M/S. Venugopal Company (A Firm under the Partnership Act) v. G. Sasikumar and Others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE K. BABU** **MONDAY, THE 8[TH] DAY OF NOVEMBER 2021 / 17TH KARTHIKA, 1943** **RSA NO. 53 OF 2005** **AGAINST THE ORDER/JUDGMENT IN AS 351/2001 OF I ADDITIONAL DISTRICT** ## **COURT, PALAKKAD** **OS 714/1998 OF ADDITIONAL MUNSIFF COURT, PALAKKAD** ## **APPELLANT/APPELLANT/PLAINTIFF:** M/S.VENUGOPAL COMPANY (A FIRM UNDER THE PARTNERSHIP ACT) BY MANAGING PARTNER, SRI.M.A.SADANANDAN, S/O. ACHUTHAN, RESIDING AT ANDIMADAM, KADUKKAMKUNNAM POST, PALAKKAD DISTRICT, PIN-678 005. BY ADVS. SURESH MENON T.C. SMT.M.R.VALSA ## **RESPONDENTS/RESPONDENTS/DEFENDANTS:** 1 G.SASIKUMAR, DRIVER, EXCISE DEPARTMENT, RESIDING AT PECHIYODE HOUSE, KODUVAYUR VILLAGE AND POST, CHITTUR TALUK, PALAKKAD DISTRICT. 2 SMT.M.P.SREEVALLI, W/O. V.M.RAMACHANDRAN, VANITHA POLICE NO.2453, VADAKKENCHERRY POLICE STATION, VADAKKENCHERRY VILLAGE AND POST, ALATHUR TALUK, PALAKKAD DISTRICT. 3 SMT. K.GIRIJA W/O. REGHUNATH, VANITHA POLICE NO.2446, TOWN SOUTH POLICE STATION, WOMEN CELL, PALAKKAD TALUK. BY ADVS. SRI.JACOB SEBASTIAN-R3 SRI.LIJU. M.P SRI.SAJAN VARGHEESE K.-R1& R2 SRI.BIPIN M.V THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 08.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: R.S.A Nos.53 of 2005 2 ## 'C.R' ## K.BABU, J . -------------------------------------- R.S.A No.53 of 2005 --------------------------------------Dated this the 8[th] day of November, 2021 ## JUDGMENT This Regular Second Appeal emanates from the decree and judgment dated 27.07.2001 passed by the Munsiff's Court, Palakkad in O.S.No.714/1998. The plaintiff, a partnership firm, which lost its case in the Courts below, is the appellant. 2. The facts giving rise to this appeal are the following: The plaintiff is a firm doing Financing and Chitty business. The plaintiff is doing its business from Faridabad in Haryana. Defendant No.1 subscribed to one 'Kuri' bearing No.22/96. He bid the said 'Kuri' in the thirteenth auction held on 13.08.1997 for a sum of Rs.42,000/at a discount of Rs.18,000/-. The priced sum of Rs.42,000/- was paid to defendant No.1 on 29-09-1997. On the same day, defendants executed Ext.A1 agreement agreeing and undertaking to regularly pay all future instalments. Defendant Nos.2 and 3 were the sureties in Ext.A1 agreement. The defendants defaulted the R.S.A Nos.53 of 2005 3 payments from the fourteenth instalment. An amount of Rs.34,000/- with interest was due from the defendants. The plaintiff prayed for realisation of a sum of Rs.39,894/- from the defendants. 3. Defendants 1 and 2 though resisted the claim of the plaintiff by filing written statements, subsequently, when the matter came up for trial they withdrew all their contentions and admitted the plaint claim. 4. Defendant No.3 contended that the plaintiff has to prove that the firm is a partnership firm registered under the provisions of the Indian Partnership Act. He further pleaded that the suit is not maintainable as the 'Kuri' is not registered under the Kerala Chitties Act. 5. The Trial Court framed the following issues: - (i) Whether the Court has territorial jurisdiction to entertain the suit? (ii) Whether the plaintiff is entitled to recover the amount claimed in the plaint from the defendants? - (iii) Reliefs and Costs? 6. The Trial Court held that by virtue of Ext.A1 agreement, defendants are liable to pay 18% interest in case of default in payment of instalments. The Trial Court further held that the R.S.A Nos.53 of 2005 4 plaintiff established that Rs.34,000/- with 18% interest is due from the defendants. However, the Trial Court dismissed the suit holding that the suit is barred under Sec.69(2) of the Indian Partnership Act (for short 'the Act'). 7. The plaintiff challenged the decree and judgment before the District Court, Palakkad, filing A.S.No.351/2001. The First Appellate Court confirmed the findings of the Trial Court. 8. This Court on 04-02-2005 admitted this appeal. 9. After hearing both sides, this Court reformulated the following as the substantial question of law for consideration: - (i) Are the Courts below justified in dismissing the suit as not maintainable in view of Sec.69(2) of the Partnership Act? 10. Heard Sri.B.Deepak, the learned counsel appearing for the appellant, Sri.Sajan Vargheese, the learned counsel appearing for respondents 1 and 2 and Sri.Jacob Sebastian, the learned counsel appearing for respondent No.3. 11. The learned counsel for the appellant contended that the respondents have not pleaded that the suit is barred under Sec.69(2) of the Act, and hence there was blatant illegality in dismissing the suit without framing an issue on the bar under R.S.A Nos.53 of 2005 5 Sec.69(2) of the Act by the Trial Court. Sri.B.Deepak, the learned counsel for the appellant, has taken me to the written statements filed by the defendants. The defendants have not raised the plea that the suit is barred under Sec.69(2) of the Act. 12. The function of pleadings is to ascertain with precision the matters on which the parties differ and the points on which they agree; and thus to arrive at certain clear issues on which both parties desire a judicial decision. 13. The sole object of the system of pleading is to secure that both the contending parties shall know what are the real points of controversy between them so that they may have an opportunity to bring forward such evidence or to submit such argument as may be appropriate to determine such points at issue between them, and to prevent surprise at the trial. 14. In Odgers' Principles of Pleading and Practice in Civil Actions in the High Court of Justice (Twenty Second Edition, Page No.87) on the function of pleadings, the learned authors write thus: “The defendant is entitled to know what it is that the plaintiff alleges against him; the plaintiff in his turn is entitled to know what defence will be raised in answer to his claim. The defendant may dispute every statement made by the plaintiff, or he may be prepared to R.S.A Nos.53 of 2005 6 prove other facts which put a different complexion on the case. He may rely on a point of law, or raise a cross-claim of his own. In any event, before the trial comes on it is highly desirable that the parties should know exactly what they are fighting about, otherwise they may go to great expense in procuring evidence to prove at the trial facts which their opponents will at once concede. It has been found by long experience that the most satisfactory method of attaining this object is to make each party in turn state his own case and answer that of his opponent before the hearing. Such statements and the answers to them are called the pleadings.” 15. In Ram Sarup Gupta (dead) by L.Rs. v. Bishun Narain Inter College and Others [AIR 1987 SC 1242], the Apex Court held that in the absence of pleadings, evidence, if any, produced by the parties cannot be considered and that no party should be permitted to travel beyond its pleadings and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The Apex Court further held that the object and purpose of pleading are to enable the adversary party to know the case it has to meet, and in order to have a fair trial, it is imperative that the party should state the essential material facts so that the other party may not be taken by surprise. 16. The Constitution Bench of the Apex Court in Gurbux Singh v. Bhooralal [AIR 1964 SC 1810], while dealing with the bar under Order II Rule 2 C.P.C held that a technical bar affecting the R.S.A Nos.53 of 2005 7 maintainability of the suit has to be established satisfactorily and cannot be presumed merely on the basis of inferential reasoning. 17. In Nortrans Marine Services (P) Ltd. and another V. Cargo Care International and others (2020 KHC 804) a Division Bench of this Court held that in the absence of a specific and categorical plea taken under Sec.69(2) of the Act, neither the court is expected to consider the maintainability of the suit in the background of noncompliance with the requirement of Sec.69(2) of the Act nor a plaintiff is expected to place on record the proof in support of its assertion that it is a registered partnership firm. 18. This Court has carefully examined the stand taken by the defendants in the written statement. They have failed to set up the pleading as is required under Order 8 Rule 2 CPC read with Sec.69(2) of the Act. 19. In the present case, it is strange to note that without a pleading and an issue framed on the bar under Sec.69(2) of the Act, the Trial Court non-suited the plaintiff on the sole ground that the suit is hit by Section 69(2) of the Act. The Appellate Court confirmed this finding. The Courts below lost sight of the salutary R.S.A Nos.53 of 2005 8 principles of a fair trial. The finding of the Trial Court as well as the First Appellate Court that the suit is barred under Sec.69(2) of the Act is liable to be set aside. 20. The Trial Court found that the plaintiff established that Rs.34,000/- with interest is due from the defendants. The Appellate Court has not disturbed this finding. Resultantly, the plaintiff is entitled to recover the plaint amount from the defendants. In the result, - (i) The judgment and decree dated 18.6.2004 in A.S.No.351/2001 of the Additional District Court-I, Palakkad and the judgment and decree dated 27.7.2001 in O.S.No.714 of 1998 of the Munsiff's Court, Palakkad are set aside. - (ii) O.S.No.714/1998 is decreed allowing the plaintiff/appellant to realise the plaint amount at the rate of 6% per annum from the date of institution of the suit. The Regular Second Appeal is allowed as above. Sd/K.BABU, JUDGE KAS