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Judgment
K.L. Manjunath, J.—Though the matter is listed for orders by consent of the parties, the appeal is heard on merits.
Aggrieved by the Judgment and Decree passed by the Small Causes & Additional Civil Judge (Sr. Dn.) Mysore dated 20.9.2006 in O.S. No. 435/1998, the appellant has filed this appeal. The appellant was defendant in the suit. Respondents were the plaintiffs. For the sake of convenience, the parties would be referred to as per their status before the Court below.
The plaintiff, a registered Partnership Firm, filed the suit against the defendant, which is a Co-operative Society registered under the provisions of Karnataka Co-operative Societies Act, 1959 (for short ''the Act'') for recovery of Rs. 3,28,228/- along with both costs and current interest at 18% p.a. from the date of suit till the date of realization.
According to the plaint averments, the plaintiff firm was working as an agent of the defendant-Society to supply food grains and other articles to the Government Institutions and other departments. Out of the sale price of the food grains supplied by the plaintiff-firm the defendant was entitled to deduct 2 1/2% as commission and pay the entire balance of the sale price to the plaintiff. In this regard, an agreement came into existence on 28.6.1986. Pursuant to the terms and conditions of the agreement, plaintiff-firm went on supplying the food grains under the I.C.D.S. Projects of Women and Children Welfare Department and submitted the bills for payment and the defendant was required to pay a sum of Rs. 3,28,228/- towards the balance commission payable to the plaintiff since the same was not paid, the suit came to be instituted.
The defendant contested the suit. Though several grounds are urged; the main contention of the defendant was that the plaintiff-firm is not a registered Partnership Firm and suit filed by the plaintiff is not maintainable. Before instituting the suit since the defendant has a Society registered under the provisions of the Act, the suit instituted by the plaintiff is not maintainable in the absence of issuance of a statutory notice as contemplated under Section 125 of the Act and also denied its liability to pay the interest.
Based on the above pleadings, the following issues were framed by the Court below:-
Whether defendant proves that the suit is not maintainable U/s. 68 of Indian Partnership Act?
Whether the defendant proves that the suit is not maintainable for want of notice U/s. 125 of Karnataka Co-operative Societies Act?
Whether plaintiff is entitled to recover Rs. 3,28,228/- from the defendant with interest and costs?
To what order or decree?
To prove the respective contentions, a partner of the plaintiff Mumtaz Ahmed Siddiqui was examined as PW.1 and he relied upon Exs. P1 to P13. On behalf of the defendant, no witnesses were examined. The trial Court held issue Nos. 1 and 2 in negative and issue No. 3 in affirmative. Ultimately, the suit came to be decreed. Therefore, the present appeal is filed.
Mr. T.N. Raghupathy, learned Counsel for the appellant contends that the Court below has committed an error in not considering issue Nos. 1 and 2 properly. According to him, the plaintiff-firm is not a registered Partnership Firm. It is for the plaintiffs to prove that it is a registered firm. The Court below was also required to give reasons with regard to maintainability of the suit if the Firm was not a registered Partnership firm on the date of transaction. He further contends that the Court below has also committed an error in not holding that a statutory notice as required under Section 125 of the Act was mandatory. Therefore, he contends that since the findings of the Court below on issue Nos. 1 and 2 are perverse, the judgment and decree of the Court below are required to be set aside. He further contended that while giving findings on issue Nos. 1 and 2, the trial Court has not considered the law laid down by the Supreme Court in the case of Gangappa Gurupadappa Gugwad Gulbarga Vs. Rachawwa Gugwad and Others, , held in paragraph No. 10 as follows:-
"10. No doubt it would be open to a Court not to decide all the issues which may arise on the pleadings before it if it finds that the plaint on the face of it is barred by any law. If for instance the plaintiff''s cause of action is against a Government and the plaint does not show that notice under Section 80 of the Code of Civil Procedure claiming relief was served in terms of the said Section it would be the duty of the Court to reject the plaint recording an order to that effect with reasons for the order. In such a case the Court should not embark upon a trial of all the issues involved and such rejection would not preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action. But, where the plaint on the face of it does not show that any relief envisaged by Section 80 of the Code is being claimed, it would be the duty of the Court to go into all the issues which may arise on the pleadings including the question as to whether notice under Section 80 was necessary. If the Court decides the various issues raised on the pleadings, it is difficult to see why the adjudication of the rights of the parties, apart from the question as to the applicability of Section 80 of the Code and absence of notice thereunder should not operate as res judicata in a subsequent suit where the identical questions arise fro determination between the same parties."
Mr. L.S. Venkata Krishna, learned Counsel for the respondent submits that the plaintiff-Firm is a registered Partnership Firm and that there is already a determination of the amount payable by the defendant to the plaintiff by the Deputy Registrar of Co-operative Societies. Therefore, he contends both the contentions of the appellant''s Counsel are to be rejected.
Having heard the learned Counsel for the parties, we are considered the following two points for consideration:-
(1) Whether the findings of the Court below on issue No. 1 is just and proper?
(2) Whether the findings of the Court below on issue No. 2 is perverse?
On perusal of Judgment and Decree of the trial Court and without considering the merits and de-merits of the pleadings of the parties and the evidence let-in by the parties, we are of the view that the Court below without considering the effect of non issuing of notice under Section 125 of the Act, has decreed the suit. Admittedly, defendant is a Co-operative Society. The suit is filed to recover the amount arising out of the business transaction. Plaintiff is a partnership firm. Based on the goods supplied by the plaintiff to a Government Department on the instructions of the defendant, suit is filed and it is purely a commercial transaction and before institution of such recovery, suit Section 125 of the Act has to be adjudicated. Learned Judge without considering the crucial aspect has erroneously held issue No. 2.
On perusal of the judgment and decree of the trial court, we are of the view that the court below has taken a wrong approach in not framing the issues based on the pleadings of the parties. Similarly, the burden of proof is also wrongly placed, because, when the plaintiff has filed the suit as a registered partnership firm and if the defendant has raised a contention that the plaintiff-firm is not a registered partnership firm and the suit is not maintainable, the initial burden will always be on the plaintiff to show that the plaintiff is a registered partnership firm and the suit filed by the firm is maintainable. On the contrary, the court below has placed the burden of proof on the defendant, which, according to us, is illegal and incorrect.
Similarly, when the defendant has raised a contention that the suit not maintainable in the absence of a notice under Section 125 of the Act. Considering the nature of the transactions between the plaintiffs and the defendant, we are of the view that it is for the plaintiff to say why issue of a notice under Section 125 of the Act does not attract on the facts and circumstances of the case. Therefore, we hold that the trial court has wrongly placed the burden of proof on the defendant regarding issue No. 2.
In the circumstances, the judgment and decree of the trial court are hereby set aside and the matter is remanded to Court below for fresh consideration in accordance with law. The trial court is directed to recast the issues and decide the matter on merits afresh, after giving a reasonable opportunity to both parties.
Accordingly, the appeal is allowed. Since the appeal is allowed and the matter is remanded to the trial court, the appellant is entitled for refund of entire Court fee.