Guljari Lal Grover vs VIIth Additional District Judge and Others

Tarun Agarwala, J.—Heard Sri Sharad Chandra Upadhyay, the learned Counsel for the petitioner and Sri Kunal Ravi Singh, the learned Counsel for the opposite parties.

It transpires that Canara Bank filed a suit for the recovery of a loan against a partnership firm M/s Hindustan Radios and its two partners, namely, Gulzari Lal Grover and Nikkamal Grover who were arrayed as defendant Nos. 1, 2 and 3 respectively. It transpires that a loan agreement was executed between the parties for overdraft facilities. The amount withdrawn was not refunded. It is alleged that the bank issued a notice for its repayment, which was duly received by one of the defendants and, inspite of the receipt of the notice, the amount was not repaid and consequently, the suit for recovery was filed against the firm and its two partners. Upon issuance of the summons, the defendant No. 2, Gulzari Lal Grover, the present petitioner, filed his written statement alleging that the suit was a nullity in the eyes of law, inasmuch as, the suit was instituted against a dead person. The defendant No. 2 alleged that defendant No. 3, Nikkamal Grover, who was his father had died on 2.12.1984, prior to the filing of the suit, whereas the suit was instituted on 14.7.1988 and therefore, the suit filed against a dead person was a nullity and was liable to be dismissed.

Upon coming to know of the death of the respondent No. 3 through the written statement, the plaintiff-respondent filed an application on the same date, before the trial court, praying that the defendants be directed to intimate the Court the heirs of the deceased No. 3. The said information was supplied by the defendants and, within a week thereafter, an application was filed for substitution of the heirs of defendant No. 3 along with an application u/s 5 of the Limitation Act. The plaintiff contended that the bank was unaware of the death of defendant No. 3 and that inspite of issuance of notice and receipt of the said notice by defendant No. 2, no such intimation was supplied to the bank about the death of the defendant No. 3. The defendant No. 2 raised his objection with regard to the proposed submission and submitted that since the suit was a nullity and that since the suit was instituted against a dead person, no amendment or impleadment in the plaint could be allowed since the court lacked inherent jurisdiction to allow such an application.

The trial court, after considering the matter, allowed the application and directed that upon the death of defendant No. 3, the heirs of the deceased should be added and that his widow should be impleaded as a legal representative of the deceased. The defendant, being aggrieved by the said order filed a revision which was also dismissed. The petitioner has now filed the present writ petition.

The learned Counsel for the petitioner submitted that since the suit was instituted against a dead person, the said suit was a nullity and that no amendment could be allowed for the substitution of a dead person who had died prior to the institution of the suit. The learned Counsel further submitted that since the Court had inherent lack of jurisdiction, the Court had no jurisdiction to allow the application under Order 1 Rule 10 of the C.P.C. or under Order 22 Rules 4 and 9 of the C.P.C. subsequent to the filing of the suit. In support of his submission, the learned Counsel has relied upon the decision of Ali Mohd. Khan Vs. Vijay Tulsi, C. Muttu v. Bharath Match Works AIR 1965 kant 293 and Seth Hiralal Patni Vs. Sri Kali Nath,

On the other hand, the learned Counsel for the respondent bank submitted that the suit was validly instituted and was not a nullity and that the bank was unaware of the death of the defendant No. 3 and bonafidely filed the application for substitution immediately upon becoming aware of the death of the defendant. The learned Counsel submitted that an application under Order 1 Rule 10 of the C.P.C. or u/s 153 of the C.P.C. read with the proviso to Section 21(1) of the Limitation Act could be filed and that the Court had the jurisdiction to entertain and allow the application. In support of his submission, the learned Counsel placed reliance upon a decision of the Supreme Court in Karuppaswamy and Others Vs. C. Ramamurthy, Stephen Laslie Victor D''Souza and others Vs. Stanley Antony D''Souza and others and Laxmi Aithappa Sharma and others, and C. Raju and Others Vs. Dinshaji Dadabhai Italia and Another,

Having given my thoughtful consideration in the matter and upon considering the various case laws cited at the Bar, this Court is of the opinion, that the orders of the Court below allowing the substitution application requires no interference. Even though the arguments were not raised, the Court finds from the pleadings that the matter is covered under Order 30 Rule 4 of the C.P.C., which provides as under:-

Right of suit on death of partner.- (1) Notwithstanding anything contained in Section 45 of the Indian Contract Act, 1872 (9 of 1872), where two or more persons may sue or be sued in the name of a firm under the foregoing provisions and any of such persons dies, whether before the institution or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit.

(2) Nothing in Sub-rule (1) shall limit or otherwise affect any right which the legal representative of the deceased may have-

(a) to apply to be made a party to the suit, or

(b) to enforce any claim against the survivor or survivors.

This provision has been explained by the Supreme Court in Anokhe Lal Vs. Radhamohan Bansal and others, which provides as under:

The aforesaid Rule 4(1) is clearly an exception to Section 45 of the Contract Act. The principle applies to a situation where one person has made a promise to two or more persons jointly. The right to claim performance of the contract arising out of such a promise would then rest with those promisees together during their joint lives and after the death of any of them, such right would devolve on the representative of the deceased promisee jointly with the surviving promisees. Thus if the joint promisees were partners of a firm this provision obliges the legal representative of a deceased partner to join the rest in enforcement of the right to have performance of the contract. This is the nub of Section 45 of the Contract Act. But a conflict of opinions arose between different High Courts regarding interpretation of the rule involved in the said Section. High Courts of Madras, Bombay and Allahabad took the view that in a suit for enforcement of the said right by a firm legal representatives of a deceased partner need not be impleaded, whereas the Calcutta High Court took the contrary view that in such a case legal representatives were necessary parties. In fact Sub-rule (1) of Rule 4 of Order 30 has been prescribed to resolve the said conflict by diluting the rigour contained in the rule embodied in Section 45 of the Contract Act in relation to a suit involving a partnership firm.

What Sub-rule (1) of Rule 4 in Order 30 of the Code provides is that it is not mandatory to join the legal representative of a deceased partner as a party in the said suit. What Sub-rule (2) says, in other words, is that sub-rule(1) is not a hindrance to any legal representative of a deceased partner to get himself impleaded if he has otherwise any right to do so. It is, therefore, clear that Sub-rule (2) does not create any right as such for a legal representative to get impleaded in a suit, but it only operates as an exception to Sub-rule (1). At any rate, Rule 4(2) of Order 30 cannot come into operation in a situation where Order 1 Rule 10 of the Code cannot be invoked.

A perusal of the aforesaid Rules indicates that where a suit is instituted against a firm in its name, and if any partner dies whether before the institution or during the pendency of the suit, it is not necessary to substitute the legal representative of the deceased. Consequently, on a mere reading of this provision, it is clear that non-substitution of the heirs of the deceased partner would not result in the abatement of the suit. Consequently, as a corollary to the above, a suit filed against a dead person will not be treated as nullity. In my opinion, the suit was validly instituted as per the provisions of Order 30 Rule 4 of the C.P.C. Rule 4 only deals with the form of the suit and does not affect the question whether the representative of the deceased party was or not a necessary party to the suit. The death of the original partner before the institution of the suit becomes irrelevant where the suit is brought in the name of the firm and it is not necessary nor mandatory to join the legal representative of a deceased partner. In my opinion, the decree, if any, binds only the interest of the deceased partner in the partnership assets but is not intended that the suit includes the representative of the deceased partner. However, if the liability on the personal property of the deceased partner is to be fixed, then his legal representative must be added. Sub rule (2) of Rule 4 of Order 30 does not create a right that a legal representative has to be impleaded. It only operates as an exception to sub Rule 1 of Order 30 the C.P.C..

In the present case, the Court finds that the bank had arrayed the firm and the partners for being liable joint and several. Since objection was raised by one of the partners, the application was filed by the bank by way of abundant caution to bring on record the legal representative of the deceased of the partner, even though the defendant No. 2, being a legal representative, was already on the record. This application so moved could be treated to be an application under Order 1 Rule 10 of the C.P.C. or an application u/s 153 of the C.P.C., read with the proviso to Section 21(1) of the Limitation Act. In this regard, it would be fruitful, if one peruses the provision of Section 153 of the C.P.C. which reads as under:-.

General power to amend.- The Court may, at any time, and on such terms as to costs or otherwise as it may think fit, amend any defect or error in any proceedings in a suit; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceedings.

In contrast to Order 6 Rule 17 to the C.P.C,. which is limited to the amendment of the pleadings, Section 153 of the C.P.C. provides a general power to order any amendment of any defect or error in any proceedings in the suit for the purpose of determining the real question or issue. Consequently, a suit instituted against a dead person can be amended by substituting his legal representative on an application by the plaintiff if the suit was not barred by limitation against them on the date of the application. Various Courts have held that such an application can be entertained and allowed as held in Haridas Ghosh and Another Vs. Thakur Jogendra Nath Sahdeo, C. Raju and Ors. v. Dinshaji Dadabhai Italia and Anr. 1961 AIR 239 , Ram Kishan Vs. Kartar Singh and Others, Ramjeewan Vs. Chand Mohammed, Kannangara Ismile v. Palayat Kappadakkal Pava Amma and Ors. AIR 1955 Mad 644.

In United Commercial Bank Vs. Dharam Paul Singh and Others, Himanchal Pradesh 56, the defendant died before the institution of the suit, the Court held that the legal representatives could be brought on the record under Order 1 Rule 10 of the C.P.C. read with Section 153 of the C.P.C. . In Gopalakrishnayya and Anr. v. Adivi Lakshamana Rao AIR 1925 Mad 1210, a Full Bench of the Madras High Court held that where an appeal was presented against a dead person, the Court may u/s 153 of the C.P.C. permit the cause title to be amended by substitution of a legal representative. The learned Counsel for the respondent Sri Kunal Ravi Singh also invited the attention of the Court to the provisions of Section 21(1) of the Limitation Act which reads as under:-

Effect of substituting or adding new plaintiff or defendant.- (1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party;

Provided that where the Court is satisfied that the omission to include a new plaintiff or defendant was due to mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

The provision contemplates that where the Court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith, it may direct that the suit as regards such plaintiffs or defendants would be deemed to have been instituted on an earlier date. Consequently, by allowing an application the said suit would be deemed to have been filed against the legal representatives of the deceased. The Supreme Court in Karuppaswamy and Others Vs. C. Ramamurthy, has held that the proviso to Section 21(1) of the Limitation Act could be utilised and the legal representatives of the deceased defendants could be impleaded in an application under Order 22 Rule 4 of the C.P.C. The Supreme Court further held-

A comparative reading of the proviso to Sub-section (1) shows that its addition has made all the difference. It is also clear that the proviso has appeared to permit correction of errors which have been committed due to a mistake made in good faith but only when the court permits correction of such mistake. In that event its effect is not to begin from the date on which the application for the purpose was made, or from the date of permission but from the date of the suit, deeming it to have been correctly instituted on an earlier date than the date of making the application. The proviso to Sub-section (1) of Section 21 of the. Act is obviously in line with the spirit and thought of some other provisions in Part III of the Act such as Section 14 providing exclusion of time of proceeding bona fide in court without jurisdiction, when computing the period of limitation for any suit, and Section 17(1) providing a different period of limitation starting when discovering a fraud or mistake instead of the commission of fraud or mistake. While invoking the beneficent proviso to Sub-section (1) of Section 21 of the Act an averment that a mistake was made in good faith by impleading a dead defendant in the suit should be made and the court must on proof be satisfied that the motion to include the right defendant by substitution or addition was just and proper, the mistake having occurred in good faith. The court''s satisfaction alone breaths life in the suit.

In my view this decision is squarely applicable to the facts and the circumstances of the present case.

Following the judgment of the Supreme Court (supra), the Bombay High Court held the same view in Stephen Laslie Victor D''Souza and others Vs. Stanley Antony D''Souza and others and Laxmi Aithappa Sharma and others,

In any case the suit was filed against the firm and its two partners. Consequently, it cannot be held that the suit was a nullity in the eyes of law merely because one of the partners was dead before the institution of the suit. At best the suit instituted could be held to be a defective suit or not properly instituted which can be cured u/s 153 of the C.P.C. or under Order 1 Rule 10 or Order 22 Rule 4 of the C.P.C. read with the proviso to Section 21(1) of the Limitation Act and under Order 30 Rule 4 of the C.P.C.

In view of the aforesaid, this Court is not inclined to accept the view given by the Jammu and Kashmir High Court in Ali Mohd Khan (supra) or the view taken by the Mysore High Court in C. Muttu (supra) The decision of the Supreme Court in Hira Lal Patni (supra), has no bearings with the facts of the case and the decision given by the Supreme Court was in relation to the validity of a decree challenged in execution proceedings.

In view of the aforesaid, this Court finds that the substitution of the legal representatives of the deceased was rightly brought on record. The impugned order does not suffer from any error of law. The writ petition fails and is dismissed. The Court further directs the trial court to decide the suit expeditiously within one year from the date of the production of a certified copy of this order.