Gambhir Mal Pandiya Vs. J. K. Jote
Mills Co., Ltd., Kanpur & ANR  INSC 147 (17 April 1962)
17/04/1962 HIDAYATULLAH, M.
CITATION: 1963 AIR 243 1963 SCR (2) 190
R 1965 SC1718 (8)
Partnership--Decree against firm--Execution
against partner not summoned in suit--Liability of such partner--Whether
partner can raise issues between himself and other partners--Code of Civil
Procedure, 1908 (Act 5 of 1908), O. 21. r. 50(2).
A contract entered into between the
respondent company and a firm consisting of two partners, T and G, was signed
by T. A dispute relating to the contract wag referred to arbitration in
pursuance of the terms of the contract providing for such arbitration, and an award
was given in favour of the company. The award was made into a rule of the court
and a decree was passed against the firm. In execution of the decree the
company sought to proceed against the personal property of G and made an
application for the leave of the Court under 0. 21, r. 50(2), of the Code of
G pleaded that the award and the decree
passed thereon were not binding on him on the grounds, that the other partner
who had signed the contract had no authority to enter into the agreement
Containing the arbitration clause or to refer the dispute to arbitration and
that he had not been served in the proceedings relating to the arbitration.
Held, that G was liable for the decree passed
against the firm. A decree passed against a firm may be executed against a
partner who was not summoned in the suit, but 0.
21, r. 50 (2), of the Code of Civil Procedure
gives him an opportunity of showing cause if he disputes his liability.
In such a case he can prove that he was not a
partner or that he was not a partner at the time the cause of action accrued.
He can also question the decree on the ground of collusion, fraud or the like,
but he cannot have the suit tried over again or arise issues between himself
and his other partners.
Jagat Chandra Battacharjee v. Gunny Hajet
Ahmed, 926) I.L.R. 53 Cal. 214, In re Malabar Forests & Rubber Co. A.I. 1932
Bom.334,Rana Harkishandas v.Rana Gulabdas, I. L. R.  Bom. 193, C. M.
Shahani v. Havero Trading Co., (1944)51 C. W. N. 488, Maharane Mandalsa Kumari
Devi 191 v. M. Ramnarain Private Ltd., I.L.R.  Bom. 1468 and Kuppuswami
v. Polite Pictures, I.L.R.  Mad. 1106, approved.
Bhagvan v. Hiraji,A.I.R. 1932 Bom. 516
Ceoverji Varjang v. Cooverbai Nagsey, A.I.R. 1940 Bom. 330 and In re Tolaram
Nathmull I.L.R.  2 Cal. 312, disapproved.
Munster v. Cox, (1885) 10 App Gas-68O Davis
v. Hyman & Co  I:K.B. 854 and Weir & Co. v. Mc Vicar & Co.,
 2 K.B. 117, relied. on. CIVIL APPELLATE JURISDICTION : Civil Appeal No.
19 of 60.
Appeal from the judgment and decree dated
September 25, 1957, of the Allahabad High Court, in Civil Revision No. 815 of
M. C. Setlvad, Attorney-Gewral for India and
B. P. Maheshwari, for the appellants.
S. M. Sikri, Advocate-General for the State
of Punjab and K. P. Gupta, for respondent No. 1.
1962. April 17. The Judgment of the Court was
delivered by HIDAYATULLAH, J.-This is an appeal on a certificate granted by the
High Court of Allahabad against an order dated September 25, 1957, dismissing a
revision petition filed by the present appellant.
The facts of the case, are very simple.
Messrs. J. K. Jute Mills Co. Ltd. (the answering respondents), entered into a
contract with a firm, Messrs. Birdhi Chand Sumer Mal, for the supply of certain
articles. The 'contract was entered into by one Seth Tikam Chand, a partner in
the firm. One of the terms of the contract was that in a case of a dispute
between the parties, it would be referred to the Merchants Chamber of Commerce,
Kanpur, for arbitration. It appears that a dispute arose, which was referred to
the Chamber of Commerce, 192 and an award in favour of the Mills was given on
January 8,1947. Two years later, the award was made into a rule of the Court,
and a decree followed in favour of the Mills.
The firm of Birdhi Chand Sumer Mal consisted
of two partners; the other partner was one Mr. Pandiya, the
predecessor-in-interest of Seth Gambir Mal Pandiya, the appellant. In execution
of the decree passed against the firm, the Mills wished to proceed against the
personal property of Mr. Pandiya, and filed an application for the leave of the
Court under 0.21, r. 50(2), of the Code of Civil Procedure. In answer to the
notice which was issued, the appellant, Seth Gambir Mal Pandiya, appeared and
raised objections. He contended that he had not been served in the proceedings
relating to the arbitration; nor of the making and the filing of the award in
Court. He also contended that Seth Tikam Chand, who had signed the contract containing
the arbitration clause with the Mills, had no authority to enter into an
agreement containing such a clause or to refer the dispute to arbitration on
behalf of the other partners. He, therefore, maintained that the award was not
binding on him.
The connections of the appellant were not
accepted by the First Civil Judge, Kanpur, who allowed the application of the
Mills and granted them leave under the rule. The appellant then filed an
application for revision in the High Court of Allahabad, which was heard by C.
B. Agarwala and Beg, JJ., Agarwala, J., held that although the decree passed
against the firm was to be deemed to have been passed against all the
individual partners thereof, it was binding proprio vigore only against the
partnership property and personally against those persons, who are mentioned in
cls.(b) and (e) of r. 50(1), 0. 21, and that the decree was not binding against
the appellant, who had 193 not been served in the suit and would be binding
only when a summons was served upon him to appear under sub-r. (2) and his liability
was determined. The reason given by the learned Judge was that a person who was
not served in the suit could question his personal liability under the decree,
even though he admitted himself to be a partner, upon any ground which was open
to him if he had been served in the suit, and that such a person could raise
the objection that as the decree was the result of an, reward which was based
upon an agreement of reference to arbitration to which he was not a party, he
was not personally liable under the decree, Beg, J., on the other hand, held
that inasmuch as the appellant admitted that he was a partner in the firm of
Birdhi Chand Sumer Mal, he was not entitled to raise any objection either to
the contract or the reference to arbitration or the award. The learned Judge
having disagreed about the interpretation to be placed on sub-r. (2) of r.
50, the case was laid before Mukherji, J. He
agreed with the conclusion of Beg, J., and in accordance with his opinion, the
application for revision was dismissed. The Divisional Bench, however,
certified the case as fit for appeal to this Court, and the present appeal has
Order 21, r. 50, of the Code of Civil Procedure
reads as follows;"50. (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 XXX or who has admitted on the
Pleadings that he is or who has been adjudged to be, a partner;
194 (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), clause (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 subrule (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) gave as against any property of the
partnership, a decree against a firm shall not realise, render liable or
otherwise affect any partner therein unless he has been served with a summons
to appear and answer." This rule deals with the execution of decrees
obtained against, firms. It enable the decree to be executed against the
partnership assets. It also enables that the decree may be executed against any
one who appeared in the suit, and admitted that he was a partner or who was
lawfully adjudged in the suit to be one. It also enables 195 that the decree
may be executed against any person lawfully summoned in the suit as a partner
but who did not choose to appear individually to defend the action. Lastly, it
provides that if it is desired to execute the decree against a person as being
a partner of the firm who does not belong to the categories already mentioned,
then the leave of the Court must be obtained and the Court before granting such
leave should summon that person whose liability, unless he admits it, should be
tried as an issue. So far, the matter is quite simple. The difficulty appears
only when one begins to give a meaning to the expression 'the liability of such
person" and this raises the question: what kind of defences are open to
such a person ? The learned Attorney General has argued that the expression
admits of a narrow construction, a wide construction and a construction which
is in between the two. The narrow construction, according to him, is that the
only. issue to be tried is whether that person was a partner or held himself
out to be one. The wide construction, according to him, is that the issue may
take in all defences open to the partnership not raised in the suit and also
all defences personal to that person to avoid his individual liability. Under
the middle view, according to him, the Court is to try an issue relating to the
personal liability of that person. On the other hand, the learned
Advocate-General of the Punjab, who appeared for the respondent Company,
contends that if the person summoned, admits that he is a partner, there is
nothing further to try, and execution can issue against him individually
without trying any other issue he may wish to raise.
This contention as raised by the learned
Advocate-General prevailed in the Allahabad High Court, while the contention of
the learned Attorney General was accepted by Agarwala, J.
Order 21, r. 50 (2), of the Code deals with
executions, but really is a part of the provisions 196 relating to suits
against firms. Those provisions are contained in O. 30 of the Code, and must be
viewed alongside to get the true meaning of the words. Order 30 and the
provisions of r. 50 of O. 21 were taken from O. XL VII, a, of the Rules of the
Supreme Court in England. Though there are slight variations in language, the
provisions . of our Code are in pari material with the provisions of the Rules
of the Supreme Court, as amended in 1891. Under common law,. an action against
firms was not known. All actions had to be brought against the partners
individually. After the Judicature Acts, rules were framed in 1883, which
enabled actions to be brought against firms in the names of the firms.
The rules provided forms for appearances by
persons who entered appearances in answer to summons lawfully issued;
but the later rules which are more
exhaustive, though they do not dispense with the forms of appearance, prescribe
how the presence of the firm and of individual partners is to be secured and
how defences are to be raised. It is not necessary to reproduce the English
rules. They are to be found in the Annual Practice, Vol. 1, P. 1151 (1962). The
rules of 1891 are almost reproduced as S 30. 30 and 0. 21, r. 50, of the Code
of Civil Procedure. Order 30 deals with procedure in suits against firms in the
firm name, and 0.
21, r. 50 with the execution of decrees
obtained against firms. These provisions are in themselves a Code. To
understand the meaning of r. 50 (0. 21), one must first consider the provisions
of 0. 30, which contains ten rules.
The first rule enables a plaintiff to sue in
the name of the firm, two or more persons liable as partners, or of which they
were partners when the cause of action accrued; and the plaintiff may also
apply to the Court for a statement of the names and addresses of the persons
who were, at the time of the accrual of the cause of 197 action, partners in
such firm. The rule also permit the signing of the written statement and the
verification by one partner only. The second rule enables the defendant to ask
for the disclosure of the names of partners, where a firm sues as a plaintiff.
The third rule then provides for service of summons upon the firm and the
partners. Such summons may be served, as the Court may direct:(a) upon all or
any of the partners; or (b) upon any person having control or management of the
business, at the principal place of business of the firm within India.
A service upon the firm is deemed to be good
service, whether all or any of the partners are with in or without India. But
if the firm is dissolved to the knowledge of the plaintiff, the summons must be
served on every person within India whom it is sought to make liable. The
fourth rule provides for right of suit on death of partner. We are not
concerned with that eventuality. The fifth rule then provides that where the
summons is issued to a firm under r.
3, every person served shall be informed by
notice whether he is served as a partner or as a person having the control and
management of the business or both; but in the absence of notice the person is
deemed to be served as a partner.
Rule 6 lays down that persons served as
partners in the name of the firm shall appear individually in their own names,
but all subsequent proceedings shall, nevertheless, continue in the name of the
firm. Rule 7 then says that if a notice is served upon a person having the
control or management of the partnership business, he need not appear unless he
is a partner. Rule 8 enables a person served as a partner to appear under
protest denying that he is a partner, but the appearance does n ot preclude the
plaintiff from serving a Summons 198 on the firm and obtain an ex party decree,
if no other partner appears. The remaining rules do not concern us in this
From the above analysis, it is clear that a
plaintiff need sue only the firm, but if be wants to bind the partners
individually he must serve them personally, for which purpose he can get a
discovery of the names of partners of the firm. Persons served individually may
appear and file written statements, but the proceedings go on against the firm
only. They may, however, appear and plead that they are not partners or were
not partners when the cause of action arose. But even if no other partner
appears, there may be a decree against the firm if the firm has been served
with the summons The gist of 0. 30 thus is that the action proceeds against the
firm, and the defence to the action by persons admitting that they are partners
is on behalf of the firm. Persons sued as partners may, however, appear and
seek to establish that they are not partners or were not partners when the
cause of action arose; but if they raise this special plea, they cannot defend
the firm. This was laid down in connection with the analogous provisions of the
English rule in Weir & Co. v. Mc Vicar & Co.(1). Partners appearing and
admitting their positions as partners can only defend the firm, because the
suit continues in the firm's name. The law is thus not concerned with a fight
between the partners inter se, and an action between the partners is not to be
tried within the action between the firm and the plaintiff. of course, the
partners who admit that they are partners need Dot raise a common defence. They
may raise inconsistent defences., but all such defences must be directed to
defend the firm and the plaintiff must surmount all such defences. See Ellis v.
Wadeson (2). The purport of the rules as well as the two English oases (1)
(1925) 2 K. B. 127.
(2) (1889) 1 Q B. D. 714.
199 which have correctly analysed, the rules
on the subject (the English and the Indian rules being alike) is that the
partnership is sued as a partnership, and though the partners may put in
separate defences, those defences must be on behalf of the firm. If some of the
partners do not appear, those that do, must defend the firm; but if no proper
defence is raised by them, the plaintiff cannot be deprived of a judgment. The judgment
and decree thus obtained are executable against the partnership assets.
This brings in the provisions of 0. 21, r.
50, of the Code.
That rule enables a decree obtained against a
partnership firm to be executed against the property of the partnership.
t, it enables the decree to be executed
individually against a person who appeared in his own name under r. 6 or r. 7
0. 30 or who admitted on the record or was
adjudged to be a partner. Next, the decree can be executed against any person
who is served individually as a partner but has failed to appear. Next, it
permits the decree to be executed with the leave of the Court against persons
belonging to the category of the persons above mentioned, provided that. they
are summoned and either admit their liability or after an issue is tried, their
liability is determined.
A large number of cases decided in India and
England have laid down the kind of issue which may be tried under 0. 21.
r. 50 (2), of the Code and the cognate
provisions of the English rules. Since the English cases are first in point of
time, we shall begin with them. It must be remembered in this connection that
the English rules prescribe forms for recording appearance by persons summoned
in actions against firms. These are to be found in the Annual Practice, Vol. 1
(1962), at p. 1 160 and are six in number:
(1) A. B. a partner in the firm of Brown
200 (2) A.B. a partner in the firm of Brown,
Evans & Co. sued as Brown & Co.
(3) A.B. a partner in the firm of Brown &
Co. at the time the alleged cause of action arose.
(4) A.B. served as a partner but who denies
that he was a partner in the abovenamed firm at any time.
(5) A.B. served as a partner in the firm but
who denies that he was a partner at the time of the accruing of the alleged
cause of action.
(6) A person appears subsequently and desires
to appear as a partner.
These forms are appropriate to an action, but
they are also used for persons summoned under O. XLVIII. a, r. 8, corresponding
to our 0. 21, r. 50(2).
In Jackson v. Litchfield (1), which was
decided prior to the rules of 1891 the writ was issued against a firm in the
firm name. It was held that the judgment must be entered against the firm, but
it could not be entered separately against an individual member of the firm who
made default in appearing in the action. The decision thus was that if the
action was against the firm, the judgment should be against the firm.
In Munster v. Cox (2), the writ was against R
& Co. The appearance was "R trading as R and Co." Judgment was by
consent. Later, the judgment was sought to be executed against one Cox who was
not summoned, and for this purpose, application was made for striking out the
words "R sued as" from the appearance recorded. This was disallowed.
On appeal, Selborne, L. C., dealing with the former (1) (1882) 8 Q.B.D. 474.
(2) (1885) 10 App. Cas. 680.
201 O.XLII, r. 8 (corresponding to 0. 21, r.
50(2), observed as follows :
"If execution was sought against any
other person as being a member of the firm, then the Court was to exercise its
discretion as to whether it would allow execution to issue or not, and upon
what terms, and, as justice seemed to require, might let in the party sought to
be trying the action over again, but by giving him, as against the application
to make him answerable, the benefit of any defence which he might have had if
he had been made a party on the record or had had notice the proceeding, so as
to relieve him from the risk of suffering by the collusion or the improper
defence of his co-partner." This would show that the defences which the
person summoned to answer an execution application can raise are the defences
open to him if he had been summoned in the suit.
If he denies that he is or was a partner when
the cause of 'action arose, the issue to be tried would be only that. If he
admits that he is or was a partner at the material time he can defend on the
ground that the decree was the result of collusion, fraud or the like.
In Ellis V. Wadeson (1), an action was
brought against a firm in 'the firm name. There were two partners, one of whom
died after the writ and appearance. The surviving partner put in a defence not
on behalf of the firm but a personal defence to the action, but this was
disallowed. It was pointed out that if a partner is not served and is ignorant
of the action, execution cannot be levied against him unless he is given an
opportunity and the plaintiff must establish his liability as a partner of the
firm, but the plaintiff (1) (1989) 1 Q.B.D. 714.
202 is not required to meet a defence of a
Again, in Davis v. Hyman & Co. (1), in an
action against a firm, only one person entered appearance, and judgment was
entered against the firm. When the plaintiff applied for a summons against
another person under 0. XLVII. a, r. 8 [0.
21, r. 50(2)], the issue to be framed by the
master was :
"Whether the said S. M. H. was or has
held himself out as a partner in the defendant firm." Phillimore, J.,
modified the issue to read:
"Whether S. M. H. was at the date the
bill of exchange sued on was given or at the date when the goods were supplied,
a member of the defendant firm of Hyman & CO." The Court of Appeal
vacated the order of Phillimore, J. Stirling, L.J. observed:"Here we have
a person who is alleged to be liable 'as a member of the defendant firm, and
the only question which requires solution is whether his liability arises from
his being a member of the firm or from his having held himself out as a partner
It is suggested that, if this form of order
is adopted, the defendant in the issue might be deprived of some defence that
he might have had if he had been served with the writ and had an opportunity of
appearing in the action.
As to this I would say that under the rule
the question to be determined is the general one of the liability, as a member
of the firm, of the person sought to be charged, and it seems to me that an
issue could, in a proper case, be so framed as to include any (1)  1 K.B.
203 proper defence. No such defence is
suggested in the present case." In Weir & Co. Mc Vicar & Co. (1),
the action was against a firm. A person who was served as a partner entered
appearance under protest denying that he was a partner. It was held that he
could not at the same time raise the defence of the firm, nor could he insist
that the issue regarding his being a partner be tried first. Scrutton, L.J.,
referred to the provisions of O. XLVIII. a, r. 8 [O.
21, r. 50,2)], to compare the position in the
trial of the suit and that in execution, and made the following remarks :
" ... Order XLVIII. a, r. 8 provides
that an issue may be directed to try the question whether the alleged partner
or not. But it seems clear that in that issue he cannot raise the question of
the liability of the firm, for if he could you might have two separate
judgments on the same cause of action, the one already obtained for a specified
amount in the action against the firm, and the other, for possibly a reduced
amount or for nothing at all, on the trial of the issue under r. 8. The only
question that can be raised on the trial of that issue is whether the person
against whom execution is sought was a partner at the material time or
not." It was also observed in that case:
"Order XLVIII. a, r. 8, assumes that
judgment has already been obtained against the firm by proper service, and then
proceeds to point out who are the persons against whom it is to be
enforced." The English cases thus establish that even in an action the
defences may be of two kinds-(1) a (1)  2 K.B. 127.
204 personal defence that a person summoned
as a partner is not a partner and was not a partner at the time the cause of
action accrued (2) defence of the firm on the ground of collusion, fraud or the
like but not a personal defence. A person who raise the first defence is
precluded from raising the second, and a person who admits that he is a partner
can only defend the firm but Dot himself. These two rules apply to persons
summoned as partners. Persons Dot summoned as partners need not appear. But
their liability by that reason alone is neither enlarged nor discharged.
Indeed, in our Code also, 0. 21, r. 50(4), lays down:
"Save as against any property of the
partnership, a decree against a firm shall not realase, render liable or otherwise
affect any partner therein unless he has been served with a summons to appear
and answer." Where the person is sought to be made liable in execution,
the defences he can raise, according to the English rulings above examined,
are: (i) he can establish that he is not a partner or that he was not a partner
when the cause of action arose, and ,the plaintiff can prove that he held
himself out as such ; (ii) he can relieve himself against collusion and fraud
of his partner. He cannot, however, raise a defence to have the action tried
over again and he cannot raise a defence personal to himself as against his
partner or partners.
We shall now consider the decisions of the
High Courts in India. It will be found that, with the exception of one or two
rulings, the same views have been expressed in India also. In Jagat Chandra
Bhattacharjee v. Gunny Hajee Ahmed (1). a summons was served upon. the firm but
not upon one K.
A decree was obtained against the firm and
the decree-holder applied to execute it (1) (1926) 1. L.R. 53 Cal. 214.
205 against the legal representatives of K by
attaching property forming the estate of K. It was admitted that K was a
partner. It was held that the assets of A were liable. Sanderson, C. J., held
that if in an inquiry under 0. 2 1, r. 50(2), it were decided that a person
summoned as a partner was, in fact, a partner, his liability is established.
'The intention of the rule is to give an opportunity to such a person to
dispute his liability.
Bucklund, J., held that if after appearance
the liability is admitted the Court may grant leave fourthwith, and that it is
not open to the person summoned to challenge the decree.
In In re Malabar Forests & Rubber Co.(1),
Mirza, J., held that where a decree has once been passed against a firm, an
individual partner who was not summoned personally, may be summoned in the
execution proceedings, and can contend that he was not a partner but cannot be
allowed to challenge the authority of the other partner or partners to enter
the transaction in dispute. In Bhagwan v. Hiraji(2), Patkar and Murphy, JJ.,
took a different view. In that case, a plea that the partners were not
authorised to refer a dispute to arbitration was allowed to be raised. Reliance
was placed upon the fourth sub-rule of 0. 21, r. 50. In Coverji Varjang v.
Cooverbai Nagsey (3 ),the judgmentof Wadia, J., from which an appeal was taken
to the Divisional Bench is printed. In that judgment, Wadia, J., held that
21, r. 50(2), the person summoned to show
cause may not only prove that he was not a partner but take other defences
appropriate to his own liability. The learned Judge apparently differed from
Mirza, J., and preferred the view in Bhagwan v. Hiraji(2), and pointed out that
the view was accepted in Tolaram Nathmull v. Mahomed Valli Patel (4) and
Chhatoo Lal Misser & Co. v. Naraindas Baijnath Prasad (5). , In the last
mentioned case, two defences (1) A.I.R. 1932 Bom.334. (2) A.I.R. 1932 Bom. 516.
(3) A.I.R. 1440 Bom.330 (4) (I.L.R.  2
(5) (1928) I.L.R. 56 Cal. 704.
206 were raised(1) that the person summoned
was not a partner, and (2) that the decree could not be personally executed
against him as he was a ward under the U. P. Court of Wards Act. The second
plea was one of a special protection under law, and the case is thus
The. Bombay view has, however, changed in
recent years. In Rana Harkishandas v. Rana Gulab das (1), Gajendragadkar and
Gokhale, JJ., dissented from Bhagwan v. Hiraji(2) and laid down that in an
enquiry contemplated under 0. 21, r. 50(2), the only question that can be gone
into is whether the person summoned as a partner to show cause was a partner at
the material time or not. The learned Judges observed that unless the plea on
this point by the person summoned to show cause succeeded, leave could not be
withheld. According to the learned Judges, 'liability" in sub-r. (2) of
r.50 means liability as a partner. They relied upon the decision of the
Calcutta High Court in C. M. Shahani v. Havero Trading Co. (3), in which Das,
J. (as he then was), and on appeal, McNair and Gentle, JJ., had taken the same
view and had dissented from the earlier Calcutta view. Rana Harikishandas's
case(1) was followed by another Division Bench of the Bombay High Court in
Maharanee Mandalsa Kumari Devi v. M. Ramnarain Private Ltd. ( 4) A similar view
was earlier expressed by the Madras High Court in Kuppuswami v.
In our judgment, the view expressed in these
later cases is the correct one. As we have pointed out, 0. 30 of the code
permits suits to be brought against firms. The summons may be issued against
the firm or against persons who are alleged to be partners individually. The
suit, however, proceeds only against the firm. Any person who is summoned (1)
I.L.R.  Bom. 193.
(2) A.I.R. 1932 Bom. 516.8.
(3) (1944),51 C.W.N.488.
(4) I. L. R.[ 1959] Bom. 146.
(5)1.L.R. Mad..1106 207 can appear, and
prove that he is not a partner and never was; but if he raises that defence, he
cannot defend the firm. Persons who admit that they are partners may defend the
firm, take as many pleas as they like but not enter upon issues between
themselves. When the decree is passed, it is against the firm. Such a decree is
capable of being executed against the property of the partnership and also
against two classes of persons individually. They are (1) persons who appeared
in answered to summons served on them as partners and either admitted that they
were partners or were found to be so, and (2) persons who were summoned as partners
but staved away. The decree can also be executed against persons who were not
summoned in the suit as partners, but r. 50(2) of 0. 21 gives them an
opportunity of showing cause and the plaintiff must prove their liability.
This enquiry does not entitle the person
summoned to reopen the decree. He can only prove that be was not a partner, and
in a proper case, that the decree is the result of collusion, fraud or the
like. But, he cannot claim to have other matters tried, so to speak, between
himself and his other partners. Once he admits that he is a partner and has no
special defence of collussion, fraud, etc. the Court must give leave forthwith.
In our opinion, of the three constructions
suggested by the learned Attorney-General, the widest meaning cannot be
attributed to the word "liability". The proper meaning thus is that
primarily the question to try would be whether the person against whom the
decree is sought to be executed was a partner of the firm, when the cause of
action accrued, but he may question the decree on the ground of collusion,
fraud or the like but so as Dot to have the suit tried over again or to raise
issues between himself and his other partners. It is to be remembered that the
leave that is 208 sought is in respect of execution against the personal
property of such partner and the leave that is granted or refused affect only
such property and not the property of the firm. Ordinarily, when the person
summoned admits that be is a partner, leave would be granted, unless he alleges
collusion, fraud or the like. No such question has been raised in this case,
and the decision given by the High Court cannot be disturbed.
The appeal fails, and is dismissed with