Shrikrishan Moolchand Vs. Deokinandan Sardharam and ors. - Court Judgment

K.L. Pandey, J.

1. This appeal by the plaintiff 1 is directed against the affirming decree of the lower appeal Court by which his claim for recovery of a loan, together with interest, amounting in all to Rs. 1,500/- from the defendants 1 and 2 was dismissed on the ground that appeal was not maintainable for non-joinder of necessary parties.

2. There was an unregistered partnership of Shrikishan (plaintiff 1), Gopikishan (father of plaintiffs 2 and 3) and Bawalram called Bawalram Moolchand which, it was claimed, advanced, on 19th September, 1952, a loan of Rs. 1,200/- to the defendants 1 and 2. On 17th September 1955, Shrikishan alone filed the suit in his own name impleading Bawalram and the heirs of Gopikishan (who was already dead) as defendants because they did not agree to join as co-plaintiffs. However, during the pendency of the suit, the heirs of Gopikishan were, at their own request, transposed as plaintiffs 2 and 3.

3. Upon contest, the Court of first instance dismissed the claim on merits. Thereupon, Shrikishan (plaintiff 1) alone filed the first appeal without impleading the heirs of Gopikishan as parties. During the pendency of that appeal, Shrikishan filed three applications. In the first application dated 22nd March 1958, he averred that he omitted to implead the heirs of Gopikishan as parties to the appeal inadvertently and on account of a bona fide mistake and prayed that either the appeal be heard on merits and a decree be passed under Order 41, Rule 4, Civil Procedure Code, in favour of all the original plaintiffs or leave be granted under Order 41, Rule 20 of the Code to implead the plaintiffs 2 and 3 as parties to the appeal.

By the second application dated 25th March, 1958, he sought leave under Order 6, Rule 17, of the Code to amend the plaint with a view to showing that he brought the suit on behalf of the dissolved firm Bawalram Moolchand. By the third application dated 1st September, 1958, he sought leave to urge a new ground, namely, that the heirs of Gopikishan, not being partners of the firm, were not necessary parties. The lower appeal Court dismissed these three applications and also, as alreadyindicated, dismissed the appeal.

4. The only ground on which the view of the first appeal Court is assailed is that Section 45 of the Contract Act does not apply to a case governed by mercantile custom and that the representatives of a deceased partner are not necessary parties to a suit for recovery of a debt which accrues due to a partnership in the lifetime of the deceased partner. The learned counsel for the plaintiff placed reliance upon Mool Chand v. Mul Chand, ILR 4 Lah 142 : (AIR 1923 Lah 197), Deoshi v. Bhikamchand, AIR 1927 Bom 125, and the following observations in the commentary of Pollock and Mulla on the Indian Contract Act:

'It seems to be the better opinion that the representatives of a deceased partner are not necessary parties to a suit for the recovery of a debt which accrues due to the partnership in the lifetime of the deceased partner.'

(Eighth Edition, page 320)

The view taken by the Lahore High Court in Mool Chand's case, ILR 4 Lah 142 : (AIR 1923 Lah 197), was not approved in Hari Singh v. Karam Chand Kanshi Ram, ILR 8 Lah 1 : (AIR 1927 Lah 115), where it was observed :

'I am unable to accept the view that the clear effect of Section 45 of the Indian Contract Act has been modified by the Civil Procedure Code, save as appears in Order XXX, which is confined to cases where suits are brought not by individuals but in the name of the firm under which they are trading.' (Page 12)

So far as the Bombay case is concerned, no doubt it supports the contention. But it is based on the observations of Farran, J., in Motilal Bechardass v. Ghellabhai Hariram, ILR 17 Bom 6 at p. 14, where the learned Judge applied, though not without some 'hesitation, the old practice even though that practice could not be supported on the basis of the words 'as between him and them' occurring in Section 45 of the Contract Act. The matter was again considered by the Bombay High. Court in Mathuradas Canji v. Ebrahim Fazalbhoy, ILR 51 Bom 986 : (AIR 1927 Bom 581), where their Lordships observed at pages 1011-12 (of ILR Bom) : (at p. 591 of AIR) :

'Although Section 45 applies in terms to all cases of joint contracts, there was in India, prior to the enactment of Rule 4, Order XXX, a difference of opinion as to whether the representatives of the deceased partner were or were not necessary parties to a suit for the recovery of a debt which accrued due to the partnership in the lifetime of the deceased. The High Courts of Allahabad, Bombay and Madras decided that they were not necessary parties : see Gobind Prasad v. Chandar Sekhar, ILR 9 All 486; Vaidyanatha Ayyar v. Chinnasami Naik, ILR 17 Mad 108; Debi Das v. Nirpat, ILR 20 All 365; Ugar Sen v. Lakhmi Chand, ILR 32 All 638 and ILR 17 Bom 6. In the latter case, Farran, J., considered the difficulty occasioned by the words 'as between him and them' and said (p. 14) :

'It is difficult to give these words their full effect if the surviving contractors in the case of partners are allowed to sue alone. The right to performance of the contract, as far as the other contracting party is concerned, rests just as much with the representative of the deceased partner as with the surviving partner. Can the latter, then, sue without joining the former as a party to the suit? Logical consistency points to an answer in the negative. The case of partners is, however, as we have shown, anomalous, and we think that as the Legislature has not enacted that the representatives of a deceased partner must join in suing in a partnership contract jointly with the surviving partners, we are not wrong in holding that, notwithstanding the provisions of the Contract Act, the old practice of the Small Cause Court need not be changed.'On the other hand, the contrary view was maintained by the Calcutta High Court: see Ram Narain Nursing Doss v. Ram Chunder Jankee Loll, ILR 18 Cal 86. There being this difference of opinion upon Section 45, Rule 4 of Order XXX was enacted when it was decided to introduce into India the English practice in regard to suits by and against firms.'

In view of these observations, the Bombay view should now be regarded as limiting the modification of Section 45 of the Contract Act only to the extent indicated in Order 30 of the Code of Civil Procedure. Pollock and Mulla relied upon older cases, including ILR 17 Bom 6 (cit. sup.) and ILR 4 Lah 142 : (AIR 1923 Lah 197) (cit. sup.), for their observations which are not supportable on the basis of the later decisions.

5. So far as this Court is concerned, the view taken in Chhotelal v. Rajmal, ILR (1951) Nag 480 : (AIR 1951 Nag 448) and Pyarelal v. Modi Sikharchand, AIR 1957 Madh Pra 89, is in accord with the latest view of the Lahore and Bombay High Courts mentioned in the previous paragraph. In the case of Chhotelal, ILR (1951) Nag 480 : (AIR 1951 Nag 448), Hidayatullah, J. (as he then was), and Rao, J., observed :

'Where a sum of money is due to a partnership firm, such a sum can be recovered either in a suit brought by all the partners of the firm or in a suit filed in accordance with Order XXX, Rule 1 in the name of the firm.' (Page 486)

'More than once it has been held that one of the several partners carrying on business in the name of a firm cannot sue in his own name on a cause of action which has arisen in favour of the firm.' (Page 487)

This view was reaffirmed by Naik and Sen, JJ. inRanglal v. Shobhalal, First Appeal No. 40 of 1957,D/- 29-2-1960.

6. Upon the authorities, it must be regarded; as firmly established that the English rule of devolution of rights in the case of joint promisees has been imported in India only to the extent indicated by the provisions of Order 30 of the Code of Civil Procedure and in all other respects the matter is governed by Section 45 of the Indian Contract Act. Since neither the suit, nor the appeal arising out of it, was filed in the name of the firm, the provisions of Rule 4 of Order 30 cannot be called in aid. That being so, the heirs of Gopikishan were necessary parties to the appeal and the lower appeal Court's view to that effect is correct.

7. In regard to the three applications, it is sufficient to say that if the applications for amendment were to be allowed, the operation of Section 22, of the Limitation Act could not be excluded : Firm Seth Hiralal Hazarilal v. Jagan Nath, AIR 1957 Raj 298. Further, the provisions of Order 41, Rule 4 or Rule 33 of the Code can apply only where the appeal is otherwise properly constituted. Those provisions cannot be called in aid to defeat the law relating to joinder of necessary parties : AIR 1957 Madh Pra 89.

8. The result is that the appeal fails and is dismissed. The plaintiff shall bear his own costs and pay those of the defendants 1 and 2 throughout. Other costs, if any, as incurred. Counsel's fee here according to schedule.