Govula Ramakistiah v. Yerram Yellappa .

Manohar Pershad, J.:— On the basis of a sircath said to have been executed by the appellant herein for the monies borrowed by him from time to time, the plaintiff has filed a suit for recovery of Rs. 18,785-10-10 together with costs and future interest at the rate of 6 per cent per annum, alleging that in respect of mutual dealings between him and the defendant (appellant) accounts were made up and there was a settlement on 20-7-1953 of the said mutual dealings and the defendant was found due to the plaintiff in a sum of Rs. 18,001. According to the plaintiff the defendant had agreed to pay the said sum within one month from the said date and executed a sircath in his favour.

2. The plaintiff alleges that in spite of notice to pay the amount, the defendant has failed to pay it. The plaintiff therefore claims Rs. 18,001 towards principal and Rs. 774/- towards interest and Rs. 10-10-0 towards notice and registration charges in all Rs. 18,785-10-10. The appellant has denied the execution of the sircath or having received the consideration and stated that it was a forged document. He further averred that he never entered into any persona transaction with the plaintiff or any settlement thereof and stated that the plaintiff's father-in-law, Anantham, and he were partners in a firm “Wamarripalli Anantham” for purpose of trading in cloth but that firm was dissolved on account of the death of Anantham. Thereafter, he states that he as one party, Mr. M. Venkatesham and the plaintiff as one joint party and Mr. Srihari as one party entered into partnership in the firm under the name of Sureshchandra & Co., to deal in cloth and in a variety of goods. He has further alleged that firm had dealings with Allauddin & Co. and others and the plaintiff who was taking active part in the said business had been drawing huge amonn's which he resented and apprehending that he would he compelled to answer those claimed he seems to have concocted and engineered a false and bogus claim.

3. Legal objections were also raised that as the firm is actively doing business and not dissolved, the suit does not lie between the partners, that the suit was not maintainable because the firm was not registered and that the plaintiff alone could not file a suit without impleading his brother-in-law Venkatesham. Another objection was also taken that the suit claim was vitiated under the Hyderabad Money Lenders Act. The learned Subordinate Judge. Secunderabad who tried the suit, framed the following issues:

1. Is the suit sircath executed by the defendant?

2. Is not the plaintiff a money lender? If he is, has he complied with the provisions of the Money Lenders Act?

3. Is the plaintiff entitled to interest claimed?

4. Is the suit based on sircath not maintainable? If so, is the suit amount due by the defendant to the plaintiff?

4. Evidence was led by the parties. On the evidence, the learned Judge held that the suit sircath was genuine document having been executed by the defendant. He further held that the sircath was a bond and not a promissory note. As regards the plea of the Hyderabad Money Lenders Act, the learned Judge held that the plaintiff was not a money lender. In the result, the learned Subordinate Judge decreed the suit. The defendant has come up in appeal.

5. Sri Venkatasubba Rao, learned counsel for the appellant contended first that the court below has erred in coming to the conclusion that the suit sircath was a genuine document when the evidence on record is sufficient to hold that it is forged one. He next contended that if it is held that the suit document is a genuine one, that would fall within the definition of a promissory note and not having been properly stamped was inadmissible in evidence.

6. It is further contended that the suit claim relates to a partnership and unless general accounts are taken or a suit for dissolution of partnership is filed, suit for a single item of the partnership is not maintainable. Lastly it is contended that even if it is held that the suit was maintainable, the plaintiff cannot get a decree because he has not proved that any consideration was paid to the appellant.

7. In so far as the first contention is concerned, which relates to whether the sircath is a forged document, on behalf of the plaintiff respondent, three witnesses have been examined. Of these, P.W 1 is the plaintiff himself. He deposes that; the defendant after going through the accounts was found indebted to the extent of Rs. 16,200/- and on his insistence that he should pay the amount with profit, which he says, he meant ‘commission’, the defendant, he says, agreed to pay a sum of Rs. 18,000/- and agreeing so executed the suit sircath. P.W 2 is the attestor of Ex. P-1, the sircath.

8. He also says that the defendant executed the sircath in favour of the plaintiff in his presence and he signed it. He identifies the sircath. He says further that the said sircath was written by the defendant himself in the house of the plaintiff. He also says that by the time he went there, the plaintiff and the defendant had made up their accounts, and that the account books were there. He identifies the signature of the defendant both on the stamp and besides it. P.W 3 identifies the signature of the defendant on Ex. P-1 and says that it bears his signature. He has given the reason for identifying his signature saying that he had worked in the firm of Gijjar Gopal Ranoji along with the defendant for a number of years.

9. As against this evidence of the plaintiff, the defendant appellant has examined three witnesses. Of these, only D.W 1, the defendant speaks about the sircath. He denies that the signatures on the sircath are his and states that it is forged document. The court below before whom evidence was led has not believed the evidence of the defendant and relying on the evidence of the plaintiff and his other two witnesses has held the execution of the sircath as proved. The evidence of the plaintiff, in our opinion, also goes to prove that the defendant executed the sircath. The evidence of the defendant that it is a forged document is such that it cannot be believed. In the result, we agree with the view of the Court below the Ex. P-1 is a genuine document.

10. The next question that arises is whether this is a promissory note or a bond. The court below has held that this is a bond and not a promissory note.

11. In order to appreciate the contention, a reference to the definition of a bond and promissory note, is necessary.

12. Section 2, clause (4) of the Stamp Act defines a ‘bond’ thus: “Bond” includes:

“(a) every instrument whereby a person agrees to pay money to another on condition that the agreement shall be void if a specific act is performed, as the case may be;

(b) every instrument attested and not payable to order or bearer, whereby a person agrees to pay money to another;

(c) every instrument attested, whereby a person agrees to deliver grain or any other kind of agricultural produce to another;”

13. Section 2(18) defines a promissory note in the following words:

“‘Promissory note’ means a promissory note as defined in the Hyderabad Negotiable Instruments Act, and it also includes a writing, promising the payment of any sum of money out of any particular fund which may or may not be available for payment or upon any condition or contingency which may or may not be fulfilled or happen.”

14. The Hyderabad Negotiable Instruments Act. Act V of 1918 F., defines a promissory note to mean a document in writing wherein the writer promises to pay unconditionally a definite sum to another or to the order or bearer excepting bank and currency notes. We may point out that the Hyderabad Negotiable Instruments Act has been repealed by Act III of 1951.

15. Section 4 of the Indian Negotiable Instruments Act defines a promissory note in the following terms:

“‘A promissory note’ is an instrument in writing (not being a bank note or a currency note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to or to order of a certain person, or to the bearer of the instrument.”

16. The learned counsel for the appellant relying on this definition of a promissory note in Section 4 of the Indian Negotiable Instruments Act contends that the suit sircath falls within this definition. We are not inclined to accept the contention of the learned counsel for the appellant. The suit sircath is not payable to order or bearer. It is not payable on demand and it has been attested by a witness. The definition of a bond in the Hyderabad Stamp Act clearly shows that a document which is attested by a witness and which is not payable to order or bearer is a bond.

17. In the instant case, the document is in the following words:

“Rs. 18,001/- on 20th July, 1953, Ashada Sudha Navami, Monday, Settlement of the accounts of Sureshchandra & Co., including profits up to this date and the credit amounts in your name in our shop; this is executed inclusive of all.

18. In words Eighteen thousand Halli due up to this date. I promise to pay this amount within one month.

Sd/- Govula Ramakristiah,

Witness: Sd/- B. Markhandayya.”

19. From a perusal of this, it would appear that this document is signed by one Markhandayya and there are no words in it, either ‘payable to order or bearer’. This document therefore, in our opinion, would be a bond.

20. The other contention of the learned counsel for the appellant is that though this document is said to have been signed by one witness still that would not be proper attestation, as ‘attestation’ means ‘signing by two persons’. In this connection, the learned counsel drew our attention to the definition of ‘attestation’ in the Transfer of Property Act. There is no force in this contention either. Admittedly, the Hyderabad Stamp Act does not define ‘attestation’. No doubt, the Transfer of Property Act does define ‘attestation’. In considering what is ‘attestation’ under the Hyderabad Stamp Act, we need not consider what meaning has been given to it in the other Acts. We have to confine ourselves to the Hyderabad Stamp Act.

21. The Hyderabad Stamp Act is in Urdu and the words used in Section 2(4)(b) of the Hyderabad Stamp Act are:

“Every instrument attested and not payable to order or bearer, whereby a person agrees to pay money to another,”

22. We may refer to the relevant provision of Section 2(4)(b) in Urdu which reads:

“(b) Har dafitavezjis per kis ki gavahi ho our jo kabiz ke hukum per ya hamil ko wajibul ada na ho our jis ki ru se aik shaksh dusre shaksh ko rupia dene ka Ekhrar kare.”

23. Section 2(4)(c) reads as under:

“Every instrument attested whereby a person agrees to deliver grain or any other kind of agricultural produce to another.”

24. The relevant Urdu provision reads as under:

“(c) Har dastavez iis per gavahi sibt hoo our jis ki ru se aik shaksh dusre shaksh ko galla ya our kisi kism ki paidawar zirati howala karne ka ikrar kare.”

25. From reading the above two provisions, it would appear, what is necessary according to the Urdu language used is, that there should be somebody's signature as witness. The English translation shows that the document should be attested and probably it may be due to this that the learned counsel for the appellant raised this contention that attestation means ‘two witnesses’. In our opinion, from the language of the above provision, it is not necessary that such a document according to he Hyderabad Stamp Act should have the signaures of two persons.

26. In other words, it follows that under the above provisions, if the document is signed by one witness that would be sufficient for purposes of the above revisions. In view of this clear provision, we need of consider what meaning has to be given to ‘attestation’ in the other Act. Relying on the definition of a ‘promissory, note’ in Section 4 of the Negotiable Instruments Act, the learned counsel for the appellant has argued further that though in the document in question there are no clear words as payable to order or bearer’, still those words, he urges, are not necessary and without them also the document in question could be taken to be a promissory note and not a bond.

27. We are not inclined to accept this contention. The amendment of the Negotiable Instruments Act contained in Explanation 1 to Section 13(1) of the Act cannot be read along with the definition of a ‘bond’ as contained in Section 2(4) of the Stamp Act, so as to make the instrument a promissory note which in the face of it is not one payable to order by virtue of the said explanation and thus to take it out of the said definition.

28. In this connection, we may refer to the case of Khetra Mohan Saha v. Jamini Kanta Dewan*, AIR 1927 Cal 472 which has been followed in the case of Dost Mohamad Khan v. Hassarath Kibulae Sayyad, AIR 1927 Mad 599 and Dashrath Tukaram v. Kashiram Raoji, AIR 1937 Nag 61. The same view has been taken by the erstwhile Hyderabad High Court in the case of Naoshir Yar Khan v. Prabhu Dayal, 38 Deccan LR 342. The same view is taken by Subba Rao C.J, as he then was, in the case of Ranganayakamma v. Venkatasubba Rao, 1956 Andh WR 526 : (AIR 1957 Andh-Pra. 779) in connection with Section 2(5)(c) of the Indian Stamp Act and this reasoning would apply when interpreting Section 2(3)(b) of the Stamp Act.

29. From the above discussion, it follows that the document in question not being one payable to bearer or order and having been attested by a witness clearly falls under me definition of a bond. We therefore cannot accept the contention of the learned counsel for the appellant that since this document is not properly stamped, it is inadmissible in evidence.

30. The next question that arises is whether this document is for consideration. What is contended on behalf of the appellant is that admittedly on the date of the document no cash amount was paid, the recital in the document clearly shows that after the settlement of accounts of Sureshchandra & Co., an amount of Rs. 18001 was found due, and as the plaintiff-respondent had snot produced any accounts or any evidence and proved that consideration was given to the defendant-appellant, he cannot get a decree for the same. There is no force in this contention. The defendant-appellant has denied that he ever executed this document.

31. In such a case, the plaintiff respondent had only to prove the execution of the document and once the execution is proved, the contents follow. As discussed above, in our opinion, the execution of; the document is proved. In this connection, we may refer to the cases of Udebhan Zangoji v. Vittoba Ukandaji, AIR 1939 Nag 78, Yadhava Rao v. Maoji Baba (decided by the then Judicial Committee), 34 Decan LR 95 and Ratnnlal v. Koshla (Full Bench case of the erstwhile Hyderabad High Court) 39 Deccan LR 183.

32. In the document, the defendant appellant has admitted Rs. 18001/- as payable by him. This in our opinion would be sufficient unless the defendant (appellant) states that some of the items were not received by him, which is not his case. That apart, the plaintiff (respondent) has produced sufficient evidence which shows that the amounts were paid to the defendant-appellant. In this connection, the learned counsel for the appellant relied on the entries Ex. P-2(a) to P-2(f), P-3(a) and D-24.

33. These are all entries in the account books of the defendant-appellant. Ex. P-2(a) is a credit entry in the name of the respondent dated 15-3-1953 for Rs. 3000/-. P-2(b) is another credit entry in the name of the respondent dated 24-3-1953 for Rs. 328. Ex. P-2(c) is another entry in the name of the respondent dated 24-3-1953 for Rs. 55-11-0. P-2(d) is a credit entry in the name of the respondent dated 18-4-1953 for Rs. 400/-. There is also another entry of the same date for Rs. 1000/-. P-2(e) is a credit entry in the name of the respondent for Rs. 1050 dated 9-4-1953 and the last entry in this account book is P-2(f) in the name of the respondent dated 16-5-1953 for Rs. 6666-10-8.

34. Ex. P-3(a) is the entry in the Rokhad in the name of the respondent for Rs. 2000/- dated 18-7-1953 and there is another entry in the said rokhad (d-2) dated 16-5-1953 for Rs. 5833-5-0 in favour of the respondent. It is contended on behalf of the appellant that Ex. P-2(f) the entry in the day book is carried to the ledger and that is the same B-24. We are not inclined to accept this contention of the learned counsel for, we are of the opinion, that there are two separate entries and are of different amounts. If we calculate the amounts of the said entries, the total comes to Rs. 18,533-10-11 and the sircath in question shows the liability of the appellant to the extent of Rs. 18,001.

35. The contention of the appellant is that though the entry shows that these amounts were credited in the name of the respondent, since those amounts were paid to the firm of Sureshchandra and Co., it cannot be said that they were paid to the appellant. There is no force in this contention. The entries stated above are in the account books of the appellant. The appellant's case was that the respondent had not sufficient means to advance loan; but the entries are sufficient proof that the respondent had sufficient funds. It cannot therefore be said that the document in question is without consideration.

36. During the course of arguments, the learned counsel for the appellant relying on the entry (Ex. P-2(J)) which is for a sum of Rs. 5833-5-0 contended ??? that entry shows that the amount was credited in the name of the appellant and not in the name of the respondent and therefore the entry P-2(f) cannot be accepted as true. This argument is equally devoid of force. P-2(f) is dated 16-5-1953 and is for a sum of Rs. 6666-10-8 and not for Rs. 5833-5-0. This is a separate item and has nothing it do with that Ex. P-2(j).

37. It is further contended that even if it is held that the document sircath is executed by the defendant-appellant and is for consideration, the plaintiff-respondent cannot get a decree on the document unless he filed a suit for general accounts. Reliance is placed upon the case of Bishen Narain v. Swaroop Narain, AIR 1938 Lah 43, Sohum Ram Mukhi Lal Chand v. Sewa Ram, AIR 1938 Lah 259. Ramaswami Nathan v. Muthiah Chetty, AIR 1925 Mad 979, A.R.M.M Meyvappa Chettiar v. P.N.M.M Planiappa Chettiar, AIR 1949 Mad 109(2) and Gopala Chetty v. Vijayaraghavachariar, ILR 45 Mad 378 : (AIR 1922 P.C 115). We are not inclined to accept the contention of the learned counsel for the appellant.

38. Lindley on Law of Partnership, 11th Edition. 668, states the law in the following words:

‘Again, if one partner gave to his copartner a bill or note which was in such a form as to bind, not the firm, but the partner who gave it he might be sued by his copartner thereon, whatever the state of the accounts between the two might be, and although the bill or note in question had reference to some partnership transaction; for by giving the bill or note, the demand in respect of which it was given was isolated from the general partnership accounts.”

39. Desai on Law of Partnership, page 300 (Ex. 1940) states the law as follows:

“There is no invariable rule that the court will not interfere in a dispute between partners where a relief is claimed without asking for the winding-up of the business and the final adjustment of accounts. Thus in cases involving special circumstances and in cases relating to matters which, though arising out of partnership business or connected with it, do not involve the taking of general accounts, the Court can give the relief applied for.

Thus one partner may sue another for accounts during the subsistence of the partnership without asking for its dissolution, if there exist circumstances which can excuse a departure from the general rule under which accounts and dissolution should be asked together. What those circumstances may be will depend upon the facts of each case. It is for the Court to determine whether under the circumstances of the case it is equitable to order a partial account, having regard to the rights of the parties under the contract.

Moreover, there is no rule of law that a partial account can be ordered only in exceptional circumstances. An examination of the cases mentioned below will show that the old rule of English Law that the Court will not interfere between partners except for the purpose of dissolving the partnership, or if it was dissolved already, for finally winding up its affairs, has been relaxed in modern times in recognition of the necessities of commercial communities and the dictates of equity.”

40. Thus, it would follow that in cases involving special circumstances one partner can sue another during the subsistence of the partnership without asking for its accounts or dissolution. We may at this stage refer to the following authorities: Hari Shankar Misra v. Firm Bansilal Abirchand, AIR 1946 Nag 266. This was a suit for recovery of loan. The plaintiff in his capacity as creditor advanced loan to the partnership. On an action by him, the defence pleaded was that without asking for general accounts, the suit for an isolated item was not maintainable.

41. It was held:

“Though ordinarily disputes between partners inter ??? decided in a suit for dissolution of partnership and for accounts, there is nothing in law in special circumstances to prevent a partner acting in a different capacity to sue some of his partners for such relief as he is entitled to as flowing from that different capacity unconnected with his capacity as a partner.”

42. In the Madras High Court also, identical question had ??? in K. Venkata Reddi v. K. Narasayya, ILR 82 Mad 76. In that case, the plaintiff had brought a suit for recovery of the cheque or in the alternative for recovery of the amount thereof. The defence taken was that no suit was maintainable. This contention of the defendant was repelled and it was held:

“In regard to suits by one partner against another for a partial account, the general rule, as applied in India, is that if the account is sought in respect of a matter, which, arising out of partnership business, or connected with it does not involve the taking of general accounts, the Court will as a rule give the relief applied for. It will be for the Court to determine under what circumstances it will be equitable to order a partial account, having regard to the rights of the parties under the contract. There is no rule of law now in force that a partial account can be ordered only under exceptional circumstances.”

43. From the above discussion, it would follow that the general trend of the recent decisions of the Courts in India appears to be that if a suit is brought by one partner against another for the recovery of a certain amount, the relief sought should be given to him though it may arise out of partnership business or connected with it and does not involve taking of general accounts.

44. The cases relied upon by the learned counsel do not help him.

45. The first case relied upon is AIR 1938 Lah 43. In this case, the suit was brought for recovery of Rs. 500/- alleged to have been advanced by him to the defendant in pursuance of a partnership agreement. It was held that the suit to recover an isolated sum was not maintainable without suing for general accounts. In this case there is absolutely no discussion of any authorities. With due respect, we differ from the view of the learned Judge.

46. The next case relied upon is AIR 1938 Lah 259. In the case, it was held that after dissolution, until the accounts of the partnership are completely settled, individual partners cannot sue for their share of any separate part of the partnership assets. This case does not apply to the facts of the present case, for in the present case, the contention is not that the partnership is dissolved.

47. The next case relied upon is AIR 1925 Mad 279. This was a suit for accounts. An objection was taken that such a suit was not maintainable. The contention of the defendant was accepted. This case does not help the contention of the learned counsel for the appellant, for in that case, the suit was filed for dissolution first and after the final decree the plaintiff in that case filed a suit for accounts. In those circumstances, it was rightly held that the claim to recover a sum of money must form part of the enquiry in the action for winding up the partnership and that subsequent suit for accounts was not maintainable and barred by limitation. There is no such allegation in the present case.

48. ILR 45 Mad 378 : (AIR 1922 PC 115) also does not help the contention of the learned counsel for the appellant, for that was a case where the partnership was dissolved.

49. The last case relied upon is the case of AIR 1949 Mad 109(2), which is not an authority for the proposition that if a partner had in his favour a document by the other partner, he cannot sue on the document without asking for general accounts.

50. Indeed, in ILR 43 Cal 733 : (AIR 1916 Cal 788) it has been held that an action for the balance of a settled account would not be restrained merely because there were other unsettled accounts between the parties.

51. In the result, the contention of the learned counsel for the appellant that a suit for a single item is not maintainable unless a suit is filed for dissolution or for general accounts fails.

52. During the course of the arguments, great stress was laid on behalf of the appellant on the question that the respondent-plaintiff was a partner of the firm Sureshchandra and Co. The plaintiff-respondent denies that he was a partner of that firm.

53. We do not wish to go into the question as to whether the plaintiff-respondent was a member of the partnership firm. We may at this stage mention that parties also did not agitate this point in the lower court and no issue was framed. In the absence of any issue, it would not be proper for us to give a finding on that question, and that question is left open.

54. In the result, we do not see any force in this appeal. It is dismissed with costs throughout.

V.R.B

55. Appeal dismissed.