Patna High Court
Chairman Lal And Anr. vs Firm New India Traders Mica Merchants ... on 28 July, 1961
Equivalent citations: AIR1962PAT25, AIR 1962 PATNA 25
JUDGMENT Ramratna Singh, J.
1. This appeal arises out of a suit for realisation of Rs. 11,396/2/6 as the price of the mica supplied to Mahabir and Company, defendants No. 3, a private unregistered firm, besides interest and some miscellaneous expenditure. The principal plaintiff is a registered firm known as New India Traders of Jhumriteleiya near Koderma, and Mahabir and Company is situated at Giridih. The plaintiffs 1 and 2 are described as managing partners of New India Traders. The suit was instituted on the 2nd April, 1954 and defendants 4 to 6, who are also partners of the plaintiff firm, were impleaded as pro forma defendants on account of a petition for amendment of the plaint filed on the 12th May, 1955, in view of the defence that they were necessary parties to the suit. Defendants 1 and 2 are connected with Mahabir and Company because, Chiman Lal, (defendant No. 2) is the father of Mahabir Prasad Agarwala, (defendant No. 1) by whose name the firm Mahabir and Company is known. Defendant No. 2, Chiman Lal, filed a written statement on the 4th November, 1954 and Shib Shankar Agarwala filed another written statement on the 14th February, 1955, as the sole proprietor of Mahabir and Company. On the allegations contained in these written statements that there is no person of the name of Mahabir Prasad Agarwala and that Shib Shankar Agarwala, one of the sons of Chiman Lal (defendant No. 2), is the sole proprietor of Mahabir and Company, an amendment was made by the aforesaid petition that Mahabir Prasad was also known as Shib Shanker. These two defendants only contested the claim of the plaintiffs.
2. Admittedly the plaintiff firm supplied some quantities of mica to Mahabir and Company on the 15th March, 1951 under pass Nos. 3270/50 and 3171/1 and again on the 3rd April, 1951 under pass No. 2371/52. These passes were required for movement of mica from one place to another under the Bihar Mica Act, 1947, Mahabir and Company paid to the plaintiff firm a sum of Rs. 4,000 by a cheque dated the 16th March, 1951 and another sum of Rs. 1,500 by another cheque dated the 13th March, 1951.
3. The case of the plaintiffs is that the said quantities of mica were sold to Mahabir and Company and the amount paid through the two cheques was the price of the mica supplied on the 15th March, 1951. But Mahabir and Company had not paid the price of the mica supplied on the 3rd April, 1951; and the suit has been instituted for recovery of the same. On the other hand, the common defence of the defendants is that mica was supplied on both the occasions to Mahabir and Company as a pledge against the amounts advanced under the two cheques, and the plaintiff firm stocked the mica in the godown of Mahabir and Company at Giridih for selling the same as and when buyers would be available. But as the mica was of poor quality no buyer came and the stock of the mica supplied by the plaintiff firm is still lying intact" in the godown of Mahabir and Company. It is also asserted that the suit was not properly framed and the claim was barred by limitation.
4. The learned Subordinate Judge accepted the case of the plaintiff firm and found that the suit was maintainable and claim of the plaintiffs was not barred by Limitation. He accepted the price of the mica claimed by the plaintiffs, but disallowed the claim regarding interest and miscellaneous expenditure. Hence, the appeal by the defendants.
5-14. The most important question to be considered is whether the mica was sold to Mahabir and Company or whether it was pledged with them. (His Lordship after considering the documentary and oral evidence came to the conclusion that the transactions were sales and not a pledge and that the second consignments of mica was sold to Mahabir and Company for Rs. 11,396/2/6 only, as alleged by the plaintiffs.)
15. Then, Mr. Mukherji raised some legal questions. He referred to Section 45 of the Indian Contract Act under which all joint promises have to join in a suit on the basis of a contract. But he conceded that this provision would not affect a suit instituted under Order 30, Rule 1, of the Code of Civil Procedure which lays down that two or more partners carrying on business may sue or be sued in the name of the firm of which they are partners. The first plaintiff in the present suit is "Firm New India Traders, Mica Merchants, a registered firm through its managing partners" and the names of the managing partners are (1) Chand Mull and (2) Kanhaiya Lal Sarda. Mr. Mukherji conceded that the words "through its managing partners should be treated as redundant when the suit was instituted in the name of the registered firm. He also conceded that the names of the managing partners after the name of the firm as plaintiffs are also redundant in a suit instituted in the name of a firm. But he contended that the legal position has changed in the present case in view of the fact that three persons have been added pro forma defendants.
In the plaint it is stated that Chand Mull and Kanhaiya Lal Sarda who are in the category of the plaintiffs and the three pro forma defendants were all partners of this firm. The contesting defendants took objection that all the partners were necessary parties to the suit and the three pro forma defendants were then impleaded as plaintiffs. Mr. Mukherji argued that by impleading the three pro-forma defendants, the plaintiffs impliedly said that the plaintiff firm did not represent the newly added parties. But if the names of Chand Mull and Kanhaiya Lal Sarda in the category of the plaintiffs are superfluous when the plaintiff is a firm, the addition of some partners as pro forma defendants is also redundant: and therefore, this argument of Mr. Mukherji must fail.
16. The next point urged by Mr. Mukherji was that the firm was not properly registered. Exhibit 12 is the registration certificate of the firm and it shows that the firm was registered on the 10th April, 1948 with two partners, namely, Chand Mull and Satyanarain Sarda only. According to the plaint, there are three other partners besides Chand Mull and Satyanarain Sarda. It is obvious that these new partners became partners of the firm subsequent to the registration of the firm and they did not care to get their names entered subsequently in the registrations certificate as partners. But, there is nothing in the Partnership Act to indicate that in such a contingency the suit shall fail. Section 69(2) of the Act lays down that no suit to enforce a right arising from a contract shall be instituted by or on behalf of 3 firm against any third party, unless the firm is registered and the persons suing are or have been shown in the Register of firms as partners. This has, however, to be read with Order 30, Rule 1, of the Code of Civil Procedure. These provisions read together apparently, mean that when a suit is instituted in the name of a registered firm, only those persons who are registered as partners of the firm can get the benefit of a decree in favour of the firm or shall be liable for a decree against the firm. Subject to these conditions, the suit is maintainable, and for purposes of this suit only Chand Mull and Satya Narain Sarda, who are registered in the registration certificate shall be deemed to be partners of the plaintiff firm.
17. It is true that the pro forma defendants were impleaded after the period of limitation was over, but no question of Limitation arises in view of the fact that the suit is by a registered firm and the names of the partners are redundant.
18. The last legal point urged by Mr. Mukherji was that the suit is barred by limitation on account of the fact that the real proprietor, Shib Shanker Agarwala was not impleaded as defendant in the plaint originally. The suit was originally instituted against Mahabir Prasad Agarwala and Chiman Lal, the third defendant being Mahabir and Company, a trade name, and not a registered firm. The dealers licence of Mahabir and Company dated the 22nd April, 1946 shows that S. S. Agarwala is the sole proprietor and Chaiman Lal Agarwala is an agent. The learned Subordinate Judge found that Mahabir and Company was a business of the joint family of Chaiman Agarwala and his three sons including Shib Shanker Agarwala.
In Paragraph 2 of the plaint it is said that defendants 1 and 2, that is, Mahabir Prasad Agarwala and Chiman Lal Agarwala were members of a joint family carrying on business under the name and style of Mahabir and Company. It appears that Shib Shanker Agarwala was about 18-19 years old when this business was started and admittedly, he never looked after this business. Chiman Lal has said that he has been looking after all the affairs of Mahabir and Company and writes even the account books. The more fact that his name was entered in the mica dealers licence as an agent and the name of Shib Shanker was entered as the sole proprietor, could not in the circumstances, make this business solely the business of Shib Shankar. The learned Subordinate Judge has, therefore, rightly held that Mahabir and Company belongs to the joint family consisting of Chiman Lal and his three sons with Chiman Lal as Karta.
But, as Chiman Lal had not been sued as karta of the joint family, any decree in this suit cannot bind those members who are not parties to it. Regarding the question whether Shib Shankar is also known as Mahabir Prasad, each party adduced oral evidence in support of its respective case. But in view of the admission in the written statements as also in the evidence of Chiman Lal, that Chand Mull was known to Chiman Lal for a long time and used to go frequently to Giridiah, it is improbable that Chand. Mull would not know the correct name of Shib Shanker Agarwala. Hence, the case of the plaintiffs that Mahabir and Company is named after Mahabir, one of the sons of Chiman Lal and this Mahabir is also known as Shib Shanker Agarwala must be accepted. It is true that the name of Shib Shanker was added to the plaint after the objection of the contesting defendants in the written statements but that does not amount to an admission of the plaintiffs that Shib Shanker was a different person from Mahabir. In view of the aforesaid finding that Mahabir and Shib Shanker are two names of the same person, the plea of limitation on account of addition of the name, Shib Shanker after the period of limitation fails.
19. In the result, the case of the plaintiff firm that they sold the mica worth Rs. 11,396/2/6 in April, 1951 to Mahabir and Company is accepted and the plea of the defendants appellants to the contrary must fail. But the decree shall be passed in favour of the firm and the advantage thereof will go only to the partners named in the registration certificate and the decree shall have no effect against the two sons of Chiman Lal who are not parties to the suit. Subject to this observation, the appeal is dismissed with cost.
Kanhaiya Singh, J.
20. I agree.