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Report No. 27

Order XXX, rule 2

An amendment has been made to Order XXX, rule 2 (3) by the High Court of Orissa, under which the names of the partners disclosed in the manner stated in Order XXX, rule 2(1) "shall appear in the decree". The question whether this amendment should be adopted for facilitating the execution of the decree against individual partners has been considered, but it is felt that there is no need for any such provision.

Order XXX, rule 8

1. The proposed amendment follows the Bombay Amendment to Order XXX, rule 8 with minor verbal changes. The following discussion will show the significance of the Bombay Amendment.

2. When a person denies that he is a partner and appears under protest under rule 8, the plaintiff may either disregard his appearance and serve the other partners (Order XXX, rule 3), or may insist that the appearance under protest be struck out. The option is entirely with the plaintiff. The defendant cannot insist on a decision1-2-3. Further, he cannot resist the claim on merits independently from the "firm" (Order XXX, rule 6).

3. The Bombay Amendment deals elaborately with the case of a person served under Order XXX who appears under protest. In the absence of such a provision, hardship often results, because, while the plaintiff could postpone the decision of the question of such person's being a partner, such person himself could not get the question decided even later under Order XXI, rule 50 (according to the better view). The position is thus "incongruous", as was observed by Sir Norman McLeod3.

4. The Bombay Amendment is somewhat similar to the amendment in rule 7 of Order 48A, R.S.C. made in 1929 in view of the decision in Weir & Co. v. Mcvicar & Co., (1925) 2 KB 127 (134) (CA) holding that a person appearing under protest cannot dispute the liability of the firm, and cannot have the question of his partnership decided before other issues. [The English rule is now replaced by Revised R.S.C. (1962), Order LXXXI, rule 4, sub-rules (2) to (5)].

Stated briefly, the effect of the Bombay Amendment is, that such person can have the question whether he was a partner decided. If he is held to be a partner, that does not preclude him from denying the firm's liability. If it is held that he was not partner and not liable as such, that does not preclude the plaintiff from otherwise serving a summons on the defendant firm, etc., but in that event the plaintiff shall be precluded from alleging the liability of that person as a partner, in execution proceedings.

5. The Bombay Amendment was made in pursuance of the suggestion of Shah J.4. Shah J. held that the combined effect of rules 3, 6 and 8 of Order XXX was, that persons served as partners could raise only such defences as were open to a partner, and could not have the issue as to whether they were or were not partners tried in the suit before the final decree was passed.

6. A defence on the merits in execution cannot also be taken- by such persons. In Order XXI, rule 50, the expression "such liability is disputed" has been construed in Bombay to be confined to liability as a partner. The validity of the decree qua the partnership property and qua the persons mentioned in Order XXI, rule 50 (1) (b) (c) cannot therefore be effected or impaired in proceedings under rule 505-6. The point has now been decided by the Supreme Court7, which has held that the person served under rule 50 can only prove that he was not a partner and (in a proper case) that the decision was the result of fraud, collusion or the like.

In view of this position, the Bombay Amendment appears to be worth adopting.

1. See International v. Mehta & Co., ILA 54 Cal 1057: AIR 1927 Cal 758 (760).

2. Nandalal v. Baker Jafer Co., AIR 1940 Born 390. 3. Ajit Singh v. Grunnin & Co., AIR 1925 Born 494 (496).

4. Rehman Khan v. Bombay Iron Syndicate, AIR 1953• Bom 23 (26) para. 14 (decided on 13-8-1951) (Shah J.).

5. Mandalsa v. M. Ramnarain Ltd., AIR 1959 Born 529.

6. Harkishandas v. Gulabdas, AIR 1956 Bor-. 513 (514, 515) (Gajendragadkar and Gokhale JJ.) (Calcutta cases also discussed and Das J's judgment inC.M. Shahani v. Havero Trading Co., 51 CWN 488 agreed with).

7. Gambir Mal v. J.K. Jute Mills, (1964) 1 mq 92 (SC): AIR 1964 SC 243 (February).



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