Ram Kumar Shew Chand... v. The Dominion Of Indi..., Calcutta High Court, Judgment, Law, casemine.com

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Case Number

No. 523 of 1963

Attorney(S)

Janendra Coomer Datt
Ajoy Kumar Basu

Judges

M.M Dutt
Sharma, JJ.

Acts

provision is S. 69 of the Indian Partnership Act, 1932. Sub-section (1) and (2) and clause (a) of sub-s. (3)
provision of Order 30 of the Code of Civil Procedure. The provision of Order 30,
S. 77 of the Indian Railways Act and S. 80 of the Code of Civil Procedure
1961 SC 325). Sub-rule (1) of Rule 1 of Order 30
S. 14 of the Indian Limitation Act, 1908
sub-rule (1) of Rule 2 of Order 30,
S. 77 of the Indian Railways Act,
S. 77 of the Indian Railway Act.
S. 69(2) of the Partnership Act,

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Smart Summary

Factual and Procedural Background

This appeal arises from a suit by the plaintiff for recovery of the price of goods. On June 29, 1948 the appellant (alleged to be a dissolved partnership firm) booked 150 bales of piece-goods for carriage by the G.I.P Railway and the B.N. Railway, to be delivered at Shalimar. On July 17, 1948 the B.N. Railway delivered 140 bales but failed to deliver (or lost) the remaining 10 bales. The appellant claimed Rs. 10,183-4-6 as value of the 10 bales and Rs. 1,018-6-3 as 10% commission, totalling Rs. 11,202-4-9. The appellant alleged that notices under S.77 of the Indian Railways Act and S.80 of the Code of Civil Procedure were duly served.

Procedurally, the appellant first instituted the suit in the Original Side of the High Court (Suit No. 3934 of 1949). The High Court dismissed that suit for want of jurisdiction on January 4, 1957. The present suit was filed on January 7, 1957 in the Court of the Subordinate Judge, Howrah. During the period, one partner, Lachminarayan Poddar, died on September 16, 1956; another person, Durga Prosad Poddar, gave evidence that he became a partner in 1956. The B.N. Railway (Union of India) admitted liability for two bales only, denied other claims, and challenged the service and validity of the statutory notices as well as the appellant's entitlement to exclusion of time under S.14 of the Limitation Act.

The learned Subordinate Judge found that the S.80 notice was duly served and that the suit was not barred by limitation, but held (a) no proper copy of any notice under S.77 had been filed and correspondence relied on was illegal/invalid as a S.77 notice, (b) the appellant failed to prove loss by the defendant railway in the absence of the contracting G.I.P Railway as a party, and (c) the appellant-firm, having been dissolved on the death of a partner, was not entitled to sue. The suit was dismissed, and the appellant appealed. The High Court (M.M. Dutt, J., with Sharma, J. concurring) heard the appeal and delivered the opinion summarized here.

Legal Issues Presented

Whether the suit is maintainable at the instance of an alleged dissolved firm under S.69 of the Indian Partnership Act, 1932, and specifically whether the absence of the name of a partner (Durga Prosad Poddar) from the Register of Firms bars the suit under S.69(2).
Whether a letter dated August 18, 1948 (Ext. 3(c)), written by Santa Singh & Co., constitutes a valid notice under S.77 of the Indian Railways Act when relied upon by the appellant.
Whether the period during which the prior High Court suit was pending should be excluded in computing limitation (i.e., appellant's reliance on S.14 of the Indian Limitation Act, 1908), and whether the plaintiff prosecuted the earlier suit bona fide and with due diligence.
Whether the appellant discharged the onus of proving loss during carriage by the respondent railway where the contracting railway (G.I.P.) was not a party to the suit.

Arguments of the Parties

Appellant's Arguments

The appellant contended that statutory notices under S.77 (Indian Railways Act) and S.80 (CPC) were duly served.
The appellant claimed the period during which the High Court suit was pending should be excluded in computing limitation (invoking S.14 of the Limitation Act), implying the present suit was within time.
On maintainability under S.69(2) of the Partnership Act, the appellant argued that because the cause of action arose before Durga Prosad Poddar became a partner, it is immaterial whether his name appears in the Register of Firms; reliance was placed on Order 30 CPC (Purushottam v. Manilal & Sons) to show that partners at the time the cause of action arose can sue in the firm's name.
The appellant relied on the record and evidence (including Ext. 3(c)) to show Santa Singh & Co. acted as its clearing agent and gave the S.77 notice on its behalf.

Respondent's Arguments (Union of India / B.N. Railway)

The respondent admitted liability only for two bales and denied the remaining claims.
The respondent denied receipt or validity of notices under S.77 (Indian Railways Act) and S.80 (CPC), or at least denied their legality when relied on by the appellant.
The respondent contended the appellant was not entitled to S.14 Limitation Act benefit because the earlier High Court suit was not prosecuted bona fide and with due diligence.
The respondent challenged maintainability on two grounds: (a) the appellant-firm was dissolved on the death of a partner; and (b) Durga Prosad Poddar (who purportedly became a partner before the present suit) was not shown in the Register of Firms.
Regarding Ext. 3(c), the respondent argued that Santa Singh & Co. had made its own claim and had been paid in full and final settlement, so the letter could not operate as a S.77 notice on behalf of the appellant.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Purushottam v. Manilal & Sons, AIR 1961 SC 325	Order 30 of the Code of Civil Procedure: permitting partners constituting a firm to sue or be sued in the name of the firm; sub-rule (1) of Rule 1 allows persons who were partners when the cause of action arose to sue in the firm name.	The court acknowledged the enabling nature of Order 30 but explained its interaction with S.69(2): when the firm is shown as plaintiff, "the persons suing" are all partners on the date of suit and their names must appear in the Register of Firms to satisfy S.69(2). The precedent was used to explain limitations of the appellant's reliance on Order 30.
M.A Hossain v. Panchamal, AIR 1970 Mys. 299	Observation that persons suing could establish by evidence they are partners on the date of the suit (alternative to proving names in register), and that oral evidence may suffice.	The appellant relied on this observation to argue that absence of Durga Prosad's name in the Register could be cured by other evidence. The court expressly disagreed with that view, holding that both conditions in S.69(2) are mandatory and the names must be or have been shown in the Register of Firms.

Court's Reasoning and Analysis

The court approached the issues in stages, applying statutory provisions and the facts on record without accepting extra-record inferences.

Maintainability under S.69 of the Partnership Act:

The court recited S.69(1), S.69(2) and S.69(3)(a) and noted that a dissolved firm may have rights to realise property; a suit at the instance of a dissolved firm can be maintainable in some circumstances. The learned Subordinate Judge's view that a dissolved firm could not sue was held to be erroneous on that narrow point.
However, S.69(2) contains two mandatory conditions for a firm to sue: (1) the firm must be registered; and (2) the persons suing must be or have been shown in the Register of Firms as partners. The court found the first condition (registration) satisfied but held the second condition was not fulfilled because Durga Prosad Poddar (who was a partner on the date of the suit according to evidence) was not shown in the Register of Firms.
The court analysed Order 30 CPC: where a suit is instituted in the name of the firm, all partners on the date of the suit are "the persons suing." Accordingly their names must appear in the Register of Firms to meet S.69(2). The partners during whose time the cause of action arose may also sue in the firm name, but then those partners' names must appear on the face of the plaint so they can be identified as "the persons suing." Because the plaint here was in the firm's name and Durga Prosad's name was absent from the Register, the court held S.69(2) not satisfied and the suit barred on that ground.
The court expressly rejected the view (from M.A Hossain v. Panchamal) that absence of a partner's name from the Register can be cured by other evidence showing partnership. It held both conditions of S.69(2) are mandatory and the names must be shown in the Register.

Notice under S.77 of the Indian Railways Act:

The appellant relied on Ext. 3(c), a letter of August 18, 1948 from Santa Singh & Co. to the Claims Officer of B.N. Railway, claiming refund for a short delivery certificate for 10 bales. Receipt of Ext. 3(c) was acknowledged in subsequent correspondence; however, S.77 requires a claim in writing by the owner of the goods or on his behalf.
The court noted Ext. 3(c) did not indicate on whose behalf it was given. The appellant attempted to show Santa Singh & Co. was its clearing agent through evidence of P.W.2, Audh Pathak, but P.W.2 did not affirm that Santa Singh & Co. was the appellant's clearing agent, produced no papers, and the firm under which P.W.2 served had been dissolved.
Because the appellant failed to discharge the onus of proving Santa Singh & Co. acted on its behalf, Ext. 3(c) could not be relied upon as a S.77 notice by the appellant. Furthermore, Ext. 3(c) showed a sum of Rs.1,063-15-6 was paid to Santa Singh & Co. in full and final settlement of its claim, and therefore even assuming Santa Singh & Co. had been the appellant's clearing agent, its claim having been settled extinguished any continuing force of that notice for the appellant's benefit.
As there was no other valid S.77 notice by or on behalf of the appellant within the statutory period, the suit could not be maintained on that basis. Since the lack of a valid S.77 notice was dispositive, the court found it unnecessary to decide whether the appellant had proved loss on the defendant railway.

Other matters: The court considered but did not ultimately base disposition on the question of proof of loss during carriage because the failure to prove a S.77 notice (and the bar under S.69(2)) were independently decisive.

Holding and Implications

Holding: The High Court affirmed the judgment and decree of the Subordinate Judge and APPEAL DISMISSED. The court held (1) the suit was barred under S.69(2) of the Indian Partnership Act because a partner who was a partner on the date of the suit (Durga Prosad Poddar) was not shown in the Register of Firms, and (2) the appellant failed to prove service of any valid notice under S.77 of the Indian Railways Act by or on its behalf (Ext. 3(c) could not be treated as such a notice). There was no order for costs in view of the facts and circumstances.

Implications: The immediate consequence is that the appellant's suit fails and the appellate relief is refused; the decree of the Subordinate Judge is affirmed. The court's interpretation enforced the mandatory character of both conditions in S.69(2) (registration of the firm and presence of the names of the persons suing in the Register of Firms) and required valid statutory notice under S.77 to be shown to maintain a claim against a railway for loss or overcharge. The opinion did not, in explicit terms, announce any broader remedial rule beyond its application to the facts of this case; the direct legal effects are limited to dismissal of the appeal and affirmation of the decree, with no order as to costs.

Disposition recorded in the original opinion: "Appeal dismissed." (Order delivered by M.M. Dutt, J., with Sharma, J. concurring.)

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Ram Kumar Shew Chandrai, A Firm v. The Dominion Of India Now Union Of India, Representing The Railway Administration

M.M Dutt, J.:—This appeal is at the instance of the plaintiff and it arises out of a suit for recovery of the price of goods.

2. On June 29, 1948, the appellant alleged to be a dissolved partnership firm, booked 150 bales of piece goods at Wadi Bander on the G.I.P Railway for carriage by the said railway and also by the B.N Railway and for delivery of the same to the appellant at Shalimar. It was alleged that on July 17, 1948, the B.N Railway delivered 140 bales of piece-goods and failed and neglected to deliver the remaining 10 bales and/or lost the same and thereby caused loss and damage to the appellant. The appellant accordingly, claimed Rs. 10,183-4-6 on account of the value of 10 bales and Rs. 1,018-6-3 for loss of commission at the rate of 10% of the value of the goods. The total amount claimed by the appellant is Rs. 11,202-4-9. It was alleged that the statutory notices under S. 77 of the Indian Railways Act and S. 80 of the Code of Civil Procedure were duly served.

3. Initially, the appellant instituted the suit claiming the said amount in the Original Side of this Court being Suit No. 3934 of 1949. On September 16, 1957, Lachminarayan Poddar, one of the partners of the appellant-firm died. On January 4, 1957, the High Court dismissed the suit for want of jurisdiction. On January 7, 1957, the present suit was filed in the third Court of the Subordinate Judge, Howrah. It was contended that the period during which the High Court suit was pending should be excluded in computing the period of limitation of the present suit.

4. The respondent Union of India representing the B.N Railway contested the suit by filing a written statement. The claim of the appellant in respect of two bales only was admitted and the remaining claim was denied by the respondent. The receipt of the notices under S. 77 of the Indian Railways Act and S. 80 of the Code of Civil Procedure and the legality and validity thereof were denied. It was also denied that the appellant was entitled to claim the benefit of S. 14 of the Indian Limitation Act, 1908 as the plaintiff did not prosecute the High Court suit bona fide and with due diligence.

5. The learned Subordinate Judge came to the findings that the notice under S. 80 of the Code of Civil Procedure was duly served and that the suit was not barred by limitation. Regarding the notice under S. 77 of the Indian Railways Act, he held that no copy of the alleged notice had been filed and that, if the co-respondence between Santa Singh & Co. and the claims of the respondent-Railway be construed as constituting a notice under S. 77, it was illegal and invalid. Further, he took the view that as the G.I.P Railway which was the contracting railway was not made a party to the suit, the onus lay on the appellant to prove loss during carriage by the respondent-Railway, and the appellant failed to discharge the said onus. He held that the appellant-firm having been dissolved on the death of the said Lachminarayan Poddar was not entitled to sue. Upon the said findings, he dismissed the suit. Hence, this appeal.

6. We may first of all consider the maintainability of the suit. On behalf of the respondent, the maintainability of the suit has been challenged on two grounds, namely, (1) the appellant firm is a dissolved firm and (2) the name of Durga Prosad Poddar who became a partner of the appellant-firm in 1956 before the institution of the present suit is not shown in the Register of Firms. The relevant provision is S. 69 of the Indian Partnership Act, 1932. Sub-section (1) and (2) and clause (a) of sub-s. (3) are as follows:—

“69(1). No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm, unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm

(2). No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

(3). The provisions of sub-sections (1) and (2) shall apply also to a claim of set off or other proceeding to enforce a right arising from a contract, but shall not effect—

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or”.

7. It has been already noticed that the learned Subordinate Judge was of the view that as the appellant-firm was a dissolved firm, the suit was not maintainable. We are, however, unable to agree with him. Sub-section (1) and (2) give a clear indication that a suit at the instance of a dissolved firm is maintainable. Moreover, under sub-s. (3) a dissolved firm has the right or power to realise its property and, in that case, the provisions of sub-ss. (1) and (2) will not apply. But in other cases including a case to enforce a right arising from a contract the conditions under sub-ss. (1) and (2) must be fulfilled. The learned Subordinate Judge was in error in holding that the suit was not maintainable at the instance of the appellant-firm alleged to be a dissolved firm.

8. The second ground which has been raised on behalf of the respondent was not taken in the Court below, but as it is a pure question of law and all the facts required to determine the question are on record, we propose to consider the same. Under S. 69(2), two conditions must be fulfilled before a suit can be said to be maintainable. The said conditions are: (1) the firm must be a registered one and (2) the persons suing are or have been shown in the Register of Firms as partners in the firm. There is no dispute that the first condition is satisfied, for the appellant-firm is a registered firm. There is, however, a serious dispute between the parties as to whether the second condition is fulfilled. It is now necessary to state certain facts. The appellant has examined one Durga Prosad Poddar. Durga Prosad has stated in his evidence that he became a partner of the firm 1956 after the death of his father Lachminarayan Poddar. In paragraph 12 of the plaint, it has been stated that one of the partners Shri Lachminarayan Poddar having died on September 16, 1956, the plaintiff-firm has been dissolved. The suit was instituted on January 7, 1957 and before the institution of the suit Durga Prosad Poddar was taken in as a partner. So it is not correct to say that on the date of the suit the firm stood dissolved. When a firm consists of more than two partners, it is dissolved on the death of one of the partners unless the partnership agreement provides for its continuance in spite of the death of a partner. In the instant case, no partnership agreement has been produced by the appellant. But as stated by Durga Prosad he became a partner of the firm in 1956 after the death of Lachminarayan. From this fact, it may be reasonably presumed that the firm did not dissolve, but continued to carry on its business as before. The statement in paragraph 12 of the plaint does not seem to be correct. The second condition under S. 69(2) is that the persons suing are or have been shown in the Register of Firms as partners in the firm. The entries in the Register of Firms do not, however, include the name of Durga Prosad as one of the partners of the firm. It is argued on behalf of the appellant that as the cause-of-action for the suit arose before Durga Prosad was taken in as a partner it is quite immaterial whether or not his name appears in the Register of Firms, and the second condition is fulfilled as the names of the partners who were at the time of the accruing of the cause-of-action have been shown as partners in the Register of Firms. In support of this contention, reliance has been placed on behalf of the appellant on the provision of Order 30 of the Code of Civil Procedure. The provision of Order 30, is an enabling one which permits partners constituting a firm to sue or be sued in the name of the firm (Purushottam v. Manilal & Sons, AIR 1961 SC 325). Sub-rule (1) of Rule 1 of Order 30 enables two or more persons to sue or be sued in the name of the firm of which such persons were partners at the time the cause-of-action arose. A firm's name is merely a compendious mode of describing the partners constituted in the firm. When a suit is instituted in the name of the firm, it is really a suit by all the partners of the firm. In such a case, “the persons suing” within the meaning of S. 69(2) of the Partnership Act, are all the partners on the date of the suit. The partners during whose time the cause-of-action arose may also sue in the firm name, but the names of those partners must appear on the face of the plaint, so that they can be said to the “persons suing”. If the firm is only shown as the plaintiff, in that case, all the partners of the firm on the date of the suit must be held to be the persons suing and not only those partners during whose time the cause-of-action arose. Under sub-rule (1) of Rule 2 of Order 30, where a suit is instituted in the name of the firm, plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant forthwith declare in writing the names and addresses of all the persons constituting the firm. In the instant case, the plaintiff is the firm, that is, all the partners of the firm as on the date of the suit. In other words, all the partners of the firm on that date were the persons suing within the meaning of S. 69(2) and, as required by the second condition of that section, their names must be shown in the Register of Firms as partners in the firm. Admittedly, Durga Prosad Poddar was a partner of the firm on the date of the suit, but his name is not or has not been shown in the Register of Firms and, accordingly, the second condition is not fulfilled.

9. On behalf of the appellant, the following observation of the learned Single Judge of the Mysore High Court in M.A Hossain v. Panchamal, AIR 1970 Mys., 299 has been relied on:

“…persons suing may establish either that they are partners on the date of the suit or that they are persons whose names are shown in the register of firms as partners in the firm. As already observed, the second alternative, namely, the fact that the names of the persons suing have been shown in the register of firms as partners of the firm can be established either by producing relevant Register of firms or a certified copy of the same and not by adducing oral evidence. But there is no legal bar to prove the first alternative, namely, that the persons suing are partners of the firm by adducing evidence other than the register of firms or its certified copy.”

10. It follows from the said observation that the second condition will be fulfilled if it is proved that he is a partner in the firm notwithstanding that his name does not appear in the Register of Firms. With respect, we are unable to agree to this view as expressed by the learned Judge. Both the conditions under S. 69(2) are mandatory. In our opinion, the second condition will be fulfilled only when the names of the persons suing are or have been shown in the Register of Firms as partners in the firm. In the instant case, as the second condition of S. 69(2) has not been fulfilled, it must be held that the suit is barred by that section.

11. The next question that requires consideration relates to the notice under S. 77 of the Indian Railway Act. The appellant has placed reliance on a letter dated August 18, 1948, [Ext. 3(c)], and it is contended that the said letter constituted a notice under S. 77. Ext. 3(c) was written by Santa Singh & Co. to the Claims Officer, B.N Railway, claiming refund in respect of the short certificate for 10 bales granted by that railway. The receipt of this notice is not denied, and in the subsequent letters the Claims Officer has acknowledged the receipt of Ext. 3(c). On behalf of the respondent, however, it has been strenuously urged that Ext. 3(c) cannot be relied on by the appellant as a notice given on their behalf. Section 77 provides that a person shall not be entitled to a refund of an overcharge in respect of animals or goods carried by railway or to compensation for the loss, destruction or deterioration of animals or goods delivered to be so carried, unless his claim to the refund or compensation has been preferred in writing by him or on his behalf to the railway Administration within six months from the date of the delivery of the animals or goods for carriage by railway. It is clear from S. 77 that the notice must be in writing by the owner of the goods or on his behalf. Ext. 3(c) does not indicate on whose behalf it was sought to be given. It is, however, the case of the appellant that Santa Singh & Co. was its clearing agent and, as such, it should be inferred that Ext. 3(c) was written on behalf of the appellant. In order to prove the same, the appellant examined P.W 2 Audh Pathak who stated that Santa Singh & Co. was a clearing agent. He did not, however, say that the said company was a clearing agent of the appellant. Moreover, the firm of Santa Singh & Co. under which P.W 2 served had been dissolved, and it was admitted by him that there was no paper to show that the company was a clearing agent. He could not also give any other particular. The learned Subordinate Judge has held that the appellant has failed to discharge the onus that Santa Singh & Co. was its clearing agent. According to respondent Santa Singh & Co. made a claim and its claim was satisfied. It appears from Ext. 3(c) that a sum of Rs. 1,063-15-6 was given to Santa Singh & Co. in full and final settlement of its claim in connection with the consignment in question. In these circumstances, it must be held that Ext. 3(c) cannot be held to be a notice given by Santa Singh & Co. on behalf of the appellant. Even assuming that Santa Singh & Co. was the clearing agent of the appellant, the claim preferred by him having been settled finally, the said notice spent its force and the appellant cannot rely on the same. As there is no other notice given by the appellant under S. 77, the suit must fail on that ground. The learned Subordinate Judge was, therefore, right in holding that the plaintiff failed to prove service of any notice under S. 77 by or on its behalf. In these circumstances, it is not necessary to consider whether the appellant has been able to prove loss of goods on the defendant railway.

12. In the result, the judgment and decree of the learned Subordinate Judge are affirmed and this appeal is dismissed, but in view of the facts and circumstances of the case, there will be no order for costs.

Sharma, J.:—I agree.

Appeal dismissed.

Ram Kumar Shew Chand... v. The Dominion Of Indi...