Report No. 27
Order XXI, rule 50(1)
The change in sub-rule (1) is purely verbal, being intended to substitute the correct reference (section 30 of the Partnership Act) instead of the old section (section 247, Contract Act).
Order XXI, rule 50 (2)
1. The expression "such liability is disputed" in Order XXI, rule 50(2) had caused some controversy. But the narrower view, namely, that the person concerned could only dispute the fact of his being a partner, was generally preferred1-2.
2. In a recent Supreme Court case2, it has now been held that under this sub-rule, the person can only prove that he was not a partner, and (in a proper case) that the decree is the result of collusion, fraud or the like. He cannot re-open the whole question of the liability of the firm.
3. Hence no clarification is now needed.
1. See also discussion under Order 30, rule 8.
2. See AIR 1956 Bom 513 (515) and AIR 1955 Mad 154, for a good discussion.
3. See Gambir Mal v. J.K. Jute Mills, (1964) 1 MLJ 92 (SC): AIR 1963 SC 243.
Order XXI, rule 50 (2) "Court which passed"
1. Where a decree has been passed against a firm and execution is sought against persons other than those mentioned in Order XXI, rule 50(1), the decree-holder has to apply for leave under Order XXI, rule 50 (2) to the "court which passed the decree". A controversy has arisen as to whether such leave can be granted only by the court which passed the decree, or whether the court to which the decree is transferred for execution can also grant such leave.
One view is that only the former court can grant such leave1-2. A contrary view is that by virtue of section 42, the transferee court can also determine the question3-4-5.
2. Local Amendments made by certain High Courts (Patna, Orissa and Allahabad) permit the application to be made to the transferee court also. This is one of the points on which clarification was suggested in the Fourteenth Report6.
3. The Civil Justice Committee7 also felt, that though section 42 was widely expressed, yet, in view of the specific language used in Order XXI, rule 50, it was doubtful whether the powers under that rule could be exercised by any executing court, and suggested clarification.
4. It is, however, considered that these provisions should remain only with the Court which passed the decree. That Court would be in a better position to deal with such applications.
Necessary amendment8 is proposed in section 42.
1. Pulin v. lswar, AIR 1945 Cal 303 (B.K. Mukherjea & Ellis JJ.).
2. Pottiswami v. Sulaiinan, AIR 1942 Mad 501.
3. Sital v. Robson and Co., ILR 43 All 394: AIR 1921 All 199.
4. Bombay Co. Ltd. v. Kahan, AIR 1931 Lah 736 (Addison & Coldstream JJ.).
5. Abdul v. Dhanpat, AIR 1931 Lah 507.
6. 14th Report, Vol. I.
7. Civil Justice Committee (1924-25) Report, p. 387, para. 15.
8. See section 42 (as proposed).
Order XXI, rule 50 and joint family firms/
1. A controversy exists as to whether Order XXI, rule 50 applies to joint family firms. One view is that it does not1. The Calcutta High Court2 expressed the same view in one case. But, as, in a later decision3, it has regarded Order XXX, rule 1 as applicable to joint family firms, it is likely that it may regard Order XXI, rule 50 as also applicable to them if the question now arose. The Patna High Court regards Order XXX, rule 1 as applicable to joint family firms4, and has observed that Order XXI, rule 50 should be read with Order XXX.
2. The Punjab High Court5 has held, that in view of the amendment to Order XXX made in Punjab, Order XXI, rule 50 also applies in Punjab to joint family firms.
3. It is however considered, that even if the provisions of Order XXX are made applicable to joint family firms6, the provisions of Order XXI, rule 50 should not apply to such firms, and that this proposition should be enacted. Necessary change is proposed.
4. It is considered unnecessary to make any other provision as regards the property against which decrees passed against joint family firms may be executed.
1. Maturi v. Bhagaban, AIR 1950 Ori 189.
2. Moti v. Chhajumal, AIR 1942 Cal 613.
3. Jamanadhar v. jannina Ram, AIR 1944 Cal 138 (Mitter and Blank JJ.)
4. Alakh Chandra v. Krishna Chandra, AIR 1941 Pat 596.
5. Punjab National Bank v. Raj Mnl, AIR 1959 Punj 362 (Falshaw and Dua JJ.).
6. See Order 30, rule 10 (proposed).