Calcutta High Court
Indofil Industries Ltd vs M/S. Kaycee Chemicals on 29 August, 2018
Author: Soumen Sen
Bench: Soumen Sen
OD-79
ORDER SHEET
GA 2198 OF 2018
WITH
EC 16 OF 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
INDOFIL INDUSTRIES LTD.
Versus
M/S. KAYCEE CHEMICALS
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 29th August, 2018.
Appearance:
Mr. Jishnu Chowdhury, Adv.
Mrs. Bani Ghosh, Adv.
...for the Judgement debtor The Court : This application has been taken out by one Mr. Giridhari Lal Singvi praying, inter alia, for a declaration that the decree dated 9th June, 2015 is inexecutable and void. This application has been filed after the applicant has filed an affidavit of assets in terms of the order dated 4th May, 2017. Mr.Singvi was also present for examination on 6th July, 2018. Mr.Singvi, after accepting an order dated 4th May, 2017, has ingenuously crafted this petition to defeat the claim of the decree-holder as by this time it has become eminently clear to the applicant that dye is cast and bolt impending. The frivolity of the application would be evident from the facts mentioned hereinafter.2
The plaintiff filed the suit against the defendant for recovery of price of goods sold and delivered to the defendant. The plaintiff contended that between December 13, 2009 and July 13, 2010, the defendant made part payments to the plaintiffs by account payee cheques aggregating a sum of Rs. 2,94,300/- and thereafter, few payments leaving a sum of Rs.9,81,692.05 as the principal sum due as on 30th September, 2012. The suit was instituted on 4th December, 2012. During scrutiny of the plaint certain defects were noticed and by the time the defects were removed the time for issuance of writ of summons had expired. In fact, the time for issuance of writ of summons expired on 14th December, 2012. The plaintiff accordingly filed an application being GA No.85 of 2013 praying, inter alia, for extension of time to lodge the writ of summons with the office of the Sheriff. The said prayer was allowed on 11th January, 2013. Thereafter, the writ of summons appears to have been sent to Mr. Nitin Singvi on 18th January, 2013 as sole proprietor of the judgment-debtor as the plaintiff seems to be unaware of the fact that in the meantime the character of the judgment-debtor has been changed from proprietorship to partnership. However, curiously the writ of summons was received on behalf of the judgment-debtor by one Mr. Subhas Mukherjee. The covering letter by which the writ of summons was sent was addressed to Nitin Singvi as proprietor of the defendant and/or person in management of the defendant concern i.e. M/s. Kaycee Chemicals. While the writ of summons sent by speed post was returned undelivered with the postal remark 'addressee left', the report filed by the office of the Sheriff shows that Mr. 3 Subhas Mukherjee has received a copy of the notice on behalf of the defendant on 4th February, 2013 at 3:45 PM. Mr. Mukherjee after putting his signature has put a rubber stamp which reads:
"For KAYCEE CHEMICALS Proprietor"
However, the word 'proprietor' appears to have been scored through by Mr. Mukherjee. The entire thing was witnessed by one Mantu Charan Manna.
Thereafter, on 16th April, 2013 Sri Nitin Singvi filed an application as the partner of the defendant for extension of time to file written statement on behalf of the defendant. Mr. Singvi in the application has acknowledged that the defendant has received the writ of summons on 4th February, 2013 and was supposed to file a written statement by 9th March, 2013. In the application, however, he has not disclosed the deed of partnership or the names of other partners. The said Mr. Nitin Singvi entered appearance in the suit through M/s. Sinha & Co. The said application being GA No.1169 of 2013 was disposed of by extending the time to file written statement within four weeks from 9th June, 2015. The defendant in the meantime had appeared in the application for summary judgment. By an order dated 16th June, 2013, directions were given for filing affidavits. The defendant, however, did not file any affidavit. Thereafter the application was taken up for consideration and was allowed.
In the instant application Girdhari Lal Singvi has alleged that the partnership firm was formed and constituted on 1st April, 2012 and by a deed 4 of dissolution dated 22nd July, 2014 the said firm was dissolved. In this application, the deed of dissolution of partnership which according to the plaintiff was to take effect from 1st April, 2014 was disclosed. The applicant however, conveniently did not disclose the deed of partnership dated 1st April, 2012 alleged to have been entered into between Nitin and the applicant. In this application, it is alleged that the applicant is not liable for the decretal debt as the decree was passed on the basis of a transaction which was prior to 2012 when the applicant was not a partner. It is only on and from 2014 and pursuant to the deed of dissolution, applicant is carrying on business under the name and style of the defendant. The applicant did not carry any business under the name and style of M/s. Keycee Chemicals prior to 2014. It was on such basis an application under Section 47 of the Code of Civil Procedure has been filed.
Mr. Jishnu Chowdhury learned Counsel representing the applicant submits that the decree holder having not followed the procedure prescribed under Order 30 of the Code of Civil Procedure for effecting service of notice upon the partners of the defendant firm could not have executed the said decree against the applicant. The decree is void as against the applicant and not enforceable.
Order 30 of the Code of Civil Procedure deals with suits by or against firms and persons carrying on business in names other than their own.
One mode of service authorities by the rule is service upon anyone or more of the partners. It would be good service if the summons is served on the 5 partner at the principal place of business of the firm. It is good service upon the firm as well as upon that a partner personally. If the service effected in the second mode prescribed by the rule that is upon a Manager at the place of partnership business and the manager is not a partnership, the service is good service upon the firm but it may not be a service upon any member of the firm so as to make such member a person who has been individually served as a partner within the meaning of Order 21 Rule 50 sub-Rule 1(c) of the Code of Civil Procedure. Where a decree against a firm is sought to be executed against a partner who disputes its liability on the ground of failure of impleading him in the suit, such a person may raise an objection under Order 21 Rule 50 of the Code of Civil Procedure. It is well-settled that if the summons is directed against the firm and served on a person on the ground either that he is a partner or person in control or management of the business of the firm or in both the capacity, the summons is not effecting on him as a person in control or management of the business if notice to that effect is not served on him under Order 30 Rule 5 of the Code of Civil Procedure.
In Topanmal V. Kundomal Gangaram, the Supreme Court has, on an examination of Order 21, Rule 50 (1), and Order 30, Rule 3 summed up the law on this subject as follows:
"the gist of the said provisions may be stated thus: A decree against a firm can be executed (i) against the property of the partnership, (ii) against any person who has appeared in the suit individually in his own name and has been served with a notice 6 under Rules 6 or 7 of Order 30 of CPC (iii) against a person who had admitted on the pleadings that he is or has been adjudged a partner or (iv) against any person who has been served with notice individually as a partner but has failed to appear. The decree against the firm can be executed against the personal property of such persons."
The applicant disputes its liability on the ground that the transaction relates to a period prior to the constitution of the partnership firm. The plaintiff has proceeded on the basis that the defendant is a proprietorship concerned of Nitin Singvi and/or that Mr. Singvi is the person in control and management of the said firm and notice accordingly was served upon him which Nitin has also acknowledged. Now it is being alleged by the applicant that a partnership firm was constituted on 1st April, 2012 of which he and Nitin were the partners. The applicant, however, did not disclose any such partnership deed. Nitin also in his application did not disclose the partnership deed nor the particulars of the partners.
In absence of the disclosure of such partnership deed it has to be presumed that the partnership firm if at all constituted as claimed has taken over the liability of the proprietorship firm and accordingly the partners are jointly and severally liable to discharge the debt. If the parties have deliberately withhold information from the Court as to its real character after suffering an order, one of the parties cannot come forward and deny its liability. The deed of partnership of 1st April, 2012 accordingly has become 7 relevant which, however has been conveniently not disclosed. Moreover, it is difficult to accept at this stage that the applicant was unaware of the pending suit. The applicant at this stage also cannot deny that the firm was served with the writ of summons and an application was filed by Nitin Singvi for extension of time to file written statement on behalf of the firm. The Authority of Nitin to represent Giridhari on the partnership principle binds Giridhari as well. Mr. Nitin Singvi has also filed an affidavit of competency in the capacity as partner of the defendant appointing M/s. Sinha & Co. as the Advocate on Record for the defendant. The materials on record clearly show that Giridhari was fully aware of the pending proceeding and at this stage cannot deny his liability. Both Nitin and Girdhari have filed their respective affidavits of assets.
The application, accordingly, stands dismissed with costs assessed at Rs.5000/- to Ramkrishna Sarada Mission Matri Bhawan, SBI, Southern Avenue Branch, Kolkata, Account No.34536990323, IFSC Code:SBIIN0001505.
(SOUMEN SEN, J.) S.Bag/S.Kumar