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Judgment
P.R. Shivakumar, J.—This appeal has been preferred against the Judgment and Decree of the trial Judge viz., the learned Additional District
Judge, Karaikal, dated 31.08.2001 made in O.S. No. 37 of 2000 on the file of the Court below. The defendant, who suffered the Decree for the
recovery of a sum of Rs. 33,210/- with interest and costs, has filed the appeal.
The suit was filed by the respondent herein against Murugaram Transport, originally showing one Periyasamy be its Proprietor. It was
contended in the plaint that Murugaram Transport regularly purchased tires and tubes from the respondent/plaintiff on credit basis and a sum of Rs.
33,210/- was due as on 25.12.1998; that the said Periyasamy representing Murugaram Transport confirmed the balance and acknowledged the
debt in writing on 30.12.1999; that thereafter despite repeated request and service of a legal notice on 21.03.2000, the appellant concern viz.,
Murugaram Transport failed to discharge the said loan and that hence the respondent/plaintiff was forced to file the suit for recovery of the said
sum with interest and costs. It was also contended therein that as per the trade practice, the respondent/plaintiff was entitled to recover an interest
at the rate of 24% per annum for the outstanding amount. Thus, the respondent/plaintiff had prayed for a Decree directing the appellant/defendant
to pay a sum of Rs. 44,500/- towards the principal and interest up to the date of plaint along with future interest at the rate of 24% per annum and
also costs.
The suit was resisted by the appellant/defendant by filing a written statement, which was signed by the said Periyasamy. In the said written
statement, besides contending that the suit was barred by the provisions of the Partnership Act and also by the law of limitation, it had been
contended that the defendant concern was not properly described. According to the averments found in the said written statement, the defendant
was a partnership firm and not a proprietary concern and hence the frame of the suit as if it was a proprietary concern was defective and hence
liable to be dismissed.
Pursuant to the said plea taken in the written statement, the respondent/plaintiff filed an interlocutory application in I.A. No. 98 of 2001, got an
order on 29.06.2001 for amendment and consequently the name of the appellant/defendant concern was corrected as Murugaram Transport
represented by its Managing Partner Periyasamy. Thereafter, an additional written statement was filed signed by the above said Periyasamy on
behalf of the appellant/defendant concern. In the said additional written statement, it was contended that the partnership firm to be sued should be
shown to be represented by all the partners; that Periyasamy was not a partner and that since no partner was shown to be representing the
partnership firm and a person unconnected with the partnership firm was shown to be the Managing Partner, no valid decree could be passed
against the partnership firm. A further contention to the effect that the amendment made regarding the description of the appellant/defendant was
done without notice to any of the partners and that no fresh summons was served on the partnership firm after such amendment and for that reason
also the suit should be dismissed. Apart from the above said contentions, the other allegations regarding the transaction alleged in the plaint and the
acknowledgment of debt made on behalf of the appellant/defendant firm in the written statement were also reiterated in the additional written
statement.
Based on the above said pleadings, the learned trial Judge framed the following issues:
1) Whether the plaintiff is entitled to a Decree as prayed for with costs.?
2) Whether the suit is legally barred by the provisions of the Partnership Act.?
3) Whether the suit is barred by limitation.?
4) What other reliefs the parties are entitled to.?
One witness was examined as P.W.1 and five documents were marked as Exs.A.1 to A.5 on the side of the plaintiff (Respondent herein). Two
witnesses were examined as D.Ws.1 and 2 and two documents were marked as Exs.B.1 and B.2 on the side of the defendant (the appellant
herein).
The learned trial Judge, on a consideration of the materials placed before him and the arguments advanced on both sides, found that the
averments made in the plaint were proved; that the suit was properly instituted against the Murugaram Transport, a partnership firm; that the suit
transaction and the acknowledgment of liability pleaded by the respondent herein/plaintiff were proved and that the suit was not barred either by
the Limitation Act or by the provisions of the Partnership Act. Accordingly, the Court below decreed the suit as prayed for directing the appellant
herein/defendant to pay a sum of Rs. 44,500/- towards the principal and interest up to the date of plaint along with an interest on Rs. 33,210/-
(principal) at the rate of 24% per annum from the date of plaint viz., 05.06.2000 till realisation and also a sum of Rs. 5,826.76 as costs.
Aggrieved by and challenging the Judgment and Decree of the trial Court dated 31.08.2001, this appeal has been filed by Murugaram Transport
represented by Periyasamy as its Managing Partner. Since the said Periyasamy died during the pendency of the appeal, Ponni W/o. the said
Periyasamy, Sivakumar and Nallarajan Sons of Periyasamy and Kavitha D/o. Periyasamy got impleded as appellants 2 to 5.
The points that arise for consideration in this appeal are:
1) Whether the suit has not been properly instituted against the partnership firm by name Murugaram Transport?
2) Whether the suit is barred by limitation?
3) Whether the respondent/plaintiff is entitled to a Decree for the amount claimed in the suit with subsequent interest at the rate of 24% per annum
and costs?
The arguments advanced by Mr. S. Sounthar, learned Counsel for the appellants and that of Mr. T. Susindran, learned Counsel appearing for
the respondent were heard. The entire materials available on record were also perused.
Point No. 1:
Murugaram Transport, a business concern was sued by the respondent herein/plaintiff for the recovery of the amount due to the
respondent/plaintiff towards the payment of costs of the tires and tubes purchased from the appellant/defendant on credit basis together with
interest and costs. The main contention raised on behalf of the appellant is that the suit was not properly instituted against the Murugaram
Transport, a partnership firm; that the said firm could not be represented by Periyasamy, who was not a partner and that the alleged
acknowledgment of liability made by Periyasamy would not be binding on the partnership firm by name Murugaram Transport. It is the specific
contention raised on behalf of the appellants that no Decree can be validly passed against Murugaram Transport, a partnership firm when the same
being not represented by a person having the authority to represent. Therefore, this Court has to consider at the first instance the said question viz.,
whether the suit has been properly instituted against Murugaram Transport, a partnership firm?"".
It is not in dispute that Murugaram Transport, which was sued before the trial Court, is a registered partnership firm. In fact, the suit was
originally filed describing Murugaram Transport to be a proprietary concern showing Periyasamy to be its Proprietor. The suit was thus filed
showing Murugaram Transport as a Proprietary concern, since the plaintiff was not aware of the composition of the business concern viz.,
Murugaram Transport. However, the said Periyasamy, who entered appearance on behalf of the business concern with the name Murugaram
Transport, chose to file a written statement describing Murugaram Transport, Karikal to be a partnership firm and describing himself to be the
Managing Partner of the said firm. The verification column provided in the written statement is reproduced hereunder:
I, Periyasamy, the Managing Partner of the defendant herein do hereby declare that the facts stated above are true to the best of my knowledge
and belief and I signed this at Karaikal on 30.10.2000.
As the said written statement was filed by Periyasamy on behalf of the Murugaram Transport showing the said business concern to be a
partnership firm and projecting himself to be the Managing Partner of the defendant concern, the respondent/plaintiff was made to seek an
amendment of the plaint in I.A. No. 98 of 2001 and get an order permitting amendment of the description of the defendant as ""Murugaram
Transport represented by its Managing Partner Periyasamy"". Having filed a written statement on behalf of Murugaram Transport, claiming him to
be its Managing Partner and thus making the plaintiff to amend the description of the defendant, the defendant shall be estopped from contending
that the suit was not properly filed against Murugaram Transport and Periyasamy was not entitled to represent the partnership firm.
It must be noticed that the suit was not filed against a natural person in his name. Of course, in jurisprudence neither a proprietary concern nor
a partnership firm is recognised to be a distinct jurisdict person apart from the proprietor or the partners. Only by virtue of a concession extended
to those who deal with the business concerns not carried on in the names of the natural persons to sue such person in the name of the business
concern, suits are filed against the proprietary concern or partnership firm. The relevant provisions are found in Order 30 of Civil Procedure Code.
It is titled as ""Suits by or against firms and persons carrying on business in the names other than their own"". Rule 1 says any two or more persons
claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm (if any) of which such persons were
partners at the time of the accruing of the cause of action and any party to a suit may in such case apply to the Court for a statement of the names
and addresses of the persons who were, at the time of accruing of the cause of action, partners in such firm, to be furnished and verified in such
manner as the Court may direct. Rule 2 deals with the furnishing of the particulars of the persons constituting the firms in case the suit is filed in the
name of a partnership firm. We are not concerned with the same.
Rule 3 deals with the service of summons where persons are sued as partners in the name of the firm. It prescribes the following modes of
service of summons:
a) Service upon any one or more of the partners, or
b) Service at the principal place at which the partnership business is carried on within India upon any person having, at the time of service, the
control or management of the partnership business there and such service shall be deemed good service upon the firm.
c) The proviso says that in case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit, the
summons are to be served upon every person whom the plaintiff seeks to make liable.
Rule 6 says that the partners shall appear individually in their own names where they are sued as partners in the name of the firm, with a rider, that
despite such appearance by the partners individually, all subsequent proceedings shall nevertheless be continued in the name of the firm.
Rule 8 is to the effect that any person served with summons as a partner may enter appearance under protest denying that he was a partner at any
material time. The said Rule also provides for the determination of the question before the final disposal of the suit as to whether such person who
has entered appearance under protest was a partner of the firm and liable as such.
Sub-class 4 of Rule 8 is to the effect that, if the Court holds that such person was not a partner of the firm and was not liable as such, the same
shall not preclude the plaintiff from otherwise serving summons on the firm and proceeding with the suit and that in such an event, the plaintiff shall
be precluded from alleging the liability of the above said person as a partner of the firm, in execution of the decree that may be passed against the
firm.
In this case, the suit was originally filed showing the defendant to be a proprietary concern as the plaintiff did not know the composition of the
defendant concern. However, Periyasamy entered appearance on behalf of the defendant concern and filed a written statement contending that the
defendant concern was a partnership firm and he was the managing partner of the defendant concern. Only consequent to such appearance, the
description of the defendant concern was amended. Therefore, it is quite obvious that the summons issued by the trial Court was received by
Periyasamy on behalf of the defendant concern in his capacity as the person having the control and management of the partnership business. In
fact, he has not only entered appearance but also filed a written statement in the name of the defendant concern in his capacity as its Managing
Partner. The said Periyasamy and all other partners of the said firm are estopped from contending that the service of summons was not properly
effected on the firm or that Periyasamy was not a partner. Even the additional written statement, wherein it has been contended that Periyasamy
was not a partner of the defendant firm, was signed by the said Periyasamy on behalf of the defendant firm.
In fact, the learned Counsel for the plaintiff served a notice on the Counsel for the defendant to produce the partnership deed so as to ascertain
the names of the persons, who constituted the firm as partners. The copy of the said notice has been marked as Ex.A.5. Despite the fact that such
a notice was served on the Counsel for the defendant, neither the original partnership deed nor a certified copy of the same was produced. On the
other hand, D.W.1 and D.W.2 were examined and Exs.B.1 and B.2 were marked in order to show that Periyasamy was not a partner. Ex.B.1 is
the permission letter given to D.W.2, an employee in the office of the Registrar of firms to produce Ex.B.2 and give evidence regarding the same.
Ex.B.2 is the certified copy of Form ''A'' of the firm Murugaram Transport having Firm No. 71/76. As per the said document, T. Ganthiammal, P.
Ponmani and M. Manimekalai alone were shown to be the partners of the firm ""Murugaram Transport"". One Subramanian claiming to be the
Assistant Manager of the defendant firm has deposed as D.W.1. Periyasamy, who is shown to be representing the defendant firm as its Managing
Partner in the plaint, has not chosen to enter the box to give evidence. It is pertinent to note that the suit was defended by Periyasamy on behalf of
the firm. However, he would sigh away from the Court and choose to send D.W.2 to depose on behalf of the defendant. Periyasamy is not a
person who is totally unconnected with the business of the defendant firm. As it has been pointed out supra, even though the suit was originally filed
against Murugaram Transport describing it to be a proprietary concern and Periyasamy as its Proprietor, the said Periyasamy chose to appear on
behalf of the Murugaram Transport and file a written statement signed and verified by him as its Managing Partner. Except the certified copy of
Form ''A'', no other document has been produced to show that Periyasamy was neither a partner nor Managing Partner of the defendant firm.
The person examined as D.W.1 would plead ignorance in respect of almost all the material facts relating to the composition and management
of the defendant firm. At the first instance, he made an attempt to say that he did not know Periyasamy. Subsequently, he changed his version and
said that he knew Periyasamy but his whereabouts were not known to him. He would also plead ignorance as to in what capacity Periyasamy
signed and verified the written statement. If it is so, it remains a misty as to how D.W.1 was able to come to the Court to depose on behalf of the
defendant firm as its Deputy Manager. One of the persons shown to be a partner of the defendant firm in Ex.P.2 viz., Ponmani is none other than
the wife of Periyasamy. The same has been admitted by D.W.1. He would also admit that the said Ponmani was previously residing in Bharathi
Street, Karaikal and at the time of his examination as a witness, she was residing at Nehru Nagar, Karaikal. It is surprising to note that he had
ventured to state that he was not aware of the whereabouts of Periyasamy, the husband of Ponmani. Furthermore, D.W.1, has pleaded ignorance
of the suit transaction allegedly made by Periyasamy with the plaintiff for and on behalf of the defendant firm. A consideration of the evidence of
D.W.1 would make it obvious that he is not a reliable witness. Therefore, on the basis of the testimony of D.W.1 and Ex.P.2 alone a conclusion
that Periyasamy is not a partner or Managing Partner of the defendant firm is not possible. On the other hand, Periyasamy himself having entered
appearance on behalf of the defendant firm and filed written statement as its Managing Partner shall be estopped from contending that he was not a
partner or Managing Partner of the defendant firm.
As pointed out supra, when a partnership firm is sued by another person, it is not necessary to state the names of the partners of the defendant
firm in the plaint. Such a concession is made available to a person suing a firm, on the assumption that the customers of business concern cannot
have access to the document showing the composition of the firm. What is mandatory is that when a suit is filed against a firm, summons issued to
the firm should be served upon any one or more of the partners or upon the person having at the time of service, the control and management of
the partnership business at a place wherein partnership business is carried on within India. In this case, clear evidence has been adduced on behalf
of the plaintiff that Periyasamy was the person having the control and management of the business of the defendant firm. It is not necessary that the
summons should be served on each one of the partners. It shall be enough to serve it upon any one of the partners or on the person having the
control or management of the partnership business. Such summons was served on Periyasamy as the person having control and management of the
business of the defendant concern, pursuant to which he entered appearance claiming the defendant concern to be a partnership firm and not a
proprietary concern and claiming himself to be its Managing Partner. The service of summons on him as the person having the control and
management of the business is sufficient service on the defendant concern. Therefore, the contention raised on behalf of the appellants that the suit
was not properly instituted against the firm and hence no effective Decree could b e passed against the firm does not hold water and the same
deserves to be discountenanced.
The next contention raised on behalf of the appellants is that the alleged transactions having been entered into more than three years prior to the
date of suit the suit is hopelessly barred by limitation. It has been pointed out on behalf of the appellants that even as per the averments made in the
plaint, the last of the purchase of tires and tubes on credit was on 08.11.1996 and that since the suit was filed after a lapse of three years from the
said date, the claim is barred by limitation. Of course, it is true that the last of the purchases made by the defendant as per the statement of account
produced along with the plaint, which was subsequently marked as Ex.A.1, was made on 08.11.1996. But the respondent/plaintiff relies on the
acknowledgment and confirmation of balance signed by Periyasamy for the defendant firm on 30.12.1999 to show that the suit has been filed in
time. The said confirmation letter has been marked as Ex.A.2. P.W.1 has stated in clear terms that Periyasamy gave the letter of confirmation of
balance on 30.12.1999 on behalf of the defendant. As against the clear testimony of P.W.1, there is no denial of such acknowledgment made by
Periyasamy on behalf of the defendant. D.W.1 has not denied such acknowledgment. On the other hand, he would plead ignorance as to whether
such acknowledgment was given or not. He has also pleaded ignorance as to whether Periyasamy was dealing with the plaintiff and purchasing
tires and tubes on credit representing the defendant firm. In fact, in Ex.A.2, he has signed on behalf of the defendant firm. He was also described
therein as ''P.R.O''. the seal reading ""for Murugaram Transport firm"" has also been affixed. Subsequent to Ex.A.2, a notice was sent to
Periyasamy, Murugaram Transport, Karaikal on 21.03.2000, demanding payment of the amount with interest. A copy of the notice has been
produced as Ex.A.3. The same was served on Periyasamy at the following address:
Sri N. Periyasamy, Murugaram Transport, 2 Pragara Street, Karaikal- 609602.
Though such notice was served, no reply was sent either by Periyasamy or by anybody on behalf of the defendant firm. Ex.A.2
acknowledgment/confirmation of balance has been duly proved by the respondent/plaintiff. The said acknowledgment of confirmation of balance of
a running account was made on 30.12.1999. Therefore, limitation shall start running afresh from the said date of confirmation of balance. The suit
has been filed on 05.06.2000 i.e., well within the period of limitation viz., three years. Therefore, there is no defect or infirmity in the finding of the
Court below that the suit is not barred by limitation.
As per Ex.A.2, letter of confirmation of balance, a sum of Rs. 33,210/- was due as on 30.12.1999. As the liability was incurred in a business
transaction, the plaintiff can claim interest at contractual rate or the rate of interest as per the business custom. Evidence has been adduced through
P.W.1 to the effect that they used to levy interest at the rate of 24% per annum from the customers for belated payments in accordance with the
business custom. The same has not been refuted. There is no contra evidence to the effect that there was no such custom or that the interest as per
the custom was less than what was claimed by the plaintiff. Under such circumstances, this Court finds no defect or infirmity in the finding of the
trial Court that the plaintiff was entitled to claim interest for the said amount from the date of acknowledgment at the rate of 24% per annum. The
respondent/plaintiff has correctly calculated the interest up to the date of plaint. The liability having been incurred in a business transaction, future
interest from the date of claim till realisation has also been rightly allowed by the trial Court at the very same rate. There is no scope, whatsoever,
to interfere with the same in this appeal. There is no merit in the appeal and the same deserves to be dismissed.
In the result, the appeal is dismissed with costs and the Decree passed by the trial Court shall stand confirmed.