Research › Search › Judgment

Madras High Court · body

2012 DIGILAW 155 (MAD)

P. Rathinasabapathy v. P. Annamalai

2012-01-09

M.VENUGOPAL

body2012
Judgment :- 1. The Appellant, (Legal Representative of the First Defendant before the First Appellate Court), has projected this instant Second Appeal as against the Judgment and Decree dated 28.01.1994 in A.S.No.72 of 1986 passed by the learned Sub -Judge, Kancheepuram in affirming the Judgment and Decree made in O.S.No. 397 of 1983 dated 24.07.1986 passed by the Learned District Munsif, Kancheepuram. 2. The First Appellate Court viz., the Learned Sub Judge, Kancheepuram, while delivering the Judgment in A.S.No.72 of 1986 dated 28.01.1994, has, among other things, observed that the Appellants father, viz., deceased First Defendant, has not been examined before the trial Court as a witness and also opined that it has not been proved that the suit amount has not been obtained for the purpose of partnership business and moreover PW1, in his evidence, has deposed that he has lent the suit amount and accordingly, proved Ex.A1-Receipt dated 02.06.1980, and resultantly, dismissed the Appeal with costs, thereby confirming the Judgment and Decree passed by the trial Court in O.S.No. 397 of 1983. 3. Earlier, before the trial Court, 1 to 7 issues have been framed for determination. On behalf of the Plaintiff side (Later deceased), witness P.W.1 has been examined and Exs.A.1 to A.5 have been marked. On the side of the deceased First Defendant, no witness has been examined and no exhibits have been marked. 4. The trial Court, on an appreciation of oral and documentary evidence on record, has come to a clear conclusion that the plea on the side of the First Defendant that the suit loan would not bind him, is not accepted and further, the Second Defendant has received a sum of Rs.50,000/- as per decree in O.P.No. 23 of 1982 and has left the partnership business and thereafter, the deceased First Defendant, who is running the business, is liable to pay the suit amount and further, it is held by the trial Court that from 01.06.1982, the Second Defendant is not a partner in the partnership business along with the First Defendant and also has come to the conclusion that the suit is not barred by limitation and decreed the suit with costs by passing a decree against the First Defendant alone. 5. 5. The Appellant (Legal Representative of the First Defendant) as an aggrieved person, against the Judgment and Decree of the First Appellate Court in A.S.No.72 of 1986 dated 28.01.1994, has preferred the Second Appeal before this Court. 6. At the time of admission of the Second Appeal, this Court has formulated the following Substantial Question of Law for consideration: Whether the courts below right in relying Ex.A1 and A2 when the same were not signed by the Appellant? The Contentions, Discussions and Findings on Substantial Question of Law : 7. The Learned Counsel for the Appellant (Legal Representative of the First Defendant) submits that both the Courts have failed to appreciate the fact that the suit against the Appellant (Legal Representative of the First Defendant) is not maintainable in law, but decreed the suit against the Appellant erroneously. 8. It is the further contention of the Learned Counsel for the Appellant that the suit, filed by the Plaintiff (deceased), is not maintainable because, the suit is barred by Limitation. 9. The Learned Counsel for the Appellant urges before this Court that the deceased Plaintiff failed to establish that the borrowal has been made for the partnership business of the First Defendant (deceased) and the Second Defendant. According to the Learned Counsel for the Appellant, in Ex.A1-Receipt, the Second Defendant alone has signed and therefore, the suit ought not to have been decreed by both the Courts in the interest of justice. 10. The stand of the Appellant, before this Court, is that the award in O.P.No. 23 of 1982 dated 01.06.1982, is between the Appellant and the Second Defendant, which has not been disputed by the Plaintiff (since deceased) and therefore, both the Courts ought to have dismissed the suit against the Appellant, who is none other than the Legal Representative of the First Defendant (deceased). 11. The Learned Counsel for the Appellant projects a legal plea that as a partner of the partnership firm, the Second Defendant is also liable for the claim, if any against the firm, under the Indian Partnership Act. 12. Lastly, it is the contention of the Learned Counsel for the Appellant that the Judgments and Decrees of the trial Court as well as the First Appellate Court are contrary to law and against the evidence of the case. 13. 12. Lastly, it is the contention of the Learned Counsel for the Appellant that the Judgments and Decrees of the trial Court as well as the First Appellate Court are contrary to law and against the evidence of the case. 13. In the plaint, the Plaintiff (later deceased) has averred that the Defendants 1 and 2 have been carrying on a partnership trade in Textile in D.No.183 - AB Gandhi Road, Kancheepuram under the name and style of "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" and towards the business, the Defendants borrowed a sum of Rs.5,000/-from the Plaintiff on 02.06.1980, and the Second Defendant executed a letter in token thereof on 02.06.1980 for the receipt of the money, on behalf of the said partnership and that as the debt has been borrowed on behalf of the partnership, both the Defendants are liable to pay the suit debt. 14. According to the Plaintiff, the Defendants have paid interest at 15% till 16.03.1982 and further, till 16.03.1982, the Defendants paid interest at 15% from 17.03.1982, and agreed to pay at 18% and paid Rs.75/-on 16.04.1982 towards one month interest at 18% and subsequently, they have not paid the amount and therefore, the Plaintiff has claimed interest at 18% from 17.04.1982 till date and the borrowing of the defendants has been entered into the trade account, ledger and day book and hence, the Plaintiff (later deceased) has filed the suit against the Defendants for recovery of a sum of Rs.6,025 and costs of the suit and subsequent interest at 6% per annum from the date of suit till the date of realisation. 15. In the Written Statement of the First Defendant (father of the Appellant), it is stated that the Second Defendant is not a partner of the firm from 01.06.1982 and further, the Second Defendant with a view cause loss and deceive has made criticise entries in the account books and not cared for the business. Therefore, a dispute has arisen between the First Defendant and the Second Defendant and the matter has been referred to Arbitrators. Therefore, a dispute has arisen between the First Defendant and the Second Defendant and the matter has been referred to Arbitrators. The Arbitrators, considering the plea of the Second Defendant, who claimed that he has borrowed the loan from the Plaintiff to an extent of Rs.5,000/- and from one Palani, Akkoor village a sum of Rs.5,000/-and from one Dharmadurai, a sum of Rs.5,000/- and from Sivakumar, a sum of Rs.5,000/-and in interest of all the claims made by the Second Defendant, directed the First Defendant to pay a consolidated amount of Rs.50,000/- to him and accordingly, passed the award dated 01.06.1982. 16. Moreover, O.P.No.23 of 1982 has been filed, on the file of Sub Court, Kancheepuram, by the First Defendant (later deceased) and a sum of Rs.50,000/-has been deposited into Court and the Sub Court made the award as rule of the Court. The Second Defendant has also withdrawn the said amount of Rs.50,000/- from the Court. The Second Defendant issued a notice on 22.11.1982, claiming a sum of Rs.50,000/-belonging to him. Apart from other sums mentioned above, a suitable reply on 04.12.1983, has been issued by the First Defendant. The present suit has been filed only on the instigation of the Second Defendant and in collision of the Second Defendant to harass the First Defendant. There is no privity of contract between the main Plaintiff and the First Defendant. 17. The First Defendant never borrowed any amount, much less a sum of Rs.5,000/-from the Plaintiff (later deceased). Letter dated 02.06.1980, is a criticise documentcreated by the Second Defendant and along with the Plaintiff to defraud the First Defendant. The alleged debt has never been borrowed for the benefits of the partnership. The First Defendant is not liable to pay any sum to the Plaintiff, nor to the Second Defendant. The alleged letter dated 02.06.1980, is not binding on the First Defendant, and the same is not admissible in evidence. The suit is also barred by limitation. Therefore, the First Defendant has prayed for the dismissal of the suit against him with exemplary costs of Rs.100 as per 35(a) of CPC. 18. The Second Defendant, in his written statement, has, inter alia, averred that the suit filed by the Plaintiff, relates to a loan obtained for the partnership business namely "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons". 18. The Second Defendant, in his written statement, has, inter alia, averred that the suit filed by the Plaintiff, relates to a loan obtained for the partnership business namely "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons". The suit loan amount has been entered into in the business account of the partnership firm. In O.P.No. 23 of 1982, a Panchayat Resolution has been passed in regard to the amount to be received by the Second Defendant, and a sum of Rs.50,000/-has been arrived at as a full and final settlement. As per Panchayat Resolution, the First Defendant is liable to pay the suit balance amount. The Second Defendant is not liable to pay any amount. 19. If a suit is filed in the name of Firm, it is still a suit by all the partners of the Firm, unless it is proved that all the partners have not filed the suit. 20. A Firm may not be a legal entity like that of a Corporation or Company (incorporated under the Companies Act, 1956), but it is still an existing concern where business is transacted by a number of individuals in partnership. 21. The payment to the Firm of a private debt due to one partner is not a discharge, unless it is established that the Firm has in fact an authority to receive it. It is well settled principle of law that the Act of the partner of the firm can very well be construed as an act for and on behalf of all the partners if the situation so warrants to arrive at such a conclusion. 22. It is the evidence of PW1 (later deceased) that the defendants have been doing partnership business under " Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" and to the defendants on 02.06.1980, he has paid a sum of Rs.50,000/- and the defendants paid interest at 15% till 16.03.1982 and from 17.03.1982, they have paid interest at 18% per annum and the defendants are paying income-tax and commercial tax and the Plaintiff is entitled to get the suit amount as per plaint. 23. Ex.A1 is the receipt given by the Second Defendant (partner of the "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" dated 02.06.1980 to and in favour of the Plaintiff (Durairaj since deceased) for Rs.5,000/-. 23. Ex.A1 is the receipt given by the Second Defendant (partner of the "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" dated 02.06.1980 to and in favour of the Plaintiff (Durairaj since deceased) for Rs.5,000/-. A perusal of recitals in Ex.A1 receipt, dated 02.06.1980, shows that the Second Defendant as partner of "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons", for its business has received a sum of Rs.5,000/-in cash, from the Plaintiff (later deceased) and categorically in Ex.A1 receipt dated 02.06.1980, it is mentioned by the Second Defendant (partner of the firm) that the amount of Rs.5,000/- is received for the purpose of their business. Ex.A2 is the memo of the defendants partnership textile shop dated 08.04.1982, which refers to the Plaintiff (later deceased), wherein there is an entry of 12.12.1980 for a sum of Rs.5,000/-being received, and also there is a reference as to the interest of Rs.752.08 and after mentioning a sum of Rs.687.50 paisa, there is an indication in Ex.A2 memo that there remain Rs.64.58 paisa. Ex.A3 is the notice dated 23.05.1983, issued by the Plaintiff (later deceased) and addressed to the defendants 1 and 2, in and by which it is clearly mentioned that on 02.06.1980, the defendants for their business have received a sum of Rs.5,000/- as per Ex.A1 letter. In spite of the fact, the said amount has not been repaid and further, for the aforesaid sum of Rs.5,000/-, for Rs.100 per month interest of Rs.1.50 has been paid by them till 16.04.1982. Thereafter, the interest amount has not been paid. On numerous occasion the principal and the balance interest amount have been demanded by the Plaintiff from the defendants, but in spite of personal demands, the said sum has not been settled and therefore, on receipt of the notice, the principal and balance amount are directed to be paid, failing which, action through Courts below will be initiated. Ex.A4 is the receipt for Ex.A3 notice, being sent to both the defendants. Ex.A5 reply lawyers notice dated 15.06.1983, was issued on behalf of First Defendant and addressed to the Plaintiff (later deceased). Ex.A4 is the receipt for Ex.A3 notice, being sent to both the defendants. Ex.A5 reply lawyers notice dated 15.06.1983, was issued on behalf of First Defendant and addressed to the Plaintiff (later deceased). In the said notice, it is mentioned that the Plaintiff is an obliging friend of the First Defendants son, namely the Second Defendant, who has quarrelled with the First Defendant and left the shop after taking number of account book, etc., and further, the First Defendant suspected that after making criticise entry in the account books and at the instance of the Second Defendant, the Plaintiff has issued Ex.A3 notice. 24. That apart, in Ex.A5 Reply Lawyers Notice dated 15.06.1983 it is also made mention that Second Defendant has issued a notice on 22.11.1982 claiming that the suit amount of Rs.5,000/- belonged to him, for which the First Defendant has replied on 14.12.1982. Moreover, there has been a Panchayat and the Second Defendant agreed to receive Rs.50,000/- for full quit of all his claims and after agreeing for the same, the Second Defendant has gone back on the agreement, for which O.P.No. 23 of 1982 has been filed before the Sub Court, Kancheepuram by the First Defendant, and the same has been decreed in favour of the First Defendant. 25. It is not out of place for this Court to make a significant mention that in Ex.A5 reply notice of the First Defendant, dated 15.06.1983, addressed to the Plaintiff. The First Defendants lawyers have cleared mentioned that First Defendant has not received any amount from the Plaintiff either for himself or for the firm and even if any amount has been given by the Plaintiff to the Second Defendant, the First Defendant is not liable for the same. 26. It is to be noted that under the Indian Partnership Act, one partner is an agent of the other partner and he or she has express or implied authority to do certain acts for and on behalf of the firm, representing the other partners. After all a partnership is nothing but a compendium of individuals who have entered into an agreement to do one or other kind of business transaction. 27. After all a partnership is nothing but a compendium of individuals who have entered into an agreement to do one or other kind of business transaction. 27. As far as the present case is concerned, it transpires from Ex.A1 receipt, dated 02.06.1980, that the same has been executed by the Second Defendant, partner of the textile firm " Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" to and in favour of the Plaintiff for a sum of Rs.5,000/-. Further, the recitals of Ex.A1 receipt, unerringly pointed out that for the purpose of the textile firm business. The Second Defendant has borrowed a sum of Rs.5,000/- in cash from the Plaintiff. Although, a plea was taken on behalf of the Appellant (Legal Representative of the First Defendant) that the alleged receipt of Rs.5,000/-under Ex.A1 receipt, dated 02.06.1980, is not made for and on behalf of firm or for its business and only the Second Defendant being the son of the First Defendant, has received a sum of Rs.5,000/-under Ex.A1 receipt, which will not bind the First Defendant, inasmuch as the Second Defendant has received the sum of Rs.5,000/- under Ex.A1 not for and on behalf of Textile firm namely "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons", another plea was also taken in the written statement of the First Defendant, to the effect that there is no privity of contract between the Plaintiff and the First Defendant. It is to be pointed out that as seen from Ex.A1 receipt dated 02.06.1980, the Second Defendant in clear terms, has received a sum of Rs.5,000/- from the Plaintiff for the purpose of the Textile firm "Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons" and it cannot be said that he has obtained the said amount of Rs.5,000/- from the Plaintiff for his personal need or otherwise and to put it differently, a reading of the recitals in Ex.A1 dated 02.06.1980, goes to show that the Second Defendant as partner of the firm " Sri Lakshmi Vilas A. Periathambi Mudaliar and Sons", has received a sum of Rs.5,000/-for and on behalf of the textile firm, and therefore, the said amount of Rs.5,000/-is to be repaid as per claim made by the Plaintiff in the plaint. It may not be again stated that due to certain difference between the First Defendant and Second Defendant, O.P.No. 23 of 1982 has been filed before Sub Court, Kancheepuram and an award has been passed by the said Court and by the tenor of the award, the Second Defendant has received a sum of Rs.50,000/-and left the partnership Textile business. Only the Appellants father (First Defendant) is liable to pay the suit amount to the respondent /Plaintiff in the considered opinion of this Court. From Ex.A2 endorsement, made in memo by the Plaintiff, it is seen that some amounts have been given credit towards the interest and also there is an indication that balance amount of Rs.64.58 remained to be paid. Significantly, there is a reference in payment of interest, namely a sum of Rs.752.08,representing the interest factor. From Ex.A2, it is candidly clear that for a sum of Rs.5,000/-, under Ex.A1 receipt, by the Second Defendant for and on behalf of the firm, the interest amount has been paid only towards the amount of Rs.5,000/- specified in Ex.A1 Receipt. 28. Coming to the plea that the suit is barred by limitation, it is to be pointed out that Ex.A1-Receipt, is dated 02.06.1980, and that before the trial Court, the suit has been filed on 06.06.1983 and the plaint has been returned for compliance of certain defects by the office of the District Munsif, Kancheepuram and even on 13.06.1983, some defects have been pointed out, and plaint has been returned, and finally, the same has been re-presented on 23.06.1983. The plaint filed by the Plaintiff, has been taken on file by the trial Court and numbered as O.S.No. 397 of 1983 on 27.06.1983, and notice of hearing has been mentioned as 5.8.1983. The Court, after summer recess, has reopened only on 06.06.1983. The trial Court has been closed for summer recess on 2.6.1983. Since the plaint before the trial Court, has been presented on 6.6.1983, after reopening of the Court, the suit filed by the Plaintiff, as per section 4 of the Limitation Act, is perfectly in time and the same is validly instituted in the eye of law, as opined by this Court. 29. In regard to the plea that as against the firm alone, the suit ought to have been filed by the Plaintiff and not against the defendants in their individual capacity. 29. In regard to the plea that as against the firm alone, the suit ought to have been filed by the Plaintiff and not against the defendants in their individual capacity. It is to be pointed out that the Second Defendant has left the partnership business on 06.01.1982, after receiving a sum of Rs.50,000/-in full quit, as evidenced by the award passed in O.P.No.23 of 1982. The partnership business has been dissolved by the First Defendant and from 01.06.1982, the Appellants father, First Defendant (later deceased) has been conducting the textile business. Therefore, since the Second Defendant has already left the partnership business and subsequently, the partnership business has been dissolved and only the First Defendant has continued the business in his individual capacity notwithstanding the fact that the sum of Rs.5,000/-as per Ex.A1 receipt, has been received by the erstwhile Second Defendant for and on behalf of the partnership business, this Court comes to an irresistible conclusion that the First Defendant (Appellants father, since deceased) is liable to pay the suit amount and after his death the appellant herein ( son of deceased First Defendant) is liable to pay the suit amount to the plaintiff (since deceased) and later to the heirs of the plaintiff namely the respondents in Second Appeal and accordingly, both the trial Court and the First Appellate Court have correctly rendered its findings in favour of the Plaintiff and decreed the suit and rightly dismissed the First Appeal, which do not require any interference in the hands of this Court. Also, this Court holds that even though the Appellant (Legal Representative of the First Defendant) has not signed in Ex.A1- Receipt dated 02.06.1980 and Ex.A2 yet the Appellant is liable to pay the suit amount as Legal Representative of the First Defendant and as such both the Courts have rightly relied upon Ex.A1 and A2 though it has not been signed by the Appellant. Accordingly, the substantial question of law is answered against the Appellant. 30. In the result, the appeal is dismissed, leaving the parties to bear their own costs.