RANA HARKISHANDAS LALLUBHAI Vs. RANA GULABDAS KALYANDAS

JUDGEMENT

(1.) THE point of law which arises for decision as a preliminary point is concerned with the provisions of Order 21, Rule 50, Sub-rule (2), Civil P. C. The decree-holder had asked for leave to proceed in execution against the appellants and their brother under Order 21, Rule 50, Sub-rule (2), and since the appellants and their brother disputed their liability under the decree sought to be executed, it became necessary to consider what pleas it was open to them to raise in the proceedings under Order 21, Rule 50, Sub-rule (2 ). The learned Judge below has held that the pleas which the appellants wanted to raise could be raised by them in the present proceedings and so he proceeded to deal with the merits of the said pleas in the light of the evidence adduced before him. The finding of the learned Judge that the several pleas which the appellants purported to raise before him were competent is challenged before us by Mr. Shastri for the decree-holder. Mr. Shastri argues that in a proceeding under Order 21, Rule 50, Sub-rule (2) where the decree-holder seeks to proceed against the appellants, the only point which the appellants can raise is that they were not partners of the firm against which the decree in question has been passed; it would not be competent to the appellants to raise any other contention which might affect the validity of the decree. That is how the question which falls to be determined is: What are the limits of the enquiry held under Order 21, Rule 50, Sub-rule (2) ?

(2.) BEFORE dealing with this question, it would be relevant to refer to the material provisions of Order 21, This Order deals with suits by or against firms and persons carrying on business in names other than their own. Rule 1 Sub-rule (1) of this Order allows suits to be filed by or against firms in the names of the firms, and Sub-rule (2) of Rule 1 authorises any one of the partners of the firm to sign, verify or certify pleadings or other documents in such suits. Rule 2 requires the disclosure of partners' names to be made on demand and Sub-rules (2) and (3) of this rule provide for the passing of orders consequent upon the disclosure of the names or its absence. Rule 3 provides for the manner in which notice can be served in actions against firms. If a firm is sued, the summons shall be served either upon any one or more of its partners, or at the principal place at which the partnership business is earned on within India upon any person having, at the time of service, the control or management of the partnership business there, as the Court may direct. This rule provides that service, when thus made, shall be deemed good service upon the firm so sued, whether alt the partners are within or without India. The proviso to this rule may be noticed. It deals with the cases of partnership which have been dissolved to the Knowledge of the plaintiffs before the institution of suits and it requires that in such cases the summons shall be served upon every person within India whom it is sought to make liable. Rule 6 of Order 30 provides that, where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but even so all subsequent proceedings will continue in the name of the firm. According to Rule 7, where a summons is served in the manner provided by Rule 3 upon a person having the control or management of the partnership business, no appearance by him shall be necessary unless he is a partner of the firm sued. Now, when the suit is brought against a firm in conformity with the rules prescribed by Order 30 and a decree is passed, the said decree can be executed under Order 21. Rule 50 of Order 21 deals with the execution of such a decree. According to Sub-rule (1) of Rule 50, where a decree has been passed, against a firm, execution may be granted (a) against any property of the partnership; (b) against any person who has appeared in his own name under Rule 6 or Rule 7 of Order 30 or who has admitted on the pleadings that he is, or who has been adjudged to be, a partner; and (c) against any person who has been individually served as a partner with a summons and has failed to appear. In other words, where a decree has been passed against a firm, it can be executed against the property of the partnership without the decree-holder taking any further step by way of obtaining leave from the Court. Similarly, it can be executed against persons mentioned in Clauses (b) and (c) of Sub-rule (1) of Rule 50. So long as the decree-holder is content to execute the decree either against the property of the partnership or against the persons mentioned in these two clauses, he is not required to ask for any leave and the execution application is entertained by the executing Court and further steps in execution are ordered to be taken in the ordinary course. Where, however, the decree-holder claims to exercise his decree passed against a firm and wants to proceed in that behalf against persons other than those mentioned in Clauses (b) and (c) of Sub-rule (1), he has to obtain leave of the Court and the proceedings which he is required to take for obtaining leave are governed by Sub-rule (2) of Rule 50. The application for leave would naturally state that the decree-holder has obtained a decree against the judgment-debtor firm and that the person shown as the opponent in the execution application is a partner of the said firm. When such an application is made, summons would issue against the opponent. If the opponent ap- pears and admits his liability as a partner of the firm, execution would proceed against him. If the opponent is served and disputes his liability, the rule provides that the liability of such person has to be tried and determined in any manner in which any issue in a suit is to be tried and determined. If the liability is determined in favour of the decree-holder, execution would proceed against the opponent; if it is determined in favour of the opponent, no further steps in execution can be taken by the decree-holder against him.

(3.) MR. Chhatrapati contends that, in construing the material terms used in Sub-rule (2) of Rule 50 of Order 21, it would be necessary to bear in mind the fact that the opponent to the application has not been directly impleaded in the suit in which a decree has been passed and he has had no individual opportunity to meet or contest the claim made by the plaintiff against the firm in the suit itself. He, therefore, suggests that, if the material words are capable of a wider interpretation so as to enable the opponent to raise all pleas relevant for the purpose of disputing his liability, we should accept the said wider interpretation. Sub-rule (2) of Rule 50 provides that, where such liability is disputed, the Court may order that the liability of such person be tried. According to Mr. Chhatrapati, all pleas which have a bearing on the liability of the appellants should be allowed to be raised in the present proceedings. If the appellants contend that the decree under execution was the result of fraud or collusion, or that the decree has been passed contrary to the provisions of Section 19, Sub-section (2) (e), Indian Partnership Act, it should be open to them, says Mr. Chhatrapati, to raise these pleas and substantiate them. On the other hand, Mr. Shastri argues that the only point which can be raised in the present proceedings must have reference to the question whether the opponent was a partner of the firm or not. According to Mr. Shastri, as soon as it is found that the opponent was a partner at the material time, no further issue can be tried and the enquiry must be deemed to have been determined in favour of the decree-holder, leaving it open to him to proceed further in execution against the opponent.