T RADHAKRISHNA CHETTIAR Vs. K V MUTHUKRISHNAN CHETTIAR

JUDGEMENT

(1.) APPEAL by the Plaintiffs in O. S. No. 12 of 1956 on the file of the Subordinate judge's Court, Devakottai, against the decree and order of the Principal subordinate Judge dismissing their I. A. No. 673 of 1960 for a personal decree against the second defendant-respondent. The suit was filed on an equitable mortgage evidenced by a promissory note Ex. A-7 dated 7-2-1950 executed by the first defendant E. N. G. Muthukrishnan Chettiar and renewed by another promissory note Ex. A-8 dated 3-2-1953 three years later by the first defendant and deposit of title deeds of properties belonging to the second respondent K. M. Muthukrishnan Chettiar. There was a usual preliminary decree on 26-2-1957 and a final decree on 11-3-1958. The appellants filed I. A. No. 778 of 1959, on the file of the lower Court, for a personal decree against the first defendant alone to recover the balance of Rs. 10,339-08 with intermit from 30-3-1959, the date of the sale of the hypotheca. They pleaded that by inadvertence they failed to implead the second defendant-respondent and sought to implead him as respondent in the said application. But it was dismissed as they subsequently filed the present I. A. No. 673 of 1960, on the file of the Sub-Court, Devakottai. The said Court found that the second defendant-respondent, was not personally liable for the debt advanced by the appellants to the first defendant and that the present application was barred by reason of the prior application for personal decree made against the first defendant alone.

(2.) THE basis of the claim against the defendants in the plaint is that they were doing business as dealers and brokers in stocks and shares under the name and style of "central Brokers" at Madras and that they took loan for the said business, though the promissory note was executed by the first defendant alone. But the second defendant retired from the said partnership business on 1-11-1947 and thereafter his son and son-in-law continued as partners of the said firm "central brokers" with the first defendant. Though the second defendant has pleaded the above fact in his written statement, the appellants did not dispute the same in their reply statement, but merely pleaded that with some ulterior motives and to suit his purpose, the second defendant-respondent purported to remove his name and introduced his son-in-law as partners, but continued to have control and management as a partner. It should be noted that the suit is not against the partnership firm of Central Brokers and the defendants have not been sued as partners of the firm, "central Brokers".

(3.) THE promissory note Ex. A-7 dated 7-2-1950 was executed by the first defendant E. N. G. Muthukrishnan Chettiar alone and it was renewed by him alone under Ex. A-8 dated 3-2-1953. It is, however, urged that the second defendant-respondent made himself jointly and severally liable by reason of the letters Exs. A-1 to 3 sent prior to the promissory note Ex. A-7. But a reading of the letters clearly negatives the contention of the appellants. In fact, these letters really form the basis on which the first defendant executed the promissory note Ex. A-7. In the letter Ex. A-l dated 2-2-1950, the second defendant-respondent has stated that a sum of Rs. 10,000 to Rs. 12,000 was urgently required for the firm of central Brokers and that the first defendant would execute a promissory note for the loan and that he would arrange for a collateral security. Thus it is significant to note that the second defendant-respondent has not undertaken any liability for the loan which he arranged for the first defendant for the business of the firm of central Brokers. The two subsequent letters, Exs. A-2 and A-31, merely reiterate the request made in Ex. A-1. Thus the second 'defendant-respondent has not undertaken any personal liability for the loan advanced by the appellants to the first defendant who was running the firm of Central Brokers along with the son and son-in-law of the second defendant