Andhra Pradesh High Court - Amravati

Vijaya Lakshmi Rice And Dall Mill, ... vs Yalavarthi Jhansi Lakshmi, W/O. ... on 28 June, 2021

      THE HON'BLE SRI JUSTICE M.VENKATA RAMANA

               SECOND APPEAL No.67 of 2015

JUDGMENT:

Heard Sri V.V.L.N.Sarma, learned counsel for the

appellant.

2. Having regard to the nature of this matter, since it does

not fall within the scope of Section 100 C.P.C, the Second Appeal

is being disposed of now at the stage of admission.

3. The defendant in the suit is the appellant. The respondent

as the plaintiff, laid the suit for recovery of Rs.1,66,523/- with

costs and subsequent interest.

4. The suit claim is based on a promissory note alleged to

have had been executed on behalf of the appellant agreeing to

repay the same with interest at 24% p.a with yearly rests, on

25.01.2001. There were part payments of Rs.5000/- on

24.01.2001, Rs.20,000/- on 10.10.2006 and Rs.20,000/- on

12.10.2006 towards this promissory note debt as per the plaint

and in spite of repeated demands, since the appellant failed to

pay the amount due, the suit was laid.

5. The appellant resisted the claim of the respondent mainly

on the ground that this firm was closed in the year 2003 and

since then, it was not at all in existence. On such premise, it

was pleaded for the appellant that any payment made on its

behalf will not bind it or others and that the managing partner

did not have such capacity. Another defence raised was that the

suit claim stood barred by limitation and that the suit could not

have been maintained, without impleading all the partners of

this firm as parties to this suit. Further, it was stated that the

interest claimed is excessive.

6. The trial Court settled appropriate issues on the pleadings

and the parties entered trial thereon. The respondent examined

herself as PW.1 and another witness on her behalf as PW.2,

while marking of Exs.A1 to A6 in support of her claim. The

managing partner of the appellant firm was examined as DW.1 at

the trial and no documents were marked on its behalf.

7. Basing on the material and the evidence, learned trial

Judge, did not agree with the defence and basing on the

testimony of PW.1 coupled with the evidence let in on behalf of

the respondent, decreed the suit as prayed, however with future

interest at 12% p.a. pendentilite and at 6% p.a. post decree on

the principal amount of Rs.80,000/-.

8. Aggrieved, the appellant presented A.S.No.172 of 2012 on

the file of the Court of learned XI Additional District Judge,

Guntur at Tenali.

9. Learned appellate Judge, on reappraisal of the entire

evidence and the material particularly, having regard to the

clear admissions of DW.1 supporting the version of the

respondent, agreed with the findings recorded by the trial Court.

Consequently, the appeal was dismissed with costs confirming

the decree and judgment of the trial Court. It is, against this

background, the presentation of the second appeal needs

consideration.

10. Sri V.V.L.N.Sarma, learned counsel for the appellant,

strenuously contended referring to substantial questions of law

raised in the grounds of appeal that both the Courts below failed

to appreciate the fact that the appellant-firm was no more in

existence by the date of institution of the suit and that there is

clear bar of limitation in institution of the suit, since the

payment endorsements did not bring the claim within time. In

this context, effort is made to point out the date of registration

of the suit in the trial Court, while further elaborating on the

capacity of PW.1 to represent the firm having regard to the

material on record that the firm did not continue its affairs since

the year 2003.

11. It appears that there was an attempt in the 1st appellate

Court to adduce additional evidence under Order 41 Rule 27 CPC,

producing the registration extract of registered Rectification

Deed dated 28.06.2003 and it was rejected by the appellate

Court. Learned counsel also raised one of the grounds

questioning the manner of appreciation of evidence on record.

12. Now the question is, "whether the appellant can well

canvass in terms of Section 100 CPC and if this Court to consider

pleas so raised?"

13. The first contention on behalf of the appellant is that this

firm was closed in the year 2003 and did not continue its

existence. It is not supported by any documentary proof. It is

not the case of a dissolution of a firm pleaded by the appellant.

The trial Court took into consideration in this context, the

admissions of DW.1-Sri T.Sivalingeswara Rao, in support of the

transaction covered by Ex.A1-suit promissory note and three

payment endorsements proved by Exs.A2 to A4 on the reverse of

the same. Added to it, the effect of Section 22 of the Indian

Partnership Act, was considered by the learned trial Judge

rightly.

14. Learned appellate Judge, in the judgment relied on the

very same situation and also considered the effect of the

testimony of PW.2, who attested Ex.A1-suit promissory note. In

para-13 of the judgment, the learned appellate Judge considered

deposition of DW.1, which reflected the admissions on his part

regarding execution of promissory note. It is desirable to extract

the same hereunder:

' The promissory note shown to me dated 25.01.2001(Ex.A1) was executed by me on behalf of the defendant's firm in favour of the plaintiff in my own handwriting. 2nd attestor is Viyyanka of the plaintiff. It is true that PW.2 used to be close with me at the time of suit transaction.

It is true that I made part payment of Rs.5,000/- on 24.01.2004 and part payment of Rs.20,000/- on 10.10.2006 and part payment of Rs.20,000/- on 12.10.2006 in my own handwriting towards the amount due under Ex.A1.....

It is true that the suit was filed within 3 years after the last payment endorsement dated 12.10.2006......."

15. Learned appellate Judge also considered the effect of

Section 22 of the Partnership Act regarding liability of all the

partners of the firm, with reference to contract involved.

16. The effect of Sections 72 and 45 of the Indian Partnership

Act was also considered in the same context. Learned appellate

Judge, while referring to the evidence recorded by the learned

trial Judge recorded certain observations in paras 19 to 21

rightly. They are extracted hereunder.

'19. However, as rightly held by the trial Court as per Section 45 of the Act, notwithstanding the dissolution of a firm, partners continue to be liable as such to third parties for any act done by any of them, which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution and Section 46 provides that all the partners shall apply the property of firm in payment of debts and liability of the firm and to have the surplus distributed among the partners etc.

20. As rightly observed by the trial Court there is no scrap of paper filed by the defendant that the defendant firm was dissolved or any public notice was given in that connection. Therefore, the contention of the defendant that the firm was closed or dissolved has no merits. Similarly, as rightly observed by the trial Court as per the Section 19 of the Act every partner has got implied authority in the absence of any usage or customs or trade contrary to join the firm for the acts done by him and as per Section 18 of the Act a partner is the agent of the firm for the purpose of business of the firm.

21. Therefore, in view of the findings of trial Court with reference to the provisions of the Partnership Act referred above, the findings of the trial Court that part payment endorsements under Exs.A2 to A4 are valid and binding against the defendant's firm are justified by law and fact. So far as the contention of the defendant with reference to the evidence of PW.1 that she filed the suit against DW.1 but not against the firm and that DW.1 is not personally liable etc. are

not consistent with the nature of the liability of DW.1 as partner. Even from the provisions of Partnership Act, the liability of the partner is joint and several and the relationship of partnership arose as per the relation ship of contract and not from status. Therefore, there is nothing unusual or unnatural in the case of the plaintiff with reference to the status of the defendant, identified with DW.1 and her evidence with reference to the liability of the defendant identified with DW.1 is apparent on the face of record with reference to his status in the firm. Therefore, the debt is not barred by limitation and the plaintiff is entitled for recovery of money. The findings of the trial Court on issues 1 and 2 are justified by both evidence and law and the result thereon is consistent with the findings. I do not find any merits in the appeal and the appeal is liable to be dismissed. This point is answered accordingly against the appellant and in favour of the respondent."

17. In the light of these clear findings recorded by the learned

appellate Judge, basing on the fact including law, that reflect

right approach to the questions involved, this Court sitting in the

second appeal cannot lightly interfere with the same.

18. The payment endorsements particularly, the last one

covered by Ex.A4 dated 12.10.2006 bring the suit claim within

time, in as much as the plaint was presented in the trial court on

09.10.2009.

19. The attempt of the appellant in given facts and

circumstances to adduce additional evidence at the appellate

stage was rightly rejected by the learned appellate Judge,

recording reasons in paras 15 and 16.