MARKANDRAI KALYANRAI MEHTA Vs. VIRENDRARAI CHANDRAPRASAD DESAI

JUDGEMENT

(1.) The plaintiff, Markandrai Kalyanrai Mehta claims from the defendants Rs. 48,000. It appears that on 15th February 1909 the plaintiff advanced Rs. 50,000 at interest at the rate of 6 per cent, per annum for a period of three years to" the firm of Y. H. Desai & Co. who passed in favour of the plaintiff a deposit receipt for this amount. The firm of Y. H. Desai & Co. at that time consisted of three brothers, Laxmiprasad, Yeshwantprasad and Chandraprasad the father of the defendants in this suit. The amount due under the receipt became due and payable on 15th February 1912 but the firm of Y. H. Desai and Co. being unable to pay the loan passed a fresh deposit receipt to the plaintiff for Rs. 50,000 repayable after one year with interest at the same rate. The deposit receipt of 15th February 1909 was returned by the plaintiff to the firm of Y. H. Desai & Co. Before the loan of Rs. 50,000 was repaid Chandraprasad Hariprasad Desai died on 28th February 1913 leaving two sons, the pre-sent defendants.

(2.) On 7th April 1913, Laxmiprasad and Yeshwantprasad, the surviving partners of the firm of Y. H. Desai & Co., passed in the name of the firm a demand promissory note to the plaintiff for Rs. 50,000 with interest at 6 per cent, per annum the deposit receipt of 15th February 1912 being returned to the firm of Y.H. Desai & Co. Subsequently the firm of Y.H. Desai & Co. paid Rs. 2000 on account to the plaintiff" and on 27th April 1914 the surviving partners of the firm of Y. H. Desai and Co. passed a fresh demand promissory note for Rs. 48,000, the balance of the original loan of Rs. 50,000. On 21st December 1914 the plaintiff filed a suit being Suit No. 1502 of 1914 against the firm of Y, H. Desai & Co. to recover the amount of the promissory note of the 27th April 1914. The Suit No. 1502 of 1914 was on 9th March 1915 referred to the arbitration of Mr. Chimanlal H. Setalvad. On 21st August 1915 an agreement was arrived at between the plaintiff and Laxmiprasad and Yeshwantprasad in respect of the subject matter of the reference and a bond was prepared providing for payment of Rs. 48,000 by instalments and the bond was afterwards settled by the arbitrator and engrossment thereof signed before the arbitrator on the 26th January 1916 by Yeshwantprasad and Dinkarrai Laxmiprasad as manager of the family of Laxmiprasad who died on 1st October 1915. The plaintiff accepted the bond without prejudice to his rights, if any, against the estate of Chandraprasad. The arbitrator made his award on 31st January 1916. The plaintiff now seeks to recover from the estate of Chandraprasad in respect of the deposit receipt dated 15th February 1912 and the debt in respect of which the receipt was passed. There are two main defences to this suit. The defendants contend that the plaintiff is not entitled to maintain this suit by reason of the proceedings taken in Suit No. 1502 of 1914 and acts had and done thereunder and further that the right of the plaintiff in respect of the alleged debt is extinguished or released by reason of the promissory notes, dated 7th April 1913 and 27th April 1914 and by the return of earlier notes and by reason of the plaintiff s acceptance of the bond dated 26th January 1916. Hence the present suit. The first question that I have to consider is whether this suit is barred by reason of what has taken place in Suit No. 1502 of 1914. Therefore it is necessary to consider against whom that suit was filed, that is to say, who were the defendants in that suit. It must be remembered that suit No. 1502 of 1914 was filed by the present plaintiff against the firm of Y. H. Desai & Co. in the firm s name. It was open to the plaintiff to have made Laxmiprasad and Yeshwantprasad and the defendants in the present suit, as heirs and legal representatives of the deceased Chandraprasad, defendants individually, but the plaintiff preferred to file that suit in the name of the firm. It appears that parties to that suit referred the matters in dispute in that suit and something more with which we are not concerned, to the arbitration of Mr. Setalvad. On 21st August 1915, parties came to some agreement; attention of the arbitrator is called to this agreement and the decision of the arbitrator is invited as to the terms on which the parties were ultimately to settle the claim. The arbitrator gave his decision and his decision is acted upon by the bond being executed in his presence. The arbitrator made his award and the award directed the defendants to execute a bond in favour of the plaintiff providing payment of Rs. 48000 by instalments. Eventually, on 13th April 1916, decree in terms of this award was taken. It is contended that the bond of 26th January is not part of the award but in my opinion such contention is absolutely untenable. The bond must be considered as part of the award. On this a most careful, elaborate and interesting argument was addressed to the Court both by Mr. Mulla and Mr. Desai for their respective clients. To put it briefly it is contended for the defendants that the plaintiff had one single and entire cause of action against the three brothers constituting the firm of Y. H. Dasai & Co. and that Suit No. 1502 of 1914 was a suit not only against the surviving partners, Laxmiprasad and Yeshwantprasad but as well as against the assets of the deceased partner Chandraprasad and any decree passed in the suit can be executed against all the assets of the firm including those of Chandraprasad and therefore the plaintiff cannot now go against the representatives of the deceased partner Chandraprasad because it extinguished his cause of action. On the other hand it is argued for the plaintiff that the only persons who were parties to Suit No. 1502 of 1914 were Yeshwantprasad and Laxmiprasad because the suit was founded on a promissory note passed on 27th April 1914, that is at a time when they were the only partners and that they would have had no authority to pass a promissory note so as to bind the estate of a deceased partner. It is not necessary to consider and discuss in great detail this part of the case having regard to the decision I have come to on the question whether there was novatio or not for it is conceded by Mr. Mulla for the plaintiff that in the event of the Court holding that there was novatio there is an end of his case.

(3.) It is true that the plaintiff in Suit No. 1502 of 1914 sought unsuccessfully to bring the representatives of Chandraprasad on the record and he accepted the bond without prejudice to his rights if any against the representatives of Chandraprasad but it seems to me that the plaint in this suit and the affidavits filed on the Chamber Summons dated Gth February 1915 for bringing the representatives of Chandraprasad on the record make it abundantly clear that there was only one cause of action and that the Suit No. 1502 of 1914 being against the firm in the firm s name it must be taken to be against the three.