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1955 Supreme(Bom) 91

IN THE HIGH COURT OF BOMBAY
Gajendragadkar P.B. and Gokhale B.N, JJ.
Appellants: Rana Harkishandas Lallubhai and Ors.
Versus
Respondent: Rana Gulabdas Kalyandas and Anr.
First Appeal No. 224 of 1953
Decided On: 19.08.1955
Counsels:
For Appellant/Petitioner/Plaintiff: M.H. Chhatrapati and H.C. Thakore, Advs.
For Respondents/Defendant: C.G. Shastri, Adv.

The scope of enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC in execution of a decree against a partnership firm is limited to the question of whether the person sought to be proceeded against was a partner of the firm at the material time.

Headnote:

ORDER 21 RULE 50 SUB-RULE (2) - EXECUTION OF DECREE - SCOPE OF ENQUIRY - PARTNERSHIP FIRM - LIABILITY OF PARTNERS - DEFENCES AVAILABLE:

Fact of the Case:

The appellants, who were partners in a firm, disputed their liability under a decree sought to be executed against them by the decree-holder. The issue before the court was to determine the limits of the enquiry held under Order 21, Rule 50, Sub-rule (2) of the Civil Procedure Code (CPC).

Finding of the Court:

The court held that the enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC is limited to the question of whether the person sought to be proceeded against was a partner of the firm at the material time. The court reasoned that the decree against the firm stands, and the court has to determine against whom that decree can be executed. The court further held that the pleas which can be taken in the enquiry are confined to the question of partnership and cannot touch the validity of the decree against the firm or affect the decree-holder's right to take steps in execution as mentioned in Rule 50, Sub-rule (1).

Issues: 1. What are the limits of the enquiry held under Order 21, Rule 50, Sub-rule (2) of the CPC? 2. What pleas can be taken in the enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC?

Ratio Decidendi: 1. The enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC is limited to the question of whether the person sought to be proceeded against was a partner of the firm at the material time. 2. The pleas which can be taken in the enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC are confined to the question of partnership and cannot touch the validity of the decree against the firm or affect the decree-holder's right to take steps in execution as mentioned in Rule 50, Sub-rule (1).

Final Decision: The court dismissed the appeal and upheld the lower court's decision that the enquiry under Order 21, Rule 50, Sub-rule (2) of the CPC is limited to the question of whether the person sought to be proceeded against was a partner of the firm at the material time.

Judgment

1. The point of law which arises for decision as a preliminary point is concerned with the provisions of Order 21, Rule 50, Sub-rule (2), Civil P.C. The decree-holder had asked for leave to proceed in execution against the appellants and their brother under Order 21, Rule 50, Sub-rule (2), and since the appellants and their brother disputed their liability under the decree sought to be executed, it became necessary to consider what pleas it was open to them to raise in the proceedings under Order 21, Rule 50, Sub-rule (2).

The learned Judge below has held that the pleas which the appellants wanted to raise could be raised by them in the present proceedings and so he proceeded to deal with the merits of the said pleas in the light of the evidence adduced before him. The finding of the learned Judge that the several pleas which the appellants purported to raise before him were competent is challenged before us by Mr. Shastri for the decree-holder.

Mr. Shastri argues that in a proceeding under Order 21, Rule 50, Sub-rule (2) where the decree-holder seeks to proceed against the appellants, the only point which the appellants can raise is that they were not partners of the firm against which the decree in question has been passed; it would not be competent to the appellants to raise any other contention which might affect the validity of the decree. That is how the question which falls to be determined is: What are the limits of the enquiry held under Order 21, Rule 50, Sub-rule (2) ?

2. Before dealing with this question, it would be relevant to refer to the material provisions of Order 21, This Order deals with suits by or against firms and persons carrying on business in names other than their own. Rule 1 Sub-rule (1) of this Order allows suits to be filed by or against firms in the names of the firms, and Sub-rule (2) of Rule 1 authorises any one of the partners of the firm to sign, verify or certify pleadings or other documents in such suits.

Rule 2 requires the disclosure of partners names to be made on demand and Sub-rules (2) and (3) of this rule provide for the passing of orders consequent upon the disclosure of the names or its absence. Rule 3 provides for the manner in which notice can be served in actions against firms. If a firm is sued, the summons shall be served either upon any one or more of its partners, or at the principal place at which the partnership business is earned on within India upon any person having, at the time of service, the control or management of the partnership business there, as the Court may direct.

This rule provides that service, when thus made, shall be deemed good service upon the firm so sued, whether alt the partners are within or without India. The proviso to this rule may be noticed. It deals with the cases of partnership which have been dissolved to the Knowledge of the plaintiffs before the institution of suits and it requires that in such cases the summons shall be served upon every person within India whom it is sought to make liable.

Rule 6 of Order 30 provides that, where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but even so all subsequent proceedings will continue in the name of the firm. According to Rule 7, where a summons is served in the manner provided by Rule 3 upon a person having the control or management of the partnership business, no appearance by him shall be necessary unless he is a partner of the firm sued.

Now, when the suit is brought against a firm in conformity with the rules prescribed by Order 30 and a decree is passed, the said decree can be executed under Order 21. Rule 50 of Order 21 deals with the execution of such a decree. According to Sub-rule (1) of Rule 50, where a decree has been passed, against a firm, execution may be granted (a) against any property of the partnership; (b) against any person who has appeared in his own name under Rule 6 or Rule 7 of Order 30 or who has admitted









































































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