul Kumar Singla, PW1 Document expert after comparing the signatures of Balwant Singh with the specimen signatures taken in the court as well as signatures on the written statement and Power of Attorney has given a detailed report that Ex.P-19 to P-21 are signed by Balwant Singh, appellant. Learned Counsel for the appellant was unable to controvert these facts. Moreover, the defendant Nos. 3 and 5 who are the partners of the firm have issued cheques on 7.6.1994 and 9.6.1994 to discharge the liability of loan/debit issued towards the defendants. It is a matter of record that no dissolution deed and no statement of account etc. were produced to prove defendant No. 1 was served, no written statement was filed on its behalf denying the liability of the firm. On the other hand, the liability of the firm towards plaintiff has been admitted by defendant Nos. It is a matter of record that no dissolution deed and no statement of account etc. were produced to prove defendant No. 1 was served, no written statement was filed on its behalf denying the liability of the firm. On the other hand, the liability of the firm towards plaintiff has been admitted by defendant Nos. 3 and 5. Thus, defendant Nos. 3 and 5 had issued cheques on 7.6.1994 and 9.6.1994 to discharge the liability of debit due towards defendant-firm and its partners, the admission of a co-partner of a registered firm is binding on the other partners as well as on the firm. Learned Counsel for the appellant has failed miserably to controvert this settled proposition of law. 11. The next argument of the learned Counsel for the appellant that the suit is barred by limitation is also without any merit. In this case, the plaintiff has contended that the balance was struck on 31.3.1994 and the said entry was duly signed by the appellant Baldev Singh. The suit was filed on 25.5.1997. However, it has been proved on record that defendant Nos. 3 and 5 had issued cheques on 7.6.1994 and 9.6.1994 respectively, acknowledging the amount due against the defendants and making of the payments. Thus, the liability of the firm towards plaintiff has been admitted by defendant Nos. 3 and 5. The admission of a copartner of a registered firm is binding on the other partners as well as on the firm. Therefore, limitation for filing of the suit for recovery will commence from these dates when defendant Nos. 3 and 5 issued cheques to discharge liability of the debts due towards defendant-firm. Undisputedly, the suit was filed on 25.5.1997 i.e., within 3 years from 7.6.1994, the date on which defendant Nos. 3 and 5 issued cheques as the limitation for filing of the suit for recovery commences from this date. 12. Learned Counsel for the appellant has also argued that the suit is not maintainable as the entries in the account books cannot be relied upon as the same are not in accordance with the requirement of Section 34 of the Evidence Act. Moreover, the plaintiff has failed to produce on record entries/account statement along with the plaint as required under Order 7 Rule 17 CPC. The argument raised by the counsel for the appellant is without any basis. Moreover, the plaintiff has failed to produce on record entries/account statement along with the plaint as required under Order 7 Rule 17 CPC. The argument raised by the counsel for the appellant is without any basis. A finding of fact has been recorded by the courts below that the account books maintained by the plaintiffs in normal course has been proved as per Section 34 of the Evidence Act and there is no evidence to rebut the entries of the account books produced by the appellants. The argument of the counsel for the appellant with regard to failure of plaintiff to file statement of accounts along with the balance sheet is against the record. In the plaint the respondent has specifically stated that the balance against the appellant was struck on 31.3.1994 and the same was signed by the appellant and the copy of the same along with balance sheet is attached with the plaint. In the written statement filed by the appellant, this contention has been repelled by stating that the appellant has neither signed any such entry in the record of the firm nor any such account has been entered in the balance sheet of the firm and the plaintiff has prepared a false record. In view of this reply, the contention raised by the counsel for the appellant is without any basis. No other point has been urged. For the reasons recorded above, I find no merit in the present appeal. No substantial question of law arises. Dismissed.