KAMALAKSHA PAI Vs. SHA DHANJI BHAGAVANDAS AND COMPANY

JUDGEMENT

(1.) The first respondent obtained a decree for sale of mortgaged properties against a firm whose partners were the appellant and respondents 2 and 3. The suit in which the decree was obtained was on the basis of a registered mortgage deed executed by this firm in favour of the first respondent on 2-12-68 for Rs. 86000/-. The preliminary decree was passed in the suit on 2nd March, 1970 and the final decree on 19th June, 1970. It appears that on 23rd May, 1970, that is after the preliminary decree but before the final decree the firm had been dissolved by a registered deed.

(2.) When the decree holder first respondent moved for realisation of the decree amount by sale of the properties, the three partners of the firm concerned who are brothers and who had been impleaded in the proceedings as partners representing the firm claimed to be agriculturists and prayed for benefits under the Kerala Agriculturists' Debt Relief Act 11 of 1970 (hereinafter referred to as the Act) which had come into force on 14th July, 1970. It might be stated here that in the definition of the term 'agriculturist' as given in the Act a firm registered under the Indian Partnership Act, 1932, or a company as defined in the Companies Act, 1956, or a corporation formed in pursuance of an Act of Parliament of the United Kingdom or of any special Indian Law are specifically excluded. However, what each of the partners of the judgment debtor firm contended was that as the firm had been dissolved, they could in their individual capacity claim benefits of the Act as they are agriculturists and what the decree holder was seeking is execution against the separate individual property of each of them. Therefore, their contention was that the court could give benefit under the Act to these persons in their individual capacity. The executing court overruled these contentions. The third respondent took up the matter in appeal to this court in A. S.623/71 which was dismissed by a Division Bench of this court on 4-1-72. In that appeal though the present appellant and the other brothers had been impleaded they had not been served with notice of the appeal.

(3.) Mr. Balasubramaniyan, learned counsel for the appellant strongly contended before us that decree being against a firm, that will not preclude the individual partners from claiming reliefs under the Act when execution is sought not against property of the firm but against the separate property of the erstwhile partner. According to him, the firm having been dissolved before coming into force of the Act, the decree debt is not one payable by the firm as such but by the individual partners. In any view, according to him, as the decree debt is payable by a partner apart from the firm, if the partner is an agriculturist he would be entitled to relief under the Act if his person or property is proceeded against. In the mortgage deed on which the suit was filed, it was urged by Mr. Balasubramanyan that though what was secured was a firm debt, the mortgaged properties belonged to the partners in their individual capacity. They did not form part of firm asset.