The central legal point established in the judgment is the protection of partnership assets and the need for a thorough investigation to determine the ownership of a debt in garnishee proceedings.

JUDGMENT

R.C. Mitter, J. - The Kurseong Hydro-Bleofcrio Supply Co. Ltd., (hereafter called the company) was incorporated in August 1930. A firm carrying on business under the name and style of Sundar and Rai, of which P. M. Sundar and N. B. Rai were partners in equal shares, became the managing agents-of that company. It is said by the company that the said firm Sundar and Rai, was also appointed its engineers to look after the construction of its works at a monthly remuneration of Rs. 700, with yearly increments of Rs. 25 a month, for a period of three years commencing from October 1930. The respondents maintain that P. M. Sundar and N. B. Rai were appointed engineers on those terms in their individual capacities. In our judgment, the controversy on this point is a material one. The learned subordinate Judge, however, did not record his finding on the same, but, on the other hand, proceeded upon the assumption that the firm, Sundar and Rai, had been appointed as engineers. In reciting the facts in our judgment we will for convenience use the phrase "Sundar and Rai" without denoting either the firm of that name or the individuals, P. M. Sundar and N. B. Rai. N. B. Rai was also the secretary and one of the directors of the company for a long time. The services of "Sundar and Rai" as engineers were continued after September, 1933 and up to March 1936 when they resigned. They were paid their engineering remuneration up to February 1931, but thereafter they received no remuneration from the company. For the period March 1931 to March 1936 they would be entitled to get from the company Rs. 47,400 as engineering remuneration. On the footing that P. M. Sundar and N. B. Rai were the engineers of the company in their individual capacities each of them would be entitled to Rs. 23,700.

2. On 17th December 1934 respondent 2, Ramgopal Agarwalla, got a decree for Rs. S693 against N. B. Rai and one Sridoyal Rai and on 29th April 1935 respondent 1, Lakshmi Narayan Sukhani, got another decree for Rs. 21,815 odd against those two persons. Both those decrees carried interest. Earn Gopal first applied for execution. His case was numbered. Money Execution Case No. 6 of 1936. Lakshmi Narayan followed suit and his case was numbered Money Execution Case No. 19 of 1936. Both the decree-holders applied for attachment of the moneys in the hands of the company due on account of, (a) the salary, emoluments and remuneration of the judgment-debtor N. B. Rai as engineer and employee of the company, (b) the remuneration of N. B. Rai as director and secretary of the company, and (c) his half share in the firm, Sundar and Rai, as managing agents of the company. Attachment processes were issued under the provisions of Order 21, Rule 46, Civil P.C., and the prohibitory notices were served on the company on 31st January and on 18th March 1936 in Execution Cases Nos. 6 and 19 of 1936 respectively. Thereafter, garnishee proceedings were started against the company. In those proceedings the company took up the position, that although the sum of Rs. 47,400 was payable to "Sunder and Rai" as engineering remuneration under the terms of service, there had been an adjustment between it and "Sundar and Rai" by which P. M. Sundar agreed to accept Rs. 13,700 partly in cash (Rs. 10,700) and partly in shares of the company (face value of Rs. 3000) and N. B. Rai agreed to accept Rs. 13,700 also partly in cash (Rs. 2400) and partly in shares of the company (face value of Rs. 11,300) in full satisfaction of their claims for engineering remuneration. Out of Rs. 2400 payable to N. B. Rai in cash under this adjustment the company paid Rs. 305-9-0 as income tax on his behalf. It deposited in Court a cheque for Rs. 1586-8-0 and shares of the face value of Rs. 11,300. The learned subordinate Judge, however, held in his judgment dated 1st February 1937 that the said adjustment with N. B. Rai was not binding on the two attaching creditors as the said adjustment was made after the attachmen