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Judgment
Rajagopala Aiyangar, J.—This is an appeal against an. order of Ramaswami J. granting leave under Order 21, Rule 50(2), C. P. C., to
execute the decree obtained in C. S. No. 812 of 1948 on the file of this Court against a firm by name Sri Murugan Films against the appellant here
on the allegation that he was a partner in the said firm.
The suit out of which this proceeding arises was instituted by a registered firm by name ""The polite Pictures"" against a firm carrying on business
in the name of Sri Murugan Films and two others. The plaintiff-firm obtained rights to exhibit a film by name Thulasi Jalandar in the City of Madras,
whereas the Murugan Films obtained distribution rights in respect of the same film in the District of Chingleput. The plaintiff-firm alleged that
contrary to the terms of the lease deed in favour of the defendant, they had unlawfully exhibited the picture within the City of Madras and thus
Infringed their rights. In the cause-title to the plaint the first defendant was described as Sri Murugan Films a film carrying on business at Ambur.
The summons in the Suit was served upon one M.J. Vittal Rao who, it is admitted, was the managing partner of the first defendant firm.
In the summons, however, taken out to this Vittal Rao, the description given of the person on whom service was to be effected was ""Sri Murugan
films by sole proprietor M. G. Vittal Rao."" On receipt of this summons, Vittal Rao appeared through counsel Mr. T.L. Venkatarama Aiyar then at
the Bar. In the vakalat executed la favour of the counsel Vittal Rao described himself as the managing partner of the Sri Murugan Films. He filed a
written statement contesting the claim of the plaintiff and putting forward a defence that Aminjikarai where it was stated that the defendant had
exhibited the film in contravention of the plaintiff''s rights was oh the date of the agreement within the District of Chingleput and that, therefore, the
defendant firm had a right to exhibit the picture in the Theatres in the locality.
This defence was the subject-matter of issue before the Court and Ramaswami Goundar J. after consideration of the relevant notifications by
Government reached the conclusion that Aminjikarai was not in the District of Chingleput on the date of the agreement. The result of this finding
was that the defendant firm had been proved to have infringed the plaintiff''s rights and the only question for consideration by the Court was the
quantum of damages payable to the plain tiffs '' for the infraction of their rights. The learned Judge held that the plaintiffs were en titled to have a
decree passed in their favour for 1 3/4 times, i.e., 175 per cent, of the net profits made by them from the. exhibition of the film in two theatres
within this area. This being taken to represent the actual loss sustained by them. The matter was, thereupon sent to the Official Referee for the
ascertainment of the profits made by the defendant-firm.
The defendant filed their accounts from which the net profit which they derived and on the basis of which the damages payable to the plaintiff were
to be calculated could be ascertained. The accounts produced by the defendants'' firm were accepted by the plaintiffs and the only question was as
regards certain deductions claimed by the defendant for computing the net profits. The learned Official Referee decided the items which were
allowable and on this basis, directed the counsel to work out the figure of net profit derived by the defendant-firm. Counsel Submitted a figure and
on the basis of this amount due to the plaintiff was ascertained. This was placed before the Court and a final decree was passed in favour of the
plaintiff for a sum of Rs. 3074-5-6 in the place of Rs. 29000 for which the suit had been laid. This final decree was passed in August 1952.
In pursuance of this decree the plaintiff firm applied to execute this decree against the present appellant as being one of the"" partners of the
defendant-firm and as against whom therefore the decree could be executed after obtaining leave of the Court under Order 21, Rule 50, C. P. C.
On receipt of the Master''s summons in this application, the present appellant without denying that he was a partner of the Sri Murugan Films
raised three contentions. The first was that he was not served with summons of the suit C. S. No. 812 of 1948 of the High Court, Madras, the
decree in which was sought to be executed against him personally. He said that the decree was obtained after service upon Vittal Rao who was
described as the sole proprietor of the first defendant firm.
On this ground it was stated that the decree obtained against Sri Murugan Films could not be executed against the appellant personally. The
second ground that was urged was that the decree in C. S. No. 812 of 1948 was a consent decree and that under the Partnership Act which
governed the rights of the parties of the defendants'' firm Vittal Rao had no authority to con-Bent to a decree being passed against the firm in the
face of the statutory provision enacted in Section 19(c). Partnership Act. The third objection to the leave being granted was that the firm of Sri
Murugan Films had been dissolved and that final decree proceedings in the suit for dissolution, O. S. No. 155 of 1951 on the file of the District
Munsif''s Court, Tirupattur were pending.
It will be noticed that the last ground is absolutely untenable since no dissolution effected after the cause of action in favour of the plain- tiff arose
can have any effect on his rights and evidently this ground was not pressed before the learned Judge on the Original Side and we do not find any
reference to this point in this Judgment. Nor did the learned counsel for the appellant put forward this objection before us in this appeal. The
learned Judge"" held that the suit, C. S. No. 812 of 1948, was really filed against the firm in the firm''s name and properly in conformity with the
provisions of Order 30, C. P. C., and that the summons to the managing partner describing him as the sole proprietor was in the nature of a
misdescription which did not vitiate the validity of the decree as against the firm, particularly as Vittal Rao understood the summons to him as to
him in his capacity as the Managing partner of the first defendant firm and the further proceedings at the trial were all conducted, on that footing.
In regard to the second point, the learned Judge after an elaborate discussion of the authorities reached the conclusion that the decree, though
by consent, was binding on the appellant by reason of the powers of the managing director Vittal Rao being comprehensive and that the consent
could also be Justified on the ground of its being an emergency power. He consequently granted leave to the decree-holder to execute the decree
against the appellant and it is from this order that the present appeal has been filed.
The learned counsel for the appellant raised before us three contentions. The first was that before a decree as against a firm could be passed,
there ought to be proper service of summons upon the firm and that this could be effected only when the service is directed to the managing partner
as such. Reliance was placed upon the terms of Order 30, Rule 3. C. P. C., read with Rule 5 particularly the opening words of Rule 5 which
speaks of a summons being issued, to a firm. The contention is that it was not the defendant firm that was served with the summons, but Vittal Rao
personally as the sole proprietor of some concern which he was carrying in a name other than his own. We think there is no substance in this
argument. In the present case, the cause title of the plaint makes it clear that it was a firm and not a proprietary concern that was sought to be
made liable by the description of Sri Murugan Films for It is described as a Firm.
The summons was served upon one of the partners and at the principal place at which the partnership business is carried on. At the most it is
merely an error in the description of Vittal Rao which does not affect the regularity of the service of the summons upon the firm. The question in
such cases is really whether the person so served with summons is misled by the form of the summons into believing that he was being served in
one character rather than another. Having regard to the subsequent proceedings in the suit it is clear that Vittal Rao who was admittedly the
managing partner and who had, therefore, authority to represent the firm in the suit was not misled by his description in the summons. Since,
therefore, the plaintiff''s intention is clear from the description in the cause-title to the plaint and the defendant was not misled either the error in the
description in the summons is really immaterial in the present case and the learned Judge was right in treating this as a mere misdescription which
did not affect the validity of the decree as against the defendant firm.
The next contention of the learned counsel for the appellant is that the decree in C. S. No. 812 of 1948 is not finding upon the firm or the
appellant for the reason that it was a consent decree and therefore ultra vires of Vittal Rao as one of the partners in the firm. As stated earlier, the
learned Judge has repelled this contention by a reference to the terms of the partnership deed as well as by invoking the emergency powers of a
partner in a partnership. The entirety of the argument'' of this branch of the case is based upon the decree in O. S. No. 812 of 1948 being a
consent decree. But on the facts, there is no foundation for this contention. As would be apparent from the narrative of the facts set out earlier the
decree was a decree in ''invitum'' and the only consent was the agreement between counsel as to the computation of the figure of profits, after the
basis upon which the computation should be made had been-laid down by the official Referee. It would be a misnomer and abuse of ""language to
call this decree as one by consent. We have perused the order of the Official Referee which makes this position absolutely clear. In the
circumstances, it is unnecessary to discuss the correctness of the views expressed by the learned Judge as regards the scope of a partner''s
powers. This contention therefore is not open on the facts and has to be rejected.
The last point that was put forward by the learned counsel for the appellant related to the question whether he was not entitled to question the
propriety and correctness of the decree in C. S. No. 812 of 1948 against the firm before the decree could be executed against him. The contention
was based upon the language of Order 21, Rule 50, which runs in these terms:
60(1) Where a decree has been passed against a firm, execution may be granted-
(a) against any property of the partnership;
(b) against any person who has appeared in his own name under Rule 6 or Rule 7 of Order 30, or who has admitted on the pleadings that he is or
who has been adjudged to be, a partner;
(c) against any person who has been individually served as a partner with a summons and has failed to appear;
Provided that nothing in this sub-rule shall be deemed to limit or otherwise affect the provisions of Section 247 of the Indian Contract Act, 1872.
(2) Where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to
in Sub-rule (1), Clauses (b) and (c) as being a partner in the firm, he may apply to the court which passed the decree for leave and where the
liability is not disputed, such court may grant such leave, or where such liability is disputed, may order that the liability of such person be tried and
determined in any manner in which any issue in a suit may be tried and determined.
(3) where the liability of any person has been tried and determined under Sub-rule (2), the order made thereon shall have the same force and be
subject to the same conditions as to appeal or otherwise as if it were a decree.
(4) Save as against any property of the partnership, a decree against a firm shall not release, render liable or otherwise affect any partner therein
unless he has been served with a summons to appear and answer.
Reliance was placed upon the words ""such liability is disputed"" in the latter part of Sub-rule 2 under which where the person against whom the
decree is sought to be executed does not admit the liability, the court has to order the liability of such person to be tried and determined in the
manner in which an issue in the suit may be tried and determined. In the present case, it is admitted that the appellant is a partner in the firm, as the
partnership deed constituting the firm of Sri Murugan Films which has been filed in the case shows. If the decree in C. S. No. 812 of 1948 is
binding on the defendant firm, it would follow that it would be binding upon every partner in the firm on proof that he is such partner. But the
argument of learned counsel for the appellant is that the issues and points which could be raised and tried when a decree is being sought to be
executed against a person not falling within the categories mentioned in Clauses (b) and (c) of Sub-rule (1) of Rule 50 as being a partner in the firm
are not confined to the issue of his being a partner, but also to the merits of the claim against the firm.
In this form the question has not been considered by the learned Judge on the Original Side, but as the point is one of pure law, we think it
proper that it should be considered by us. We have examined several authorities bearing upon this question and have reached the conclusion that
there is no substance in this point. Reliance is sought to be placed by the learned counsel for the appellant for his contention principally upon three
decisions: -- Kalu Ram and Others Vs. Sheonand Rai Jokhi Ram, : -- ''Tolaram Nathmul v. Mahomed Valli Patel'', AIR 1940 Cal 38 (B) and --
Kalu Ram and Others Vs. Sheonand Rai Jokhi Ram, .
The decisions in Kalu Ram and Others Vs. Sheonand Rai Jokhi Ram, and Pottiswami, alleged partner of Pottiswami and Brothers Vs. Salt
Sulaiman (Mitta), both related to the determination of the question whether an application under Order 21, Rule 50(2) for leave had to be filed in
the court which passed the decree or could be filed also in the executing court where the decree has been transferred to another court for
execution and turned upon the proper construction of Section 42, C. P. C. There are no doubt some observations in ""favour of the appellant, but
these are ''obiter.'' We consider that the views expressed in these dicta are erroneous and that on the proper interpretation of the provisions of
Order 30 read with Order 21, Rule 50(2) the only defence open to a person who has been served with a notice under Sub-rule (2) of Order 21,
Rule 50 is that he is not a partner of the firm.
The effects of a decree against a firm where the provisions of Order 30 have been complied with could not be better stated than in the words
of Lindley L. J. in -- ''Western National Bank v. Perez Triana & Co.'', 1891 1 QB 304. (D), where he said;
Where a firm''s name is used, it is only a convenient method for denoting those persons who compose the firm at the time when that name is used
and a plaintiff who sues partners in the name of their fireman truth sues them individually just as much as if he had set out all their names.
It follows, therefore, that when a firm is sued in its firm name, the decree against it would be a decree against the individual partners of the firm also
and this is the rational basis for the provisions in Order 21, Rule 50(1) (a) under which the decree-holder can proceed against the assets of the firm
as also Sub-clause (b) and (c). The decree being binding upon the firm and against all the partners, it could be executed against those who have
been proved to, be partners. Order 21, Rule 50(1) (b) and (c) deal with cases where persons have been proved to be partners of the firm and
when this is done, the decree against the firm could logically be executed against those persons.
Therefore, notwithstanding the wide language of the expression ''where such liability is disputed'' in Sub-rule (2) of Rule 50, the only question for
consideration by the court is the same as that which arises under Rule 50(1) (b) i.e., adjudging the person to be a partner. No defence which seeks
to negative the liability of the partnership to the decree or impugns the validity of the decree as against the partnership would be open when a
person is served with a notice under Order 21, Rule 50(2). All the earlier cases Upon the topic have been considered in the decision of Das J. of
the Calcutta High Court in -- ''C.M. Shahani v. Havero Trading Co.'', 51 CWN 488 (E) Which was affirmed by a Divisional Bench of they court
and with respect we agree with the judgment of that court. In particular, the matter has received full consideration in the appellate court and it is
sufficient to cite a passage from the judgment of Mcnair J. which expresses succinctly the effect of these provisions.
A further question has been raised, whether in an application in execution under Order 21, Rule 50, C. P. C., a partner who has admitted that he
is a partner can question his own liability and incidentally the liability of his firm under the decree which has already been passed.
Order 21, Rule 50 provides that where a decree has been passed against a firm execution may be granted (a) against any property of the
partnership, (b) against any person who has appeared in his own name or who has admitted on the pleadings that he is, or who has been adjudged
to be a partner, and (c) against ""any person who has been individually served as a partner with a summons and has failed to appear. The rule
provides for the execution against the property of the partnership and against a person who is a partner. Sub-rule (2) of Rule 50 provides that
where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in
Sub-rule (i), Clauses (b) and (c) as being a partner in the firm, he may apply to the court which passed the decree for leave and where the liability
is not disputed, such court may grant such leave, or where such liability is disputed, may order that the liability of such person be tried and
determined in any manner in which any issue in a suit may be tried and determined.
I am clearly of opinion that what is intended by Sub-rule (2) of Rule 50 is that the liability of a person as a partner may be put in issue, But that
once his liability as a partner has been decided or, as in the present case, where it is admitted Sub-rule (2) of Rule 50 enables the decree-holder to
execute the decree against all partners, and the partner against whom execution is sought is not entitled to contest the validity of the decree or his
own liability thereunder.
We respectfully agree with this analysis of the provision and the conclusion reached by the learned Judges. There is, therefore, no substance in
the third contention raised on behalf of the appellant.
The result is, the appeal fails and is dismissed with costs.