KONDURU MANKAYYA LINGAM Vs. PINGLE VIJAYAPAL REDDY

JUDGEMENT

(1.) These two appeals are directed against the judgment and decree of the learned Subordinate Judge at Warangal in O.S. Nos. 18 and 19 of 1958 respectively, on hi file. The 1st plaintiff, Pingle Vijayapal Reddy, in O.S. No. 18 of 1958 is the son of the and plaintiff Krishna Reddy in that suit. The sole plaintiff in O.S. No. 19 of 1958, Pingle Ranga Reddy, is the brother of the and plaintiff, (Krishna Reddy) in O.S. No. 18 of 1958. The defendants in both the suits are the same, defendant No. 1 being the father, and defendants a to 4 his undivided sons. The 5th defendant, Mallesham. in both the suits, is stated to be the clerk of defendants 1 to 4.

(2.) O.S. No. 18 of 1958 was filed for recovery of a sum of Rs. 35,288-2-8 (O.S.)- Rs. 30,247 (I.G.), with interest and costs. The plaintiffs' case is that the 1st plaintiff had been carrying on the business of discounting hundies. Defendants 1 to 4 are merchants carrying on business in groundnut, groundnut kernel, and groundnut oil, at Warangal and Jammikunta, trading under the name of Kondur Mankayya Lingam and Sons. The 5th defendant is their clerk. Rawa Pullaiah is the agent of the 1st plaintiff. The 1st plaintiff had transactions with the Hyderabad State Bank at Warangal. Defendants 1 to 4 used to pass hundies in favour of the 1st plaintiff and receive cheques from him for the amounts of the bills less the hundi commission and the hundi used to be endoreed in favour of the State Bank for collection. The Bank would' credit the amount of each bill in the name of the 1st plaintiff, debiting the commission charges, and recover the hundi amount from the drawee. This course of business between the 1st plaintiff and the defendants was being carried on from August, 1954. The 2nd defendant, on behalf of their shop, Kondur Mankayya Lingam and Sons, drew three bills on the 5th defendant and in favour of the 1st plaintiff viz.. Bill No. 377, dated 26th February, 1955, for Rs. 10,000, Bills Nos. 382 and 383, each for Rs. 10,000, dated 2nd March, 1955. Towards the consideration of the bills, the 1st plaintiff issued a cheque in favour of the and defendant, No. 249611, dated 28th February, 1955 for Rs. 9,987-8-0 in respect of the first bill after deducting commission, and cheque No. 249616, dated 3rd March, 1955, for Rs. 19,975 in respect of the other two bills. The said bills were endorsed in favour of the State Bank by Rawa Pullaiah, but. when presented through the branch of the Hyderabad State Bank at Jangaon, on the 5th defendant, for encashment, all the three bills were di honoured, whereupon the State Bank intimated that fact to the 1st plaintiff on 15th March, 1955 and asked him to deposit the entire amount. The 1st plaintiff accordingly deposited on 17th March, 1955, Rs. 30,000 towards the principal and interest etc., and laid the suit for recovery.

(3.) The suit was resisted by all the defendants. It was contended by defendants 1 and 2, inter alia, that the business of discounting bills is not the business of the plaintiff, but of a partnership firm of which Pullayya was a partner, holding a Re 0-6-0 share, and that the said firm not having been registered under the provisions of the Partnership Act, the suit is not maintainable. It was also contended that there was novation between the parties which terminated the liability of the defendants in respect of the dishonoured hundies, and that as per the latter agreement the goods belonging to the defendants offered as security to the plaintiff should be sold and the account settled and that liability of the defendants was only in respect of that amount and the suit was not maintainable.