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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 45 of the Indian Contract Act, 1872 (9 of 1872)
  • Section 69 of the Partnership Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Section 45 of the Indian Contract Act, 1872 (9 of 1872)
  • Section 69 of the Partnership Act
Smart Summary

Factual and Procedural Background

The respondents (original plaintiffs) filed a civil suit to recover Rs 58,880 on the basis of a promissory note dated 1 April 1960, comprising a principal sum of Rs 46,380 and accrued interest. The trial court dismissed the suit. On appeal, the Patna High Court reversed the trial court and decreed the amount in favour of the plaintiffs. The present appeal was brought before the Supreme Court of India by special leave, challenging the High Court’s decree.

Legal Issues Presented

  1. Whether the suit filed by a registered partnership firm was liable to be dismissed for non-joinder of necessary parties when one partner had died during the pendency of the proceedings and his legal representatives were not substituted.
  2. Whether the renewal of the promissory note had, in fact, been executed by all liable parties, thereby fastening liability on the appellants for the sum claimed.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

Issue 1 – Non-joinder of Parties: The Court analysed Order XXX Rule 4(1) of the Code of Civil Procedure, which expressly provides that when a partner in a firm dies, either before institution or during the pendency of a suit filed in the firm’s name, it is not necessary to join the deceased partner’s legal representatives. This statutory provision overrides the rule in Section 45 of the Indian Contract Act, 1872. Consequently, the trial court’s dismissal of the suit for non-joinder was legally erroneous. The High Court’s conclusion that the suit remained maintainable was affirmed.

Issue 2 – Execution of Renewal Promissory Note: The appellants contended that renewal of the promissory note could not have been executed because one of the signatories was hospitalised. The Supreme Court noted that the High Court, acting as the final court of fact, had already undertaken a detailed examination of the documentary and other evidence. The High Court found that the note was duly executed by all relevant parties. Treating this as a pure finding of fact, the Supreme Court held that no question of law arose warranting interference.

Holding and Implications

APPEAL DISMISSED. No order as to costs.

Implications: The High Court’s money decree against the appellants stands confirmed. The decision reiterates the effect of Order XXX Rule 4(1) CPC—that a partnership suit does not abate nor become defective if a partner dies and his or her legal representatives are not substituted—without laying down any new precedent beyond this statutory clarification.

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    Brij Kishore Sharma And Another v. Ram Singh & Sons And Others

    Order

    1. This appeal by special leave arises from the judgment of the Division Bench of the Patna High Court made on 2-5-1980 in appeal from Original Decree No. 306 of 1969.

    2. The respondents filed a suit to recover a sum of Rs 58,880 on the foot of a promissory note dated 1-4-1960 to recover the principal sum of Rs 46,380 and interest which accrued thereon. The trial court dismissed the suit. But on appeal, the High Court allowed the appeal and decreed the suit. Thus, this appeal by special leave.

    3. Two points were raised in the written statement and argued by the respondents. The first point that was addressed and pressed for consideration is that the respondent-plaintiff being a partnership firm, has not impleaded all the partners co-nominees as plaintiff-party to the suit. Resultantly, the suit is not maintainable. Pending suit, one of the partners died and the legal representatives were not brought on record. The question, therefore, was whether the suit is liable to be dismissed for non-joinder of the necessary and proper parties? The trial court as well as the High Court recorded as a fact that the respondent-firm is a registered partnership firm and, therefore, under Section 69 of the Partnership Act, the suit is maintainable. The trial court dismissed the suit on the ground that since one of the partners died pending suit and the legal representatives were not brought on record, suit was bad for non-joinder of necessary and proper parties. The controversy is covered by the provisions of Order XXX of the CPC which gives special procedure for filing the suit by or against a partnership firm carrying on business in the name other than its own. In this case, the relevant provision is Rule 4 of Order XXX which provides thus:

    “4. (1) Notwithstanding anything contained in Section 45 of the Indian Contract Act, 1872 (9 of 1872), where two or more persons may sue or be sued in the name of a firm under the foregoing provisions and any of such persons dies, whether before the institution or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit.
    (2) Nothing in sub-rule (1) shall limit or otherwise affect any right which the legal representative of the deceased may have—

    (a) to apply to be made a party to the suit, or

    (b) to enforce any claim against the survivor or survivors.”

    4. Sub-rule (2) is not relevant for the purpose of this case. By operation of sub-rule (1) of Rule 4 of Order XXX, despite the embargo under Section 45 of the Indian Contract Act, it is not necessary that the legal representatives of the deceased partner who dies whether before institution of the proceedings or during the pendency of the proceedings, should be substituted as a co-nominee party plaintiff/defendant to the suit. The trial court, therefore, was not correct in holding that the suit is bad for non-joinder of necessary party. The High Court was right in the conclusion that the suit is maintainable.

    5. The next plea raised was that the renewal of promissory note was not executed by the appellants. The ground in support thereof was that one of the coparceners who was the signatory to the promissory note was hospitalised. Consequently, he could not have executed the promissory note on the even date. The High Court has gone into depth of this aspect by consideration of the entire evidence on record, mostly documentary evidence. Since it is a question of appreciation of evidence and the High Court, as the final court of fact, on appreciation thereof came to the conclusion that the promissory note came to be executed by all the persons and, therefore, the appellants-defendants are liable for the payment of the amount due thereunder. This being the finding of fact, we do not find any error of law in the finding recorded by the High Court.

    6. The appeal is accordingly dismissed. No costs.

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    Comments

    Brij Kishore Sharma And Another v. Ram Singh & Sons And Others
    (Oct 1, 1996)