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High Court Of Calcutta
Murari Mohan Dutt, Ramkrishna Sharma
RAM KUMAR SHEW CHANDRAI, A FIRM - Appellant
Versus
DOMINION OF INDIA NOW THE UNION OF INDIA - Respondent
A. F. O. D. 523 Of 1963
Decided On : 04/09/1976
PARTNERSHIP ACT - SECTION 69 - MAINTAINABILITY OF SUIT - DISSOLVED FIRM - NAME OF PARTNER NOT SHOWN IN REGISTER OF FIRMS - NOTICE UNDER SECTION 77 OF INDIAN RAILWAYS ACT - REQUIREMENTS - CLEARING AGENT - CLAIM PREFERRED BY CLEARING AGENT - SETTLEMENT OF CLAIM - EFFECT.
Fact of the Case:
The appellant, an alleged dissolved partnership firm, sued the respondent railway for recovery of the price of goods lost during carriage. The appellant claimed that it had served statutory notices under Section 77 of the Indian Railways Act and Section 80 of the Code of Civil Procedure. The respondent denied the receipt of the notices and contended that the suit was barred by limitation and that the appellant was not entitled to claim the benefit of Section 14 of the Indian Limitation Act, 1908.
Finding of the Court:
The court held that the suit was maintainable as a dissolved firm has the right or power to realize its property under Section 69(3) of the Indian Partnership Act, 1932. However, the court found that the second condition under Section 69(2) was not fulfilled as the name of a partner who joined the firm after the cause of action arose was not shown in the Register of Firms. The court also held that a letter written by a clearing agent claiming refund for short delivery of goods did not constitute a valid notice under Section 77 of the Indian Railways Act as it was not clear on whose behalf the notice was given and the claim made by the clearing agent had been settled.
Issues: 1. Whether a dissolved firm can maintain a suit under Section 69 of the Indian Partnership Act, 1932? 2. Whether the second condition under Section 69(2) of the Indian Partnership Act, 1932, is fulfilled if the name of a partner who joined the firm after the cause of action arose is not shown in the Register of Firms? 3. Whether a letter written by a clearing agent claiming refund for short delivery of goods constitutes a valid notice under Section 77 of the Indian Railways Act?
Ratio Decidendi: 1. A dissolved firm can maintain a suit under Section 69 of the Indian Partnership Act, 1932, as Sub-sections (1) and (2) give a clear indication that a suit at the instance of a dissolved firm is maintainable. Moreover, under Sub-section (3) a dissolved firm has the right or power to realise its property and, in that case, the provisions of Sub-sections (1) and (2) will not apply. 2. The second condition under Section 69(2) of the Indian Partnership Act, 1932, is not fulfilled if the name of a partner who joined the firm after the cause of action arose is not shown in the Register of Firms. The condition requires that the persons suing are or have been shown in the Register of Firms as partners in the firm, and this includes all the partners of the firm on the date of the suit. 3. A letter written by a clearing agent claiming refund for short delivery of goods does not constitute a valid notice under Section 77 of the Indian Railways Act if it is not clear on whose behalf the notice was given and the claim made by the clearing agent has been settled.
Final Decision: The court dismissed the appeal, holding that the suit was barred by Section 69(2) of the Indian Partnership Act, 1932, as the name of a partner who joined the firm after the cause of action arose was not shown in the Register of Firms, and that there was no valid notice under Section 77 of the Indian Railways Act.
( 1 ) THIS appeal is at the instance of the plaintiff and it arises out of a suit for recovery of the price of goods.
( 2 ) ON June 29, 1948, the appellant alleged to be a dissolved partnership firm, booked 150 bales of piece goods at Wadi Bander on the G. I. P, Railway for carriage by the said railway and also by the E. N. Railway and for delivery of the same to the appellant at Shalimar. It was alleged that on July 17, 1948, the B. N. Railway delivered 140 bales of piece goods and failed and neglected to deliver the remaining 10 bales and/or lost the same and thereby caused loss and damage to the appellant. The appellant accordingly, claimed Rs. 10. 183-4-6 on account of the value of 10 bales and Rupees 1,018-6-3 for loss of commission at the rate of 10 per cent of the value of the goods. The total amount claimed by the appellant is Rs. 11,202-4-9. It was alleged that the statutory notices under Section 77 of the Indian Railways Act and Section 80 of the Code of Civil Procedure were duly served.
( 3 ) INITIALLY, the appellant instituted the suit claiming the said amount in the Original Side of this Court being suit No. 3934 of 1949. On September 16, 1957, Lachminarayan Poddar, one of the partners of the appellant-firm died. On January 4, 1957, the High Court dismissed the suit for want of jurisdiction. On January 7, 1957, the present suit was filed in the third Court of the Subordinate Judge, Howrah. It was contended that the period during which the High Court suit was pending should be excluded in computing the period of limitation of the present suit.
( 4 ) THE respondent Union of India representing the B. N. Railway contested the suit by filing a written statement. The claim of the appellant in respect of two bales only was admitted and the remaining claim was denied by the respondent. The receipt of the notices under Section 77 of the Indian Railways Act and Section 80 of the Code of Civil Procedure and the legality and validity thereof were denied. It was also denied that the appellant was entitled to claim the benefit of Section 14 of the Indian Limitation Act, 1908 as the plaintiff did not prosecute the High Court suit bona fide and with due diligence.
( 5 ) THE learned Subordinate Judge came to the findings that the notice under Section 80 of the Code of Civil Procedure was duly served and that the suit was not barred by limitation. Regarding the notice under Section 77 of the Indian Railways Act. he held that no copy of the alleged notice had been filed and that if the correspondence between M/s. Santa Singh and Co. and the claims of the respondent-Railway be construed as constituting a notice under Section 77, it was illegal and invalid. Further, he took the view that as the G. I. P. Kailway which was the contracting railway was not made a party to the suit, the onus lay on the appellant to prove loss during carriage by the respondent-Railway, and the appellant failed to discharge the said onus. He held that the appellant-firm having been dissolved on the death of the said Lachminarayan Poddar was not entitled to sue. Upon the said findings, he dismissed the suit. Hence, this appeal.
( 6 ) WE may first of all consider the maintainability of the suit. On behalf of the respondent, the maintainability of the suit has been challenged on two grounds, namely, (1) the appellant-firm is a dissolved firm and (2) the name of Durga Prosad Poddar who became a partner of the appellant-firm in 1956 before the institution of the present suit is not shown in the Register of Firms. The relevant provision is Section 69 of the Indian Partnership Act, 1932. Sub-sections (1) and (2) and Clause (a) of Sub-section (3) are as follows :--"69. (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm, unless the firm is regist
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