IN THE HIGH COURT OF ALLAHABAD
V. K. Mehrotra, J.
RAM ADHAR - Appellant
Versus
RAMA KIRAT TIWARI - Respondents
Second Appeal 2495 Of 1974
Decided On : 07/31/1981
PARTNERSHIP ACT - SECTION 69 - SUIT BY PARTNER AGAINST THIRD PARTY - CONDITIONS - FIRM MUST BE REGISTERED AND PERSON SUING MUST BE SHOWN AS PARTNER IN REGISTER OF FIRMS - SUIT BY PARTNER IN OWN NAME FOR DEBT DUE TO FIRM IS BARRED.
Fact of the Case:
Plaintiffs, who were manufacturers of bricks, filed suits against the defendant to recover the price of bricks purchased by him and interest thereon. The defendant pleaded that the plaintiffs were carrying on business in partnership and that the suit was barred under Section 69 of the Partnership Act.
Finding of the Court:
The trial court held that the plaintiffs were not partners and that the suit was not barred under Section 69 of the Partnership Act. The lower appellate court reversed the trial court's decision and held that the plaintiffs were partners and that the suit was barred.
Issues: Whether the plaintiffs were partners and whether the suit was barred under Section 69 of the Partnership Act.
Ratio Decidendi: The court held that the plaintiffs were not partners and that the suit was not barred under Section 69 of the Partnership Act. The court observed that a suit by a partner in his own name for a debt due to the firm is barred under Section 69 of the Partnership Act. However, in the present case, the plaintiffs were seeking to recover the amount due to them individually from the defendant under Sarkhats executed by him and not any amount from him under the partnership as such. Therefore, the provisions of Section 69 of the Partnership Act were not attracted.
Final Decision: The appeals were dismissed.
( 1 ) THESE two second appeals have been filed by plaintiffs of suit Nos. 457 of 1970 and 53 of 1971 against the same defendant, namely, Ram Kirat Tiwari who is respondent in this Court. The two suits were consolidated and after their trial together they were disposed of by a common judgment dated Sept. 30, 1972. Both were decreed. In two separate appeals filed by the defendant, these suits were dismissed by the lower appellate court by a common judgment dated nov. 30, 1973.
( 2 ) THE case with which the plaintiffs came to court was that they were manufacturers of bricks and the defendants used to purchase it from them. The defendant had purchased bricks worth Rs. 2000/- from each of the plaintiffs and had executed separate Sarkhat in their favour in which he had also agreed to pay interest at the rate of 1% per mensem. Since he had not paid the price of the bricks for the amount of interest, the plaintiffs were compelled to file the suits for the amounts due to them. Initially it was averred in the plaint of suit No. 53 of 1971 that the two plaintiffs carried on the business of manufacturing bricks in partnership. By an amendment a further allegation was made that the two plaintiffs used to divide bricks manufactured at the bricks-kiln equally after contributing to the expenses incurred in the manufacture and thereafter became owners of their separate shares of bricks which they used to dispose of separately, in the dealings after the separation of the bricks one had no concern with the other.
( 3 ) THE pleas that the defendant took in the two suits primarily were that he used to make payments to the two plaintiffs from whom bricks were purchased by him periodically and the transactions between them were incorporated in the account books. He had made all payments and nothing was due from him. The Sarkhats had been executed by him for the satisfaction of the plaintiffs during the period awaiting settlement of account. It was also pleaded that the plaintiffs were carrying on business in partnership and that the suit was barred under Section 69 (2) of the partnership Act. Both suits, as noticed earlier were consolidated.
( 4 ) THE trial Judge framed six issues in each of the two cases. The first and the third issues of suit nos. 457 of 1970, and 53 of 1971 were common, namely, whether the suits were barred by section 69 of the Partnership Act. Some of the other issues related to the merits of the claim of the plaintiffs.
( 5 ) PARTIES adduced evidence in support of their respective cases. The trial Judge considered this evidence and held that the plaintiffs had agreed only to share bricks manufactured in the brick kiln and not the profits so that the relationship between them was not of partners. Section 69 of the Partnership Act had, therefore, no application to the suits. On merits he concluded that the defendant had purchased bricks from each of the plaintiffs for a sum of Rupees 2000/- and had executed the Sarkhats as alleged by the plaintiffs. He had not paid any amount either towards the price of bricks or towards the interest agreed upon. He was liable to pay both to the plaintiffs. The trial Judge also negatived the objection on behalf of the defendant that the suits were barred by limitation and decreed both the suits for the amounts claimed with pendente lite and future interest at the rate of 6% per annum, A sum of Rs. 2000/-was claimed as the price of bricks in each of the two suits while a sum of Rs. 645-50 and Rs. 375/- had been claimed in suit Nos. 457 of 1970 and 53 of 1971 as the agreed interest at the rate of 1% per mensem respectively. The defendants felt aggrieved by the decrees passed and assailed them in two separate appeals.
( 6 ) THE appeals were heard by the District Judge, Azamgarh. He allowed them on his conclusion that the suits were barred by Section 69 of the Partnership Act without going into the merits of the matter. The learned District Judge re-appraised the evidence of the pa
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