Aparna Creations and Others vs Anantha Krishnan and Others

L. Narayana Swamy, J—This review petition is filed seeking review of the order dated 27.4.2015 passed in W P No. 58282/2014 by which order the writ petition was dismissed.

The petitioners in the writ petition had challenged the order dated 8.12.2014 on I A No. 1/2014 in Execution No. 1615/2015 passed by the XXX Additional City Civil & Sessions Judge, Bengaluru, by which order the Executing Court had allowed the application for attachment and sale of property bearing No. 6/1A(KA No. 428/488/1) of Sunkadakatte in public auction for recovery of balance of the decree amount in O S No. 3775/2010.

The judgment and decree passed in O S No. 3775/2010 was challenged by the petitioners in R F A No. 386/2014 (MON), which by the judgment dated 10.4.2014 came to be disposed of by this Court in terms of the memo filed by the petitioners. The memo filed by the petitioners was set out in the judgment in R F A No. 386/2014 (MON), which is to the following effect:

"1. The Trial Court decreed the suit against the appellants and respondent No. 2 to recover a sum of Rs. 42,56,657.35 with 10% interest per annum till realization. Since the decree passed by the trial court is jointly and severally to pay the amount based on the ratio agreed between the partners as provided under the partnership Deed dated 14.6.1996 and 8.9.1997 within 6 weeks from today. The fourth appellant agreed to deposit/pay this amount without prejudice to the rights of the fourth respondent to recover the same from the other partners and the firm in the settlement of Accounts in Arbitration proceedings. Since the Firm was dissolved on 3.7.2010, the appointment of Arbitrator, is still pending for consideration in CMP No. 58/2011.

The appellants No. 3 and 4 have also paid a sum of Rs. 26,58,563/- on behalf of the firm. The right is also reserved to claim the said amount against the other partners.

In view of the above submission, the Appeal may be disposed of giving liberty to the appellants to work out their remedy in accordance with law, in the interest of justice and equity."

The petitioners have urged the following grounds in support of the review petition:

"(a) Partnership firm is dissolved and hence question of execution of the decree does not arise.

(b) In view of Section 146 of Indian Contract Act, 1872, when there is co-guarantor, liability has to be proportionately apportioned and a partner cannot be allowed to escape from liability.

(c) In R F A No. 386/2014 liability was accepted in terms of shares in the partnership and hence finding recorded by this Court requires reconsideration.

(d) During pendency of arbitration proceedings in which restoration application is pending, execution of the decree would not arise.

(e) There is no liability or dues by the petitioners and entire liability has to be fastened on the 2nd respondent."

I have heard the learned senior counsel for the petitioners'' counsel and the learned counsel for the respondents and perused the entire papers. In view of terms of the memo, which is extracted as herein above, none of the contentions raised either in the writ petition or in the review petition stand for consideration. The contentions raised in the review petition are already considered while disposing of the writ petition. The contentions now sought to be raised are touching the merit of the matter and beyond the scope of review as provided under order 47 Rule 1 of Code of Civil Procedure. Only on limited ground of error apparent on the face of record, court gets jurisdiction to review the order. No such ground is made out in the present review petition.

The learned senior counsel for the petitioners relied upon the following authorities:

"(a) U. Abdul Jabbar and Another Vs. Manonmani Pictures and Others, AIR 1976 Mad 368 : (1976) 89 LW 367 : (1976) 2 MLJ 102 , to contend that attachment of partnership property applies only to an existing partnership.

(b) Income Tax Officer (III), Circle-I, Salem and Another Vs. Arunagiri Chettiar, (1996) 134 CTR 167 : (1996) 5 JT 254 : (1996) 9 SCC 33 : (1996) 86 TAXMAN 330 , to contend that even retired partner is also liable to pay tax arrears due from the firm pertaining to the period of his partnership.

(c) Adamsab Usmansab Kanakya Vs. Gurushinddayya Lingayya and Others, AIR 1967 Kar 147 to contend, appellant agreed to stand guarantee for the amount of a decree on the footing of a partnership and not on any other basis.

(d) S.V. Chandra Pandian and Others Vs. S.V. Sivalinga Nadar and Others, (1993) 1 ARBLR 386 : (1995) 212 ITR 592 : (1993) 1 JT 278 : (1993) 1 SCALE 141 : (1993) 1 SCC 589 : (1993) 1 SCR 58 : (1995) 80 TAXMAN 151 to contend that each and every partner of a firm has an undefined interest in each and every property of the firm and it is not possible to say unless the accounts are settled and the residue or surplus determined what would be the extent of the interest of each partner in the property.

(e) Industrial Finance Corporation of India Ltd. Vs. The Cannanore Spinning and Weaving Mills Ltd. and Others, AIR 2002 SC 1841 : (2002) 2 ARBLR 676 : (2002) 2 BC 430 : (2002) 110 CompCas 685 : (2002) 4 CompLJ 337 : (2002) 4 JT 318 : (2002) 3 SCALE 574 : (2002) 5 SCC 54 : (2002) 2 SCR 1093 : (2002) AIRSCW 1822 : (2002) 3 Supreme 427 to advance the contention regarding discharge of surety.

(f) Syndicate Bank Vs. Channaveerappa Beleri and Others, AIR 2006 SC 1874 : (2006) 2 BC 579 : (2006) 131 CompCas 303 : (2006) 4 JT 579 : (2006) 4 SCALE 368 : (2006) 11 SCC 506 : (2006) AIRSCW 2134 : (2006) 5 Supreme 115 regarding surety''s liability.

(g) State Bank of India Vs. Saksaria Sugar Mills Ltd. and Others, AIR 1986 SC 868 : (1986) 2 ARBLR 14 : (1986) 1 CompLJ 297 : (1986) 1 SCALE 244 : (1986) 2 SCC 145 : (1986) 1 SCR 290 : (1986) 1 UJ 742 regarding surety''s liability.

(h) Sukur Pradhan and Others Vs. Orissa State Financial Corporation and Others, AIR 1992 Ori 281 : (1992) 74 CLT 241 : (1994) 80 CompCas 443 to contend that creditor may proceed against the surety without exhausting his remedies against the principal debtor.

(i) State Bank of India Vs. G.J. Herman and Others, AIR 1998 Ker 161 : (1998) 2 ILR (Ker) 374 , to contend that sureties liability was immediate and it was not deferred until the creditor exhausted his remedies against the principal debtor.

(j) Aditya Narayan Chouresia Vs. Bank of India and Others, AIR 2000 Patna 222 to contend that guarantors binding themselves to a particular maximum limit of the principal debt.

(k) State of Maharashtra Vs. Dr. M.N. Kaul (Deceased by his Legal Representatives) and Another, AIR 1967 SC 1634 : (1968) 38 CompCas 1 to contend that guarantor cannot be made liable beyond terms of his engagement.

(l) Krushna Chandra Mallick Vs. Chief General Manager, State Bank of India and Others, AIR 2009 Ori 99 : (2008) CLT 539 Supp to contend that when there are more than one surety, liability has to be shared equally."

The learned counsel for the respondent No. 1 relied upon decision in Pandit Sri Chand and Others Vs. Jagdish Parshad Kishan Chand and Others, (1966) 3 SCR 451 regarding sureties liability and discharge. The relevant portion in Para-9 of the judgment is to the following effect:

"9. Liability of the sureties is under the law joint and several. If a creditor seeks to enforce the surety bond against some only of the joint sureties, the other sureties will not on that account be discharged; nor will release by the creditor of one of them discharge the other; vide Sections 137 and 138 of the Contract Act. But the fact that the surety bond is enforceable against each surety severally, and that it is open to the creditor tore lease one or more of the joint sureties, does not alter the true character of an adjudication of the Court when proceedings are commenced to enforce the covenants of the bond against all the sureties..."

It is the contention of the learned senior counsel that there is dissolution of partnership and therefore execution of the decree does not arise. As on the date of disposal of R F A No. 386/2014 which is by the judgment dated 10.4.2014 and filing of the Memo therein, the partnership was said to have dissolved, but memo was filed whereby 4th appellant agreed to pay the amount without prejudice to the rights to recover the same from the other partners and the firm, in the settlement of accounts in arbitration proceedings. In that view of the matter, grounds relating to execution of decree does not arise when there is dissolution of the partnership, liability of co-guarantor or his discharge, liability accepted in terms of partnership and hence finding requires reconsideration, execution of decree during pendency of arbitration proceedings and no liability of the petitioners, do not survive for consideration. Most of the authorities relied upon by the learned senior counsel are relating to sureties liability and their discharge. Though there is no quarrel as to the ratio laid down in the above judgments, they cannot be applied to the facts of the present case as they are not applicable.

Hence, I am of the view that there is no error apparent on the face of the record. The review petition is dismissed accordingly.