Shri Pradeep Khanna vs M/S Ashok Electric Company & Ors
2011 Latest Caselaw 2358 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                              Date of judgment: 03.05.2011


+                        R.S.A.No. 276/2007

SHRI PRADEEP KHANNA                              ...........Appellant

                         Through: Mr. Ashim Vachher and Mr.
                              Abhilash, Advocates.

                   Versus

M/S ASHOK ELECTRIC COMPANY & ORS                 .......Respondents

                         Through:    None.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers may be allowed to
        see the judgment?

     2. To be referred to the Reporter or not?                  Yes

     3. Whether the judgment should be reported in the Digest?
                                                          Yes

INDERMEET KAUR, J. (Oral)

1. This appeal has impugned the judgment and decree dated

13.07.2007 which had reversed the finding of the trial judge dated

19.04.2005 whereby the suit filed by the plaintiff M/s Thermoking

seeking recovery of Rs. 2,43,103.00/- had been decreed along with

the interest at 6% per annum. The impugned judgment had

reversed this finding. Suit of the plaintiff stood dismissed.

2. Plaintiff had filed the aforenoted suit for recovery of the

aforenoted amount. Plaintiff was engaged in the business of

manufacture and sale of electrical appliances. Defendant no. 1 is

the partnership firm of whom defendant nos. 2 to 6 are partners.

Goods were purchased by the defendant from the plaintiff; vide

bill dated 28.08.99, various electrical geysers were supplied by

the plaintiff which were valued at Rs. 99,316.00/-. On 11.03.1999

again, electrical geysers were supplied to the defendant no. 1 vide

bill dated 11.11.1999. Total bill which was raised on the

defendant no. 1 was to the tune of Rs. 1,43,038.00/-. Part

payment was made by way of demand draft no. 072148 dated

29.10.1999 of Rs. 50,000/-. Thereafter, defendant no. 1 placed a

further order with the plaintiff; this was in November, 1999;

supplies were made by the plaintiff. Part payment was again

made by defendant in the sum of Rs. 33,630/-. Defendant however

failed to clear the balance arrears. This was in spite of legal

notice. Present suit was accordingly filed.

3. In the written statement, preliminary objections were taken.

On merits, it was denied that any amount was due to the plaintiff.

It was not denied that the orders were placed upon the plaintiff

company for the supply of geysers; however, liability was denied

as the quality of the goods supplied were not as per the order.

4. On the pleadings of the parties, the following five issues

were framed:-

"1. Whether there is no cause of action in favour of the plaintiff to file the present suit? OPD.

2. Whether the suit filed by the plaintiff is beyond the limitation? OPD.

3. Whether the defendant is entitled to the decree of counter claim as prayed for? OPD.

4. Whether the plaintiff is entitled to the decree for a sum of Rs. 2,43,103/- alongwith the interest as prayed for? OPP

5. Relief."

5. Oral and documentary evidence was led. All the issues were

decided in favour of the plaintiff. The suit was decreed. Counter

claim filed by the defendant was rejected.

6 The impugned judgment had reversed this finding. Court

was of the view that the suit was barred by limitation. Section 21

of the limitation Act had been adverted to.

7. Counter claim of the defendants also stood rejected.

8. This is a second appeal. It had been admitted and on

09.07.2008, the following substantial questions of law had been

formulated:-

"(1) Whether by correcting the mis-description of a defendant in a suit filed by the plaintiff, which mis-description came to the notice of the plaintiff, for the first time, through the written statement filed by the defendant will make the suit time barred in terms of Section 21 of the Limitation Act?

(2) Whether by amendment in the plaint merely clarifying the name of the

defendant from a Proprietorship concern to a Partnership Firm would amount to instituting a fresh suit against such defendants on the date when the said amendment was allowed?"

9 On behalf of the appellant, it has been urged that the finding

in the impugned judgment qua the provisions of Section 21 of the

Limitation Act is a perverse finding; no new defendant was either

added or substituted and this is clear from the order of the trial

court who had allowed the application of the plaintiff under Order

6 Rule 17 of the Code. Attention has been drawn to the aforenoted

order where the Court on 06.05.2003 had allowed the application

of the plaintiff seeking an amendment.

10 The plaintiff had originally filed a suit against the defendant

Ashok Electric Co. impleading him as a sole proprietorship

concern of Shanti Kumbhat. In the written statement, the defence

raised was that Ashok Electric Company is not a proprietorship

firm; it is a partnership firm comprising of five partners; details of

the partners had been given in the said written statement.

Thereafter an application had been filed by the plaintiff seeking

an amendment of the plaint; by way of this amendment he had

sought to implead Ashok Electric Company as a partnership firm

detailing the names of the partners. The Court had relied upon

AIR 1990 NOC 28 (KANT) P. Mabusab & Sons Vs. T. Nagendrappa

wherein a bench of this Court had noted as under:-

"where there was only mis-description of the plaintiff and the claim, as originally made on behalf of the nonexistent firm necessarily include a claim on behalf of the alleged partner who in fact, was the proprietor of the concern and, therefore, correcting the description of the plaintiff would not result replacing the plaintiff; and the defendant who had totally denied his liability, would also not be prejudiced by the amendment; and the cause of action for the suit also remained unaltered by the amendment. Hence the application for amendment application was allowed."

11 The application for amendment was accordingly allowed.

The court was also of the view that the nature of the suit has not

been changed; it shall remain the same. Amendment was

accordingly allowed. This order was never challenged; it has since

attained a finality.

12 Thereafter on the pleadings of the parties, the following five

issues were framed:-

"1. Whether there is no cause of action in favour of the plaintiff to file the present suit ? OPD

2. Whether the suit filed by the plaintiff is beyond the limitation ? OPD

3. Whether the defendant is entitled to the decree of counter claim as prayed for ? OPD

4. Whether the plaintiff is entitled to the decree for a sum of Rs. 2,43,103/- alongwith the interest as prayed for ? OPP v. Relief"

13 Parties had led the evidence. Issue No. 2 is relevant for the

controversy in dispute. The trial Judge had returned the following

finding:-

"The issue of the limitation is the main bone of contention between the parties in the present suit. The gist, crux and thirst of the entire written final arguments filed on behalf of the defendants is the point of limitation involved in the present suit. Ld. Counsel for the defendant has relied upon judgment (2001) 4 SCC 96 which reads as under :-

„Limitation Act, 1963 . S. 21(1) and proviso. Impleadment of new defendant . Held , unless court expressly directs otherwise by a separate and further order under the proviso, suit would be deemed to have been instituted against such defendant on the date of his impleadment, no any earlier date . Debt Laws . T .N. Revenue Recovery Act, 1864 ( 2 of 1864), Ss. 59 and 38 .

Limitation period for suit by person aggrieved by proceedings under.‟

Heavily relying upon the said judgment it has been argued that the cause of action arose in favour of the plaintiff on 15.12.1999 and a part payment of Rs. 33,630/- was made by the defendant and as per Schedule item -14 of Limitation Act three years have been provided as the limitation. It has been argued that the plaintiff filed the present suit No. 232 of 2003 against Sh. Shanti Kumbhat, sole proprietor , Ashoka Electrical Company, within three year from the time at which the alleged cause of action arose but in that suit the present defendant was not impleaded as a defendant and in the absence of the present defendant the suit instituted was incompetent. It has been argued that later on , on an application moved by the plaintiff the present defendant was impleaded as a party but since the amendment was allowed only on 6.5.2003 , by that time already three and a half year were over and as such the suit is barred by time in view of S. 21 of Limitation Act because the suit by the plaintiff has to be treated and instituted when the application for impleading the defendant was allowed on 6.5.2003. It has been further argued that since there is no separate/ further order of the court, the case of the plaintiff also does not fall within the ambit of Proviso to section 21 of Limitation Act.

Chronology of the events of the present suit reveals that earlier the suit was filed with the memo of parties as under:-

. M/s Thermoking A sole proprietorship concern;

with Shri Pradeep Khanna as its sole proprietor, A-24, Naraina Industrial Area, New Delhi-110028 .............Plaintiff Versus M/s Ashok Electric Company A Sole Proprietorship concern:

With Smt. Shanti Kumbhat as its sole proprietor
138, Govidpa,
Street Naiken Street,
Chennai                .............Defendant.

Later on the plaintiff moved an application under 6 Rule 17 CPC for amendment of the plaint and the said application was allowed vide orders dated 6.5.2003 by the Ld. A.D.J. Delhi specifically on the ground that there was only a mis-description of the defendant because earlier in the title of the plaint the defendant M/s Ashok Electrical Company was described as a proprietorship concern with Sh. Shanti Kumbhat as its sole proprietor whereas the same was partnership concern and Sh. Shanti Kumbhat was one of the partners. Ld. Counsel for the plaintiff has vehemently argued that the authority relied upon by the defendant is not applicable to the facts and circumstances of the present case because in the case in hand no new party has been added/impleaded. It is true that there cannot be any deviation from the proposition of the law as laid down by the Apex Court of the land in the above mentioned authority. Hon'ble Supreme Court of India in the above said authority has said that unless court expressly directs otherwise by a separate and further orders under the proviso to section 21 of Limitation Act, the suit would be deemed to have been instituted against the defendants on the date of impleadment and not on the earlier date. In the above said authority, State of Tamil Nadu was not party in the earlier instituted suit but later on by way of the impleadment , the State of Tamil Nadu was impleaded as a party and in these circumstances Hon'ble Supreme Court of India gave the above said observation. But the question to be

considered by this court is as to whether the same situation prevails in the present suit or not. Needless to mention that earlier also in the present suit M/s Ashok Electric Company was the only defendant and after the amendment also M/s Ashok Electric Company is the main defendant and defendants no. 2 to 6 are partners of the defendant no.1. The application for amendment was allowed vide orders dated 6.5.2003 mainly on the ground that there was mis- description of the defendant because in the title of the plaint M/s Ashok Electrical Company was described as a proprietorship concern whereas the same is a partnership firm as is the stand of the defendants in the written statement. To my mind, no new party has been added in the present suit and with utmost respect to the observation of Apex Court of the land in the above said authority, in my opinion, the ratio decidendi of this case is not applicable to the facts and circumstances of the present case. In my opinion, the submission of Ld. Counsel for the defendant is fallacious when he says that new party has been impleaded by way of the amendment vide order dated 6.5.2003. In my opinion, the defendant was the same and by way of the amendment the defendant was only described properly. Needless to mention that the defendants themselves admit that earlier the suit was instituted within the period of limitation.

In the light of the above said discussion, I have no hesitation to hold that the present suit has been filed within the period of limitation as such issue no.2 is decided in favour of the plaintiff and against the defendants."

14 The impugned judgment had however set aside the finding

on limitation. All other issues were decided in favour of the

plaintiff. The Court had held that the plaintiff has proved his case

on merits; he is entitled to recover the amount as claimed by him.

However the suit, in view of provisions of Section 21 of the

Limitation Act is time barred. On all other scores, the impugned

judgment had endorsed the finding of the trial Judge.

15 Learned counsel for the appellant has placed reliance upon

35 (1988) DLT Bush Boake Allen (India) Ltd. Vs. Red Club

Products Corporation as also another judgment reported in AIR

1991 Kerala 72 Gopalkrishnan Chettiar and Another Vs. Annamma

Devassye and Others to support his submission. In Bush Boake

Allen (Supra) the plaintiff had filed a suit initially against the

partnership firm without the details of the partners. Thereupon

the defendant had furnished a statement giving details of the

partners. An application under Order 6 Rule 17 of the Code had

been filed to implead the said persons as the defendants as also

one co-defendant M/s Sher-e Punjab Trading Company through its

proprietor Suhinder Singh. Application had been allowed.

Provisions of Order 1 Rule 10 (2) of the Code had also been

adverted to. Relying upon the judgment of the Apex Court

reported in Devidas & Ors. Vs. Shailappa & Ors. AIR 1961 SC

1277 wherein it had been held as under:-

".... Failure to join a person who is a proper party but not a necessary party does not affect the maintainability of the suit nor does it invite the application of Section 22 of the Limitation Act. The rule that a person, who ought to have been joined as a plaintiff to the suit and is not made a party will entail dismissal of the suit, if the suit, as regards him, be barred by limitation when he is joined, has no application to non-joinder of proper parties...... If fresh parties are merely joined for the purpose of safeguarding the rights subsisting as between

them and others claiming generally in the same interest, the determination of the date of the institution of the suit as regards such freshly joined parties does not ordinarily affect the right of the original plaintiff to continue the suit and will not attract the application of the general provisions of the Limitation Act."

16 The court had held that where the added party is already

constructively a party to the suit, it is not in essence an order of

adding or substituting a new party and Section 21 of the

Limitation Act would not apply.

17 In this case also the partners of the defendant firm were

constructively parties as defendants in the suit; the defendant firm

had been arrayed as a proprietorship firm through its proprietor

Shanti Kumbhat and this defendant firm had in fact fully

represented all the partners; a partnership firm having no

separate identity except through its partners. A firm is not a

person; it is merely a qualitative name for individuals who are

members of the firm; it is neither a legal entity nor a person; a

firm name is merely a description of individual who compose the

firm. Addition of the names of the partners was not an addition of

any new party within the meaning of Section 21 of the Limitation

Act; it was a case of mis-description of parties who were

constructively represented by its firm (defendant No. 1). It was

not a case of adding a new defendant; defendant No. 1 was mis-

described as a proprietorship firm; it was a partnership firm

comprising of five partners whose names had only subsequently

been added. The provisions of Section 21 of the Limitation Act are

not attracted.

18 Suit filed against the original proprietorship firm was

admittedly in time. The order of the Court dated 06.05.2003

allowing the amendment application had also noted the

observations of the Court in P. Mabusab & Sons (Supra) which

observation has been quoted above.

19 The finding returned in the impugned judgment qua

limitation is accordingly set aside. The impugned judgment had

otherwise endorsed the finding of the trial Judge on all other

counts and had held that the plaintiff had been able to prove his

case qua entitlement of recovery of the suit amount along with

interest.

20 Substantial question of law is accordingly answered in

favour of the appellant and against the respondent. Appeal is

allowed. Suit of the plaintiff stands decreed. Appeal is disposed of.

INDERMEET KAUR, J.

MAY 03, 2011 a/ss