TOWN INVESTMENTS Vs. SUBRAMANIAN

JUDGEMENT

(1.) AGAINST the decree and judgment in O. S. No. 66 of 1989 on the file of the Sub Court, thrissur, this appeal is preferred by the plaintiff. The plaintiff is a firm registered under the Indian Partnership Act and signatory to the plaint, being a partner of the firm, is competent to sue on behalf of the firm. The defendants had borrowed a sum of Rs. 50,000/- from the plaintiff firm and had executed a demand promissory note in favour of the plaintiff firm on 7. 2. 1983 agreeing to repay the same with interest at 12% per annum. Out of the said amount, the defendants have repaid a sum of Rs. 12,500/- on 22. 11. 1984 and another sum of Rs. 500/- on 5. 2. 1986. The balance amount is due from the defendants. Despite of repeated demands the balance amount was not paid. Since an amount of Rs. 500/- was paid on 5. 2. 1986 by the defendants, and the same was endorsed on the back side of the demand promissory note, the suit is not barred by limitation. The suit is filed for recovery of a sum of Rs. 74,422/- with interest at 12% per annum.

(2.) THE defendants filed written statement admitting the execution of Ext. A1 promissory note. But denies the allegation that he had repaid only an amount of Rs. 13,000/- towards the transaction. THE first defendant paid an amount of Rs. 43,000/- out of the loan transaction. An amount of Rs. 30,000/- was paid in March 1984 in two occasions. All the payments made by the defendants had been effected through the second defendant, a partner of the plaintiff firm. No receipts have been given to the defendants towards repayment but the payment were credited in the account books of the plaintiff. THE plaintiff may be directed to produce the account books maintained by the firm. On receipt of the notice, defendants contacted the plaintiff and therefore he did not send any reply to the plaintiff's notice. THE allegation that the firm is registered under the Indian Partnership Act is denied. THE plaintiff cannot sue against the second defendant. THE interest claimed is excessive.

(3.) IT is submitted by the learned counsel for the defendants that the suit itself is not maintainable. There is nothing on record to show that the firm is a registered one. Under section 69 (2) of the Indian partnership Act, the suit will not lie. Under section 69 (2) of the said Act, a suit is validly instituted by or on behalf of the firm against any third party, only at two conditions are fulfilled (1) the firm must be registered and (2)the persons suing are or have been shown in the Register of Firms as partners in the firm. The scope and ambit of the provisions of the Rules 1 and 2 of order 30 of the Civil Procedure Code is different from the provisions of section 69 (2) of the Partnership Act. The provisions contained in Rules 1 and 2 are procedural; whereas the provisions of Section 69 (2) are substantive and create a bar at the threshold of the filing of a suit by or on behalf of a firm if the conditions mentioned therein are not fulfilled. The averments in the plaint would not show that the suit is filed for and on behalf of the other members of the firm. Further there is nothing on evidence to show that the person who signed the plaint is a member of the firm. The firm is not a legal entity but is only a collective or compendious name for all the partners. So, if a suit to enforce a right arising from a contract is to be instituted by a firm against a third party, the firm would be the plaintiff. If the suit is to be instituted on behalf of a firm, the partner or partners who want to institute the suit on behalf of the firm would be the plaintiff. But, in both the cases the suit would an effect be by or on behalf of all the partners of the firm. In the present suit, so such averment is made. In the absence of any averments the court below has rightly found that the suit is not maintainable.