VRAJ KUWAR BAI Vs. KUNJBIHARILAL KRISHNACHANDRA

JUDGEMENT

(1.) THIS order shall also govern the disposal of Letters Patent Appeal No. 34 of 1963.

(2.) THESE Letters Patent Appeals arise out of a suit for specific performance filed by kunjbeharilal against three partners Bechar Bhai, Rupchand and Brijdas of firm diamond Trading Company, Raipur. The case of the plaintiff was that the partners of the firm, on behalf of the firm, agreed to sell malik makbuza rights in half share of certain fields which were partnership property, by agreement dated 22nd january, 1947. The document was executed by Rupchand, one of the partners, on behalf of the firm. On 4th November, 1947, Brijdas another partner of the firm, confirmed the agreement. The plaintiff alleged that he was always willing to perform his part of the contract, but that the defendants failed to execute the sale deed in spite of service of registered notice. The plaintiff, therefore, claimed that the defendants be directed to execute a sale deed on payment of the balance of price i. e. , Rupees 7743/4/-, or any other amount that may be found payable. This suit was filed on 26th October, 1950. On 19th March, 1952, Bechar Bhai, one of the partners, mortgaged the whole of this property with the Allahabad Bank Ltd. , claiming himself to be the owner thereof. On 22nd March, 1952, that is within a few days of this mortgage, one of the creditors of Bechar Bhai applied for adjudicating Bechar Bhai as an insolvent. On 24th September, 1955, Bechar Bhai was adjudicated insolvent. No receiver was appointed. The plaintiff did not take any steps in his suit for specific performance to join the Insolvency Court as representing the estate of the insolvent. On 3rd April, 1958, the two partners rupchand and Brijdas entered into a compromise with the plaintiff Kunjbeharilal and agreed to a decree being passed in his favour. On 23rd April, 1958, a decree for specific performance was passed in favour of Kunjbeharilal on compromise by two of the partners and ex parte against Bechar Bhai. On 23rd June, 1958, kunjbeharilal deposited the money as consideration for execution of the sale deed and applied for execution of the decree. On receipt of a notice from the executing court asking him to execute a sale deed in favour of the plaintiff, Bechar Bhai filed an objection on 19th December, 1960, informing the Court that he had been adjudicated insolvent; that the decree having been passed without impleading the insolvency Court as a party, the decree was a nullity and that the sale deed could not be executed. A similar objection was also filed on behalf of the Allahabad bank, now respondent No. 4. The Additional District Judge on 3rd April, 1962, held that the decree was a nullity and could not be executed. He, therefore, dismissed the application for execution. Against that order the plaintiff filed an appeal in this court and the learned Single Judge by order dated 10th October, 1963, reversed that order and directed the Court below to proceed with the execution of the decree according to law. Against that order of the learned Single Judge, the present Letters Patent Appeals have been filed by Bechar Bhai and the Allahabad bank Ltd.

(3.) THE contention of learned counsel for the appellants is that a firm has no legal personality of itself. It is merely a compendious name indicating all the partners of the firm and consequently the property of the firm is in reality the joint property of all the partners. All the partners have, therefore, a share in the property and the suit for specific performance could not be decreed in respect of the whole of the joint property after one of the partners had been adjudicated insolvent and the insolvency Court, in which the insolvent's property vested, had not been made a party The decree was, therefore a nullity. It was also further contended that in any case the decree was wholly inexecutable as no sale deed for the whole of the property could be executed either by the two solvent partners or by the two solvent partners along with the insolvent who had no interest in the property left. The insolvency Court not having been made a party could not be forced to execute a sale deed. It was further contended that under Section 28 of the Provincial insolvency Act no proceedings against the estate of the insolvent could be taken without the prior permission of the Insolvency Court and hence the execution proceedings were invalid.