THUMMALA RAMA RAO Vs. CHODAGAM VENKATESWARA RAO

JUDGEMENT

(1.) This is an appeal by the defendants 6, 7, 8 and 10 against the decree in O. S. No. 28 of 1955 on the file of the Subordinate Judges Court, Guntur. The suit was filed by the three plaintiffs, who are the respondents in this appeal to recover a sum of Rs. 18,173-12-2 being the amount of principal and interest due on three promissory notes for Rs. 10,000.00 each. There are 11 defendants in this suit. The 11th defendant is Gokul Krishna Film Distributing Company, Vijayawada. It is alleged in the plaint that the defendants 1 to 10 are the partners of the 11th defendant firm. One promissory note was executed by the 5th defendant in favour of the 1st plaintiff for Rs. 10,000.00 on 17-12-1951. Another promissory note was executed by the 1st defendant in favour of the 2nd plaintiff for another sum of Rs. 10,000.00 on 9-9-1951. The third promissory note was executed also by the 1st defendant for another sum of Rs. 10,000.00 in favour of the third plaintiff on 9-9-1951. The three promissory notes are marked as Exs. A-1 to A-3 in the suit. According to the allegations in the plaint, the 1st defendant has been the managing partner of the 11th defendant-firm and the 5th defendant was assisting him in the management. Subsequently, an arrangement was entered into between the plaintiffs and the defendants whereunder the distribution rights of a film "Perantalu" which the defendants had at the time were transferred to the plaintiffs and under which the plaintiffs were given the right to credit 85% of the collections towards the suit promissory notes till the amounts due under them were discharged. As per this arrangement, a document, Ex. A-4 was executed on 30-5-1952 by the 1st defendant, who was the managing partner. After deducting the amounts which the plaintiffs received in pursuance of this arrangement the suit was held for thee Balance due viz., Rs. 18,173-12-2. It is stated in the plaint that as the original borrowing was for the purpose of the partnership, all tile defendants are jointly and severally liable to discharge the suit debts. Defendants 1 to 4 and 11 were absent during the trial of the suit though they filed written statements. The 5th defendant filed a written statement admitting his executing the promissory note dated 17-12-1951 in favour of the 1st plaintiff on behalf of the 11th defendant-firm. But, he contended that he ceased to be a partner of the firm on 4-6-1952 and therefore he was not liable for the suit debt. The further plea taken by him was that the arrangement entered into on 30-5-1952 operates as Novatio and that the suit is not maintainable on the suit promissory notes. The maintainability of one suit by all the three plaintiffs was also objected to.

(2.) The 6th defendant contended that he ceased to be a partner of the 11th defendant-firm on and from 6-6-1951 having sold away his Rs. 0-2-6 share to defendants 1 to 5 and that his retirement from the partnership was duly published in the newspapers in September, 1951 and was also communicated to the Registrar of Firms and that the plaintiffs were aware of his retirement prior to 9-9-1951 i.e., even before the execution of the suit promissory notes and the borrowings thereunder. Therefore, he is not liable for the suit claim. He also denied the truth of the suit debts and execution of the promissory notes and their binding nature on the partnership and their alleged acknowledgement under Ex. A.4.

(3.) Defendants 7, 8 and 10 filed a written statement contending that they ceased to be the partners of the firm from 6-6-1951 & that an agreement dated 14-9-1951 was executed between them and the remaining partners, defendants 1 to 5, that due publication was made regarding their retirement both in the newspapers and by giving notice to the Registrar of Firms. They also denied the truth, validity and binding nature of the suit debts on the firm or its partners. According to them, the suit promissory notes were not executed and the suit debts were not incurred on behalf of the firm and the 1st defendant or the 5th defendant had no authority to borrow on behalf of the firm. They also pleaded that this 1st defendant had no authority to execute the agreement dated 30-5-1952 which is marked as Ex. A-4 on which the plaintiff rely as an acknowledgment of liability to save limitation as it cannot hind them. It is also pleaded that the suit is bad for misjoinder of parties and causes of action and that all the three plaintiffs cannot file one suit.