Public Bankers, Pudukkad v. Raphel and others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR** **THURSDAY, THE 21ST AUGUST 2008 / 30TH SRAVANA 1930** **A.S.No. 405 of 1994(B) -------------------O.S.NO.412/1987 of PRL. SUB COURT,IRINJALAKUDA. .................... APPELLANT/PLAINTIFF: -------------------** **PUBLIC BANKERS, PUDUKKAD, THORAVU VILLAGE, MUKUNDAPURAM TALUK.** **`BY ADV. SRI.V.O.JOHN,JIMMY JOHN VELLANIKKARAN` SRI.JOSEPH THOMAS,K.J.ANTONY, SRI.V.R.JAYADEVAN** **RESPONDENTS/DEFENDANTS:** - **----------------------** - ***1. RAPHEL, S/O. AKKARA JOSEPH, ANGAMALY TOWN, ANGAMALY VILLAGE, ANGAMALY TALUK (2ND DEFENDANT IN THE PLAINT)** **2. P.J. THOMAS, PALLIPATTU HOUSE, ANGAMALY DO VILLAGE, DO TALUK, (3RD DEFENDANT IN THE PLAINT)** **3. LUCY., W/O. VALIYAVEETTIL BABY, NAYARAMBALAM VILLAGE, KOCHI TALUK (7TH DEFENDANT IN THE PLAINT)** - ***4. JOSEPH, S/O. PAYYAPPILLY PYLOTH, KORATTY DESOM, KORATTY KIZHAKKUM MURI VILLAGE. (8TH DEFENDANT IN THE PLAINT)** - ***5. ANNIE, W/O.PARAKKADATH JOSE MATHEW, DO DESOM-DO. DO.(10TH DEFENDANT IN THE PLAINT)** - ***6. ANNIE BABY, W/O. BABY, PAYYAPPILLY HOUSE, DO. DO.(11TH DEFENDANT IN THE PLAINT)** ## **A.S.No. 405/1994** **7. FRANCIES, S/O. VADAKKEN JOSE RESIDING AT DO. DO. (12TH DEFENDANT IN THE PLAINT)** **8. ANNAMMA, W/O. CHALAKARIYIL MATHEW, KORATTI DESOM DO. DO. (13TH DEFENDANT IN THE PLAINT)** - ***9. VARGHESE, S/O. UKKEN ANTONY, CHALAKUDY TOWN EAST, CHALAKUDY VILLAGE (14TH DEFENDANT IN THE PLAINT)(DEAD)** **10. JOSE, S/O.KANICHAIKKATTIL VARU, RESIDING AT DO. DO.(15TH DEFENDANT IN THE PLAINT)** **11. GRACY, W/O.KALLINGAL THOMAS, RESIDING AT DO.DO. (16TH DEFENDANT IN THE PLAINT)** **12. TOMY, S/O.PAYYAPPILY JOSEPH, DO. DO. DO. (17TH DEFENDANT IN THE PLAINT)** **13. PAPPACHAN, S/O.UKKEN ANTONY, EDAKULAM DESOM,POOMANGALAM VILLAGE, (18TH DEFENDANT IN THE PLAINT)** **14. ANTO, S/O.CHOONDAKARAN, VARANDARAPPILLY VILLAGE,DO. DESOM.** **15. JOHN, S/O. THARAGHAN PORINCHU, CHELAKKARA VILLAGE, THALAPPILLY TALUK (29TH DEFENDANT IN THE PLAINT.)** **16. CHAKKORO, RETIRED D.E.O, S/O.KAKKASSERY JOSEPH, MATTOM DESOM, MATTOM VILLAGE, (21ST DEFENDANT IN THE PLAINT)** **BY ADV. SRI.P.R.VENKETESH - R1 SRI.THOMAS JOHN ABOOKAN SRI.THAMBI JACOB,TONY PETTAH SRI.T.O.XAVIER,N.P.SAMUEL SRI.WILSON URMESE - R9,R13,R16** **(* DEFENDANTS 1,5 AND 6 WERE REMOVED FROM PARTY ARRAY AND CLAIM AGAINST 4TH DEFENDANT NOT PRESSED AND 9TH DEFENDANT IS DEAD AND NO L.RS IMPLEADED.)** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **scm** ## **P.R.RAMAN & T.R.RAMACHANDRAN NAIR, JJ. ======================================== A.S.NO.405 OF 1994** ## **============================= Dated this the 21[st ] day of August, 2008.** ## **J U D G M E N T** ## P.R.RAMAN, J. The plaintiff is the appellant. The suit is for realisation of money based on two promissory notes said to have been executed by the 3[rd] defendant, on behalf of the 1[st] defendantfirm. The plaintiff is stated to be a Partnership Firm. The 1[st] defendant is also a Partnership Firm of which the other defendants are said to be its partners. It was the case of the plaintiff that, the plaintiff being a firm registered under the Indian Partnership Act, the Managing Partner of the firm is competent to sue for and on behalf of the 1[st] defendant-firm. The Managing Partner-3[rd] defendant, executed two promissory notes, on 14.11.1984 and the other on 27.12.1984 for Rs.25,000/- and 50,000/- respectively and it was agreed that the borrowed amount will carry interest at the rate of 12 % per annum. Towards the amount due under the promissory note dated 27.12.1984, Rs.1,000/- was paid on 27.4.1985. No other payment was made. Subsequent to issue of demand notice for the amount due and for the non compliance, a suit was instituted 2 **A.S.NO.405 OF 1994** for an amount of Rs.1,00,700/-. 2. Defendants 1,5 and 6 were removed from the party array. 9[th] defendant reported dead. His legal representatives were not impleaded and the suit was abated against the 9[th] defendant. Subsequently, as for the 4[th] defendant, the suit was not pressed. Defendants 7,12 and 20 remained ex-parte. Though defendants 2 and 3 filed a joined written statement, 3[rd] defendant later submitted no instructions. Hence, for his absence, he was declared ex-parte. Defendants 13,14,18 and 21 entered appearance, no written statement was filed by them. The other defendants filed written statements. Since the 3[rd] defendant is not competent to execute the promissory note on behalf of the firm, he may refer to the written statement filed by the defendants 2 and 3, wherein it is denied that he has not executed any promissory note as alleged in the plaint. He has also denied that he has not received any amount from the plaintif. It was contended that the plaintiff is not a registered firm. There is no licence under the Money Lenders Act and the suit is liable to be dismissed. 8[th] defendant contended that he has no knowledge about the plaint transactions. He has not 3 **A.S.NO.405 OF 1994** borrowed any amount from the plaintiff. In the joint written statement filed by the defendants 10 and 15, it is contended that the plaintiff is not a registered firm and even though, any of the partners are not alive, some of them had retired from the firm. The firm has not been reconstituted and hence the suit is not maintainable. On the date of the execution of the alleged promissory notes, there was no partnership in existence, of which the 3[rd] defendant was the managing partner and the other defendants cannot be said to be partners. Nobody is authorised to receive any amount for and on behalf of the defendants. The 3[rd] defendant has not created any documents. The 11[th] defendant has also contended that the plaintiff-firm is not registered and that defendants 2 to 21 are not partners of the 1[st] defendant-firm. He has not signed any promissory note, hence the suit is not maintainable. 17[th] defendant has also contended that defendants 2 to 21 are not partners of the firm. It was even contended that the 3[rd] defendant is not the managing partner of the 1[st] defendant-firm and the promissory notes have been fraudulently created by the plaintiff in collusion with the 3[rd] defendant. 19[th] defendant filed a separate written statement 4 **A.S.NO.405 OF 1994** contending that the plaintiff-firm is not a registered firm and also - denied the existence of the 1[st] defendant firm. 3. Necessary issues were raised including issue regarding the maintainability of the suit and whether the plaintiff is a registered firm and the person suing is competent to represent the firm. Another issue raised was that the defendants 2 to 21 are partners of the firm. It is not necessary to refer other issues that were raised in the suit. The evidence consists of Exts.A1 to A5 and B1 and deposition of PW1 and DWs 1 and 2. 4. Ext.A1 is the certified extract of the register of firms. PW1 has verified the same and signed the plaint as he is the managing partner of the plaintiff-firm and also admitted that, out of the 22 partners in Ext.A1, two of them have expired and they were not partners of the plaintiff-firm on the date of the institution of the suit. The suit was instituted in the year 1987. Ext.A1 was issued on 7.3.1989. It is admitted by PW1 that, on the death of the partners 1 and 4, there were re-constitution of the firm and a new deed was registered with 19 partners. There was nothing to support the said contention by the extract produced as Ext.A1. In Ext.A1, admittedly, even those who are 5 **A.S.NO.405 OF 1994** not alive at the time of institution of the suit, have been shown as partners. Court below after placing reliance on the decision of the Apex Court in _**M/s.Sreeram Finance Corporation v. Yasinkhan**_ (AIR 1989 SC 1769), held that in view of Section 42 (c) of the Indian Partnership Act, unless there is a contrary provision in the partnership deed, on the death of a partner the firm stands dissolved. Therefore, the firm was a non-existing one and hence the suit is not maintainable. 5. The court below also found on issue number 4 that the 3[rd] defendant is not competent to execute a promissory note, representing the 1[st] defendant-firm and that is done in collision between the plaintiff and the 3[rd] defendant. No authority was shown in favour of the 3[rd] defendant to borrow money or execute money on behalf of the 1[st] defendant firm. Even though Ext.B1, a certified extract of register of firm in respect of the 1[st] defendant was produced, that will clearly show that defendants 2 to 21 are not partners of the 1[st] defendant-firm. At least there were discrepancies in the name and address of some of the defendants 10, 11, 15, 16, 17 and 19 and according to them, none of them are partners of the 1[st] defendant-firm. There was 6 **A.S.NO.405 OF 1994** no acceptable evidence to show that defendants 2 onwards were partners of the 1[st] defendant-firm. It was then considered as to whether the 3[rd] defendant remained ex-parte and therefore whether any presumption arises on admission of the execution of promissory note under Section 18 of the Negotiable Instruments Act. But this contention after consideration was rejected. The 3[rd] defendant has filed a written statement denying the execution of promissory notes. He has not subsequently withdrew his contentions nor admitted the execution of promissory note. Therefore, the burden is still on the plaintiff to show that the promissory note is executed by the 3[rd] defendant at any rate. No evidence adduced to show that any such promissory note if at all executed on behalf of the 1[st] defendant ought to bind defendants 2 to 21 as partners. If as a matter of fact, the promissory notes Exts.A2 and A3 were supported by consideration, plaintiff could have produced better evidence for receipt of this payment by the 1[st] defendant. But nothing was produced in this case. In the above facts, it was found that, after analysing the entire facts on the matter and finding the aforesaid issues, the suit was dismissed against the plaintiffs. 7 **A.S.NO.405 OF 1994** 6. We have heard the parties. 7. Even though, it was contented that the decision referred by the court below is legally not correct, we find that the appellant was not able to substantiate that the 1[st] defendant was subsisting on the date of the suit. The court below has found that the suit is not maintainable on the evidence of PW1 himself. It can be seen that at least two of the partners died subsequently and if at all there is re-constitution of the firm, it ought to have produced such reconstitution deed. Ext.A1 produced would show even the names of those partners who died subsequently. In view of the dispute raised by the defendant, the burden was on the plaintiff to show the existence of the partnership firm as on the date of suit by producing cogent evidence. Therefore the finding that the suit is not maintainable was only to be upheld. 8. So also, defendants 2 to 21 are shown to be partners of 1[st] defendant-firm and the 3[rd] defendant is the managing partner. There is nothing on record to show that the 3[rd] defendant was acting on behalf of the 1[st] defendant or authority to bind the other defendants by any of his act performed. The promissory note, execution of which itself was denied by the 3[rd] 8 **A.S.NO.405 OF 1994** defendant. He also denied the receipt of any consideration. Execution of the promissory note is not proved. Therefore no presumption arises under Section 118 of the Negotiable Instruments Act. Therefore, this is a case where plaintiff miserably failed to support the plaint allegation by producing any supporting materials. The finding of the court below dismissing the suit of which we do not find any error of law. We also find that the court below has appreciated the evidence produced and after due care and meticulous scrutiny of the materials produced, arrived at the finding. There is no merit in the appeal and accordingly, the same is dismissed. However, the parties shall bear their respective costs. ## **P.R.RAMAN, JUDGE** ## **T.R.RAMACHANDRAN NAIR, JUDGE** bkn/-