Harishankar Lath And Others v. General Merchants Ltd.

P.V.B Rao, J.:— The judgment-debtors in an execution proceeding filed this appeal against, the order of the learned Subordinate Judge of Sambalpur dismissing their objections to the execution of the decree.

2. The order appealed against was passed in two miscellaneous cases arising out of the execution of a decree obtained by the decree-holder, The General Merchant Limited of Bombay, against a firm Jayanarayan Trilokchand of Sambalpur in summary suit No. 180 of 1948 of the Bombay City Civil Court. The decree was transferred for execution on to the Court of the Subordinate Judge of Sambalpur. Execution was levied against the movable property of the firm Jayanarayan Trilokchand. Notice on the execution application was issued against the firm represented by Madanlai Lath. Madanlai Lath was the son of Trilokchand. Madanlal filed an application under Section 47 of the CPC in Misc. Case No. 33 of 1953 alleging that Jayanarayan Trilokchand was the name of the firm run by his father who died about ten years prior thereto and that after his death, the business was wound up; that he, the applicant, was neither the proprietor, nor a member of the above said firm and was running a new business under the name and style of Madanlal Harisankar for the last 8 years, that the decree-holder obtained a decree in execution against a non-existent firm and against dead persons, and as such the decree was null and void and was not executable against him.

3. During the pendency of the enquiry into the above application, another application was filed by the sons of Madanlal in Misc. Case No. 56 of 1953 in which the allegations were different from those in the application filed by Madanlal. The applicants were the four sons of Madanlal. They contended that the firm Jayanarayan Trilokchand was a joint Hindu family firm and that after the death of Trilokchand, the applicants along with their father Madanlal as member of a joint Hindu family inherited the properties and were in possession of the same running the firm in another name, Madanlal Harisankar; that they were not parties to the decree and as they constituted a joint Hindu family firm, the members of the family who were not mentioned in the decree could not be liable for the decretal debt.

4. Madanlal appears to have died during the pendency of the execution application. Madanlal is the son of Trilokchand who is the son of Jayanarayan. Jayanarayan died in the year 1941 and Trilokchand also died. Madanlal after the death of Trilokchand appears to have carried on the business in the firm name Jayanarayan Trilokchand. The liability under the decree arose out of certain transactions between Madanlal and the decree-holder in the name of the firm Jayanarayan Trilokchand.

5. Before and after the suit was filed in 1948, there were a number of letters between the decree-holder and Madanlal covered by Exs. A, B and C series. The decree-holder's letters were addressed to the firm of Jayanarayan Trilokchand. The letters written by Madanlal and signed by Madanlal begin with the recital “accept the Pranams of Jayanarayan Trilokchand”.

6. There is also a letter, Ex. A signed by Madanlal Lath, Trilokchand and Madanlal Harisankar after the decree under execution was obtained by the decree-holder which is an acknowledgment of liability admitting the claim under the decree and agreeing to pay Rs. 2,000/- as part payment of the said decretal amount within one month and the balance within four months from that day. The contention of the objectors was rejected by the learned Subordinate Judge and hence the appeal.

7. Mr. R. Das, the learned counsel for the appellant contended that the decree was a nullity, and cannot be executed, and that the learned Subordinate Judge erred in holding that O. 30 of the CPC applies to the present case. His contention is that O. 30 of the CPC applies only to a firm coming into existence on contractual relationship and that it does not apply to a Hindu joint family concern, which cannot be considered to be a firm and the members cannot be properly described as partners within the meaning of O. 30 of the CPC. He also contended that Trilokchand and Jayanarayan having died, the decree was against a dead person and that the firm Jayanarayan Trilokchand was not in existence.

8. In support of his contention that ‘partner in O. 30 of the CPC means a partner by contract are ??? personal ??? and the firm does not include joint family business, learned counsel relied upon the cases of ‘Ramchandra Ramkisan v. Narayandas Sundarlal 1936 Nag 292 (AIR V 23) (A); Mahabir Ram v. Ram Krishen Ram’. 1936 All 855 (AIR. V23) (B), ‘Lalchand Amonmal v. M.C Boid and Co.’, 1934 Cal 810 (AIR V 211 (C) and ‘Motilal Chhadulal v. Giridharilal Rameshwarlal’, 1942 Cal 613 (AIR V 29) (D).

9. There is no dispute with regard to this contention: but, these decisions do not apply to the facts of the present case, and they deal with the provisions of O. 30, Rr. 1 to 9. As stated above it is clear that the judgment-debtors as also the sons of Madanlal were carrying on business in the name of Jayanarayan Trilokchand. The correspondence referred to as also the evidence of the agent of the decree-holder clearly establish this fact. This case is clearly governed by the provision of O. 30, R. 10 of the CPC which is to this effect:

“Any person carrying on business in a name or style other than his own name may be sued in such name or style as if it were a firm name; and so far as the nature of the case will permit, all rules under this order shall apply”.

10. This rule applies to individuals who carry on business in an assumed or trading name. In the case of ‘Jamunadhar Poddar Firm v. Jamunaram Bhakat’, 1944 Cal 138 (AIR V 31) (E) it was held by a Division Bench of the Calcutta High Court that:

“A Hindu joint family trading concern is not a firm. Such a Hindu joint family even when it carries on business under an assumed firm name, cannot sue as plaintiff in the firm name under the provisions of O. 30, R. 1. The suit must be brought either by the Karta of the family or by all the members of the joint family who are coparceners. But it does not necessarily follow that a suit cannot be instituted against the members of a joint Hindu trading family in the assumed name in which they are carrying on business or that a decree obtained in that form would be a nullity.

Order 30, R. 10 however enables a person to sue another as defendant in the assumed name……O. 30, R. 10 applies not only to a single individual carrying on business under a firm name or an assumed name, but it also applies to a number of individuals carrying on business either under a firm name or an assumed name when those individuals do not, in law, constitute a partnership resting on contract. Such a defendant can, however, be sued in his firm name or in the assumed name in which he is carrying on business only in respect of matters which are connected with the business which he is carrying on under that name”.

11. It is proved that the objectors were carrying on business in the firm name which was sued upon and that the transaction arose in the course of the business which the objectors were carrying on. Consequently, in my opinion, the decree is not a nullity. It is a perfectly valid decree and is executable against the objectors.

12. Mr. Das strongly relies upon a decision of this Court in the case of ‘Maturi Mail v. Bhagaban Das’, 1950 Orissa 189 (AIR V 37) (F), and a decision of the Madras High Court in the case of ‘Chidambaram Chettiar v. National City Bank of New York’, 1936 Mad 707 (AIR V 23) (G), and on the strength of these two decisions, contends that R. 10 of O. 30 applies only to a case of a single individual and that as in this case the objectors are members of a joint Hindu family who were carrying on business, the decree is a nullity and execution cannot be levied against them as O. 30, R. 10 does not apply.

13. In the ‘Madras Case (G)’ the plaintiff obtained a decree against defendant 1 who was described in the plaint as “R.M.P.M Chettiar firm” carrying on business at No. 84 Mogul Street, Rangoon. In execution of that decree, the plaintiff bank attached certain properties, which on their own showing belonged to the four minors, who were appellants before the High Court, constituting a joint undivided Hindu family.

14. The executing Court disallowed the objections preferred on behalf of the minors and mad an order allowing the execution. The objection which was urged in that case was that the firm had no legal ‘entity’ and that there could be no decree against a firm without any agent or partne being represented, and that all the proprietors of the said firm were minors and there was no adult proprietor and that a decree obtained without any representation on behalf of the minor proprietors was wholly void and was a nullity.

15. The facts of that case were that one Muthuveerappa Chetty, a member of the Nattukottai Chetty community was carrying on money-lending business under the name of “R.M.P.M Chettiar Firm”. He died in 1931, leaving his undivided sons, four minors. Their mother continued the business on their behalf with the aid of an agent, by name Veerappa Chetty and the suit debt was incurred in December, 1932, in course of that business.

16. The suit was then filed and attempts made to effect personal service of the summons on the agent having proved unsuccessful, an order for substituted service was obtained. Copies of the summons on the agent having proved unsuccessful, an order for substituted service was obtained. Copies of the summons were affixed and the decree as mentioned above was made.

17. On these facts, the learned Judges of the Madras High Court held that partnership having been described as the relationship between persons who had agreed to share the profits of a business, and that relationship of partnership arose from contract and not from status, a minor who is incapable of contracting, could not be a partner and that it was incomprehensible that four persons, who were all minors could agree with each other to form a partnership, even though the minors could be admitted to the benefits of a partnership.

18. They came to the conclusion that there must be at least two adult partners who are capable of contracting before a minor is entitled to the benefits of the partnership. The learned Judges, followed the rule of English law as laid down in the cases of ‘Maclver v. Burns’, (1895) 2 Ch 630 (H) & ‘St. Gobain v. Hovermann's Agency’ (1893) 2 QB 96 (I), and observed that O. 30, R. 10 applies only to cases of single individuals.

19. The decision of the learned Judges in that case was mainly based upon the fact that all the objectors were minors, and the debt was contracted by the agent who was looking after the business. Nevertheless, the learned Judges observed in the concluding paragraph of the judgment that nothing that they have said was to prejudice, in any manner, the plaintiff's right to apply to the Rangon High Court for the amendment of the decree or the plaint, or to obtain any other similar relief.

20. In my opinion, therefore, this decision is not on all fours with the facts of the case before us. In the case in 1950 Orissa 189 (AIR V 37) (F), the appeal was directed against an order permitting the decree-holder to implead the appellants as judgment-debtors under O. 21, R. 50 (2) of the CPC. The decree was obtained against Messrs Biseswarlal Kishorilal alleged to be a firm of commission agents. In that case the decree was passed on 24-5-1933, and affirmed in appeal on 19-9-1933, and execution was taken out against the judgment-debtor in the year 1935, but it was unsuccessful.

21. A second execution petition was filed in execution of which the judgment-debtor was described as Biseswarlal Kishorilal firm, proprietor Mangturam Kishorilal. Mangturam appeared and objected to the execution of the decree against him on the ground that he was not a partner of the firm. The decree-holder, however, did not press his execution and all wed it to be dismissed and the misellp neous case feed by Matrt iram was allowed.

22. The decree-holder thereafter started a third execution case and described the judgment-debtor this time as Kishorilal Mangturam Kishorilal firm and impleaded the appellants as legal representatives of the judgment-debtors. That execution case also was dismissed. A fourth execution case was thereafter started in which the judgment-debtor was described as Biseswarlal Mangturam Kishorilal firm, Proprietors Maturi Mall and Jogeswar the appellants therein.

23. That execution case was also dismissed and the Miscellaneous Case No. 161 of 1944 filed by the appellants as objectors was consequently not pressed. Then a fifth execution case was started against the appellants who started a miscellaneous case which was allowed by the executing Court absolving the appellants from any liability under the decrea sought to be executed. The decree-holder thereafter filed an application under O. 21, R. 50 of the CPC, for leave to execute the decree against the appellants as undisclosed partners of the judgment-debtor firm of Biseswarlal Kishorilal.

24. The undisputed facts in that case were that Biseswarlal had a son, Mangturam and the appellants were the grandsons of Mangturam. Kishorilal, their father was the son of Mangturam. Appellant 2 Jogeswar was still a minor and was not born at the time of the passing of the decree. Kishorilal died a few years ago while Biseswarlal is said to have died some forty years ago. It is also said that the firm Biseswarlal Kishorilal was dissolved about fourteen years ago when appellant Manturi Mall was a minor and appellant Jogeswar was not even born.

25. The appellants' case was that the judgment-debtor firm of Biseswarlal Kishorilal was not a joint Hindu family business, and that they did not inherit any property belonging to the judgment-debtor firm, and it was found by the lower Court that the members of the joint family were not partners of that firm so as to make them liable under O. 21, R. 50 of the CPC. It was also contended by the appellants in the case that by virtue of the order passed in the prior miscellaneous case which had become final the decree could not be available for execution against the appellants.

26. On these facts the judgment was delivered by Panigrahi, J. (as he then was, now my Lord the Chief Justice) with which Ray. C.J agreed, and the decision was that O. 21, R. 60, has no application to the case of a joint family concern carrying on business in an assumed name and that its application must be limited to cases of contractual partnership only. In that case the decree was obtained against the firm Biseswarlal, but the execution was levied against the joint family property of the appellants, and in none of the previous executions, the property of the partners, if there was any such property, was sought to be proceeded against.

27. Though there are observations in the judgment that O. 30 R. 10 contemplates suits against a single individual, they were made by virtue of the facts present in that case. In my opinion, the facts in that case are quite different. Panigrahi, J. observed in para 7 of the judgment:

“I am satisfied that there was no decree against anybody other than Biseswarlal Kishorilal assuming that the firm represented a single individual. The decree not having been executed against the assets of that firm, is now barred by limitation. Alternatively, even if it be held that the judgment-debtor represented a joint Hindu family business as the ‘Karta’, the order passed on 22-1-1946, by the Court in Miscellaneous Case No. 147 of 1945, having become final, the decree is no longer available for execution. In either view the decree has now become inexecutable. No leave under O. 21, R. 50 can therefore be granted to the decree-holder”.

28. It is clear therefore that the case was dismissed mainly on the ground of limitation and constructive res judicata. But there is one observation in the judgment of Panigrahi, J. in the course of the judgment:

“Order 30, R. 10, however, contemplates suits against a single individual carrying on business in a name or style other than his own”.

29. This observation was based on the two English decisions referred to above. Mr. Das strongly relied on this observation in support of his contention. But this observation, in my opinion, is merely an obiter dictum and as I will show presently the rule laid down in the English cases is not applicable in India.

30. The decision in the ‘Madras case (G)’ to the effect that O. 30, R. 10 applies only to a single individual is based upon the English law as decided in the cases of (1895) 2 Ch 630 (H) and ‘St. Gobain v. Hoyermann's Agency’, (1893) 2 QB 96 (I). The facts in the case of ‘Maclver v. Burns’, (H), were that an action was brought by three gentlemen of the name Maclver against Sir John Rams, sued as G. and J. Burns and the action was a partnership action to take the accounts and wind up the business of what was called the Clyde Steam Navigation Company, which was a partnership between the plaintiffs and Sir John Burns, and the dealings and transactions of that partnership related to the sailings of steamships from the Clyde.

31. Sir John Burn being sued simply as a member of that firm, and being a domiciled Scotsman not residing in England and having nothing whatever to do in that country so far as that cause of action was concerned, carried on business in Liverpool under the name of “G. and J. Burns” and in consequence of that circumstance he was sued under that firm name and a writ was served in Liverpool upon the person having the management of his business there, and the question to be decided in that case was whether that course was right. Lindley, L.J in course of the judgment observed:

“Now, consider what is the object of R. 11. It is to authorise the suing persons in the name in which they carry of business to facilitate the carrying on of action against persons who conceal their names, and for that purpose the rules relating to actions against firms are to be applied as far as possible; but they cannot be applied to a case not within the reason of the rule”.

32. It may be observed that O. 48A, R. 11 of the Supreme Court Rules is exactly the same as O. 30, R. 10 of the CPC. In the case before the Court there was only one person who was sued, that is, Sir John Burns. The decision was based upon the fact that in the partnership action which was filed by Maclver, Sir John Burns in his individual capacity as partner of that firm was only concerned, and that the subject matter of that action had nothing to do with the business of the firm in the name of G. and J. Burns carrying on business in Liverpool.

33. In the course of the judgment, no doubt it was observed that O. 48A, R. 11 of the Supreme Court Rules applies only to cases of single individuals, but that was not a point in dispute in that case. Similarly in the case of ‘St. Gobain v. Hoyermann's Agency’, (I), it was held that the rule did not apply to a foreign subject resident out of the jurisdiction who carried on business under the jurisdiction in the name or style other than his own name.

34. In that case an action was brought for damages for the nondelivery by the Defendant to the plaintiffs of 400 tons of sulphate of ammonia, under a contract for sale made between the plaintiffs and the defendant on 16-12-1892. The plaintiffs were a French firm of chemical manufacturers carrying on business at Paris, with a depot in London. The defendants named in the writ were “Hoyermann's Agency”.

35. The sole proprietor of the business which was also that of a chemical manufacturer, was Gerhard Hoyermann, a foreigner resident in Hanover, who had never resided within the jurisdiction. His business of manufacturing chemicals was carried on in Hanover, in the name of “Phesphatrabric, Hanover” and he had also an office at Mark Lane, where orders for goods were taken, and sales effected, by a manager employed by him. The contract for the breach of which the action was brought was signed by the defendant's manager in Mark Lane.

36. The writ was served by the plaintiff's solicitors upon the defendant's manager at the office in Mark Lane. The question was whether that service was valid, and it was held, as already stated, that O. 48A, R. 11 did not apply. These two decisions were also based upon the fact that in the one case the defendant was a Scotsman where the law was different and that there would have been much outcry on the part of Scotsmen and foreigners if they were sued in England and in the other case the defendant was a foreigner resident in Germany, and it would be against international law if he was to be sued in England.

37. In both the cases the question whether O. 48A R. 11 applied to single individuals or can be applied to more than one individual was not the point in dispute. The observations of Panigrahi, J. (as my Lord then was) in the decision of this Court reported in 1950 Orissa 189 (AIR V 37) (F), are also based upon the two English cases referred to in the Judgment of the ‘Madras case (G)’.

38. I have already pointed out that the ‘Madras case (G)’, us well as the case in this Court proceeded mainly on other considerations. In those two cases though observations were made that O. 30, R. 10 of the CPC applies only to single individuals, I agree with respect with the observations made in the judgment of the Calcutta case, and hold that the two English cases do not directly decide that O. 48A, R. 11 of the Supreme Court Rules applies only to cases of single individuals.

39. Further, the expression ‘person’ as used in O. 30, R. 10 of the CPC may be made applicable to a legal person and a joint Hindu family can be, I in the eye of law, a person. In the case of Alekh Chandra v. Krishna Chandra’, 1941 Pat 596 (AIR V 28) (J), the Patna High Court was of the opinion that a joint Hindu family is to be considered as a single person. In this case it was also held that O. 30, R. 10 applies to a joint Hindu family trading firm.

40. Fazl Ali, J. who delivered the judgment adhered to his view expressed in ‘Sirikant Lal v. Sidheshwari Prasad’, 1937 Pat 455 (AIR V 24) (K), that a joint Hindu family being a legal person according to Hindu law lawfully represented by and acting through the managing member or head thereof is included ordinarily in the term ‘a person’. In 1937 Pat 455 (AIR V 24) (K), Fazl Ali, J., observed, following the case in ‘Krishnanand Nath v. Ram Singh’, 1922 All 116 (AIR V 9) (L) that

“the head of the joint Hindu family is not the same as that of an ordinary business agent and that a joint Hindu family, being a legal person according to Hindu law lawfully represented by & acting through the managing member or head thereof, is included ordinarily in the term ‘a person’.

41. In 1922 All 116 (AIR V 9) (L) it was observed:

“The position of the head of the joint Hindu family is not the same as that of an ordinary business agent, and according to the true view, a joint Hindu family being a legal person according to Hindu law, lawfully represented by and acting through the managing member or head thereof, is included ordinarily in the term ‘a person’.”

42. In the case of ‘Mewa Ram v. Ram Gopal’, 1926 All 337 (AIR V 13) (M) which was a case under Section 4 of the Companies Act, it was held that the joint family must be considered to be a unit and must be deemed to be one person within the meaning of Section 4 of the Indian Companies Act, The expression ‘person’ is defined in the General Clauses Act as follows:

“Unless there is something repugnant in the context or in the subject, the term ‘person’ will include any association or body of individuals whether incorporated or not”.

43. Applying this definition to the expression ‘person’ used in O. 30, R. 10, it can be seen that a person includes the members of a joint Hindu family.

44. Business is carried on usually from one part of the world to another through post and goods are supplied on such orders. The goods are generally supplied sometimes on credit. The correspondence is carried on in the firm name. Persons, residing in distant places and supplying goods on credit in the firm name which ordered the goods cannot be expected to know the names of the persons who are carrying on the business. It is to facilitate commercial transactions that O. 30, R. 10 is intended.

45. Lindley L.J, in one of the above cases cited, observed that the corresponding provision, O. 48A R. 11 had nothing to do with partnership rules and that the rule was intended to authorise the suing persons in the name in which they carry on business. The underlying principle being to facilitate the carrying on of actions against those who conceal their names. In India there are a large number of merchants belonging to a joint Hindu family who carry on business in an assumed name being that of the grandfather or father.

46. If O. 30, R. 10 is not made applicable to their cases and the creditor is allowed to sue them in the firm name, great hardship would arise inasmuch as a distant creditor may not be able to know the names of persons to be sued.

47. Agreeing therefore, with the view taken by the Calcutta and Patna High Courts, I am of opinion that the decree obtained by the decree-holder is a legal and enforceable decree, and the objectors can be proceeded against under O. 30, R. 10 of the CPC. I would, therefore, hold that both the contentions raised by the learned counsel for the appellants are not sustainable. The decree-holder obtained a valid and enforceable decree and it can be executed against the movable properties of the firm in the hands of the objectors. The appeal, therefore fails, and is dismissed with costs.

Panigrahi, C.J:— I agree, I would like to make it clear that the proper interpretation of Rule 10 of O. 30 of the CPC did not arise directly in the previous case reported in 1950 Orissa 189 (AIR V 37) (F), and the observation made by me that it applies only to a single individual was no more than an obiter dictum, as pointed out by my learned brother.

D.H.Z

48. Appeal dismissed.