2003 Supreme(Del) 68

High Court Of Delhi
D.C.M.SRI RAM INDUSTRIES LIMITED - Appellant
Versus
INDO ORGANICS - Respondent
Interim Application 54 of 1997
Decided On : 01/27/2003

Headnote:Civil Procedure Code, 1908 - Section 20 — Territorial jurisdiction — Suit for recovery — Plaintiff company having registered office at Delhi — Defendant having its subordinate office at Delhi, placing orders on plaintiff for supply of goods, through its partners — Goods supplied from unit of plaintiff at Merrut — Cheques issued by defendants bounced, and despite plaintiffs pleas defendant not making payment — Suit for recovery of amount in Delhi court, maintainable — Plea that only Meerut courts having exclusive jurisdiction unsustainable.

       Held:

       The plaintiff has its registered office at Delhi. The orders by defendant No. 1 were placed at its Delhi address and in various sales notes it was agreed that Delhi courts would have jurisdiction. Moreover defendant No. 1 has also its office may be subordinate office at Delhi

       Merely because one of units of the plaintiff company is situated at Meerut and goods were supplied from its unit at Meerut to defendant No. 1 at Meerut does not mean that Meerut courts have jurisdiction nor would the issuing of notice by plaintiffs counsel to defendant No. 1 at Meerut provides an exclusive jurisdiction to Meerut court. Sub-section (c) of Section 20, CPC provides jurisdiction to the court where cause of action wholly or in part arises. Further Sub-clause (b) of Section 20 which relates to a situation where there are more than one defendant provides that cause of action would be available to the local limits of whose jurisdiction any of the defendants at the time, of commencement of the suit actually or voluntarily resides and curries on business or personally works for gain.

       The circumstance of defendants having placed orders at Delhi office cannot be lost sight of nor can office address of defendant No. 1 at Delhi be ignored. These facts subjugate the factum of plaintiff having supplied goods at Meerut and served notice at Meerut. thereforee, the plea that this court has no jurisdiction is without substance and appears to be feeble attempt to escape the liability.

       Partnership Act, 1932 - Section 32 — Suit for recovery against firm and partners — Leave to defend — Suit filed for failure to make payment by defendants on account of bounced cheques issued by defendants to plaintiff in respect of goods supplied by the latter — Application by one of the defendant-partners for leave to defend as he was a retired partner — Said party not giving any notice in terms of Section 32 of the Partnership Act in time to relieve him from liability to third party, and he was in existence as a partner during the subsistence of the firm and a party to the transaction in question — Leave to defend declined as the case is hit by Section 32(2) of the Partnership Act.

       Held:

       As is apparent from the aforesaid provisions of law, a retiring partner can be discharged from the liability to any third party for the acts of the firm done before his retirement in following eventualities :-

       (i) There should be an agreement between such third party and the partners of reconstituted firm :

       (ii) There should be a public notice of the retirement given by such a partner as such a notice encompasses the notice of retirement to various class of persons who might enter into partnership firm.

       Admittedly cheques in question were issued by defendant No. 2 in his capacity as a partner during subsistence of the partnership firm and his existence as a partner and some of the cheques were even signed by defendant No. 2 which bounced on presentation.

       Plaintiff was only concerned with the payments due from defendant No. 1 and its partners. The very fact that defendant No. 2 did not give any notice in terms of Section 32 upon third party and as per his own version, public notice was given some time in December, 1995 whereas he retired from the partnership firm in April, 1995 does not entitle him to leave to defend because of provisions of section 32 of the Partnership Act. If he has any dispute with other partners as to the non payment of the entire agreed amount of Rs. 2 lac towards cash credit facility against mortgage of his plot it is independent of instant transactions and is to be settled by way of independent remedy and not by way of seeking discharge from the liability which existed at the lime when he was the partner of defendant No. 1 firm. The dispute of defendant No. 2 with defendant No. 1 and other partners cannot be decided or determined in these proceedings and, thereforee, the plea taken by defendant No. 2 that after his retirement he did not receive the said amount from other partners cannot come to his defense. The proceedings are only confined to the question whether defendant No. 2 can be discharged from the liability on account of his having retired from the partnership of defendant No. 1. Answer has been provided in the negative.