Delhi District Court
Sh. V. K. Paliwal vs M/S. Dhaneshwar Gupta & Sons on 21 August, 2010
1/21
IN THE COURT OF SH. PRASHANT KUMAR CCJ/ARC ROHINI COURTS
DELHI
SUIT No. :- 413/09
1.Sh. V. K. Paliwal S/o. Late Sh. B.S. Paliwal R/o. BE- 196, Street No. 2, Hari Nagar, New Delhi - 110064 (PLAINTIFF) Versus
1. M/s. Dhaneshwar Gupta & Sons [Through its Managing Partner - Shashi Bhushan Gupta (HUF)] D - 438, New Subzi Mandi, Azadpur, Delhi - 110 033.
2. Mr. Shashi Bhushan Gupta (HUF) [Through its Karta Mr. Shashi Bhushan Gupta] D - 438, New Subzi Mandi, Azadpur, Delhi - 110 033.
Also at:-
D - 113, 2nd Floor, Mahindru Enclave, Delhi - 110 009.
3. Mr. Dhaneshwar Gupta, D - 438, New Subzi Mandi, Azadpur, Delhi - 110 033.
4. Mr. Praveen Kumar Gupta S/o. Sh. Dhaneshwar Gupta D - 438, New Subzi Mandi, Azadpur, Delhi - 110 033. (DEFENDANTS) SUIT No.: 413/09 2/21 Date of institution of the Petition : 04.04.2009 Date on which order was reserved : 05.08.2010 Date of decision : 21.08.2010 FINAL JUDGMENT
1. By way of this Order I shall pronounce Final Judgment.
The facts of the case filed by the plaintiff in brief are as under that:-
Defendant no. 1 is a partnership firm in which defendant no.
2 is the Managing partner and the defendant no. 3 & 4 are other partners therein. Defendants were reportedly in dire need of funds, therefore, defendant no. 1 through defendant no. 2, Sh. Shashi Bhushan Gupta, approached with the plaintiff with the mediation of a common friend, Sat Narain, R/o. E - 4/8A, Model Town, Delhi - 110 009 in December, 2005. The defendant requested the plaintiff for a short term loan of Rs. 80,000/- and further promised to repay the same within the four months alongwith the interest. Plaintiff believing upon the defendant, lent them Rs. 80,000/- on 23.12.2005. Defendant undertook to repay the said friendly loan on 22.04.2006. Defendants through defendant no. 1 in acknowledgment of the debt, executed a receipt dt. 23.12.2005 and defendant no. 2 on behalf of the defendants also executed a promissory note dt. 23.12.2005 promising the plaintiff to repay the said loan amount of Rs. 80,000/- on 22.04.2006 or on demand alongwith due interest. The fixed date of repayment of said loan was also specifically mentioned as 22.04.2006 on the overleaf of the promissory note by defendant no. 2. Plaintiff asked the defendant to returned the said loan amount, however, defendants have not repaid the same on one pretext or another. Thus, plaintiff served a legal notice dt. 04.08.2008 against defendants. In their reply to legal notice, defendant no. 2 has stated that a loan of Rs. 80,000/- was returned to SUIT No.: 413/09 3/21 the plaintiff on due date of 22.04.2006 with interest. This fact is not correct. Plaintiff sent a legal notice dt. 02.09.2008 in rejoinder to the defendant's aforesaid reply vide which he denied all the controvertible averments of the defendant and again demanded his money back. Defendants have not repaid any amount. Hence, this suit.
2. In his WS, defendant no. 2 has stated that suit filed by the plaintiff is barred by law of limitation. The suit is filed against the partnership firm i.e., defendant no. 1, which has already dissolved. It is further stated by the defendant no. 2 that payment of amount has already been made through common friend/ money lender, Sat Narain. It is further stated by defendant no. 2 that defendant no 3 & 4 are other partners of defendant no. 1. the payment of the loan taken on behalf of defendant no. 1 has already been repaid. Defendant no. 2 has accepted that the legal notice has been received by them as reply has been given by him vide letter dt. 18.08.2008.
3. In their WS, defendant no. 1, 3 & 4 have stated that suit filed by the plaintiff is barred by the law of limitation. It is further alleged on behalf of defendant no. 3 & 4 that defendant no. 2 has cheated upon them by borrowing money for his personal need on behalf of firm. Defendants were in the dire needs of funds. Loan of Rs. 80,000/- has been taken by defendant no. 1. Defendant no. 2 never promised to repay the loan amount alongwith the interest. Defendant no. 1, 3 & 4 have never made any promise to indemnify the plaintiff.
4. Following issues have been framed on 23.07.2009.
i.) Whether the suit is barred by limitation? OPD.
ii.)Whether the suit of plaintiff is bad in the eyes of law as the defendant firm was unregistered partnership firm?
SUIT No.: 413/09 4/21 OPD.
iii.)Whether the plaintiff is entitled for recovery of Rs. 1,76,400? OPP.
iv.)Any other relief?
One additional issue has been framed on 24.09.2009.
Whether there is no privity of contract in between the defendant no. 1,3 & 4 and the plaintiff? OPD. (Onus on defendant no. 1, 3 & 4.)
5. It is important to mention here that the issue pertaining to the suit filed by the plaintiff is bad due to unregistered partnership firm has already been decided in favour of the plaintiff. Thus, no need to give any opinion afresh on this issue. It is further important to mention here that issue pertaining to the limitation was considered on 24.09.2009 at length and it was observed that this issue is mix question of fact and law, therefore, this issue is dealt alongwith other issues in the following paras.
6. It is important to mention here that plaintiff has examined two witnesses in his evidence and defendant no. 2 who is represented by a separate counsel has examined only one witness, Shashi Bhushan Gupta and defendant no. 1, 3 & 4 are being represented through separate counsel has examined only one witness in his evidence.
7. My issue wise findings are as under:-
Issue Number 1 :-Whether there is no privity of contract in between the defendant no. 1,3 & 4 and the plaintiff? OPD. (Onus on defendant no. 1, 3 & 4.) Defendant no. 1, 3 & 4 have taken objection in their WS that SUIT No.: 413/09 5/21 there has been no privity of contract between the plaintiff and defendant no. 1, 3 & 4 alleging that defendant no. 2 has played fraud upon defendant no. 1 and its partners as he has not taken any loan on behalf of defendant no. 1, 3 & 4. It is further alleged by the defendant no. 1, 3 & 4 that they have not ratified the act of defendant no. 2.
8. Arguments on this issued heard at length. Record perused throughly. Perusal of the record reflects that it is admitted by both the parties that partnership is at Will. In this regard the deed of partnership is perused. Para no. 15 of the deed is important to mention here, which is as under:-
"That in the case of death of or termination of interest of any partner, the partnership shall be carried on with the surviving partner and the legal heir of the deceased partner can be taken in partnership if so decided by the surviving partner."
9. After the careful perusal of para no. 15 of partnership deed Ex. D4W1/P1, it is reflected that the partnership firm, defendant no. 1 shall continued to exist even in case of death or in case of termination of any partner which in other words reflects that partnership is at Will. It is important to refer Section 7 of Indian Partnership Act, which reads as under: -
"Partnership at Will - Where no provision is made by contract between the partners for the duration of their partnership , or for the determination of their partnership, the partnership is 'Partnership at Will'".
It is mentioned in the Section 7 of the Act that when the duration of the partnership is not mentioned then, partnership among them is considered at Will. Similar are the facts and circumstances here in this case. As per para no. 15 of the Partnership Deed, the duration of the partnership is not mentioned and it is further reflected that partnership shall continue to exist even in SUIT No.: 413/09 6/21 case of death or termination of interest of any partners.
Thus, in the light of the above mentioned reasonings, I am of the opinion that the partnership in between the defendants is partnership at Will.
10. Chapter 4 of the Indian Partnership Act deals with the provision relating to the relation with third party. Section 18 of Chapter 4 under the scheme of the Act states that partner is the agent of the firm. Section 18 of the Act reads as under:
"Partner to be agent of the firm - Subject to the provisions of this Act, a partner is the agent of the firm for the purpose of the business of the firm."
11. Section 25, 26 & 27 are also important to mention here which reads as under: -
Section 25 - Liability of a partner for acts of the firm -
"Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner."
Section 26 - Liability of the firm for wrongful acts of a partner - "Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is cause to any third party, or any penalty is incurred, the firm is liable therefore to the same extent as the partner"
Section 27 - Liability of firm for misapplication by partners - "Where (a) a partner acting within his apparent authority receives money or property from a third party and misapplies it, or (b) a firm in the course of its business receives money is misapplied by any of the partners while ti is in the custody of the firm, the firm is liable to make good the loss."
SUIT No.: 413/09 7/21
12. After careful perusal of the provisions given under Chapter 4 of the Act, it is therefore, clear that if any act is done by the partner under his authority to work on behalf of the firm then his act so done is considered to be the act done by the firm as a whole and other partners of the firm are equally liable towards the third party. It is also important to mention here that as per the Partnership Act, 1932, if any act is done by any of the partner which is against the interest of the firm or any partner has played fraud upon the firm by taking money from third person while acting as a partner, then, the firm is liable to that third person. It is further important to mention here that other partners and the firm are liable for that mischievous partner and it shall not affect the right of the third person qua the partnership firm to claim his dues from the firm incurred by that erring partner.
13. It is reflected from the averments of the parties and more particularly stated by defendant no. 2 in his WS as well as in his cross examination that he had taken a loan from the plaintiff for firm through one common friend, Sat Narain and that loan has been repaid, however. It is further reflected from the record that defendant no. 1, 3 & 4 in their WS have stated that defendant no. 2 has played fraud upon the firm and other partners, therefore, they are not liable for any of the act done by the defendant no. 2. It is further reflected from the pleadings and the cross examination of the witnesses from both the sides that though, defendant no. 1, 3 & 4 have alleged that defendant no. 2 played fraud against them, however, they have neither passed any resolution against defendant no. 2 declaring this act of taking the loan by plaintiff, as unauthorized, nor the partnership firm has taken any action against defendant no. 2 till date. The reply given by defendant no. 1, 3 & 4 in this regard is that defendant no. 2 is related to other partners, therefore, as the partnership firm was among the family, therefore, other partners decided not SUIT No.: 413/09 8/21 to take any action against defendant no. 2, though they condemn his actions.
14. It is important to mention here that merely saying that defendant no. 2 has played fraud upon the firm and other partners is not sufficient. If the partnership firm and other partners decide not to take any action, as per the law against any such partner which, in other words means, as per the law, that the act done by any such alleged mischievous partner is ratified impliedly by the firm and its partners. Section 18 of the Act is clear in this regard. Partner is said to be agent of the firm for the purpose of the business of the firm. Therefore, as per the law of agency, an act of an agent is considered to be an act of principal. Thus, I am of the opinion that the objection taken by defendant no. 1, 3 & 4 that there exist no privity of contract in between the plaintiff and defendant no. 1, 3 & 4, has no merits in the eyes of law. Therefore, in the light of the above discussions, this issue is decided in favour of the plaintiff holding that doctrine of privity of contract does not apply here in this case.
15. Issue no. 2:- Whether the suit is barred by limitation? OPD.
Onus of proving this issue is upon the defendants. Both defendant no. 2, on one side and defendant no. 1, 3 & 4, on the other side have taken the similar objection in their respective WS alleging that suit filed by the plaintiff is barred by the period of limitation. It is stated by the defendants that the promissory note was executed on 23.12.2005, therefore, limitation period starts from this date, as per the Limitation Act, as there is no fixed date for payment mentioned in his promissory note. It is further alleged by the defendant that date 22.04.2006 has been mentioned specifically after the execution of this promissory note just in order to cover their suit within the period of limitation.
SUIT No.: 413/09 9/21
16. It is important to mention here that this issue was dealt at length, as per the order dt. 24.09.2009 and it was observed vide that order it is a mix question of fact and law and for which evidence is required on this point.
17. Plaintiff has stated that this date of payment 22.04.2006 was mentioned with the consent of the defendant no. 2 who had taken the loan on behalf of the firm. This fact is admitted by the defendant no. 2 in his cross examination wherein he has stated that the date 22.04.2006 was mentioned by the plaintiff, however, it was within the knowledge of the defendant no. 2. Defendant no. 2 as well as defendant no. 1, 3 & 4, however, has taken the defence that at the time of taking of the loan it was agreed in between the parties that no such due date 22.04.2006 was fixed among them. From the evidence of the defendants, it is reflected that they have not led their evidence on this "oral agreement in between the plaintiff and defendant no. 2".
18. Defendant no. 2 has stated in his WS that the loan was taken through one common friend, Sat Narain. The examination of Sat Narain, who appeared as plaintiff's witness is perused. This witness, upon whom, both the parties are relying heavily that date of repayment of loan was 22.04.2006 as mentioned in the promissory note, has appeared as witness on behalf of the plaintiff and has corroborated what he has stated in his examination in chief in this regard. Therefore, I am of the opinion that plaintiff has been able to show that the promissory note was payable on demand on 22.04.2006. Plaintiff has also stated that this date 22.04.2006 has also been mentioned at the back side of the promissory note Ex. PW1/1. In these circumstances, therefore, I am of the opinion that the limitation period in this case, therefore, starts from 22.04.2006 and not from 23.12.2005. The limitation period of recovery in such cases is three years and this suit has been filed on 02.04.2009 which is within the period of limitation.
SUIT No.: 413/09 10/21 Therefore, I am of the opinion that suit filed by the plaintiff is not barred by the law of limitation and is within the period of limitation. Hence, it is maintainable. This issue is decided in favour of the plaintiff.
19. Issue no. 3:- Whether the plaintiff is entitled for recovery of Rs. 1,76,400? OPP.
Onus of this issue is upon the plaintiff. It is alleged by the plaintiff that defendant no. 2, Shashi Bhushan Gupta has taken a loan of Rs. 80,000/- on behalf of defendant no. 1, Partnership Firm and other partners i.e., defendant no. 3, Dhaneshwar Gupta & defendant no. 4, Praveen Gupta. The evidence taken by defendant no. 2 is that he had taken the amount of Rs. 80,000/- as alleged by the petitioner, however, this amount has been repaid. It is further alleged by the defendant no. 2 that the alleged friendly loan was taken through one common person, Sat Narain and it was repaid through that common person, Sat Narain. Defendant no. 3 has expired during the pendency of this suit. Defence taken by defendant no. 1 & 4 and defendant no. 3, since deceased is that the loan taken by the defendant no. 2, Shashi Bhushan Gupta was in his personal capacity and he has played fraud upon the defendant no. 1.
20. In order to support his contention, plaintiff has examined two witnesses. PW2, Sat Narain who is stated to be a common person by defendant no. 2, in whose presence loan was taken by him and loan was returned by him. Sat Narain has stated in his examination in chief that defendants are known to him for a very long time. They were in need of funds, therefore, he, PW2, introduced them to plaintiff, V.K. Paliwal, in December 2005. It is further alleged that the defendants through defendant no. 2, requested the plaintiff for a short term of loan of Rs. 80,000/-. Defendants promised to repay the amount in four months. It is further alleged by the PW2, Sat Narain that plaintiff had lent a sum of Rs. 80,000/-
SUIT No.: 413/09 11/21 in cash on 23.12.2005 and executed one promissory note wherein defendant no. 2 promised to repay the said amount on 22.04.2006 or on demand alongwith the interest. It is further alleged by PW2 in clear words that as per his knowledge defendant has not repaid this amount. Sat Narain has further stated that he was never authorized by the plaintiff to collect any payment or loan from the defendant on his behalf and has never accepted any payment from the defendant for the plaintiff for any purpose whatsoever.
21. In his cross examination by defendant no. 2, PW2, Sat Narain has stated that he was present when loan of Rs. 80,000/- was advanced by the plaintiff to defendant's firm. The promissory note Ex. PW1/1 has been filled up by some other person. It is further alleged by the Sat Narain, PW2, that the seal of the firm and the signature of the partners were affixed on the pro note, Ex. PW1/1 in his presence. It is further stated by PW2 that the date 22.04.2006 was not written after the execution of documents. Sat Narain has further denied the suggestion given by defendant no. 2 that the repayment of the loan has been paid by defendant no. 2. Sat Narain has admitted that the loan was lent by the plaintiff through him since he was known to both the parties.
22. In the cross examination of PW2 by defendant no. 1, 3 & 4, PW2 has duly corroborated what he has stated in his examination in chief and no contradiction has been emerged. PW2 is an important witness in this case as the defendants and more particularly defendant no. 2 have been heavily relying upon this person alleging that the loan has been repaid through Sat Narain who has specifically denied having receiving the amount on behalf of the plaintiff.
23. In his examination in chief, PW1 has stated that defendants were introduced by one common friend, Sat Narain and at his request he has given SUIT No.: 413/09 12/21 a loan of Rs. 80,000/- on interest which was returned by him within four months. It is further alleged by the plaintiff / PW1 that one promissory note dt. 23.12.2005 which was Ex. PW1/1 is also executed in between the parties. It is further alleged by the plaintiff that the loan was repaid on 22.04.2006 or on demand, however, defendants have not repaid the loan till today. It is further alleged by the plaintiff/ PW1 that he has given a legal notice dt. 04.08.2008 which is Ex. PW1/2 and the reply given by the defendants is dt. 18.08.2008 which is Ex. PW1/7. The plaintiff has further alleged that he sent rejoinder of legal notice dt. 02.09.2008 which is Ex. PW1/8. It is stated lastly by the plaintiff/ PW1 that defendant has not repaid the loan till date.
24. In his cross examination by defendant no. 1, 3 & 4, plaintiff has stated that the loan was extended on 23.12.2005. The suggestion regarding paying the date of repayment on PW1/1 having been written, has been specifically denied. Another question was asked specifically by counsel for defendant no. 1, 3 & 4 that the date 22.04.2006 on the documents Ex. PW1/1 were added later on, which was accepted by the plaintiff. The plaintiff however, has stated that it was verbal agreement in between the parties that loan would be repaid within the four months on or before 22.04.2006. Plaintiff has admitted in his cross examination that legal notice Ex. PW1/2, he had addressed the defendants alleging that defendant no. 2 had also misled and defrauded the other partners of the firm and committed fraud against all of them.
25. In his cross examination by defendant no. 2, PW1 has stated that Sat Narain is his friend. It is further alleged by the plaintiff/ PW1 that he has lent a sum through Shashi Bhushan and this loan was not given to anyone in his personal capacity. Another question was asked by the counsel for defendant no. 2 that the pronote Ex. PW1/2 was payable on demand and plaintiff has answered SUIT No.: 413/09 13/21 this question in following words "the loan was asked from me four months and accordingly this pronote was executed". Plaintiff has further stated that he has added the date of repayment that 22.04.2006 on the same day of execution. Another specific question put by the defendant no. 2 that plaintiff has received the full loan amount has been answered in negative. Plaintiff has stated further in his cross examination that he never authorized Sat Narain for receiving any payment on behalf of the defendant.
26. Thus, following things have emerged from cross examination of PW1 & PW2 which are as under: -
i.) The loan of Rs. 80,000/- was received by defendant no. 2. ii.)The pronote, Ex. - PW1/1 bears the signature of defendant no. 2 & having the seal of defendant no 1.
iii.)Plaintiff has stated in clear words that loan was taken by defendant no. 1, the partnership firm through Sashi Bhushan, Defendant no. 2.
iv.)It is further shown by the plaintiff that as per the pronote Ex. PW1/1, the date of repayment of loan was 22.04.2006. v.)Plaintiff has further established in his evidence that despite several reminders the loan has not been repaid. The common person, Sat Narain has also denied that he has received any amount from defendant no. 2 on behalf of the plaintiff.
27. Now the evidence led by the defendants is to be seen whether any contradiction have emerged or defendants have been able to discharge the burden of disproving the case of the plaintiff.
SUIT No.: 413/09 14/21
28. Defendant no. 4 has examined only one Praveen Gupta, who has stated that neither defendant no. 1, the firm nor other partners were in dire need of funds. It is further stated by DW1, Praveen Gupta that it is not within his knowledge that in December, 2005, defendant no.. 2 has mat with Sat Narain and approached the plaintiff and requested for a short term loan of Rs. 80,000/-. It is further stated by DW, Praveen Gupta that defendant no. 2 never promised to return the amount to the plaintiff. DW, Praveen Gupta has questioned the validity of the promissory note as a whole alleging that date 22.04.2006 has been written specifically by the plaintiff, in order to cover this plea within the period of limitation. DW, Praveen Gupta has further denied having receiving any notice dt. 04.08.2008. It is further alleged by the DW, Praveen Gupta that alleged notice rejoinder was never addressed to the other partners or the defendant firm.
29. In his cross examination Praveen Gupta has stated that the firm was in existence and working in December, 2005 and defendant no. 2, Shashi Bhushan Gupta and defendant no. 3, Dhaneshwar Gupta (now deceased) were partner at that time. During cross examination, the deed of partnership, which is Ex. D4W1/P1 is admitted by DW, Praveen Gupta. Praveen Gupta, DW, however, has not acknowledged the handwriting of defendant no. 2. It is further stated by the Praveen Gupta that defendant no. 1 has not accepted any kind of loan.
During cross examination, counsel for plaintiff has put specific question to DW, Praveen Gupta whether he or firm has taken any coersive action against defendant no. 2 for redressal of their grievances for which DW, Praveen Gupta, has stated that no action has been taken against defendant no. 2. DW, Praveen Gupta, further stated that defendant no. 2 might have exploited / utilized the funds for his partner needs. In his further cross examination DW, Praveen Gupta has stated that Ex. PW1/1 bears his signatures, however, he expressed his ignorance regarding the acceptance of loan by him.
SUIT No.: 413/09 15/21 Another question was put by the plaintiff's counsel whether the loan was taken on behalf of firm with regard to which DW, Praveen Gupta has expressed his ignorance. Praveen Gupta, DW also expressed his ignorance regarding the utilization of the said loan for the purpose of firm, defendant no. 1. He however, denied any liability towards the repayment of loan.
Defendant no. 2 also examined himself as in his defence and he has stated in his examination in chief that he is one of the partner of defendant no. 1, M/s. Dhaneshwar Gupta & sons. Defendant no. 2 has categorically admitted that he has signed & executed the pronote dt. 23.12.2005 for Rs. 80,000/- as Karta of HUF being the partner of defendant no. 1, firm. Defendant no. 2 has also stated that seal of the firm has also affixed on the pronote, however, it is filled up this later on by Sh. Sat Narain, after it was signed. It is further stated by the DW, Sashi Bhushan filed that the loan was taken for on behalf of defendant no. 1, which was appointed by Sat Narain. It is stated by DW, Shashi Bhushan Gupta that the loan has been repaid and he was assured that on receiving the loan payment and the pronote shall be destroyed, however, it has not been done.
30. In his cross examination, DW, Shashi Bhushan Gupta has stated that loan was taken by him. Shashi Bhushan Gupta has also stated that pronote Ex. PW1/1 bears his signature as well as seal of the firm. It is further admitted by the Shashi Bhushan Gupta that the loan was for four moths starting from 23.12.2005 and the due date is 22.04.2006 mentioned at joint Ex. PW1/1 as well as on the back side of Ex. PW1/1. DW, Shashi Bhushan Gupta has further stated that his firm used to accept the business loan. The loan of Rs. 80,000/- , however, has been repaid on due date i.e., 22.04.2006. In his cross examination, Shashi Bhushan Gupta has stated, however, that he is not having any document showing that the loan has been repaid. Shashi Bhushan Gupta has failed to show any accounts maintained with regard to the loan transaction.
SUIT No.: 413/09 16/21 One specific question was asked by the counsel for plaintiff that whether he has given any notice either to plaintiff or Sat Narain asking for return of pronote in question for which Shashi Bhushan Gupta has replied that he has not taken any steps to get the pronote Ex. PW1/1 declared as cancelled or discharged.
31. It has already been stated above that the plaintiff in his evidence by examining two witnesses i.e., plaintiff himself and examination of another witness Sat Narain, he has been able to discharge the onus upon him. The onus has now shifted upon the defendants. Defendant no. 2 in order to discharge the burden has alleged in his WS as well as in his evidence that loan was taken by him on behalf of the firm which has been repaid to the plaintiff. Defendant no. 2 however, has not been able to show any proof in respect thereto. It is further reflected from the examination of defendant no. 2 that the person through whom defendant no. 2 allegedly repaid the loan, has denied the averment made by the defendant no. 2. Sat Narain is the person to whom defendant no. 2 had taken the loan and returned the loan amount, who has specifically denied. It is further important to mention here, as already stated above, that Sat Narain has been produced and examined by the plaintiff as one of the plaintiff's witness. In these circumstances, therefore, defendant no. 2 has not been able to rebut the averments of the plaintiff that the loan in question was repaid by him. Thus, the onus in this regard has not been discharged by the defendant no. 2 to disprove the averments made by the plaintiff that defendant no. 2 had repaid the loan back to the plaintiff through Sat Narain.
32. It is further reflected from the averments made by on behalf of the defendant no. 2 as well as from their WS that the loan was taken by him on behalf of firm and the said loan has been utilized for the firm.
SUIT No.: 413/09 17/21
33. With regard to the defendant no. 1, 3 (now deceased) & 4, it is reflected from their evidence that they have not disputed the status of defendant no. 2 in the partnership firm. In other words, they have admitted that defendant no. 2 was their partner at the time of said transaction. Defendant no. 1, 3(now deceased) & 4 have also not shown anything to the contrary that defendant no. 2 was not authorized on behalf of the firm to receive any loan from any other person. No such copy of any such resolution has been filed on behalf of defendant no. 1, 3 & 4. It is further reflected from the evidence led by on behalf of defendant no. 1, 3(now deceased) & 4 that they had alleged in their WS that defendant no. 1 & 2 had played fraud upon the firm and defendant no. 2 is personally liable for his act, however, defendant no. 1, 3(now deceased) & 4 have not been able to show by way of their evidence that defendant no. 2 having any official authority on behalf of firm or in other words, he was not working in the capacity of the partner while receiving any such loan from the plaintiff. After perusal of the entire evidence led by the defendant no. 1, 3(now deceased) & 4 in their defence, it is reflected that they have nowhere stated that the act of the defendant no. 2 have been declared as illegal and against the interest of the partnership firm. It is further reflected from the defence evidence of the defendants that defendant no. 2 was the partner at the time of the loan was taken by him.
In these circumstances, I am of the opinion that defendants have not been able to discharge their burden of disproving the fact that defendant no. 2 is personally liable for any such act and partnership firm and other partners are not liable for the act of defendant no. 2. Defendants have not been able to disprove the contentions of the plaintiff that defendant no. 2 has taken the loan and that loan has been repaid by him.
34. The counsel for plaintiff has relied upon certain judgments SUIT No.: 413/09 18/21 which are as under: -
i.) "AIR 1985 SC 1281, NarchinvaV/s. Kamat & Anr". In this case firm's vehicle driven by one of the partner and it was held that vehicle can be said to be driven by firm i.e., insurer itself. It has been held by Hon'ble Supreme Court of India that each partner of the firm is an agent of the firm as well as the other partner as provided by Section 18 of the Partnership act. Every partner is entitled to attend diligently to his duties in the conduct of the business as provided in Section 12 of the Partnership Act. It is further held that as per Section 26 of the Act which provides that where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefore to the the same extent as the partner.
The arguments advanced by the counsel for plaintiff by citing this judgment are that defendant no. 2 had taken the loan on behalf of the firm, defendant no. 1, therefore, the firm as well as other partners are liable for the act done by the defendant no. 2, as a whole.
ii.) "AIR 1974 Andhra Pradesh 307, Gurram Subbarayudu V/s. Moto Pothula Narasimham". In this case, it has been held in this case that Section 5, 18 & 19 and 25 of the Act that all the partners are jointly and eventually liable for the acts of one of the partners of the firm as representing the firm. When the managing partner of a firm executes a promissory note on behalf of a firm for the purpose of the firm, all the partner will be liable. Under Section 16 (2) of the Negotiable Instruments Act the endorsee stands in the same footing as the payee, and is entitled to a decree in a suit on the pronote against all the partners also for the amount due as those SUIT No.: 413/09 19/21 liable under the promissory note itself as makers.
35. In the light of the above mentioned authorities relied upon by the plaintiff and reasonings so given above, I am of the opinion that plaintiff has not been able to discharge the burden of proving of this issue upon him by showing that defendant no. 2 have taken the loan on behalf of the firm and this loan has been repaid by him on behalf of the firm. The plaintiff has further shown that the said loan taken by defendant no. 2 on behalf of firm was used for the firm. Defendants, on the other hand, have not been able to prove anything to the contrary, therefore, I am of the opinion that plaintiff has been able to discharge the burden of proving this issue upon him. Therefore, this issue is decided in favour of the plaintiff.
34. In the light of these facts and circumstances, plaintiff has been able to prove that defendants through defendant no. 2 have taken the loan of Rs. 80,000/- which has not been returned by them, therefore, they are liable to returned the same. With regard to the another relief of recovery of Rs. 36,000/- towards recovery of damages and compensation, it is reflected from the record and entire perusal of the evidence led by the plaintiff by way of affidavit that there is no averment with regard to this relief of recovery of damages and compensation up to the tune of Rs. 36,000/-. It is further reflected that plaintiff has prayed for recovery of Rs. 4,400/- towards the Advocate Fees for which affidavit of the concerned Advocate or any receipt of the concerned Advocate, in this regard has not been filed. Thus, there is no documentary evidence in this regard and no averment has been made in the evidence filed by the plaintiff by way of affidavit, therefore, the recovery of these two heads i.e., Rs. 36,000/- towards the damages and compensation and Rs. 4,400/- towards the Advocate fees are not supported by any evidence. Therefore, I am of the opinion that plaintiff has not been able to SUIT No.: 413/09 20/21 prove these two heads under the recovery of Rs. 1,56,400/- against the defendant as no evidence has been led by the plaintiff on these two heads. Thus, these amounts cannot be recovered from the defendants as they are not supported by any evidence.
36. Thus, defendants are liable to pay Rs. 1,16,000/- (Rs. 80,000/- + Rs. 36,000/- towards interest) from the defendants alongwith the interest of 8%, pendentlite, future cost.
Decree Sheet be prepared accordingly alongwith the cost. File be consigned to Record Room.
Announced in Open Court (Prashant Kumar)
Dated 21.08.2010 CCJ/ARC/ROHINI/Delhi
SUIT No.: 413/09
21/21
Suit No. 413/09
21.08.2010 Present :None.
Final arguments have already been heard. Final judgement is pronounced. Vide separate order sheet suit is decreed in favour of the plaintiff.
Decree Sheet be prepared accordingly alongwith the cost. File be consigned to the record room.
(Prashant Kumar) CCJ/ARC/Delhi 21.08.2010 SUIT No.: 413/09