BABU Vs. DAYAMBAI

JUDGEMENT

(1.) This is an appeal from a judgment of Rangnekar, J. in which he dismissed the plaintiff's suit on the ground that it was barred by limitation. The facts are not substantially in dispute. The defendants represent a firm which, at the material dates, consisted of three partners, Alibhai, defendant 1, Esoofalli, whose widow and heirs are defendants, and Tyaballi, whose widow and heirs are also defendants. These three persons carried on business as partners in Bombay in a firm dealing in canvas, and they had, at one time, in the firm a raehta named Ratansey, who was the father of the plaintiff. Ratansey died in 1921, and in 1922 a sum of Rs. 15,000 odd was advanced to the firrrii whose name, I should have said, was Esoofalli Moosaji & Co., by the representatives of Ratansey. The loan is entered in the samadaskat book kept by the representatives of Ratansey, i.e. the creditors, and it was the custom for payments on account of that loan and the interest thereon to be entered up and a balance struck in that samadaskat book, the entries being signed by one of the partners on behalf of Esoofalli Moosaji & Co. There are various entries in the samadaskat book of payments on account of that debt, of which the later payments are relevant. A sum of Rs. 125 was paid on 5 March 1929, and another sum of Rs. 125 was paid on 30 May 1929, and the balance of the debt was thereby reduced to Rs. 6,098 odd, and an entry to that effect was signed by defendant 1 on behalf of the firm. On 21 November 1928, Esoofalli, one of the partners, died and that date is very material upon the question as to the liability of his estate. This suit was not commenced until 16 May 1933, and, therefore, unless the suit is to be barred by limitation, we have to find some acknowledgment or part-payment made within three years of 16 May 1933, and something which will bind the estate of Esoofalli, who died in 1928. Now the acknowledgment and part-payment principally relied on is an entry in the samadaskat book signed by defendant 1 on behalf of the firm showing the amount due in respect of the debt on 22 October, 1930, at Rs. 6,173-1-3, and also showing that on 10 November 1930, the sum of Rs. 2,173-1-3, was paid off, thus reducing the debt to Rs. 4,000, to which a sum of Rs. 262-14-0 was added for interest. In the next entry the balance is shown as Rs. 4,262-14-0, 10 November 1931, and this again is signed by defendant 1 on behalf of the firm.

(2.) The learned Judge held that on the death of Esoofalli the partnership was dissolved, and that there was no evidence of any new partnership between the two surviving partners and the heirs of Esoofalli. I think the view he took was that the two surviving partners started a new partnership between themselves, and not that they merely carried on the old business for the purpose of winding up. The evidence on the point is not very clear, but I will accept the learned Judge's view that probably there was a new partnership between the two surviving partners, Tyaballi and defendant 1. Tyaballi subsequently died on 13 May 1932. On that finding of fact the learned Judge came to the conclusion that the plaintiff's claim was barred. He held that surviving partners had no power to give an acknowledgment of the debt which would keep the debt alive as against the representatives of the deceased partner. He held also that the Part-payment of Rs. 2,173-1-3 could not be relied upon, because the proviso to Section 20, Lim. Act, was not shown to have been complied with. That proviso is that an acknowledgment of part-payment must appear in the handwriting of or in a writing signed by the person making the payment. It is not very easy to see how that proviso can be complied with when the person making the payment is an artificial person, a firm, or a company, which can have no handwriting and cannot make a signature. But assuming that the proviso would be complied with by a signature on the part of somebody having authority to sign the name of the firm, I think the learned Judge was right in holding that we have nothing evidencing the payment which is in the handwriting of any particular person, or in a document signed by any particular person.

(3.) The only evidence is that the payment was made by a cheque, and the bank-book of the firm shows that the cheque was paid, but we have no evidence as to the person who actually signed the cheque. However, in my view, it is not necessary to go into the various questions, some of them by no means free from difficulty, as to the effect of part-payment and acknowledgment, which are dealt with by the learned Judge. Nor is it necessary to consider whether there is any distinction between the liability of the heirs of Esoofalli and the heirs of Tyaballi. The first point taken by Mr. Jayakar on this appeal is that the plaintiffs had no notice of the dissolution of the firm which occurred on the death of Esoofalli, and that, therefore, they were entitled to go on dealing with the firm in the same manner as theretofore. He relies on Section 264, Contract Act, which is one of the sections of the now repealed Ch. 11, Contract Act, re-enacted in the Indian Partnership Act, but the rights in this suit are governed by Ch. 11, Contract Act. Section 264 provides: Parsons dealing with a firm will not be affected by a dissolution of which no public notice has been given, unless they themselves had notice of such dissolution.