IMPORTANT POINT
Exclusory clause of Section 19 of Act do not exclude the authority of partner to take loan on behalf of firm.

L.N. Mittal, J.—C.M. No. 5187-C of 2011:

Allowed as prayed for.Defendant No.3 Dalip Singh having failed in both the courts below has filed the instant second appeal.

2. Respondent No.1 plaintiff Jagdev Singh filed suit against M/s Om Parkash Dalip Singh defendant No.1/respondent No.2 and its four partners Om Parkash defendant No.2/ respondent No.3, Dalip Singh defendant No.3/appellant, Balwant Rai and Makhan Singh defendants/respondents No.4 and 5, for recovery of Rs. 2,93,750 alleging that defendants No.2 to 5 are partners of defendant No.1 firm. On 1.12.2003, defendant No.1 through its partner defendant No.2 borrowed Rs.2,50,000 from the plaintiff and executed receipt for the same. The loan amount was to be repaid with interest @ 1.75% per month after six months. However, defendants failed to repay the same accordingly. The plaintiff therefore filed suit for recovery of Rs.2,50,000 as principal amount and Rs.43,750 as interest at the aforesaid agreed rate till filing of the suit.

3. Only defendant No.3 contested the suit, whereas remaining defendants were proceeded ex parte. Defendant No.3 broadly denied the plaint averments. It was asserted that no person was authorized by partners of the firm to take loan on behalf of the firm from anybody. The alleged loan amount was never received by the firm nor the same was entered in the account books of the firm. Partners of the firm are not liable to pay any amount to the plaintiff. The amount, if any received by defendant No.2, might be in his personal capacity. Firm defendant No.1 never received any amount from the plaintiff.

The alleged writing, if any, has no concern with defendant No.3 or with the firm. It might be personal transaction of defendant No.2.

4. Learned Civil Judge (Junior Division), Jagraon, vide judgment and decree dated 28.1.2010, decreed the plaintiff’s suit for recovery of principal amount of Rs.2,50,000 along with interest@ 1.75% per month from the date of writing i.e. 1.12.2003 till date of decree and future interest @ 6% per annum from the date of decree till its realization. First appeal preferred by defendant No.3 has been dismissed by learned Additional District Judge, Ludhiana, vide judgment and decree dated 18.1.2011. Feeling aggrieved, defendant No.3 has filed the instant second appeal.

5. I have heard learned counsel for the appellant and perused the case file.

6. Plaintiff Jagdev Singh himself stepped into the witness box as PW2 and examined Gurdev Singh (PW1 ). Both of them have broadly stated according to plaintiff’s version. On the other hand, Dalip Singh (defendant No.3) himself stepped into the witness box as DW1 and broadly stated according to his own version.

7. It has come in evidence of the plaintiff that writing Ex.P1 regarding the loan in question was scribed by Accountant of defendant No.1 firm and it was signed by defendant No.2 as partner of the firm, for and on behalf of defendant No.1 firm. On the other hand, there is self-serving statement of defendant No.3, which is not sufficient to rebut the cogent evidence of the plaintiff.

8. In the aforesaid context, it has to be noticed with significance that defendant No.3 specifically pleaded that loan amount was not received by the firm or entered in its account books. However, defendant No.3 failed to produce the account books of defendant No.1 firm, of which he is a partner, and therefore, strong adverse presumption arises against defendant No.3 appellant.

9. In addition to the aforesaid, Om Parkash defendant No.2 was the most material witness on behalf of defendant No.3 appellant, but has not been examined. For non-examination of defendant No.2 also, strong adverse inference has to be drawn against defendant No.3 appellant. There is no explanation whatsoever for non-examination of Om Prakash as witness and for non-production of account books of defendant No.1 firm. It is thus manifest that defendant No.3 appellant has intentionally withheld the available material oral as w