P K EASWARAN Vs. M KUPPUSWAMI

JUDGEMENT

(1.) THIS is an appeal preferred by defendants 4, 5, 6 and 7, easwaran, Shanmugham, Sachithanandam and Kaliannan, against the judgment and decree dated 26th June, 1981, in O. S. No. 395 of 1980 on the file of the Court of principal Subordinate Judge of Erode, in a suit on a promissory note, decreeing the same as prayed for with costs against all the defendants.

(2.) THE case of the plaintiff (first respondent herein)before the Court below was as follow s :the plaintiff the appellants herein and some others entered into a partnership deed on 12. 7. 74 under the name and style of Vallinayagi Financiers at Erode, which firm was registered under the Indian Partnership act. THE main business of the firm is money-lending. THE plaintiff had contributed a sum of Rs. 25 ,000 towards the share capital. One of the partners by name M. N. Chin- naswamy Gounder , retired from the partnership on 31. 3. 1976, leaving the entire assets and liabilities to the other partners, who reconstituted the firm on and from 1. 4. 1976, and got a partnership deed executed on 25. 5. 1976. Defendants 2 and 3 (respondents 3 and 4 herein) were managing the business of the firm form commencement of the partnership. THE plaintiff and another partner expressed their desire to dissolve the firm by the end of March, 1978 and to settle the accounts. Defendants 2 and 3 desired to continue the firm from 1. 4. 1978 and agreed to pay the amounts to the plaintiff and the other retiring partner and suggested a transfer of the amounts due to them from the share capital account to the deposit account and make the payment thereof later, but the plaintiff and the other retiring partner insisted on some guarantee for the sum due to them. THE second defendant took the appellants to Erode and got a guarantee letter executed by them in favour of the plaintiff and two others on 31. 3. 1978. After that, a sum of Rs. 39 ,826 -94p. due to the plaintiff from the first defendant firm was transferred to the deposit account. On 1. 4. 1978 the firm was reconstituted and defendants 2 and 3 entered into a partnership deed. THE plaintiff paid a sum of rs. l73-05p in cash to the first defendant to make the deposit a round figure of rs. 40,000 and defendants 1 to 3 executed a promissory note for the said sum of rs. 40,000 in favour of the plaintiff on 1. 4. 1978, promising to pay the same with interest at 15 per cent per annum. Inspite of repeated demands, defendants 1 to 3 failed to pay the same to the plaintiff. Defendants 1 to 3 as executants of the promissory note and defendants 4 to 7 as guarantors , are jointly and severally liable to pay the amount to the plaintiff. THE defendants are not entitled to claim benefits under any of the Tamil Nadu Debt Relief Acts. THE plaintiff thus prayed for a decree for the said sum of Rs ,40. 000

(3.) ON a consideration of the above evidence, oral and documentary, the trial Court held on Issue 1 that the provision of the Debt relief Acts will not apply to the claim in the suit. ON Issue 2 it held that the suit as framed is maintainable. ON Issue 3 it held that the suit is not bad for non- joinder of any party and under Issue 4 it held that the plaintiff is entitled to the claim against the third defendant. It further held that a letter of guarantee need not necessarily be on a stamped paper or a thick paper and there is no reason to doubt the genuineness of exhibit A-3 guarantee letter relied on by the plaintiff. Under issue 6, the trail Court held that the plaintiff is entitled to a decree against all the defendants. Aggrieved by the above decision of the trial Court, defendants 4 to 7 have come up in appeal.