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Messrs. M.M Abbas Brothers And Others v. Seth Chethandas Fathechand And Another.
Factual and Procedural Background
This opinion concerns an appeal by Defendants 2 to 4 in O.S. No. 2882 of 1971 from the City Civil Court at Madras. The plaintiff sued for recovery of Rs. 17,500 said to be due under three promissory notes: two promissory notes of Rs. 4,000 each executed on 11th January, 1969, and a third promissory note for Rs. 3,500 which the opinion first records as dated 24th January, 1959 (the text later refers to an exhibit dated 24th January, 1969). All promissory notes carried interest at 24% per annum according to the face of the instruments.
The promissory notes were executed by one Mallik on behalf of the first defendant (a proprietary concern of one Khatija Bee). A person named Moshin Bhai signed as a joint executant; the plaintiff contended that he signed as a partner of the second defendant firm, making the firm (defendant 2) and its partners (defendants 3 and 4) jointly and severally liable.
The first defendant admitted execution but contested the amount allegedly advanced, alleged repayment, and challenged the 24% interest as usurious. Defendants 2 to 4 denied that the signature was that of Moshin Bhai, alleged his memory had failed before his death, and contended there was no consideration because no amount was credited to the firm's account on the relevant dates.
The trial Court framed six issues (including whether the promissory notes were supported by consideration; what amounts were actually advanced; whether the second defendant executed the notes along with the first defendant; and whether the notes were validly executed by the first defendant). The trial Judge found for the plaintiff in part: the promissory notes were fully supported by consideration; the second defendant (by Moshin Bhai) executed the notes along with the first defendant (Mallik); defendants 1–4 were liable; and the plaintiff was entitled to a decree for Rs. 11,500 being principal advanced with interest at 12% per annum and proportionate costs. The first defendant did not appeal; defendants 2 to 4 (the appellants) raised two points on appeal concerning proof of consideration and whether the signature of Moshin Bhai bound them.
Legal Issues Presented
- Whether the promissory notes are fully supported by consideration.
- What amounts were actually advanced to the defendants.
- Whether the second defendant (the firm) executed the promissory notes along with the first defendant.
- Whether the defendants are liable to pay the suit claim.
- To what relief is the plaintiff entitled.
- Whether the suit promissory notes were validly executed by the first defendant.
- As raised on appeal by defendants 2–4: whether there was proof that the three promissory notes were supported by consideration, and whether the signature of Moshin Bhai binds defendants 2–4 (i.e., whether his signature created firm liability).
Arguments of the Parties
Plaintiff's (Respondent's) Position
- The promissory notes were executed by Mallik on behalf of the first defendant and signed by Moshin Bhai as a partner of the second defendant-firm; therefore the firm and its partners (defendants 3 and 4) are jointly and severally liable for the debt.
- The promissory notes carried an interest rate of 24% per annum as stated on the face of the instruments.
First Defendant's (Khatija Bee) Arguments as to Written Statement
- Admitted execution of the promissory notes but asserted that the actual cash advanced was only Rs. 7,000 and that Rs. 6,000 had been repaid, leaving only Rs. 1,000 due on the promissory notes.
- Contended that the 24% rate of interest written on the notes was usurious and illegal.
Defendants 2–4 (Appellants) — Written Statement and Appellants' Arguments
- Denied that the signature on the promissory notes was that of Moshin Bhai; alleged that Moshin Bhai had been ill and suffered memory failure for about two or three years prior to his death.
- Contended there was no need for any borrowing and that no amount had been credited to the firm's account on the relevant dates; thus, contended the promissory notes were not supported by consideration.
- On appeal, argued (in respect of one promissory note, Exhibit A-3) that the form and wording did not disclose that the firm was a party liable on the face of the instrument — that the words "Partner, M.M. Abbas & Bros." were only descriptive and did not show that the signatory intended to bind the firm; consequently the signature should bind the individual but not impose liability on the firm.
- Asserted that the legal point about capacity/signature could be taken at any stage (relied on authorities such as Subbanna v. Subbanna and Kesava Gounder v. Rajan).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Subbanna v. Subbanna | Authority for the proposition that certain pure legal points may be taken at any stage of proceedings. | Cited by appellants' counsel to justify raising a new contention in appeal; the Court considered whether the contention was a pure question of law and allowed it to be argued. |
| Kesava Gounder v. Rajan (1976 1 M.L.J. 56 : A.I.R. 1976 Mad. 102) | Referenced in support of the appellants' contention that a pure legal point may be taken at a late stage. | Relied on by appellants' counsel; the Court did not reject the contention on the basis that it was not pleaded earlier and proceeded to examine its merits. |
| Firm of Sadasuk Janki Das v. Maharaja Sir Kishan Pershad Bahadur and Anr (1919 I.L.R. 46 Cal. 663 : A.I.R. 1918 P.C. 146) | Held that the name of a person or firm to be charged upon a negotiable document must be clearly stated on the face or back of the document so that the responsibility is plainly disclosed; mere disclosure "in some way" is insufficient. | The Court relied on the Privy Council's emphasis that the principal's name must be clearly disclosed; applied this principle in deciding whether the firm was shown to be liable on the face of the promissory notes (distinguishing when a description is sufficient or insufficient). |
| Katta Venkatannagari Sreenivasayya v. Kutagulla Muddo Nagappa (1936) 71 M.L.J. 738 : A.I.R. 1936 Mad. 984 | Held that recital in the body of a promissory note that it was executed by "X, partner of the firm" was inadequate to disclose that it was executed on behalf of the partnership. | Applied as authority that a description of the executant as a partner in the body of the instrument does not necessarily make the partnership liable; used to support the conclusion that Exhibit A-3 (where the signatory is described as "partner") did not disclose firm liability. |
| Penumatsa Rangaraju v. Sait Deviehand Bhootaji Firm partner Sait Seshmull Kasturji and Anr (1945) 2 M.L.J. 113 : A.I.R. 1945 Mad. 439 | Held that a recital stating borrowing for partnership business and a preamble description of the executant as a partner were not sufficient to disclose that the firm was liable on the note. | Used to reinforce the proposition that description as a partner or recitals of partnership purpose do not, by themselves, render the firm liable on the instrument. |
| Sitaram v. Chimandas (1928) I.L.R. 52 Bom. 640 : A.I.R. 1928 Bom. 516 | Held that where the instrument's signature and form identified an individual as the liable party (e.g., "G.V. Athale, Managing Proprietor..."), the firm was not liable; aligns with the rule that the instrument must disclose the firm's liability clearly. | Referred to as a like authority; the Court relied on it to support the view that where signature form points to an individual rather than the firm, the firm may not be liable on the instrument. |
| Indur Pattabirama Reddi v. Kamisetty Balliah (1928) 55 M.L.J. 574 : A.I.R. 1928 Mad. 1196 | Held that where a promissory note was signed by two persons who formed a partnership with another, the name of the firm was sufficiently disclosed on the face of the instrument to hold the firm liable even though a partner's capacity was not expressly stated. | Applied to demonstrate that in some factual patterns (depending on the instrument's face) the firm may be held liable even absent explicit words indicating agency; the Court contrasted such cases with the facts of Exhibit A-3. |
Court's Reasoning and Analysis
The Court proceeded in two main lines of analysis: (A) whether the promissory notes were supported by consideration and (B) whether the signature of Moshin Bhai bound the second defendant-firm (and hence defendants 2–4).
(A) Consideration and Execution
- The trial Court's finding that the promissory notes were fully supported by consideration was reviewed. The first defendant had admitted execution of the instruments but disputed the amount advanced (asserting lesser cash advances and partial repayment).
- As to the second defendant, the appellants denied that Moshin Bhai had signed. The appellants failed to produce admitted specimens of Moshin Bhai's signature that were in their control and would have enabled a comparison; the Court noted that Exhibits A-6 to A-8 were acknowledgments signed for or by defendants 2 to 4 but that no undisputed comparative signatures were produced.
- The Court inferred that material evidence (admitted signatures) in the appellants' possession was not produced and that, had that evidence been favourable, it likely would have been tendered. The Court noted the death of Moshin Bhai (on 5 February 1971) and considered the remaining oral testimony, observing contradictions in D.W.2's evidence (chief vs cross-examination) about receipt and handling of the notice Exhibit A-4. This undermined the credibility of the denial of execution.
- The Court invoked Section 118 of the Negotiable Instruments Act (as referenced in the opinion): there is a presumption that every negotiable instrument was made or drawn for consideration and the burden is on defendants to prove absence of consideration. The Court found no proof of absence of consideration and accordingly upheld the trial Judge's conclusions on this point.
(B) Capacity of the Signatory to Bind the Firm (Application of Authorities)
- The appellants' late-raised contention — that Exhibit A-3 should bind only Moshin Bhai personally because the instrument described him merely as "Partner, M.M. Abbas & Bros." (a descriptive phrase) and did not show he signed on behalf of the firm — was considered. The Court examined whether this was a pure question of law that could be taken at the appellate stage and, invoking the authorities cited (including Subbanna and Sitaram v. Chimandas), held that the point was an alternative legal plea not inconsistent with earlier pleadings and could be considered without further fact-finding.
- The Court reviewed the legal principle that partners are mutual agents and can bind the firm; Section 27 of the Negotiable Instruments Act was referred to in that context. However, the Court emphasized established case-law (notably the Privy Council decision in Firm of Sadasuk Janki Das v. Maharaja Sir Kishan Pershad Bahadur) that to charge a principal or firm on a negotiable instrument the name of the person or firm to be charged must be clearly stated on the face or back of the document so that liability is plainly disclosed.
- The Court surveyed binding and persuasive authorities that distinguish when description as "partner" suffices and when it does not (cases such as Katta Venkatannagari Sreenivasayya v. Kutagulla Muddo Nagappa, Penumatsa Rangaraju, and Sitaram v. Chimandas held that mere description as a partner or recitals of partnership purpose were insufficient to show the firm was liable on the instrument). Conversely, Indur Pattabirama Reddi was noted as an instance where the instrument's face disclosed the firm as borrower and hence the firm was liable.
- Applying these principles to the facts: Exhibit A-2 contained a signature that indicated it was "for M.M. Abbas & Brothers" and thereby disclosed firm liability on its face. Exhibit A-3, however, contained only a signature described as "partner of M.M. Abbas & Brothers" — a descriptive collocation which, on fair interpretation of the instrument, did not disclose that the firm itself was a party liable on the note. The Court held that a mere description of the signatory as a partner did not suffice to bind the firm in Exhibit A-3.
- The Court acknowledged that the difference in legal consequences turned on precise collocation of words in the instruments and that such differences, though subtle, produce distinct legal results under established authority.
Holding and Implications
Holding: The Court PARTLY ALLOWED the appeal by defendants 2 to 4.
Explanation of the core rulings:
- The trial Court's finding that the promissory notes were supported by consideration and the rejection of the general plea of non-execution was upheld in respect of the instruments other than Exhibit A-3: defendants failed to prove absence of consideration or to substantiate that the signature was not that of Moshin Bhai.
- However, as to Exhibit A-3 (the promissory note in which the signatory signed only described as "partner of M.M. Abbas & Brothers"), the Court held that the instrument's face did not sufficiently disclose that the firm was a party liable on the note; accordingly, Exhibit A-3 does not bind defendants 2–4 (the firm and partners) on the authority and principles discussed.
Direct consequences for the parties:
- Appellants' contention that Exhibit A-3 does not bind defendants 2–4 was accepted; that portion of the appeal succeeded.
- The appeal was otherwise unsuccessful and was only partly allowed; the respondent (plaintiff) substantially succeeded and is entitled to costs as stated by the Court.
- The trial decree (as recorded in the opinion) in favour of the plaintiff for Rs. 11,500 with interest at 12% per annum and proportionate costs remains part of the record; the Court's order resulted in a partial modification limited to the point concerning Exhibit A-3 as described above.
The opinion applies established authorities but does not purport to lay down a novel precedent; it resolves the dispute by applying prior case-law and statutory presumptions to the documents and evidence before the Court.
1. Defendants 2 to 4 in O.S. No. 2882 of 1971 in the City Civil Court at Madras are the appellants. The plaintiff filed the 3uit for recovery of Rs. 17,500 due under three promissory notes, two of which for Rs. 4,000 each, were executed on 11th January, 1969, and the third for Rs. 3,500 on 24th January, 1959. The promissory notes carried interest at 24 per cent per annum. They were executed by one Mallik on behalf of the first defendant. One Moshin Bhai has signed the promissory note as a joint executant and according to the plaintiff he was a partner in the second defendant-firm and had executed the three promissory notes only as such partner so that the second defendant firm, and the partners thereof, defendants 3 and 4, are jointly and severally liable for the debt.
2. The first defendant is a proprietary concern of one Khatija Bee. She filed a written statement stating that the plaintiff had advanced only Rs. 7,000 in each, that a sum of Rs. 6,000 had been paid back and that only the balance of Rs. 1,000 was due on the promissory notes. The rate of interest viz., 24 per cent per annum shown in the promissory notes was said to be usurious and illegal.
3. Defendants 2 to 4 filed a common written statement for themselves. They did not admit the signature to be that of Moshin Bhai. He was said to have been ill and for about 2 or :3 years prior to his death, his memory was alleged to have failed. According to them, there was no need for any borrowal and no amount had been brought into the firms account on the relevant dates. They, therefore, contended that the promissory notes were not supported by consideration.
The following issues were framed:
(1) Whether the pronotes arc not fully supported by consideration?
(2) What are the amounts actually advanced?
(3) Did the second defendant execute the pronote along with the first defendant?
(4) Are not the defendants liable to pay the suit claim?
(5) To what relief?
The additional issue which was numbered as Issue No. 6 ran as follows:
(6) Are the suit promissory notes validly executed by the first defendant?
4. The learned trial Judge held on issue No. 1 that the promissory notes were fully supported by consideration. On issue No. 3 it was held that the second defendant represented by Moshin Bhai, who was the partner, executed the promissory notes along with the first defendant represented by Mallik. On Issue No. 4 he held that the amounts due under the promissory notes would have to be paid by defendants 1 to 4 and on issue No. 5 that the plaintiff would be entitled to Rs. 11,500 being the principal advanced with interest at 12 per cent per annum as against defendants 1 to 4. On issue No. 6 the finding was that the validity of the promissory notes and their execution had not been contested in the written statement and that no evidence had been let in to substantiate the case, of absence of liability. The result was that there was a decree in favour of the plaintiff for Rs. 1L500 with interest at 12 per cent per annum with proportionate costs. The first defendant has not filed any appeal and defendants 2 to 4 raised two points viz., whether there is proof that the three promissory notes are supported by consideration and that the signature of Moshin Bhai binds them. I shall first examine the question whether the promissory notes are supported by consideration.
5. On this point, as mentioned earlier, the first defendant had categorically accepted the execution of the promissory notes, while as regards the payment of consideration, it was stated that only Rs. 7,000 had been paid in cash as against Rs. 11,500 appearing on the face of the three promissory notes. The execution of the promissory notes on behalf of the first defendant is thus a matter of admission. As regards the second defendant it Was stated that the signature is not that of Moshin Bhai. If the appellants had any doubt as regards the same, one would have expected them to have replied to Exhibit A-4, which is the copy of the suit notice issued by the plaintiff's counsel to the defendants denying the signature of Moshin Bhai. Exhibits A-6 to A-8 are the acknowledgments signed for or by defendants 2 to 4. Except the mere denial of D.W. 2, there is absolutely nothing to doubt the signature of Moshin Bhai. If really there were any documents in which Moshin Bhai's signature was undisputed and if the signatures in those documents were different from those in Exhibits A-1 to A-3, D2 could have produced them. They have not done so. Thus, there was no scope for the trial Court to compare the admitted signatures with the signatures in Exhibits A-1 to A-3 for the purpose of accepting the theory put forward by the defendants.
6. In the absence of the production of the admitted signatures of Moshin Bhai, the Court below was compelled to infer that the material piece of evidence which should be available with defendants 2 to 4 had not been placed before the Court and that if it was favourable it would have been so produced before Court. Moshin Bhai is unfortunately no more, he having died on 5th of February, 1971 about two years after the execution of the promissory notes. Therefore, the question as to whether Moshin Bhai signed or not has to be considered only in the light of the other evidence on record. The credibility of D.W. 2 has to be considered in the light of his own contradictory evidence in the chief and cross-examinations. While in the chief examination he stated that the notice Exhibit A-4 was received alter his father's death on 5th of February, 1971, and that he did not reply because he was not concerned with it, in cross-examination he stated that Mallik was contacted and that Mallik said that he would deal with the matter mentioned in the notice. If really the defendants 2 to 4 were not concerned with the notice, there is no reason why they should have contacted Mallik and accepted his statement that he would deal with the matter. If, however, defendants 2 to 4 were concerned with the notice, there was no proper explanation as to why it was not replied to. The plea of non-execution taken by defendants 2 to 4 was rightly rejected by the Court below. There is a presumption under Section 118 of the Negotiable Instruments Act that every negotiable instrument was made or drawn for consideration. It is for the defendants to prove absence of consideration. There is no such proof.
7. Now, I consider the next point that the signatures of Moshin Bbai cannot bind these defendants. As mentioned earlier, two promissory notes were executed on 11th January, 1969. Both are identical in form. It is, therefore, enough if reference is made to the language employed in one of them. Exhibit A-2 runs as follows:
On demand we jointly and severally promise to pay to Mr. Seth Chetandas Fatehchand, Hindu Undivided Family or order the sum of Rupees four thousand only together with interest at the rate of 24 per cent, per annum for value received in cash Per Pro Zulaikha goods.
Industries, Received cash.
Mallik for M.M. Abbas & Bros.
Rs. 4,000 Moshin Bhai, Partner.
Exhibit A-3, dated 24th January, 1969 is also, in identical terms.
But the signatures are found as follows:
Per Pro Sulaikha Industries, Mallik Moshin Bhai, Partner M.M. Abbas & Brother,
8. The learned Counsel for the appellants confined his contention that the signature of Moshin Bhai did not bind them only as regards Exhibit A-3. His contention was that the promissory note did not, on its face, indicate the responsibility of the firm and that the signature of Moshin Bhai should be taken-only as binding him and not the firm. Stated differently, the words "Partner, M.M. Abbas & Bros." in Exhibit A-3 represented only a description and did not indicate that as a partner Moshin Bhai signed this instrument. If Moshin Bhai had the intention of binding the firm, then he would have signed, it is argued, for and on behalf of the firm.
9. The contention in this form had not been taken in the written statement in specific language, and did not also appear in the grounds of appeal. Mr. R. Krishnaswami appearing for the respondents objected to the said contention being taken at this stage. For the appellants the submission was this contention was a purely legal one, which could, under the law, be taken at any stage of the proceedings. Reference in this context was made to the decision of the Supreme Court in Subbanna v. Subbanna and particularly the passage in paragraph 4 at page 1328 and also to a decision in Kesava Gounder v. Rajan (1976) 1 M.L.J. 56 : 89 L.W. 205 : A.I.R. 1976 Mad. 102.
12. The point to be examined is whether the content ion described above is one of pure law requesting no fresh investigation of facts so as to be liable to be urged at any stage of the proceedings. According to the learned Counsel for the respondents the plea that is now sought to be taken is also an inconsistent plea, which cannot be allowed to be urged without amendment of the written statement.
11. There were two main pleas set out in the written statement. One was that no consideration passed and the other was that the second defendant-firm was not liable. It is on the latter aspect that evidence was let in to show that the second defendant-firm had no need to borrow funds. The point now raised does not appear to be so inconsistent a plea as to merit rejection in limine at this stage. It is an alternative case. The point now raised does not appear to be no inconsistent a plea as to merit rejection in limine at this stage. It is an alternative case. It is not necessary to investigate any further facts, as the plea is taken only on the basis of the evidence already on record. In a Bench decision of the Bombay High Court in Sitaram v. Chimandas (1928) 1. L.R. 52 Bom. 640 : A.I.R. 1928 Bom. 516 a similar point was taken only before the appellate Court at the time of the hearing and was examined, j, therefore, overrule the objection taken by Mr. R. Krishnaswami and examine the contention urged for the appellants on its merits.
12. The general principle of law is that every one of the partners in a mercantile firm is liable upon a bill drawn by a partner in the recognised trading name of the firm for a transaction incidental to the business of the firm, although the particular partner's name does not appear on the face of the instrument, and although he is "a sleeping and secret partner". Section 27 of the Negotiable Instruments Act, 1881, also provides that every person capable of binding himself may so bind himself or be bound by a duly authorised agent acting in his name. Partners are mutual agents and can bind the firm by their acts. The Judicial Committee in the Firm of Sadasuk Janki Das v. Maharaja Sir Kishan Pershad Bahadur and Anr. (1919) I.L.R. 46 Cal. 663 : 36 M.L.J. 429 : 10 L.W. 143 : 46 I.A. 33 : A.I.R. 1918 P.C. 146 examined this question of the liability of a third party (so to say). In that case hundies were drawn by one Mohanlal in favour of Seth Sadasuk Chandra Sahu. Below the signature of Mohanlal there were the following"?
Acting Superintendent of the Private Treasury of His Excellency Sir Maharaja the Prime Minister of H.H. the Nizam.?
"Maharaja" referred to was Maharaja Sir Kishan Pershad Bahadur, who was the Prime Minister of the Nizam in or about the year 1913. Seth Sadasuk Janki Das filed a suit on those hundies implcading not only Mohanlal, but also the Maharaja. The District Judge, who tried the suit, passed a decree only against Mohanlal. But on appeal, this judgment was reversed and the case was remanded with the finding that the hundies had been drawn in a form sufficient to charge the Maharaja if the agency was proved. However, on further appeal, the trial Court's judgment was restored. The plaintiff, therefore, appealed to the Privy Counsel at page 434 of the Firm of Sadasuk Janki Das v. Maharaja Sir Kishan Pershad Bahadur and Anr. (1919) I.L.R. 46 Cal. 663 : 36 M.L.J. 429 : 10 L.W. 143 : 46 I.A. 33 : A.I.R. 1918 P.C. 146 Lord Buckmaster in delivering the judgment of the Privy Council observed as follows:
...It is of the utmost importance that the name of a person or firm to be charged upon a negotiable document should be clearly stated on the face or on the back of the document, so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand...It is not sufficient that the principal's name should be "in some way" disclosed, it must be disclosed in such a way that on any fair interpretation of the instrument his name is the real name of the person liable upon the bills.
The appeal in that case was dismissed thereby confirming the exoneration of the liability of the Maharaja.
13. In Katta Venkatannagari Sreenivasayya v. Kutagulla Muddo Nagappa (1936) 71 M.L.J. 738 : A.I.R. 1936 Mad. 984 the body of the promissory note stated that it was a pronote executed by Pedda Mallappa, partner of the firm. This was held inadequate to disclose that it was executed on behalf of the partnership of which Pedda Mallappa was a partner. Similarly in Penumatsa Rangaraju v. Sait Deviehand Bhootaji Firm partner Sait Seshmull Kasturji and Anr (1945) 2 M.L.J. 113 : 58 L.W. 366 : A.I.R. 1945 Mad. 439 a promissory note had been executed by one Satyanarayanaraju who was the managing partner of a firm. It was recited in the note itself that the money was borrowed for the purpose of the partnership business. It was held that neither the recital in the note that the borrowing was for the purpose of the partnership business nor the description of the executant in the preamble as a partner could be regarded as sufficient to disclose that the firm was a party liable on the note. It was pointed out by Patanjali Sastri J., as he then was, that the description of the executant in the preamble as a partner of a named firm was perfectly consistent with his executing the note as the party liable on the note and could not be taken, on a fair interpretation of the instrument, as disclosing the name of the firm, it was not made liable on the instrument. To the same effect is the decision of the Bombay High Court in Sitaram v. Chimandas (1928) I.L.R. 52 Bom. 640 : A.I.R. 1928 Bom. 516, to which reference was made earlier. In that case the signature ran as follows;
G.V. Athale, Managing Proprietor, Gangadhar & B. Friends, Sandhurst Road, Bombay No. 4.
The suit was filed against not only G.V. Athale, but also as against the firm Gangadhar & B. Friends. Alter referring to the Privy Council decision in Sadasuk Janki Das v. Kishan Pershad (1919) I.L.R. 46 Cal. 663 : 36 M.L.J. 429 it was held that the person liable on these hundies was Athale and not any firm under the name of Gangadhar and B Friends.
14. Even where a promissory note which was signed by two persons, who formed a partnership with another person, in their own names without any words following their signatures to describe in what capacity they signed the note, it was held that the firm was liable on the promissory note as the name of the firm as a party liable was sufficiently disclosed in the instrument. See Indur Pattabirama Reddi v. Kamisetty Balliah (1928) 55 M.L.J. 574 : A.I.R. 1928 Mad. 1196. Thus, even in the absence of an indication under the signature that a person was signing as a partner, it may be possible to infer a liability on the firm provided it is found on the face of the instrument that the borrower is the firm and not the individual partner, who signed the instrument. A person merely describing himself as a partner, cannot, however, bind the firm. There must be some indication in the instrument to show that he was signing on behalf of the firm. Exhibits A-2 and A-3 bring out the contrast. In Exhibit A-2 the signature is for M.M. Abbas and Brothers. In Exhibit A-3 he has signed the instrument only as "partner of M.M. Abbas and Brothers." The latter is a description and does not disclose the firm's liability. It is true that different legal result follows from the mere change in the collocation of the words. But it is inevitable, as different results are produced in law by the mere change in the collocation of the words.
15. The result is that the appellants' case as regards Exhibit A-3 that it is not binding on defendants 2 to 4 has to be accepted. The appeal is accordingly partly allowed. The 1st respondent will be entitled to his costs, as substantially the appellants have failed.
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