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1963 Supreme(Mad) 5

MADRAS HIGH COURT
RAMAKRISHNAN,KUNHAMED KUTTI
A.V.Varadarajulu Naidu (deed.)
Versus
K.V. Thavasi Nadar
Letters Patent Appeal No. 78 of 1959
Decided On : 3January, 1963

Advocates Appeared:
R. Ramamurthi Iyer for V. Ratnam, for Appellant; V. Thiagarajan for T.V. Balakrishnan, for Respondent.

Equitable relief not given.

Headnote:Partnership Act, 1932 -Suit to recover amount from partnership on settlement of accounts - Held, not recoverable.

       

Judgement

RAMAKRISHNAN, J. :- This Letters Patent Appeal is filed against the judgment of Basheer Ahmed Sayeed, J., in App. 7 of 1956 which in its turn was an appeal from the judgment and decree passed by the learned Principal Subordinate Judge of Chingleput in O. S. No. 39 of 1954. The suit was filed on a promissory note for recovery of a sum of Rs. 5641-10-0. The plaint allegations are succinctly set out in paragraph 2 of the trial Courts judgment, as follows :

"The plaintiffs case is : He entered into a partnership trade in lorry service with the second defendant and carried on the business under the name and style of "Magiszchi Lorry service". Differences arose between them and the plaintiff wanted to retire from the partnership. In a mediation, it was settled that he second defendant should take over the business with all assets and liabilities and that Rs. 5000/- should be given to the plaintiff in full quit of his share and claims. Defendants 1, 3 and 4 proposed to continue the business in partnership. Therefore, they also undertook to pay the said sum and consequently, all the defendants executed a pronote for Rs. 5000/- on 5-6-1953 agreeing to repay the same on demand with interest at 12 per cent per annum. On their failure to pay the amount in spite of demands, the plaintiff sent notices to which they sent replies making false allegations that they were only sureties for the safe upkeep of the lorry by the second defendant and that they did not execute the pronote undertaking to pay the liability. These allegations are unsustainable and false. The suit is therefore laid for recovery of the amount. Neither Act IV of 1938, nor Act V of 1954 has application as all the defendants are income-tax assesses and they did not also possess agricultural lands.

The four defendants filed separate written statements, but their pleas were substantially identical. They alleged that the partnership agreement between the plaintiff and the second defendant in respect of the lorry service was illegal and void as being opposed to public policy, and in contravention of mandatory provisions of the Motor Vehicles Act. The suit claim arose out of the settlement of the above mentioned partnership. Defendants 1, 3 and 4 joined in the execution of the promissory note on the understanding that they were sureties only for ensuring safe custody of the lorry by the second defendant. Therefore the plaintiff cannot have any recourse to them. The lorry was kept intact by the second defendant, and no claim could be enforced against defendants 1, 3 and 4, as the disposal of the lorry was a condition precedent to the enforcement of the promissory note. Defendants 1 and 3 claimed that they were agriculturists and claim that the suit was not maintainable during the period when the proceedings were stayed under Act V of 1954.

2. The trial Court found that the partnership agreement between the plaintiff and the second defendant was an illegal partnership, as it contravened the provisions of the Motor Vehicles Act, The suit promissory note, which was executed in pursuance of the settlement of the accounts of the partnership, was illegal and unenforceable. It found that defendants 1, 3 and 4 joined in the execution of the promissory note as sureties for the payment of the debt by the second defendant, and negatived their contentions that they were sureties only for the safe custody of the lorry. But since it was found that the liability against the principal was one which could not be enforced, the claim could not also be enforced against the sureties. The other contentions of the defendants were negatived.

3. The plaintiff took up the case in appeal before Basheer Ahmed Sayeed, J. The learned Judge found, on a consideration of the evidence in the case, that the suit was one for the recovery of the amount paid by the plaintiff to second defendant for the purchase of a lorry, and it was this amount which the second defendant along with the other three defendants unde

























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