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  • provisions of Order XLI, rule 4, Code of Civil Procedure, and Order XLI, rule 33, Code of Civil Procedure. These provisions
  • provisions of Order XXX, rule 1, of the Code of Civil Procedure.
  • provisions of Order VII, rule 7, of the Code of Civil Procedure.
  • Order XLI, rule 33, of the Code of Civil Procedure, 1908,
  • Order XLI, rule 4, and Order XLI, rule 33,
  • Order XLI, rule 33,
  • Order XLI, rule 4,
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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
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  • provisions of Order XLI, rule 4, Code of Civil Procedure, and Order XLI, rule 33, Code of Civil Procedure. These provisions
  • provisions of Order XXX, rule 1, of the Code of Civil Procedure.
  • provisions of Order VII, rule 7, of the Code of Civil Procedure.
  • Order XLI, rule 33, of the Code of Civil Procedure, 1908,
  • Order XLI, rule 4, and Order XLI, rule 33,
  • Order XLI, rule 33,
  • Order XLI, rule 4,
Smart Summary

Structured Summary of the Opinion (Meredith, J.)

Factual and Procedural Background

This appeal arises from a judgment of the Subordinate Judge of Saran dated 30 September 1937. The plaintiffs (two sons of Halkhori Ram) sued for realisation of Rs. 11,240 by sale of specified partnership properties (schedules II and III) of the firm Damri Sahu Halkhori Ram. They alleged they were partners and had an equitable lien on those properties because that sum had been realised from them individually to meet partnership debts.

The defendant-appellant in this appeal is Musammat Jagpati Kuer (defendant no. 2), widow of Damri Sahu. Defendants included heirs of other partners and persons associated with the firm's branches. There was a prior decree (suit No. 38 of 1928, Court at Chapra) in favour of Dasrath Bhagat Gulabchand against the partners of Damri Sahu Halkhori Ram for a sum including interest and costs; execution of that decree led to sale of certain properties, and the plaintiffs claim Rs. 11,240 of the proceeds were realised from them.

At trial the Subordinate Judge dismissed the plaintiffs' claim to realise the money from the partnership properties because the suit did not pray for dissolution and accounts; he nonetheless gave a personal decree in part against certain individual partners. The present appeal challenges that outcome on behalf of defendant no. 2.

Legal Issues Presented

  1. Whether a partner can maintain a suit to enforce an equitable lien on partnership property (or obtain sale of partnership assets) for contribution in respect of a partnership debt without asking for dissolution of the partnership and a final account.
  2. If a partner pays the whole of a joint decretal amount arising out of a judgment against partners, whether he can sue co-partners individually for contribution where the debt is a partnership debt.
  3. Whether, in the absence of a specific prayer for personal relief, a court may nevertheless grant a personal decree when the plaint contains the general prayer for relief (Order VII, rule 7, CPC).
  4. Whether the decree against one partner (or some partners) can be varied on appeal where other co-partners have not appealed, and the applicability of Order XLI, rules 4 and 33 of the Code of Civil Procedure to alter decrees as to non-appealing parties.
  5. Subsidiary factual questions raised: the extent to which proceeds from sales of partnership or plaintiff properties went to satisfy the prior decretal amount and the extent to which contribution liability should be limited (e.g., to one-eighth) where an eight-person joint decree existed.

Arguments of the Parties

Appellant's (Mr. Mullick) Arguments

  • Main contention: A decree could not be given against partners individually for the same reason a decree could not be given against the firm — one partner cannot sue another for contribution in respect of partnership debts without first seeking dissolution and final accounts.
  • Conceded an exception: a suit for contribution may lie where the debt is not truly a partnership debt; he argued the present debt was a partnership debt (citing the plaint, judgment and decree in suit No. 38 of 1928) so the exception did not apply.
  • Subsidiary: No specific personal decree had been prayed for, so a personal decree should not have been given merely because of a general prayer for relief; defendants were taken by surprise and might have had additional defences if the pleading had been specific.
  • Fact contention: Rs. 10,050 (not Rs. 11,240) had been realised out of partnership assets and only Rs. 3,000 had been realised from property of the appellant and others; thus contribution claims should be limited to amounts actually realised from the plaintiffs.
  • Where a decree was made against eight defendants jointly and severally, any defendant who paid the whole decretal amount could recover only one-eighth from each co-defendant (i.e., contribution should be limited to proportionate shares).

Respondents' (Dr. Mitter) Arguments

  • Maintained that the Subordinate Judge was right to give a personal decree in part because the plaint contained a general prayer for relief (implicitly supporting the exercise of powers under Order VII, rule 7).
  • Relied on authorities and past decisions which, in his view, supported the trial Court's approach or the general legal principles distinguishing partnership debts from independent liabilities — arguing that some decisions permit contribution suits in certain factual circumstances.
  • Argued that the decree in suit No. 38 of 1928 did not operate as res judicata between the present plaintiffs and defendants, but the present plaintiffs had proceeded in the present suit on the assumption that the 1928 decree was correct.
  • Defended maintenance of the decree against other defendants (3–7) on grounds of finality: several of those defendants had not appealed and had acquired statutory rights from the decree remaining unchallenged within limitation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Lindley on Partnership (quoted) Partners have an equitable lien on partnership property for payment of firm debts, but the lien is practically operative only when partnership affairs are wound up or shares ascertained. Quoted to show partners' rights over partnership property do not give a right of action inter se until winding up/accounts; supports dismissal of claim to realise partnership property without dissolution/accounts.
Halsbury's Laws of England (vol. 24, Art. 918) Partners are not regarded as debtor and creditor inter se until the concern is wound up or accounts finally settled; no right of action for balance until final settlement. Adopted as a clear statement of law reinforcing the proposition that a partner cannot sue another for a partnership balance until accounts are settled.
Sadler v. Nixon One partner who pays money on account of co-partners cannot maintain an action for contribution where payment was compelled by law. Used as early precedent exemplifying that partners cannot sue for contribution in respect of partnership liabilities absent winding up/accounts.
Gopala Chetty v. Vijayaraghavachariar (Privy Council) After dissolution but before accounts, the proper remedy is a suit for account; if right to an account is barred, one cannot sue for a share in an asset. Relied upon to support the proposition that the remedy between partners for partnership assets is by accounts and not by contribution suits.
Debesh Chandra Mukerjee v. Benoy Krishna Banerjee (Calcutta High Court) Where partners borrow jointly and one pays up, first question is whether the debt was a partnership debt or a separate joint liability; if partnership debt, payment obliges adjustment by accounts unless special circumstances. Applied to emphasize that a joint decree alone does not prove the debt was not a partnership liability; supports requirement of accounts for partnership debts.
Sadgwick v. Daniell Where liability was not a partnership transaction but a separate joint liability, a partner could sue for contribution. Used to articulate the exception: if the debt is collateral/independent of partnership, contribution suit is maintainable.
Guda Kulita v. Joyram Das Sets out circumstances where a suit for contribution by a partner is maintainable (e.g., liability not joint liability of entire partnership; bond executed not in usual partnership course; express promise to contribute). Relied on to outline the exceptions permitting contribution actions against some partners only; court used it to test facts of present case.
Ghishnlal Ganeshilal v. Gambhirmal Pandya One partner has no action against another for balance until final settlement of accounts; partner may sue for debt independent of partnership accounts. Reiterated the rule distinguishing partnership liabilities from independent liabilities; applied to find the present debt was partnership indebtedness.
Kassa Mal v. Gopi Exceptional cases may permit taking of partnership accounts before dissolution. Noted as authority limiting circumstances in which accounts can be sought without dissolution; court observed exceptional grounds must be pleaded and shown.
Krishnaswami Naidu v. Jayalakshmi Ammal If a partner asks for an account without dissolution, special grounds must be alleged and the defendant must be given opportunity to oppose. Quoted to show safeguards required where account is sought without dissolution; supports requirement of pleading and opportunity to defend.
Ellappa Mudaliar v. Swaminatha Mudaliar Sitting judge held a partner who paid whole decretal amount for partnership debt could sue for contribution (not followed by Meredith, J.). Distinguished and disapproved by the court as inconsistent with established principle; not followed.
Durga Prosonno Bose v. Raghunath Das Money borrowed upon individual credit of the partners; supports contribution action where liability was individual. Used as an example where contribution suit was maintainable because liability was not a partnership liability.
Laban Sardar v. Choyen Mallik Borrowing by plaintiff and defendants jointly on their individual credit for partnership business makes them principal debtors and permits contribution action. Applied as a precedent where joint personal borrowing (not firm liability) allowed contribution action; used to distinguish from present facts.
Arunachalam Servai (Semai) v. Nottam Beer Varu Rowther Prima facie co-judgment-debtors are equally liable to contribution, but implied contract may be displaced by particular facts. Quoted to show that equal contribution among co-debtors is prima facie rule but can be displaced by special circumstances; applied when considering one-eighth contention and apportionment.
Boulter v. Peplow Where creditor dealt with some partners only, the liability of those partners may be collateral to partnership and not of the firm as a whole. Examined as potential analogy by respondents but distinguished because the present suit was based on bahi khata and a claim against the firm.
Batard v. Douglas Case of co-contractors rather than partnership; used to show legal distinctions. Noted but found not to bear on rights of partners inter se in present context.
Wooley v. Batte Case of joint tort-feasors; not directly about partners' rights inter se. Mentioned to illustrate that cited English authorities did not undermine the general rule on partnership debts.
Musammat Bibi Kazmi v. Lachhman Lal Sao Procedure: suing individual members of a firm without naming the firm is permissible; Order XXX, r.1 is permissive not mandatory. Used to counter argument that failure to implead the firm as such meant the 1928 decree was not against the firm; court held partners can be sued individually.
Ram Prasad Singh v. Mohan Madan Lal (Noor, J.) Order XLI, rule 33 should not be applied where there is a distinct and separate decree against non-appealing defendants. Relied on in assessing whether appellate court should alter decrees as to non-appealing co-defendants; used to justify leaving decree against defendants 6 & 7 undisturbed.
Daroga Rai v. Basudeo Mahto Where there are two distinct decrees on two causes of action, appellate court should not interfere with that part against which no appeal was preferred. Applied in reasoning that the separable decree against defendants 6 & 7 should stand where no appeal was taken.
Suraj Prakash Puri v. Sant Lal Singh Order XLI, rule 33 empowers appellate court to interfere with rights of non-appealing persons only to give full effect to altered decision, but should not be used where distinct separate decrees exist against non-appealing persons. Invoked to limit use of appellate powers under Order XLI, r.33 in the facts of the present case and to justify leaving some decrees intact.

Court's Reasoning and Analysis

The court began by identifying the principal legal rule: partners have an equitable lien on partnership property, but that right does not give rise to actionable claims inter se until the partnership is wound up or final accounts are taken. The judge cited Lindley on Partnership and Halsbury to frame this general principle, and relied on established case law (Sadler v. Nixon; Privy Council in Gopala Chetty) to show the appropriate remedy between partners is by account-taking rather than by contribution suits for partnership debts.

The court recognized a firmly established exception: where the debt is not truly a partnership liability but a separate or collateral obligation of some partners (examples provided in Sadgwick v. Daniell and other Indian cases), a contribution action may be maintainable. The task then was factual: to determine whether the decretal debt from suit No. 38 of 1928 was a partnership debt or an independent liability.

On the facts, the court examined exhibits (the plaint and judgment in suit No. 38 of 1928) and found the claim in that earlier suit was plainly against the firm — the bahi khata and the judgment itself treated the debt as a firm obligation. Because the 1928 proceedings and decree treated the debt as that of the firm and the present plaintiffs had sued on that basis, the present court concluded the debt was a partnership liability in substance.

Given that conclusion, the court held the present suit (to realise partnership property or to obtain contribution without dissolution and accounts) was not maintainable. The Subordinate Judge had erred in holding the debt was not a partnership debt and in granting a personal decree against the partners individually to the extent he did.

The judge addressed subsidiary points:

  • Personal decree without specific prayer: Court observed Order VII, rule 7 CPC permits the grant of general reliefs arising from the claim; had the suit been otherwise maintainable, a personal decree could have been given notwithstanding lack of a specific prayer.
  • Extent of sums realised from partnership vs. individual property: There was insufficient clear evidence on record to determine precisely how much of the sale proceeds of the plaintiffs' properties went to satisfy the 1928 decree; the trial proceeded on the common assumption that Rs. 11,240 had been applied to firm debts and that feature was not controverted at trial.
  • Contribution limited to one-eighth: The court acknowledged the prima facie rule that where joint and several liability exists among eight defendants, contribution might be proportionate, but held this is a prima facie rule displaced by special circumstances. The court did not decide the point definitively on the facts because the primary question of whether the debt was partnership indebtedness had been answered adversely to maintainability of the suit.
  • Impact on co-defendants not joined in appeal: The court analysed Order XLI, rules 4 and 33 CPC and relevant authority. It treated the decree as comprising two separable parts (one for Rs. 5,620 against defendants 2–5; another for Rs. 2,634-6-0 against defendants 6 and 7). Because defendant no. 2's appeal related to the first sum (and was competently filed and valued), and because the ground for failure applied equally to co-defendants 3–5, the court found it appropriate to set aside that part of the decree as against defendants 2–5. Conversely, because there had been no appeal as to defendants 6 and 7, and their decree was separable, the court declined to disturb it under Order XLI rules.

Holding and Implications

Holding: The Court allowed the appeal in part. It held that a suit to enforce a claim against partnership property or to obtain contribution from co-partners in respect of a partnership debt is not maintainable without dissolution and final accounts, unless the debt is not in truth a partnership liability.

The court made the following specific orders (emphasized verbatim emphasis added where used in the opinion):

  • DISPOSED OF: The appeal succeeds in respect of defendant no. 2 (Musammat Jagpati Kuer) and the suit is dismissed as against that appellant with costs.
  • The decree is dismissed as against defendants 3 to 5 (without costs) because the ground of law for dismissal applied equally to them and the appeal brought by defendant no. 2 was held to be competent and to affect that portion of the decree.
  • The decree as to defendants 6 and 7 is allowed to stand (i.e., the separate decretal sum against them is not disturbed) because there was no appeal by them and their decree is separable.

Consequences and implications: The practical effect is that the plaintiffs cannot, on the present record, realise the claimed sum from the partnership properties specified without first seeking dissolution and accounts; the judgment does not purport to create a novel legal rule but applies and restates established principles distinguishing partnership debts from independent liabilities and clarifies the limited circumstances for appellate alteration of decrees as to non-appealing parties. The court explicitly disapproved one contrary single-judge decision (Ellappa Mudaliar v. Swaminatha Mudaliar) as not stating the law correctly.

Disposition: Appeal allowed in part; suit dismissed as against appellant (defendant no. 2) with costs; decree left intact as to defendants 6 and 7; decree set aside as to defendants 3–5 (without costs).

    Musammat Jagpati Kuar v. Firm Damri Sahu Halkhori Ram

    Meredith, J.:— This appeal by defendant no. 2 is from a decision of the learned Subordinate Judge of Saran, dated the 30th of September, 1937. The appellant, Musammat Jagpati Kuer, is the widow of Damri Sahu, who was a partner in a Samastipur firm known as Damri Sahu Halkhori Ram. The suit was for realisation of a sum of Rs. 11,240 by sale of certain properties of this firm specified in schedules II and III of the plaint. The plaintiffs, who are two sons of Halkhori Ram, claimed to be partners in the firm and that they had acquired an equitable lien on the properties in question on account of a sum of Rs. 11,240 which, they said, had been realised from them individually on account of the debts of the firm.

    According to the plaintiffs, the firm was owned as follows: Damri Sahu and Kunja Sahu (both deceased) eight annas, Halkhori Ram (deceased) four annas three pies, and Bishun Prasad (deceased) three annas nine pies. The firm had branches at Calcutta and Matia, and the shares of each party were the same in the branches.

    In the plaintiffs' suit the firm Damri Sahu Halkhori Ram was made defendant no. 1. Defendants 2 to 5 are the heirs of Damri and Kunja, and defendants 6 and 7 the heirs of Bishun Prasad. Defendant 8, Rambaran Ram, was the gomashta of the Calcutta branch.

    There was another firm in Samastipur known as Damri Sahu Srikant Prasad. The firm of Damri Sahu Halkhori Ram owned an eight-annas interest in that firm, and defendants 9 to 11 were the holders of the remaining 8 annas. Again at Darbhanga there was a firm, Damri Sahu Thakur Ram Ganga Prasad in which the firm Damri Sahu Halkhori Ram owned a share of 5 annas 4 pies, while the remaining 10 annas 8 pies belonged to defendants 12 to 15.

    The Calcutta branch of Damri Sahu Halkjiori Ram had transactions with a Calcutta firm known as Dasrath Bhagat Gulabchand. There were adjustments from time to time, and ultimately a suit for the balance due was brought by Dasrath Bhagat Gulabchand against the partners of the firm of Damri Sahu Halkhori Ram. This was suit no. 38 of 1928 of the Court at Chapra. The suit was decreed for a sum of Rs. 13,042 and odd, including interest and costs, against all eight defendants including Rambaran Ram, the gomashta, as defendant no. 8. This Rambaran Ram was sued as one of the partners, and was held liable with the other defendants, though the question as to whether he was a partner or not was left open as between the defendants inter se.

    This decree was put into execution. The properties of the present plaintiff-respondents, it is said, were put to sale, and sold for a sum of Rs. 11,240. Other persons also held decrees against the firm, Damri Sahu Halkhroi Ram. They applied for, and were allowed, rateable distribution, and accordingly the entire sum of Rs. 11,240 was applied towards satisfaction of, claims against the firm. The plaintiffs claimed that as the debts were partnership debts they had an equitable lien on the partnership properties, and they sued to enforce that lien by sale of those properties specified in schedules II and III, which were actually the shares which, they said, the firm of Damri Sahu Halkhori Ram held in the two other firms, Damri Sahu Srikant Prasad and Damri Sahu Thakur Ram Ganga Prasad.

    A number of pleas were made in defence, including, for example, one by the defendants 9 to 11 and 12 to 15 that the firm of Damri Sahu Halkhori Ram had no share in the other Samastipur firm and Darbhanga firm just mentioned (a question which was not decided), but the plea taken, which is now material, was that the suit as framed was not maintainable, as all the firms were going concerns and a suit by some of the partners in a firm to sell assets of the firm in satisfaction of their claim against it, or against other partners of the firm for contribution, would not lie without asking for dissolution of the partnership and general accounts.

    The learned Subordinate Judge held that in fact the suit as framed was misconceived, and that the suit did not lie against the partnership property without a prayer for dissolution and taking accounts. Hence he dismissed the suit as regards the realisation of the claim from the properties specified. He was of opinion, however, that he could give the plaintiffs a personal decree against the other partners of the firm for the amount realised from them in excess of their own share, since there was the usual general prayer in the plaint for any other relief to which the plaintiffs might be found entitled and since, to use his own words,

    “on the facts it is abundantly clear that the debt which is also a decree debt is not in any real sense of the word a partnership debt”.

    In this view of the case he decreed the suit in part with proportionate costs against the defendants 2, 3 to 5, and 6 and 7 as partners in the firm. He dismissed the suit against the defendant no. 9 and the defendants 12 to 15 representing the other Samastipur firm and the Darbhanga firm, and he said nothing one way or the other with regard to the defendants 1, 8, 10 and 11. It is clear that so far as the defendants 10 and 11 were concerned, their, names were omitted from the decree and the order portion of the judgment merely by clerical error, because in the body of the judgment the learned Subordinate Judge observed:

    “The suit will therefore be dismissed against the defendants 9 to 11 as representing the firm Damri Sahu Srikant Prasad, as also against defendants nos. 12 to 15 as representing the Darbhanga firm.”

    With regard to the defendants 1 and 8, the learned Subordinate Judge presumably intended that as against them also the suit should be dismissed, since he gave no decree against them, and he held that only the partners in the firm individually were liable.

    The main point, which has been urged by Mr. Mullick on behalf of the appellant, is that a decree could not be given against the partners individually for the same reason that it could not be given against the firm, namely, that one partner in the case of partnership debts cannot sue another for contribution, his only remedy being a suit for dissolution and accounts. He conceded that a suit for contribution might lie where the debt was not really a partnership debt, but he argued that the learned Subordinate Judge was quite wrong in the present case in holding that this was not a partnership debt, since the plaint, judgment and decree in suit no. 38 of 1928 clearly showed that the debt was one for which the partnership was liable.

    As subsidiary points Mr. Mullick contended that in any case since no personal decree had been specifically asked for, no such decree could fairly have been given merely because the plaint contained the usual prayer for general relief, and he argued that the defendants were taken by surprise and might have had defences to put forward which they would have done had the pleading been more specific. He contended further that in fact out of the amount decreed in suit no. 38 of 1928, Rs. 10,050 had actually been realised out of the partnership assets, and indeed the present appellant had herself actually filed a suit (plaint, exhibit 48) for contribution on the allegation that two villages sold for that sum of Rs. 10,050, villages, Tajpur and Chehful, were her personal property. The amount realised from the present plaintiffs on account of the decree, he says, was only the balance of Rs. 3,000, and in any case it could only be in respect of that sum of Rs. 3,000 that they could claim contribution.

    Lastly, he contended that if it were held, as the learned Subordinate Judge seemed inclined to do, that this was not a partnership debt inasmuch as it had merged in a decretal debt, then the decree made all eight defendants jointly and severally liable. Any defendant from whom the entire decretal amount had been realised could realise from any other defendant only one-eighth share, the liability being equally apportioned amongst all the defendants.

    Upon Mr. Mullick's main point it appears to me that the law is really quite clear. The learned Subordinate Judge has himself quoted from Lindley on Partnership, at page 438: “In order to discharge himself from the liabilities to which a person may be subject as partner, every partner has a right to have the property of the partnership applied in payment of the debts and liabilities of the firm……………… In other words, each partner may be said to have an equitable lien on the partnership property for the purpose of having it applied in discharge of the debts of the firm…………… The right, lien, quasi-lien, of whatever else it may be called, does not exist for any practical purpose until the affairs of the partnership have to be wound up, or the share of a partner has to be ascertained.”

    The law on this point has been briefly and clearly stated in Halsbury's Laws of England, new edition, volume 24, Article 918, page 481 (corresponding to volume 22, Article 146, page 75, old edition) in the following terms: “Partners are not, as regards partnership dealings, considered as debtor and creditor inter se until the concern is wound up or until there is a binding settlement of the accounts. It follows that one partner has no right of action against another for the balance owing to him until after final settlement of the accounts.”

    The English law was long ago laid down in the old case of Sadler v. Nixon: “One of several partners in trade, who pays money on account of his co-partners, cannot maintain an action against them for contribution on the ground that he made such payment not voluntarily but by compulsion of law.”

    The position of partners with regard to the partnership assets has been considered by the Privy Council in Gopala Chetty v. Vijayaraghavachariar: “Where” they say “a partnership has been dissolved but no account has been taken, the proper remedy of a partner in respect of an asset received by another partner is to have an account taken; if his right to sue for an account is barred by limitation, he cannot sue the partner who has received the asset for a share in it.” In other words, the only remedy of one partner against another in respect of partnership assets is by way of suit for accounts, and not a suit for contribution.

    Mr. Mullick has also relied upon a recent case of the Calcutta High Court, Debesh Chandra Mukerjee v. Benoy Krishna Banerjee. There Lordships laid down that when some of the partners of a firm borrow money from a third party and on a joint decree being obtained by the creditor, one of the borrowers pays up the amount and sues the others for contribution, the first question to determine is whether the debt was really a partnership debt arising out of the partnership business or a separate liability incurred by the borrowers jointly on their own account. If it was a partnership debt, the judgment-debtor paying up the decretal amount cannot sue his co-judgment-debtors for contribution in the absence of the other partners and without adjustment of the partnership accounts, unless there are special circumstances such as an express promise by the co-borrowers to indemnify the plaintiff. The mere fact that a joint decree was passed against the borrowing partners alone would not prove that the debt was a separate liability incurred by such partners jointly.

    The rule of law exemplified in these cases is subject to the limitation that the debt must really be a partnership debt, and where the debt is collateral to or independent of the partnership, the principle is not applicable. This difference was made clear as far back as 1857 in the old case of Sadgwick v. Daniell. The plaintiff and defendants were shareholders in a Joint Stock Mining Company. Money being required to work the mine, T., who was also a shareholder, applied to a bank for an advance of £ 500, which they consented to make on the security of the joint promissory note of the plaintiff, defendant, and T. The note was given and the money advanced, and applied for the purposes of the mine. The plaintiff, having been compelled to pay more than his share of the note, sued the defendant for contribution. It was held that this was not a partnership transaction, and, therefore, that the action was maintainable. It will be observed that the liability was of three of the shareholders only, upon a joint promissory note. This proviso, as it might be called, to the general rule has been applied in many Indian cases; for example, the circumstances in which a suit for contribution will lie are clearly set out in Guda Kulita v. Joyram Das as follows:—“A suit for contribution by a partner against some of his copartners, on account of money paid by him for the satisfaction of a debt contracted by him jointly with the said co-partners, is maintainable in cases where the liability satisfied by the plaintiff is (1) not a joint liability of the entire partnership, or (2) where the said partners were some only of several persons comprising the partnership, and the bond was executed not in the usual course of business of partnership, and (3) where the co-partners expressly promise to contribute their share of debt after a decree has been passed upon the bond. Again in Ghishnlal Ganeshilal v. Gambhirmal Pandya it was laid down that one partner has no right of action against another for the balance owing to him until after final settlement of accounts; but a partner may have a right of action against another for a debt which is independent of the partnership accounts.

    Some of these cases might seem to imply that it is necessary to sue at the same time for dissolution of the partnership and for accounts. There are certain cases in which it has been held that in exceptional circumstances a suit for accounts may lie in respect of a partnership debt without asking for dissolution; for example, Kassa Mal v. Gopi, where it was observed that only in exceptional cases could a suit be brought by one partner against another, which involved the taking of partnership accounts prior to dissolution. And again in Krishnaswami Naidu v. Jayalakshmi Ammal where it was held that if a partner asks for an account without asking for a dissolution, the Court must be satisfied that there are special grounds for granting the prayer, which grounds must be alleged by the plaintiff, and the defendant must have an opportunity of showing cause against it.

    Even if for any exceptional reasons it may be possible to sue for contribution and accounts without asking for dissolution, there is no case so far as I am aware in which it has been held that a suit for contribution will lie respecting a partnership debt without asking for accounts. Dr. Mitter for the respondents has cited a number of cases, but all of them upon examination are found to observe the principles exemplified in the cases which I have just noted; and if in those cases suits for contribution by one partner against other partners were held maintainable, it was always because the debt was held to be not a partnership liability in the true sense, but a debt independent of the partnership. For example, in Durga Prosonno Bose v. Raghunath Das, the money had been borrowed upon the individual credit of the partners concerned. In Laban Sardar v. Choyen Mallik the money had been borrowed by the plaintiff and defendants jointly and was applied for the partnership business, but the money had been borrowed by them upon their individual credit for the purposes of the business, so that they, and not the firm itself, were the principal debtors. The same feature is to be found in Arunachalam Semai v. K. Nottam Beer Varu Rowther. That was a case where the partners had borrowed on their individual credit to raise money to pay off the partnership debt, and the borrowing moreover had been done after dissolution of the partnership. The only case in which a view inconsistent with the above principles appears to have been taken is Ellappa Mudaliar v. Swaminatha Mudaliar where Ramesam, J., sitting singly, held that a partner who is made to pay the whole of the decretal amount for a partnership debt is entitled to maintain a suit for contribution as against other partners. That case is not an authority, and with all respect to the learned Judge who decided it I am unable to follow his reasoning, and I do not think he states the law correctly.

    Dr. Mitter has also relied upon a number of English cases, but in all of them the distinction which I have noticed is clearly to be found. Thus, in Boulter v. Peplow it is clear that the creditor had dealt with three partners only out of a number, and, it was observed, would probably not have dealt with a larger number. Those three partners alone, therefore, had incurred a joint liability, and it was held that the contract was entirely collateral to the partnership. Batard v. Douglas appears to have been a case of co-contractors merely, and not of a partnership at all. Wooley v. Batte was a case of joint tort-feasors, and no point regarding the rights of partners inter se appears to have been taken.

    The law, in my view, as I have already said, is quite clear. If it is not a partnership liability, but an individual liabilty of any of the partners, then an action for contribution may lie, and in each case the question which has to be asked is whether the debt was really a partnership debt or not, and that is a question of fact. In the present case the learned Subordinate Judge appears to have appreciated the law, but he has held that the debt was not actually a partnership debt. In that finding he was, in my opinion, plainly wrong. The plaint (Exhibit 65) in suit no. 38 of 1928 makes it clear that the claim was against the partnership. It is stated therein—

    “that the defendants to the suit are the proprietors of the firm Damri Sahu Halkhori Ram. There was monetary transaction between the firm of the plaintiffs and that of the defendants since a long time. Accordingly in 1333 Fasli, the firm of the defendants received Rs. 64,921-6-9 including previous balance and paid Rs. 51,443-11-0. Rs. 13,477-11-9 remained as balance. The amount received by the defendants in 1334 Fasli, including the previous balance amounted to Rs. 17,958-9-0 and Rs. 8,348-8-0 was realized from the defendants. In 1335 Fasli the defendants' firm received Rs. 21 and repaid Rs. 21. The amount due by the defendants' firm up to the 10th of Asin sudi 1335 Fasli, amounted to Rs. 9,610-1-0. Defendant no. 8, a partner and gomashta, made his signature and added interest at the rate of 1 percent, per month. The last adjustment of account between the two firms was made on the 10th of Asin sudi 1335 Fasli and Rs. 9,610-1-0 was found due to the plaintiffs' firm by the defendants' firm…………………… Demands were made on behalf of the plaintiffs on the firm of the defendants for payment of money. But Damri Sahu Halkhori Ram or the defendants did not pay the same.”

    In the judgment in the case (Exhibit C-4) appear the following:—

    “From plaintiffs' bahi khata as well as from certain bahis which were filed on behalf of the defendants' firm by Rambaran Ram in the land registration case, items of which have been exhibited in this suit on behalf of the plaintiffs, it is quite clear that plaintiffs' claim as against the defendants' firm is correct, and therefore plaintiffs are entitled to get a decree for the amount claimed against the defendants.”

    It is clear that the claim was against the firm, and the Court held that the debt was a debt of the firm, and decreed the suit against the defendants not as individuals, but as partners of the firm. Dr. Mitter argues that though the parties to the present litigation were parties in that case, they were all defendants, and as between the present plaintiffs and defendants the question is not, therefore, res judicata. It is quite clear, however, from the terms of the present plaint that the plaintiffs have accepted that decision as correct, and have brought the present suit on that assumption. Thus, paragraph 7 of the present plaint runs:

    “That the Calcutta branch had monetary transaction with the firm Dasrath Bhagat Gulabchand Ram.”

    Paragraph 8 states:

    “That from Dasrath Bhagat Gulabchand Ram instituted suit no. 38 of 1928 for the realisation of Rs. 10,529-6-9 due from the firm at Calcutta.”

    Paragraph 9 recites that in the said suit a decree was passed on 16th December, 1929, for Rs. 12,013-4-9 with costs

    “and the liability for the payment of the same rested and rests with the firm Damri Sahu Halkhori Ram.”

    In view of all this it cannot possibly be contended with any show of reason that the debt was not a partnership debt.

    Dr. Mitter attempted to bring this case within the rule of Boulter v. Peplow on the ground that the mukhtearnama (Exhibit 15) of Rambaran Ram was executed not by all the partners of the firm, but only by two, Damri Sahu and Halkhori Ram. Therefore, he argues, when Rambaran Ram as agent signed an adjustment of accounts, he could have acted only for those two partners, and the liability was theirs alone. It appears probable, however, that Damri Sahu and Halkhori Ram signed the mukhtearnama as they were the managing partners. Apart from that, there is a short answer to the argument. The suit was not brought on any acknowledgment executed by Rambaran as agent of some of the partners, but was a suit on bahi khata, and whether Rambaran was actually entitled to sign the adjustment on behalf of the firm as an agent or not, it is clear that he purported to do so.

    Dr. Mitter has further pointed out that in that suit the firm as a firm was not separately made a defendant in accordance with the provisions of Order XXX, rule 1, of the Code of Civil Procedure. The decree, he argues, consequently was not a decree against the firm, but only a decree against individual partners, and it was a decree also against Rambaran, who was not a partner at all. As for Rambaran, he was sued as a partner, and the question whether he was actually a partner or not was left open. As for the fact that the firm itself was not made a defendant, that merely means that the special procedure provided by Order XXX, rule 1, was not adopted. This rule, however, is permissive, and not mandatory. It provides one mode of procedure, but it does not take away any existing right of suit, and since the partners in a firm in this country are jointly and severally liable for the debts of the firm, they can be sued individually even without naming the firm one of the defendants, just as has been done in the case under consideration. In Musammat Bibi Kazmi v. Lachhman Lal Sao* it has been held by this Court that although the Code of Civil Procedure, 1908, allows the plaintiff to sue the members of a firm not in their individual capacity but as a firm, it does not affect the law on the subject which is to the effect that a plaintiff bringing a suit against a firm may implead all the members of the firm as defendants in the suit. That seems to have been a case where the defendants had been impleaded without making the firm as such a defendant. It was argued accordingly that the suit could not be regarded as a suit on a hundi. Das, J. observed that he did not think there was anything at all in the point. The Code of Civil Procedure merely provided a new procedure, and did not affect in the slightest degree the right of the plaintiff to bring on the record the different members of the firm.

    In my view, the debt in the present case was clearly a partnership debt. The suit even as a suit for contribution was not, therefore, maintainable in the absence of any prayer for dissolution or for accounts. Mr. Mullick's main point must, therefore, succeed.

    As the appeal succeeds upon this point, it is not necessary to consider Mr. Mullick's subsidiary points at any great length. With regard to his contention that a personal decree could not be given in the absence of any specific prayer for that relief, this seems to ignore the provisions of Order VII, rule 7, of the Code of Civil Procedure. The case is analogous to the case where a personal decree is given in a suit brought upon a mortgage. In the present case the real claim of the plaintiffs was for the money, and they asked merely that their claim might be enforced, if possible, against certain specified property, upon which they claimed to have a lien. In my opinion, the form of the pleadings would not debar a personal decree had the suit been held to be maintainable.

    As for the point that a portion of the decretal dues in suit no. 38 of 1928 was realised by sale of partnership property and only Rs. 3,000 by sale of the property of the plaintiffs, it is impossible to decide in the absence of any clear evidence on the record exactly how much of the sale proceeds of the plaintiffs' property went towards the realisation of the decree in question. It is, however, in my view, quite unnecessary to decide that point. As I have already noticed, in paragraph 11 of the plaint it was alleged that besides the said decree other persons had obtained decrees for various stuns against the firm Damri Sahu Halkhori Ram, and the said decree-holders had applied for rateable distribution, which was allowed. The essential feature of the plaintiffs' case was that Rs. 11,240 of their money had been applied in satisfaction of claims against the firm, and that essential feature of the case does not seem to have been challenged at the trial, and the trial proceeded upon the basis, which seems to have been accepted by both sides, that the whole amount of Rs. 11,240 had gone towards the satisfaction of the firm's debts.

    Lastly, there is Mr. Mullick's contention that as to the decree against eight defendants the claim of one partner against any other for contribution would have to be limited to one-eighth part of the total decretal amount. It may be the prima facie position that where a number of defendants are made jointly and severally liable and the entire decretal amount is realised from one, that one can sue his co-defendants for contribution of equal proportionate share from each; but that is only the prima facie position, and it may be shown that there are special circumstances in the case which render it inapplicable. That was clearly noticed in Arunachalam Servai v. Nottam Beer Varu Rowther. In that case Srinivasa Ayyangar, J. observed: ‘Prima facie when there is a decree against two persons jointly and severally, each is liable to contribute equally to discharge the decree, and there is always in such cases an implied contract of indemnity: that if one of them should be compelled to pay up more than his share, the other is bound to make good the same. This is, however, on the basis that the obligations of the defendants inter se are determined only by the decree and are not subject to any other rights or obligations. No doubt, if it should be established that, having reference to the facts of the particular case, such implied contract as between co-judgment-debtors should be deemed to be displaced, then the legal principle may not be applicable.’ I find myself in agreement with those observations.

    The result is that the appeal must succeed, and the suit must be dismissed as against the appellant, the defendant no. 2. It remains to consider the position with regard to the remaining partners against whom the decree has been made and who have not joined in this appeal, namely the defendants 3 to 5, 6 and 7. On the one side, there is the fact that the ground for the failure of the suit applies equally in the case of all the partners, on the other side is the fact that as the defendants 3 to 7 have not appealed within the period of limitation, the decree-holders have acquired a valuable statutory right.

    If the decree as against any of these defendants is to be altered, it could only be under the provisions of Order XLI, rule 4, Code of Civil Procedure, and Order XLI, rule 33, Code of Civil Procedure. These provisions are in wide terms and, in my view, to give the appellate Court ample power to pass such orders as it may deem just and proper and necessary to do full justice having regard to all the circumstances of the case; though it has been observed and rightly observed, in a number of cases that they must not be so applied as to disregard other provisions of the law, such as those contained in the Limitation Act and the Court-fees Act.

    Now let us examine the circumstances of the particular case before us. There are, practically speaking, two separable decrees. The suit has been decreed against the defendants nos. 2 to 5 jointly for a sum of Rs. 5,620, and it has been separately decreed for a sum of Rs. 2,634-6-0 against the defendants nos. 6 and 7. Though, formally, there is one decree, substantially there are two quite separate decrees against different persons, one for Rs. 5,620 and the other for Rs. 2,634-6-0. This is the position which Dr. Mitter has himself adopted on behalf of the respondents and has used it as an argument for not interfering with the decree against the defendants 6 and 7 which, as he has rightly observed, is quite separable.

    It appears to me that in these circumstances there is a wide difference between the case of defendants 6 and 7 and the case of defendants 3 to 5. Dr. Mitter has argued that Order XLI, rule 4, is not applicable to this case, because before it can be applied it is necessary that some one of the defendants should have appealed from the whole decree; but if the decree for Rs. 5,620 against the defendants 2 to 5 is regarded, as it must be, as a separable decree, then it seems to me that so far as it is concerned there has been an appeal against the whole decree. The appeal of the defendant no. 2 has been valued at Rs. 6,631-9-6, and the prayer of the appellant is that the appeal may be allowed, and the suit may be dismissed to the extent of Rs. 5,620. Thus, the prayer is for the dismissal of the suit as a whole so far as this sum is concerned, and court-fees have been paid accordingly. There is, therefore, no question of any deficit court-fee. Moreover, the decree against all four defendants nos. 2 to 5 proceeds upon a common ground. Dr. Mitter has contended that in the case of the defendant no. 3 the ground cannot be said to be common, inasmuch as defendant no. 3 did not appear in the suit. It appears to me, however, in the circumstances that the non-appearance of defendant no. 3 can make no difference. So far as non-appearance is concerned, none has appeared before this Court, but the decree proceeds upon a ground common to all. It seems to me it may fairly be said that there has been a competent appeal by the defendant no. 2 so far as the entire decree for Rs. 5,620 is concerned. The prayer is that the decree be set aside as regards that sum, and it has been established that on the merits that prayer is entitled to succeed. It is to be noticed that were this decree to be set aside as regards defendant no. 2, but not as regards defendants 3 to 5, it would involve penalising defendants 3 to 5 in a manner which the decree itself has not contemplated, for under the decree as it stands should any one of the defendants 2 to 5 be forced to pay up the whole amount, then he will have a right of contribution against his co-defendants. But if the decree be set aside against defendant no. 2, then the entire liability will be saddled on the defendants 3 to 5, and the right of contribution will be gone. Should the decree be allowed to stand against defendant no. 3 only, then he would be even more heavily penalised, since he alone would be liable for the entire decretal amount without any right of contribution. In these circumstances it seems to me that this portion of the decree may fairly be set aside as a whole on the ground that the appeal has succeeded, and I see no reason why this decree, which has been shown to be wrong should be maintained as against any of the persons who have been held jointly liable by the learned Subordinate Judge and who, according to the plaintiffs, are all members of a joint family.

    With regard to the defendants nos. 6 and 7, the matter is quite different. The decree against them, as I have said, is separable. As such there has been no appeal against it, and Order XLI, rule 4, is clearly inapplicable, nor have court-fees been paid with regard to the amount decreed against defendants 6 and 7, nor has any explanation whatever been put forward for the failure of these defendants to prefer any appeal, nor will the maintenance of the decree against defendants 6 and 7 penalise them in any way which the decree itself does not already contemplate.

    As observed by Noor, J. in Ram Prasad Singh v. Mohan Madan Lal. Order XLI, rule 33, ought not to be applied to cases where there has been a distinct and separate decree against those defendants who have not chosen to appeal. Again in Daroga Rai v. Basudeo Mahto the same learned Judge observed that where there are two distinct decrees against two different persons on two different causes of action, although in form there is only one decree, the appellate Court should not interfere with that part of the decree against which there has been no appeal. In Suraj Prakash Puri v. Sant Lal Singh this Court has laid down that Order XLI, rule 33, of the Code of Civil Procedure, 1908, is intended to enable the appellate Court, where its decision interferes with or modifies or extends the decision of the lower Court, to give effect to that decision by interfering, if necessary, even with rights and liabilities of those who have not in fact appealed from the decision of the trial Court; but it ought not to be applied to cases where there has been a distinct and separate decree against persons who have not chosen to appeal. Thus, it is clear that this is not a case to which Order XLI, rule 33, should be applied, and, as I have said, Order XLI, rule 4, is manifestly inapplicable. In the circumstances, in my view, there is no good reason why a right of appeal after it has lapsed should be handed out gratuitously to persons who have themselves neglected to avail of it, especially when they have not asked for it, and the interests of the case do not require it for the purpose of doing justice to the person who has appealed. Such a case is not one for the application by the Court of the powers which Order XLI, rule 4, and Order XLI, rule 33, confer upon it.

    In the result, therefore, I would allow the appeal with costs, dismiss the suit with costs as against the appellant defendant no. 2, and without costs as against the defendants 3 to 5. With regard to defendants 6 and 7 I would allow the decree to stand.

    Shearer, J.:— I agree.

    K.D
    Appeal allowed.

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    Musammat Jagpati Kuar v. Firm Damri Sahu Halkhori Ram
    (Mar 19, 1941)