A. Sangameswaran and ors. Vs. Sri Lakshmi Textiles a Registered Firm by Partner P. Sundararajan and ors. - Court Judgment

SooperKanoon Citationsooperkanoon.com/810232
SubjectCivil
CourtChennai High Court
Decided OnNov-10-1993
Reported in(1994)1MLJ470
AppellantA. Sangameswaran and ors.
RespondentSri Lakshmi Textiles a Registered Firm by Partner P. Sundararajan and ors.
Excerpt:
- - but he did not vacate the shop since his idea of executing the lease deed was that by holding on the premises, his sons would be able to get good 'pagadi'.he further states that the shop was sub-leased to defendants 6 and 7 as per ex.thangamani, j.1. the appellants in a.s. no. 192 of 1983 are defendants 2 to 5, 11 and 1 in o.s. nos. 981 of 1978,1055 of 1978 and 109 of 1982 respectively on the file of learned subordinate judge of salem. in another two appeals the 1st defendant does not figure as an appellant. three different plaintiffs have laid those suits against the present appellants and 5 others. in the first suit there is one more defendant by name goodluck textiles. the plaintiffs are registered partnership firms dealing in textiles on wholesale business. hereafter parties are referred to as arrayed in the suits.2. the first defendant is the father of defendants 2 to 5. defendants 6 to 9 are their close relations and associates. they were doing textile business under the name and style of dhanalakshmi textile traders who is the 10th defendant in the suits at door no. 3-4-395 tobacco bazaar in secunderabad, andhra pradesh. the first suit has been instituted for the recovery of rs. 60,000 for the value of textile goods supplied on credit for the business requirements of the defendants from 1974 to 27.4.1978. the sum includes rs. 27,500 payable by way of interest as per the agreement at 12% per annum on the outstandings. while the claim in o.s. no. 1055 of 1978 is for the recovery of rs. 12,300 that in c.s. no. 109 of 1982 is for recovery of rs. 4,685 on similar allegations.3. in all the three suits defendants 2 to 5 are sought to be made liable on the ground that the first defendant represented that he was the main partner of the business run under the name and style of the 14th defendant. only on believing the representation of the first defendant and his sons, the plaintiffs supplied goods to the 10th defendant firm on credit. by conduct and representation they held out that they were the actual partners of the firm. the defendants 1 to 5 were frequently visiting and looking after the business of dhanalakshmi textile traders conducted at door no. 3-4-395, tobacco bazaar, secunderabad. as such they are personally liable to pay the amounts under section 28 of the partnership act. plaintiffs further alleged that the name of the 10th defendant has now been changed as m/s. mayilone textile corporation which is the 11th defendant in the suits. the said concern is also run by the same defendants 1 to 9 with the same stock-in-trade. this arrangement has been done by the first defendant evidently with a view to defraud the lawful creditors. the 12th defendant has been impleaded for the reason that some of the defendants have also started a textile business under the name and style of goodluck textiles in hyderabad.4. the trial court found that the defendants have purchased textiles on credit from the plaintiffs for the sake of the 10th defendant firm and as per the custom and usage of the trade, they have to pay interest at 12% per annum, that defendants 6 and 7 have filed written statement supporting the case of the plaintiffs, that though defendants 1 to 5 are not partners of the 10th defendant firm, they have held out as partners and as such defendants 1 to 5 and 11 are also liable to pay the debts due to the plaintiffs in all the suits along with the defendants 6 to 9. accordingly, all the suits were decreed as prayed for with costs against defendants 1 to 11 and the suit against the 12th defendant was dismissed without costs. and those appeals are directed against the said judgment and decree.5. originally, the first defendant was carrying on business in secunderabad under the name and style of dhanalakshmi textiles. the business was run in the premises bearing door no. 3-4-395 belonging to the father of p.w. 1 rajeswara rao. the latter states in his evidence that he had leased out the shop to the first defendant. in 1968 the first defendant approached him and represented that he was going to change the name of the shop from dhanalakshmi textiles to dhanalakshmi textile traders 10th defendant. ex. b-24 is the copy of rental agreement dated 14.5.1968 entered into between p.w. 1 rajeswara rao and the second defendant sangameswaran who is the son of the first defendant in respect of this shop. this document recites that the lease is for the purpose of carrying on cloth business. the tenant shall be entitled to carry on the business under any name and style which he may from time to time decide subject to the condition that the ownership of the tenancy is not changed. accordingly sangameswaran was doing business there. the plaintiff in o.s. no. 1055 of 1978 as p.w. 2 also states that the first defendant was doing business with him since 1954 in the name of dhanalakshmi textiles. subsequent to 1956 he represented to him that he was going to do business thereafter with defendants 6 and 7 and with his sons defendants 2 to 5 in the name of dhanalakshmi textile traders. prior to that defendants 6 and 7 were working as clerks in the shop of the first defendant. since all the seven were jointly doingbusiness as proprietors of 10th defendant firm in secunderabad, he supplied goods on credit. defendants 1, 2 and 4 to 7 were managing the shop in turn. defendants 6 and 7 were permanently residing in secunderabad. p.w. 3 janakiraman is a former partner of the plaintiff firm ino.s.no.l09of 1982. his evidence is also to the effect that only on the representation that the business was being carried on by the first defendant and his sons, goods were supplied by him. he further states that either the first defendant or the second defendant was looking after the business. they came in person to the shop of this witness at trichy and salem, selected goods and bargained for the price. p.w. 4 hariharan is a partner of the plaintiff firm in o.s. no. 981 of 1978. he also speaks about defendants 2 to 5 participating in the business of 10th defendant firm. we shall now examine whether there are sufficient materials to substantiate these verbal versions of the creditors.6. though the appellants objected to the marking of ex. b-24 by the commissioner while he was examining p.w. 1 rajeswara rao on commission at secunderabad, the first defendant as d.w. 1 admits even in his chief examination that ex. b-24 lease deed was executed by his son second defendant. as we have already seen under this lease deed the second defendant has taken premises no. 3-4-395, tobacco bazaar, secunderabad on lease for the purpose of his cloth business. this is one of the factors which weighed with the trial court in holding that the sons of the first defendant are also partners of the 10th defendant firm. it is significant to note that the residential address of second defendant sangameswaran is described in ex. b-24 as swami vivekananda street, secunderabad. it is not the case of the appellants that the second defendant has any other business in secunderabad. the second defendant has not gone into the witness box. so, it is quite likely that the shop was taken on rent only for the purpose of 10th defendant firm.7. d.w. 1 states in his evidence that he was present when ex. b-24 lease deed was executed. in 1967 he closed dhanalakshmi textiles business because he incurred loss. but he did not vacate the shop since his idea of executing the lease deed was that by holding on the premises, his sons would be able to get good 'pagadi'. he further states that the shop was sub-leased to defendants 6 and 7 as per ex. b-25 dated 25.5.1968. this lease deed had been executed by second defendant sangameswaran in favour of the sixth defendant. and this lease purports to be for the business purpose of the 10th defendant dhanalakshmi textiles corporation. but we find from ex. a-5 the counter statement of the second defendant in r.c. no. 454 of 1978 before the rent controller, secunderabad, that he has categorically denied the sub-lease. it is significant to note that the 2nd defendant has filed this counter in his capacity as a partner of 11th defendant firm.8. ex. b-23 is the registration copy of the partition deed dated 17.6.1965 entered into among the first defendant and his four sons in respect of their family properties including business at hyderabad. this was pressed into service by the appellants in support of their contention that they could not have been partners of 10th defendant firm. they also relied on ex. b-26 the firm registration certificate dated 8.3.1966 which shows defendants 6 and 7 only as partners of the 10th defendant firm and ex. b-27 firm registration certificate dated 19.5.1978, whereunder defendants 2 to 5 are indicated as partners of 11th defendant firm in order to substantiate their contention that the appellants have nothing to do with 10th defendant concern. that the father and sons had become divided long back cannot raise a presumption that in 1978 they could not have carried on business jointly as partners. no doubt in the firm registration certificate of the 10th defendant, the names of the appellants do not find a place. but it is necessary to bear in mind that the appellants are sought to be made liable only on the basis that the first defendant and his sons had held out that they are also partners of that firm.9. according to d.w. 1 subsequent to 1978, defendants 2 to 5 were doing business in the name of 11th defendant in their individual capacity. the firm of the 11th defendant did not take the stock in trade of the 10th defendant. but he admits that 11th defendant firm was supplying goods to the 10th defendant. he also says that during 1968-1977 he had been to secunderabad on many occasions. unless he had business connection there, there is absolutely no reason for d.w. 1 to undertake these journeys as pleasure trips.10. the second defendant has alleged in ex. a-5 counter that the 10th defendant firm was closed on 23.1.1978 and thereafter the 11th defendant business was started. but as per the evidence of d.w. 2, defendants 6 and 7 had closed the business of 10th defendant firm even prior to that. on 30.11.1977 defendants 6 and 7 had handed over the key of the shop. and prior to that they had decorated the shop to commence the new business. this is also a factor which belies the claim of the appellants that the tenth defendant firm did not exist during the said period.11. p.w. 4 hariharan states that he used to go to secunderabad for collection and on one occasion the 5th defendant himself had paid a sum of rs. 1,700 on behalf of the 10th defendant firm. he was in the habit of passing receipts at the time of collection. ex. a-18 is the copy of one such receipt. and 5th defendant a. sadanantham has signed the receipt in his presence. the 5th defendant as d.w. 2 no doubt denies that he was looking after the 10th defendant business at secunderabad. however, he admits that ex. a-18 bears his signature. this is a counterfoil of the receipt book of the plaintiff firm in o.s. no. 109 of 1982 dated 20.12.1977. this reads that on that day the firm has received rs. 1,700 from 10th defendant dhanalakshmi textiles traders towards the balance amount due to them. according to p.w. 2 when he was looking after the business of 11th defendant firm, the clerk of the plaintiff in o.s. no. 109 of 1982 came to secunderabad on 20.12.1977. he handed over a draft for rs. 1,700 to him and left for karur. as per his instructions he handed over the draft when somebody connected with that firm came to him and only for that purpose he obtained ex. a-18 receipt. the trial court has rightly rejected this explanation. there is nothing in ex. a-18 to indicate that p.w. 2 has signed this counterfoil on behalf of the 11th defendant firm. besides this receipt expressly recites that the money has been received from 10th defendant firm m/s. dhanalakshmi textiles traders towards the balance amount due from them. this receipt, in the absence of any satisfactory explanation from d.w. 2, improbabilises the contention of the appellants that they had nothing to do with 10th defendant firm.12. p.w. 4 also states that towards the amount due to them under ex. a-17 accounts, one of the sons of the first defendant paid him rs. 1,580 when he went for collection on 12.1.1978. ex. a-19 is the receipt passed by him in this connection. this also reads that the money had been received from dhanalakshmi textile traders. as per ex. a-20 another sum of rs. 1,800 had been paid by dhanalakshmi textiles traders on 23.3.1978. under ex. a-21 on the same day the firm of p.w. 4 has passed a receipt in favour of dhanalakshmi textile traders for rs. 415. according to p.w. 4, this sum was paid at secunderabad and the receipt was issued there. no doubt, exs. a-20 and a-21 do not contain the signature of either the first defendant or the second defendant. however, there is no reason to doubt the genuineness of those two counterfoils in the receipt book of n.c.r. mahadeo maintained in the usual course of their business. the appellants have not offered any explanation as to why payments were made on behalf of the 10th defendant dhanalakshmi textile traders, if they were doing business only in the name of 11th defendant mayilone textile corporation since january, 1978 and the 10th defendant firm had been wound up even prior to that date.13. the stand of the defendants 2 to 5 in their written statement is to the effect that they are carrying on business under the name and style of m/s.mayilone textile corporation from 1968 cowards. the 11th defendant has nothing to do with the 10th defendant dhanalakshmi textile traders. defendants 2 to 5 are partners of only 11th defendant firm. and p.w. 1 states in the wit ness box that only defendants 6 and 7 are doing business in the name of 10th defendant. but significantly enough in both exs. b-26 and b-27 the firm registration certificate, the place of business is described as 3-4-393 tobacco bazaar, secunderabad. d.w. 1 pretends that he does not know when defendants 6 and 7 started the business in the same premises where the concern of 10th defendant is located. he further concedes that he cannot say with certainty whether the business of 10th defendant firm was terminated on 23.1.1978. but there are accounts to show that goods were purchased for 11th defendant firm from concerns other than the 10th defendant. n.c.r. fabrics the plaintiff in o.s. no. 109 of 1982 had sent goods to dhanalakshmi textiles.14. p.w. 4 hariharan states that dealings between his firm and the first defendant prior to 5.7.1977 are already settled. d.w. 1 used to come to his ;hop and select goods for the purpose of 10th defendant firm. for goods sent subsequent to 1.7.1977 the relevant ledger entries, are ex. a-16 and a-17. and as per ex. a-17 a sum of rs. 4,189 is due lo his concern. according to p.w. 3 janakiraman, ex. a-15 is the ledger entry from 7.6.1968 to 31.5.1969 for sending goods to first defendant from his shop. he admits in his cross-examination that neither of she appellants has signed in any cheque or signed any draft or signed in any order book or in any other accounts. p.w. 2 palaniappan deposes that ex. a-7 is the ledger account for sending textiles to the 10th defendant since 1975. till 1978 he was sending goods. exs. a-9 and a-10 are ledger entries in his accounts from 19.4.1976 to 14.4.1977 and from 18.4.1977 to 20.2.1978 respectively. and ex. a-10 discloses that there are outstandings to the tune of rs. 12,300 from the 10th defendant.15. ex. b-32 purports to be the ledger entry relating to goods supplied to 11th defendant from the main office of erode. ex. b-33 is the ledger entry relating to bhavani branch of 11th defendant firm. d.w. 2 admits that there signs of erasure in these entries. besides while other entries dated 23.1.1978 contain bill numbers for the purchases, in ex. b-32 no such bill numbers are given. page 13 of ex. b-4 relates to goods supplied to 11th defendant from the erode shop. they also do not contain the bill numbers. this is also a circumstance which indicates that whatever be the name of the business, in reality it is the appellants who were doing business at no. 3-4-395 tobacco bazaar, secunderabad.16. it is also the evidence of d.w. 2 that the telephone bearing no. 73419 is installed at his residence. d.w. 1 pretends that he does not know whether the telephone number of the 10th defendant firm is 73419. ex. a-33 is the letter written by the first defendant on 24.4.1978 to the plaintiff in o.s. no.981 of 1978. this is written on behalf of the 10th defendant firm dhanalakshmi textile traders. here telephone number is given as 73419. unless the phone is in their shop, no one would print the phone number in their business letter head. this is also a circumstance which supports the claim of the respondents that after closing of the business the phone has been shifted to the place where the fifth defendant is permanently residing along with the second defendant.17. p.w. 3 swears in the witness box that though none of the defendants 1 to 5 has signed in any cheque or sent any draft or signed in any order book or in any other accounts, he had seen defendants 1 and 2 in the business premisdes of the 10th defendant at secunderabad when he had occasion to go over there. they were actually doing business in that place. this evidence of p.w. 3 has not been assailed in any manner in his cross-examination.18. p.w. 1 deposes that he leased out the premises to the first defendant. in 1968 the first defendant approached and informed him that he was going to change the name of the shop from dhanalakshmi textiles to dhanalakshmi textile traders. thereupon, the original of ex. b-24 rent agreement was executed. second defendant sangameswaran alone was doing business there in the name and style of the 10th defendant. this witness had issued receipt to him for payment of rent for the premises and the first defendant has signed in the counterfoil of those receipts. exs. a-1 and a-2 are receipt nos.159 and 160 dated 17.1.1978 for the month of december, 1977. they read that the money has been received from dhanalakshmi textile traders and d.w. 1 also has admitted that these counterfoils contain his signatures. d.w. 1 further states that he had paid rent even as per exs. b-1 and b-2. these are receipts issued on 11.4.1978 by p.w. 1 in favour of dhanalakshmi textile traders. d.w. 1 has not offered any explanation as to how he came to sign in these counterfoils. exs. b-3 and b-4 are aslo receipts dated 17.1.1978 passed by p.w. 1 in favour of dhanalakshmi textile traders. had really the first defendant no interest in the 10th defendant firm as pretended by him, there is no reason why he has paid rent for and on behalf of this firm. further though the rent has been paid by d.w. 1, the accounts maintained by the 10th defendant firm docs not contain any entry relating to it. and d.w. 1, has not been reimbursed of the money parted by him. so those receipts clinchingly establish the means between the 10th defendant business and defendants 1 and 2.19. we have already seen that according to d.w. 1 since he had incurred loss in business, he closed down his dhanalakshmi textiles in 1967, left for erode and settled there. he did not surrender possession of the premises and was keeping it in the name of the second defendant so that his sons could get pagadi. in 1968 defendants 6 and 7 wanted him to sub lease the premises to him. ex. b-25 is the rent deed executed by them on 25.5.1988 in his favour. it appears from this lease deed that the first defendant has permitted 11th defendant to use the said premises and pay the rent for the building directly to the landlord on his behalf. it is unlikely that d.w. 1 who was keeping the premises vacant expecting high pagadi readily obliged his erstwhile employees defendants 6 and 7 when they wanted to start a business of their own and parted with the possession of the premises.20. ex. a-8 purports to be a letter written by the first defendant to p.w. 2 on 16.1.1975 soliciting support for the business of the 10th defendant firm. the trial court has rejected this evidence for the reason that the envelope concerning the letter has not been produced and the letter itself has been filed into court belatedly. d.w. 1 also discount his signature therein. learned counsel for the respondents also did not advance any argument on this document and we find no reason to differ from the view taken by the trial judge.21. exs. a-11 and a-12 are marriage invitations relating to defendants 3 and 4, the sons of the first defendant. the trial court has proceeded on the assumption that in those invitations defendants 2 to 5 are described as partners of the 10th defendant firm dhanalakshmi textile traders. however, a perusal of these invitations discloses that there are no such indications therein, and so they cannot help the plaintiffs in any manner. however, from the preponderance of probabilities in this case as pointed out in the discussion above, we have no hesitation in coming to the conclusion that the appellants held out that they were partners of 10th defendant firm and only on that basis the plaintiffs had sold textiles on credits to thesaid concern. and under section 20 of the partnership act, anyone who bywords spoken or written or by conduct represents himself, or knowingly permits himself to be represented to be a partner in a firm is liable as a partner in that firm to any one who has, on the faith of such representation given credit to the firm whether the person permitting himself, represented to be a partner does or does not know that the representation has reached the person so giving credit. so the trial court has rightly decreed the suit.22. in the result, all these appeals are dismissed with cost.
Judgment:

Thangamani, J.

1. The appellants in A.S. No. 192 of 1983 are defendants 2 to 5, 11 and 1 in O.S. Nos. 981 of 1978,1055 of 1978 and 109 of 1982 respectively on the file of learned Subordinate Judge of Salem. In another two appeals the 1st defendant does not figure as an appellant. Three different plaintiffs have laid those suits against the present appellants and 5 others. In the first suit there is one more defendant by name Goodluck Textiles. The plaintiffs are registered partnership firms dealing in textiles on wholesale business. Hereafter parties are referred to as arrayed in the suits.

2. The first defendant is the father of defendants 2 to 5. Defendants 6 to 9 are their close relations and associates. They were doing textile business under the name and style of Dhanalakshmi Textile Traders who is the 10th defendant in the suits at Door No. 3-4-395 Tobacco Bazaar in Secunderabad, Andhra Pradesh. The first suit has been instituted for the recovery of Rs. 60,000 for the value of textile goods supplied on credit for the business requirements of the defendants from 1974 to 27.4.1978. The sum includes Rs. 27,500 payable by way of interest as per the agreement at 12% per annum on the outstandings. While the claim in O.S. No. 1055 of 1978 is for the recovery of Rs. 12,300 that in C.S. No. 109 of 1982 is for recovery of Rs. 4,685 on similar allegations.

3. In all the three suits defendants 2 to 5 are sought to be made liable on the ground that the first defendant represented that he was the main partner of the business run under the name and style of the 14th defendant. Only on believing the representation of the first defendant and his sons, the plaintiffs supplied goods to the 10th defendant firm on credit. By conduct and representation they held out that they were the actual partners of the firm. The defendants 1 to 5 were frequently visiting and looking after the business of Dhanalakshmi Textile Traders conducted at Door No. 3-4-395, Tobacco Bazaar, Secunderabad. As such they are personally liable to pay the amounts under Section 28 of the Partnership Act. Plaintiffs further alleged that the name of the 10th defendant has now been changed as M/s. Mayilone Textile Corporation which is the 11th defendant in the suits. The said concern is also run by the same defendants 1 to 9 with the same stock-in-trade. This arrangement has been done by the first defendant evidently with a view to defraud the lawful creditors. The 12th defendant has been impleaded for the reason that some of the defendants have also started a textile business under the name and style of Goodluck Textiles in Hyderabad.

4. The trial court found that the defendants have purchased textiles on credit from the plaintiffs for the sake of the 10th defendant firm and as per the custom and usage of the trade, they have to pay interest at 12% per annum, that defendants 6 and 7 have filed written statement supporting the case of the plaintiffs, that though defendants 1 to 5 are not partners of the 10th defendant firm, they have held out as partners and as such defendants 1 to 5 and 11 are also liable to pay the debts due to the plaintiffs in all the suits along with the defendants 6 to 9. Accordingly, all the suits were decreed as prayed for with costs against defendants 1 to 11 and the suit against the 12th defendant was dismissed without costs. And those appeals are directed against the said judgment and decree.

5. Originally, the first defendant was carrying on business in Secunderabad under the name and style of Dhanalakshmi Textiles. The business was run in the premises bearing Door No. 3-4-395 belonging to the father of P.W. 1 Rajeswara Rao. The latter states in his evidence that he had leased out the shop to the first defendant. In 1968 the first defendant approached him and represented that he was going to change the name of the shop from Dhanalakshmi Textiles to Dhanalakshmi Textile Traders 10th defendant. Ex. B-24 is the copy of rental agreement dated 14.5.1968 entered into between P.W. 1 Rajeswara Rao and the second defendant Sangameswaran who is the son of the first defendant in respect of this shop. This document recites that the lease is for the purpose of carrying on cloth business. The tenant shall be entitled to carry on the business under any name and style which he may from time to time decide subject to the condition that the ownership of the tenancy is not changed. Accordingly Sangameswaran was doing business there. The plaintiff in O.S. No. 1055 of 1978 as P.W. 2 also states that the first defendant was doing business with him since 1954 in the name of Dhanalakshmi Textiles. Subsequent to 1956 he represented to him that he was going to do business thereafter with defendants 6 and 7 and with his sons defendants 2 to 5 in the name of Dhanalakshmi Textile Traders. Prior to that defendants 6 and 7 were working as clerks in the shop of the first defendant. Since all the seven were jointly doingbusiness as proprietors of 10th defendant firm in Secunderabad, he supplied goods on credit. Defendants 1, 2 and 4 to 7 were managing the shop in turn. Defendants 6 and 7 were permanently residing in Secunderabad. P.W. 3 Janakiraman is a former partner of the plaintiff firm inO.S.No.l09of 1982. His evidence is also to the effect that only on the representation that the business was being carried on by the first defendant and his sons, goods were supplied by him. He further states that either the first defendant or the second defendant was looking after the business. They came in person to the shop of this witness at Trichy and Salem, selected goods and bargained for the price. P.W. 4 Hariharan is a partner of the plaintiff firm in O.S. No. 981 of 1978. He also speaks about defendants 2 to 5 participating in the business of 10th defendant firm. We shall now examine whether there are sufficient materials to substantiate these verbal versions of the creditors.

6. Though the appellants objected to the marking of Ex. B-24 by the Commissioner while he was examining P.W. 1 Rajeswara Rao on commission at Secunderabad, the first defendant as D.W. 1 admits even in his chief examination that Ex. B-24 lease deed was executed by his son second defendant. As we have already seen under this lease deed the second defendant has taken premises No. 3-4-395, Tobacco Bazaar, Secunderabad on lease for the purpose of his cloth business. This is one of the factors which weighed with the trial court in holding that the sons of the first defendant are also partners of the 10th defendant firm. It is significant to note that the residential address of second defendant Sangameswaran is described in Ex. B-24 as Swami Vivekananda Street, Secunderabad. It is not the case of the appellants that the second defendant has any other business in Secunderabad. The second defendant has not gone into the witness box. So, it is quite likely that the shop was taken on rent only for the purpose of 10th defendant firm.

7. D.W. 1 states in his evidence that he was present when Ex. B-24 lease deed was executed. In 1967 he closed Dhanalakshmi Textiles business because he incurred loss. But he did not vacate the shop since his idea of executing the lease deed was that by holding on the premises, his sons would be able to get good 'pagadi'. He further states that the shop was sub-leased to defendants 6 and 7 as per Ex. B-25 dated 25.5.1968. This lease deed had been executed by second defendant Sangameswaran in favour of the sixth defendant. And this lease purports to be for the business purpose of the 10th defendant Dhanalakshmi Textiles Corporation. But we find from Ex. A-5 the counter statement of the second defendant in R.C. No. 454 of 1978 before the Rent Controller, Secunderabad, that he has categorically denied the sub-lease. It is significant to note that the 2nd defendant has filed this counter in his capacity as a partner of 11th defendant firm.

8. Ex. B-23 is the registration copy of the partition deed dated 17.6.1965 entered into among the first defendant and his four sons in respect of their family properties including business at Hyderabad. This was pressed into service by the appellants in support of their contention that they could not have been partners of 10th defendant firm. They also relied on Ex. B-26 the Firm Registration Certificate dated 8.3.1966 which shows defendants 6 and 7 only as partners of the 10th defendant firm and Ex. B-27 Firm Registration Certificate dated 19.5.1978, whereunder defendants 2 to 5 are indicated as partners of 11th defendant firm in order to substantiate their contention that the appellants have nothing to do with 10th defendant concern. That the father and sons had become divided long back cannot raise a presumption that in 1978 they could not have carried on business jointly as partners. No doubt in the firm Registration Certificate of the 10th defendant, the names of the appellants do not find a place. But it is necessary to bear in mind that the appellants are sought to be made liable only on the basis that the first defendant and his sons had held out that they are also partners of that firm.

9. According to D.W. 1 subsequent to 1978, defendants 2 to 5 were doing business in the name of 11th defendant in their individual capacity. The firm of the 11th defendant did not take the stock in trade of the 10th defendant. But he admits that 11th defendant firm was supplying goods to the 10th defendant. He also says that during 1968-1977 he had been to Secunderabad on many occasions. Unless he had business connection there, there is absolutely no reason for D.W. 1 to undertake these journeys as pleasure trips.

10. The second defendant has alleged in Ex. A-5 counter that the 10th defendant firm was closed on 23.1.1978 and thereafter the 11th defendant business was started. But as per the evidence of D.W. 2, defendants 6 and 7 had closed the business of 10th defendant firm even prior to that. On 30.11.1977 defendants 6 and 7 had handed over the key of the shop. And prior to that they had decorated the shop to commence the new business. This is also a factor which belies the claim of the appellants that the tenth defendant firm did not exist during the said period.

11. P.W. 4 Hariharan states that he used to go to Secunderabad for collection and on one occasion the 5th defendant himself had paid a sum of Rs. 1,700 on behalf of the 10th defendant firm. He was in the habit of passing receipts at the time of collection. Ex. A-18 is the copy of one such receipt. And 5th defendant A. Sadanantham has signed the receipt in his presence. The 5th defendant as D.W. 2 no doubt denies that he was looking after the 10th defendant business at Secunderabad. However, he admits that Ex. A-18 bears his signature. This is a counterfoil of the receipt book of the plaintiff firm in O.S. No. 109 of 1982 dated 20.12.1977. This reads that on that day the firm has received Rs. 1,700 from 10th defendant Dhanalakshmi Textiles Traders towards the balance amount due to them. According to P.W. 2 when he was looking after the business of 11th defendant firm, the clerk of the plaintiff in O.S. No. 109 of 1982 came to Secunderabad on 20.12.1977. He handed over a draft for Rs. 1,700 to him and left for Karur. As per his instructions he handed over the draft when somebody connected with that firm came to him and only for that purpose he obtained Ex. A-18 receipt. The trial court has rightly rejected this explanation. There is nothing in Ex. A-18 to indicate that P.W. 2 has signed this counterfoil on behalf of the 11th defendant firm. Besides this receipt expressly recites that the money has been received from 10th defendant firm M/s. Dhanalakshmi Textiles Traders towards the balance amount due from them. This receipt, in the absence of any satisfactory explanation from D.W. 2, improbabilises the contention of the appellants that they had nothing to do with 10th defendant firm.

12. P.W. 4 also states that towards the amount due to them under Ex. A-17 accounts, one of the sons of the first defendant paid him Rs. 1,580 when he went for collection on 12.1.1978. Ex. A-19 is the receipt passed by him in this connection. This also reads that the money had been received from Dhanalakshmi Textile Traders. As per Ex. A-20 another sum of Rs. 1,800 had been paid by Dhanalakshmi Textiles Traders on 23.3.1978. Under Ex. A-21 on the same day the firm of P.W. 4 has passed a receipt in favour of Dhanalakshmi Textile Traders for Rs. 415. According to P.W. 4, this sum was paid at Secunderabad and the receipt was issued there. No doubt, Exs. A-20 and A-21 do not contain the signature of either the first defendant or the second defendant. However, there is no reason to doubt the genuineness of those two counterfoils in the receipt book of N.C.R. Mahadeo maintained in the usual course of their business. The appellants have not offered any explanation as to why payments were made on behalf of the 10th defendant Dhanalakshmi Textile Traders, if they were doing business only in the name of 11th defendant Mayilone Textile Corporation since January, 1978 and the 10th defendant firm had been wound up even prior to that date.

13. The stand of the defendants 2 to 5 in their written statement is to the effect that they are carrying on business under the name and style of M/s.Mayilone Textile Corporation from 1968 cowards. The 11th defendant has nothing to do with the 10th defendant Dhanalakshmi Textile Traders. Defendants 2 to 5 are partners of only 11th defendant firm. And P.W. 1 states in the wit ness box that only defendants 6 and 7 are doing business in the name of 10th defendant. But significantly enough in both Exs. B-26 and B-27 the Firm Registration Certificate, the place of business is described as 3-4-393 Tobacco Bazaar, Secunderabad. D.W. 1 pretends that he does not know when defendants 6 and 7 started the business in the same premises where the concern of 10th defendant is located. He further concedes that he cannot say with certainty whether the business of 10th defendant firm was terminated on 23.1.1978. But there are accounts to show that goods were purchased for 11th defendant firm from concerns other than the 10th defendant. N.C.R. Fabrics the plaintiff in O.S. No. 109 of 1982 had sent goods to Dhanalakshmi Textiles.

14. P.W. 4 Hariharan states that dealings between his firm and the first defendant prior to 5.7.1977 are already settled. D.W. 1 used to come to his ;hop and select goods for the purpose of 10th defendant firm. For goods sent subsequent to 1.7.1977 the relevant ledger entries, are Ex. A-16 and A-17. And as per Ex. A-17 a sum of Rs. 4,189 is due lo his concern. According to P.W. 3 Janakiraman, Ex. A-15 is the ledger entry from 7.6.1968 to 31.5.1969 for sending goods to first defendant from his shop. He admits in his cross-examination that neither of she appellants has signed in any cheque or signed any draft or signed in any order book or in any other accounts. P.W. 2 Palaniappan deposes that Ex. A-7 is the ledger account for sending textiles to the 10th defendant since 1975. Till 1978 he was sending goods. Exs. A-9 and A-10 are ledger entries in his accounts from 19.4.1976 to 14.4.1977 and from 18.4.1977 to 20.2.1978 respectively. And Ex. A-10 discloses that there are outstandings to the tune of Rs. 12,300 from the 10th defendant.

15. Ex. B-32 purports to be the ledger entry relating to goods supplied to 11th defendant from the main office of Erode. Ex. B-33 is the ledger entry relating to Bhavani Branch of 11th defendant firm. D.W. 2 admits that there signs of erasure in these entries. Besides while other entries dated 23.1.1978 contain bill numbers for the purchases, in Ex. B-32 no such bill numbers are given. Page 13 of Ex. B-4 relates to goods supplied to 11th defendant from the Erode shop. They also do not contain the bill numbers. This is also a circumstance which indicates that whatever be the name of the business, in reality it is the appellants who were doing business at No. 3-4-395 Tobacco Bazaar, Secunderabad.

16. It is also the evidence of D.W. 2 that the telephone bearing No. 73419 is installed at his residence. D.W. 1 pretends that he does not know whether the telephone number of the 10th defendant firm is 73419. Ex. A-33 is the letter written by the first defendant on 24.4.1978 to the plaintiff in O.S. No.981 of 1978. This is written on behalf of the 10th defendant firm Dhanalakshmi Textile Traders. Here telephone number is given as 73419. Unless the phone is in their shop, no one would print the phone number in their business letter head. This is also a circumstance which supports the claim of the respondents that after closing of the business the phone has been shifted to the place where the fifth defendant is permanently residing along with the second defendant.

17. P.W. 3 swears in the witness box that though none of the defendants 1 to 5 has signed in any cheque or sent any draft or signed in any order book or in any other accounts, he had seen defendants 1 and 2 in the business premisdes of the 10th defendant at Secunderabad when he had occasion to go over there. They were actually doing business in that place. This evidence of P.W. 3 has not been assailed in any manner in his cross-examination.

18. P.W. 1 deposes that he leased out the premises to the first defendant. In 1968 the first defendant approached and informed him that he was going to change the name of the shop from Dhanalakshmi Textiles to Dhanalakshmi Textile Traders. Thereupon, the original of Ex. B-24 rent agreement was executed. Second defendant Sangameswaran alone was doing business there in the name and style of the 10th defendant. This witness had issued receipt to him for payment of rent for the premises and the first defendant has signed in the counterfoil of those receipts. Exs. A-1 and A-2 are receipt Nos.159 and 160 dated 17.1.1978 for the month of December, 1977. They read that the money has been received from Dhanalakshmi Textile Traders and D.W. 1 also has admitted that these counterfoils contain his signatures. D.W. 1 further states that he had paid rent even as per Exs. B-1 and B-2. These are receipts issued on 11.4.1978 by P.W. 1 in favour of Dhanalakshmi Textile Traders. D.W. 1 has not offered any explanation as to how he came to sign in these counterfoils. Exs. B-3 and B-4 are aslo receipts dated 17.1.1978 passed by P.W. 1 in favour of Dhanalakshmi Textile Traders. Had really the first defendant no interest in the 10th defendant firm as pretended by him, there is no reason why he has paid rent for and on behalf of this firm. Further though the rent has been paid by D.W. 1, the accounts maintained by the 10th defendant firm docs not contain any entry relating to it. And D.W. 1, has not been reimbursed of the money parted by him. So those receipts clinchingly establish the means between the 10th defendant business and defendants 1 and 2.

19. We have already seen that according to D.W. 1 since he had incurred loss in business, he closed down his Dhanalakshmi Textiles in 1967, left for Erode and settled there. He did not surrender possession of the premises and was keeping it in the name of the second defendant so that his sons could get pagadi. In 1968 defendants 6 and 7 wanted him to sub lease the premises to him. Ex. B-25 is the rent deed executed by them on 25.5.1988 in his favour. It appears from this lease deed that the first defendant has permitted 11th defendant to use the said premises and pay the rent for the building directly to the landlord on his behalf. It is unlikely that D.W. 1 who was keeping the premises vacant expecting high pagadi readily obliged his erstwhile employees defendants 6 and 7 when they wanted to start a business of their own and parted with the possession of the premises.

20. Ex. A-8 purports to be a letter written by the first defendant to P.W. 2 on 16.1.1975 soliciting support for the business of the 10th defendant firm. The trial court has rejected this evidence for the reason that the envelope concerning the letter has not been produced and the letter itself has been filed into court belatedly. D.W. 1 also discount his signature therein. Learned Counsel for the respondents also did not advance any argument on this document and we find no reason to differ from the view taken by the trial Judge.

21. Exs. A-11 and A-12 are marriage invitations relating to defendants 3 and 4, the sons of the first defendant. The trial court has proceeded on the assumption that in those invitations defendants 2 to 5 are described as partners of the 10th defendant firm Dhanalakshmi Textile Traders. However, a perusal of these invitations discloses that there are no such indications therein, and so they cannot help the plaintiffs in any manner. However, from the preponderance of probabilities in this case as pointed out in the discussion above, we have no hesitation in coming to the conclusion that the appellants held out that they were partners of 10th defendant firm and only on that basis the plaintiffs had sold textiles on credits to thesaid concern. And under Section 20 of the Partnership Act, anyone who bywords spoken or written or by conduct represents himself, or knowingly permits himself to be represented to be a partner in a firm is liable as a partner in that firm to any one who has, on the faith of such representation given credit to the firm whether the person permitting himself, represented to be a partner does or does not know that the representation has reached the person so giving credit. So the trial court has rightly decreed the suit.

22. In the result, all these appeals are dismissed with cost.