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1992 Supreme(Bom) 216

IN THE HIGH COURT OF BOMBAY
(NAGPUR BENCH)
Patel H.D. Ghodeswar M.B., JJ.
Shivraj Fine Art Litho Works others .... Appellants.
Versus
Purushottam Sitaramji Khandelwal others.... Respondents.
First Appeal No. 35 of 1988, decided on 10-4-1992.
Advocates appeared :
V.C. Daga V.M. Deshpande, for appellants.
A.S. Bobde, B.J. Agrawal, S.G. Jagtap R.S. Paradkar, for respondents 1 2.
A.D. Vyawahare, for respondents Nos. 7 8.

Headnote:PARTNERSHIP ACT, 1932

       Sections 14, 15 and 69 (2)-Property of firm--Maintainability of suit filed by unregistered firm--Such suit not maintainable-Partner contributing his personal asset to capital in partnership firm-His exclusive right to his personal asset thus gets reduced to the shared right with other partners-Held, decree for payment of outstanding amount can not be passed in his favour.

       It becomes apparent that when a partner brings in his personal asset into partnership firm as his contribution to the capital, an asset which originally was subject to his entire ownership of the partner becomes now subject to the rights of other partners in it. In other words, the partner who brings in the asset reduces his exclusive right in the asset to the shared rights in it with other partners of the firm Court, therefore, cannot accept that the exclusive right of the plaintiff No.1 in the asset which is brought into partnership will survive even after formation of the partnership. The answer to the question posed would be in the negative. The decree passed cannot therefore be maintained in favour of the plaintiff No.1.

JUDGMENT - PATEL H.D., J.:---A decree for Rs. 8,92,815,14 was passed against the original defendants Nos. 1 to 9 holding them jointly and severally liable to make payment to the plaintiff by judgment delivered on 29-4-1987 in Special Civil Suit No. 52 of 1980 by the Third Joint Civil Judge (Senior Division), Nagpur. Feeling aggrieved thereby the present appeal is filed by the original defendants Nos. 1 to 3.

2. The facts relevant for the purpose of deciding the appeal are as follows:

The plaintiff No. 1 carried on the business as wholesale paper merchant under the name and style "Dinesh Paper Mart" being the sole proprietor. The said business is now taken over by the partnership also in the name of "Dinesh Paper Mart" with all its existing assets and liabilities with effect from 1-1-1980. The suit claim being one of the assets of the partnership firm it was joined as plaintiff No. 2. After formation of the partnership the plaintiff No. 1 Purushottam became the partner of the firm. The plaint is signed by plaintiff No. 1 as an individual as well as the partner of the firm.

3. The defendant No. 1 was a registered partnership firm of which the defendants Nos. 2 to 9 were the partners. In a suit for dissolution of partnership and accounts, registered as Special Civil Suit No. 9 of 1974, the defendant No. 10 was appointed as a Receiver to take possession of the properties and run the business of the firm. In the year 1978 the defendant No. 2 was appointed to work as a Receiver in place of defendant No. 10. This order was challenged in A.O. No. 20 of 1978 in this Court. The defendant No. 11 came to be appointed as a Joint Receiver in addition to defendant No. 2. Due to refusal by the defendant No. 11 to act as a Joint Receiver, the defendant No. 12 came to be appointed as a Joint Receiver in his place. At the relevant time the defendant No. 2 and the defendant No. 12 were in management of the firm.

4. The defendant No. 1 firm purchased goods from the plaintiff on credit. The purchases made prior to the appointment of Receivers, that is till 20-3-1974, were fully paid up. The successive Receivers appointed by the Court purchased the goods from the plaintiffs for business of the defendant No. 1 on credit from time to time. A Khata in the name of the firm was maintained by the plaintiffs. They also made payments from time to time and those payments were also entered in the Khata. Every year on 31st December the outstandings in the name of the defendant No. 1 used to be carried forward. As per entries in the Khata, the balance due from the defendant No. 1 as on 31-12-1974 was Rs. 4,518/-. Such balances in the year 1975 was Rs. 88,318.25/-, in the year 1976 was Rs. 3,66,486.12, in the year 1977 was Rs. 4,44,813.29, in the year 1978 was Rs. 5,96,152.26 and in the year 1979 the total outstandings were to the tune of Rs. 6,22,713.06 which the plaintiffs claimed in the suit. Interest was also claimed at the agreed rate of 18% per annum on the balance outstanding for more than seven days.

5. The defendant No. 10 contested the claim by filing the written statement. The defendant Nos. 1 and 2 adopted the written statement filed by the defendant No. 8, who also opposed the claim. Others were proceeded ex parte. The defendant Nos. 1, 2 and 8 denied the entire claim of the plaintiffs. In no case they contended that they could be held personally liable. Even defendant No. 10 did not accept any personal liability. The contesting defendants, however, denied that the plaintiff firm is registered under the Partnership Act and the plaintiff No. 1 is one of the partners.

6. The learned trial Court on the basis of evidence adduced decreed the plaintiffs suit to the extent mentioned above. One of the issues answered by the learned trial Court related to the registration of the plaintiff No. 2 as a firm under the Indian Partnership Act. Relying upon Exhibit 81 which is the certificate of registration of the firm, it was held that the firm was registered under se





















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