BALAJI FINANCE CORPORATION Vs. R VENUGOPAL

JUDGEMENT

(1.) The plaintiffs in O.S.No.115 of 1976 on the file of the Subordinate Judge, Vellore, are the appellants in this appeal. The respondents are defendants 3 and 4. They along with the second defendant, were partners of the first defendant firm. The plaintiffs laid the suit for recovery of amounts due under two promissory notes. According to the plaintiffs, the second defendant, as representing the first defendant firm as well as the other partners, defendants 3 and 4, executed the promissory notes in the course of chit transactions. We are not concerned with the defence of the second defendant, because the second defendant has suffered a decree and he is not before this Court by way of further agitation. Defendants 3 and 4 against whom alone this appeal is directed, contended in substance before the Court below that the first defendant was not a trading firm and a mercantile firm the second defendant did not and could not have implied or express authority to borrow the borrowing could only be by all the partners and in any event, the benefit of the borrowing did not reach the first defendant firm. The Court below countenanced this case of defendants 3 and 4 and exonerated them. The appeal by the plaintiffs is directed against the judgment and decree of the Court below in so far as defendants 3 and 4 were so exonerated.

(2.) Mr.K.V.Subramaniam, learned counsel appearing for the plaintiffs, would submit that the first defendant firm, of which defendants 2 to 4 were partners, was a trading concern the second defendant did have an implied authority to borrow for the purpose of the business of the first defendant firm in the usual course of such a business and the question of the benefit of the borrowing not reaching the first defendant firm and other partners is not germane and they cannot escape their liability on this basis. Learned counsel covets for a decree against defendants 3 and 4 also.

(3.) As against this, learned counsel appearing for defendants 3 and 4 would contend that the first defendant firm, even according to the case of the plaintiffs, was only carrying on the business of a commission agent and the first defendant firm was not a trading concern and the second defendant could not be held to have either implied or express authority to borrow, and in the evidence, it has come out that ail the partners should join for the purpose of borrowing and the second defendant, by himself, did not have any express authority to indulge in such borrowing.