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Judgment
P.K. Tripathy, J.—Defendant in Money Suit No. 110 of 1971 has preferred this appeal against the decree passed on October 30, 1979 by the Subordinate Judge, Berhampur in Money Suit No. 110 of 1971. The plaintiff/respondent, in this appeal, is being defended by the legal representatives who were substituted after his death.
Plaintiff filed the aforesaid suit for recovery of Rs. 24,480/- along with future interest on the grounds that the defendant being a front door neighbour to the plaintiffs cloth shop, was in the habit of taking clothes on credit as well as cash loan on occasions. Plaintiff during the relevant period was a registered money lender. So far as the transactions from 13.5.1965 up to 5.10.1968 are concerned, the defendant admitting the transactions as conceding to the liability executed the suit pronote on 8.10.1968 for a sum of Rs. 18,000/- with simple interest '' 12% thereon. The defendant having not repaid the same, plaintiff issued a registered notice on 28.8.1971 demanding repayment and when the defendant/appellant did not respond to that notice, he instituted the suit with the prayer for recovery of the aforesaid amount.
In his written statement, defendant admitted about the suit pronote, but advanced the contention that the accounts between the year 1965 and 1968 were not properly maintained and apart from that the said accounts relating to the cash loan and the credit were inflated on 8.10.1968 he was prevailed upon to execute the suit pronote though no consideration passed on that date. He further pleaded that the suit by the plaintiff is not maintainable because the cloth shop was a partnership firm of the plaintiff and his brother and the other partner has not joined the plaintiff in the suit. He further pleaded that the suit is barred by law of limitation and not maintainable because of violations of the provisions of Orissa Money Lenders Act, 1939 (in short ''the Act''). Defendant also stated that plaintiff did not properly account some repayments which he had made. Accordingly he prayed to dismiss the suit.
On the basis of the aforesaid pleading, Trial Court framed the following issues :
ISSUES
(1) Is the suit promissory note true, valid and supported by consideration ?
(2) Is the suit not hit by the provisions of the Orissa Money Lenders Act for non-compliance of Section 18-B(2) and Rule 11 (iii) ?
(3) Is the suit not hit u/s 69(2) of the Indian Partnership Act ?
(4) Is the suit maintainable in law ?
(5) Is the suit barred by limitation ?
(6) To what reliefs ?
In the Court below, plaintiff examined himself and relied on documents vide Exts. 1 to 5, out of which Ext. 3 is the suit pronote, Ext. 4 is the certificate granted by the S.D.O., Berhampur in accordance with the provision u/s 18-B of the Act, 1939 and Ext. 5 is the certified copy of the money lending account of the plaintiff. Defendant examined himself as D.W. No. 1 and relied on documents vide Exts. A to C/2, out of them Ext.A is the office copy of the plaint in Money Suit No. 79 of 1973. Ext. B, a copy of the letter dated 27.11.1971 sent by the plaintiff to the defendant, and Exts. C to C/2 are three different portions marked from the deposition of the plaintiff in a proceeding before the Arbitrator.
On assessment of the evidence and considering the pleading of the parties, learned Subordinate Judge held that though the defendant admitted to have taken loans and clothes on credit and thereafter executed the pronote, but he has failed to discharge the onus by proving his contention of inflated accounts or obtaining of the pronote by application of force, undue influence or coercion and, therefore, defendant is bound by the contract as incorporated in Ext. 3 so as to repay the debt. Learned Subordinate Judge also recorded the finding that non-inclusion of the brother of the plaintiff as a co-plaintiff is of no consequence besides being the admitted fact that plaintiff is a registered money lender and the credits were advanced by him. Accordingly, he decided Issue No. 3 against the defendant. Learned Subordinate Judge also found the suit to have been filed within the statutory period and accordingly decided Issue No. 5. So far as Issue No. 2 is concerned, learned Subordinate Judge recorded the findings that Rule 11 of the Orissa Money Lenders Rules was substantially complied with therefore the suit is not liable to be dismissed and similarly Ext. 4, the certificate granted by the S.D.O. set at naught the plea of the defendant relating to non-compliance of the provision u/s 18(B)(2) of the Act, 1939. He also recorded the finding that the suit is maintainable and the plaintiff is entitled to recover the suit amount along with interest '' 6% per annum on the principal sum of Rs. 18,000/- but the plaintiff shall not be entitled to realise the amount exceeding Rs. 36,000/- besides the cost of suit.
Learned Counsel for the appellant argued that plaintiff s claim is liable to be defeated. because :
(i) the plaintiff has not proved advancement of clothes and cash on credit to the extent of Rs. 18.000/- during the period from 13.1.1965 to 5.12.1968. Thus execution of Ext. 3 (the suit pronote) does not entitle the plaintiff to recover that amount.
(ii) Plaintiff has failed to prove to be a registered money lender during the aforesaid period (1965 to 1968) and, therefore, the claim made by him is not maintainable as he was not a registered money lender during the relevant time.
(iii) Alternatively, if the plaintiff will find to be a registered money lender, then the provision in Section 18(b) of the Act having not been properly complied with by him by obtaining the certificate of the relevant transactions from 13.1.1965 to 5.10.1968, the claim is not maintainable in accordance with that provision.
(iv) Plaintiff being a partner or joint owner of the cloth shop, the suit is not maintainable by the plaintiff without including the co-owner, i.e. his brother and the suit is hit by Section 69(2) of the Indian Partnership Act, 1932.
Learned Counsel for the plaintiff/respondent repelled the aforesaid contention and defended correctness of the impugned judgment.
Before discussing the aforesaid points raised by the appellant a relevant circumstance which has been brought on record during the course of argument is relevant to be noted having an important bearing. It is the admitted position on record that at the stage of settlement of issues on 23rd March, 1973 the Power of Attorney-holder of the defendant/appellant made the following statement in Courts :
"Defendant has executed the suit pronote in favour of plaintiff marked Ext. 1 (on admission).
He has taken the amount of Rs. 18,000/- in favour of cloth and cash.
The defendant has not made any payment after execution of this document.
I am me power of attorney-holder of defendant to conduct and compromise the suit. Ext. A is the Power of Attorney."
In view of the above quoted statement, the suit was decreed on admission. Appellant preferred First Appeal No. 122 of 1973 challenging that judgment and decree. This Court while allowing that appeal, held as follows :
"Mr. Das for the defendant-appellant contends that in the written statement, a plea of non-compliance of the provisions of the Money Lenders Act and the suit being bad on account of Section 69 of the Partnership Act had been raised and if these defences were ultimately established, notwithstanding the admissions of the power of attorney holder, the plaintiff was liable to be non-suited. These defences being material should have been taken into account even when the Court was seeking elucidation and since nothing has been done with reference to these pleas, defendant has been prejudiced by granting decree or the suit on the basis of alleged admissions of the power of attorney-holder. Several other contentions have also been advanced before us by Mr. Das which we consider unnecessary to examine as we are satisfied that at the stage of examination under Order 10 Rule 1, Code of Civil Procedure, material pleas raised in the written statement have not been taken into account. It may be that the defendant may not be able to establish his pleas or it may even be that after evidence is led, these pleas may turn out to be not material or suitable. There is, however, no application of the judicial mind to the pleas and defendant has not been given an opportunity or establishing the pleas. In the circumstances, we are of the view that the decree granted in the instant case cannot be sustained and we allow the appeal and vacate the decree and require the learned trial Judge to re-dispose of the suit in accordance with law."
After receipt of the suit on remand, trial was undertaken and the impugned judgment was passed. Admittedly the defendant/appellant examined himself as the solitary witness to resist the claim.
So far as it relates to the statement made by the Power of Attorney at the time of settlement of issues, the appellant as D.W. No. 1 explained the same in his evidence in the following manner:
"9. On 23.3.731 could not attend Court. I deputed Lokanath Nanda to state according to my written statement, But he made some statement without understanding anything."
It appears from the aforesaid evidence of the appellant that he has not disputed that on 23.11.1973 above named power of attorney made the above quoted statement at the stage of settlement of issues admitting the loan transaction. Though the defendant has stated that the statement made by his power of attorney-holder was not as per his instruction but that statement remained uncorroborated because the said power of attorney-holder was not examined to explain under what circumstances he made the statement admitting the claim advanced by the plaintiff. This aspect has been much highlighted by the respondent at the time of argument. Such fact and circumstance is taken note of.
It appears from the evidence on record that plaintiff in his evidence has proved the relevant transactions in support of his claim which he has advanced. As noted above, the transactions were given a new lease of life when admittedly Ext. 3 was executed by the defendant. Therefore, non-production of Money Lending Certificate for the years 1965 to 1968 is not of much consequence when defendant has not challenged the same by raising relevant pleadings in his written statement. The loan transaction, as in Ext. 3, was certified u/s 18-B which is apparent from Ext. 4. Ext. 5, a copy of the entry in the Money Lending Account Book Nos. 68 and 70, on the other hand, proved that the plaintiff was carrying on the business as a registered money lender during the relevant period. Under such facts and circumstances the aforesaid argument covered by point Nos. 1 to 3 are found not sustainable. In that respect the ratio in the cases of Basudev Sahu v. Krushna Chandra Sahu and Ors. Vol. 62 1976 C.L.T. 1269 Daitari Sahu v. Pegal Panda and Anr., Vol. 47 1979 C.L.T. 346 and Balakrishna Bhai v. Pitambar Dani 1990(1) OLR 176 are of no help to the appellant. On the other hand, the ratio in the case of Sankar Kumar Bhattar and Others Vs. Tehsildar-cum-Revenue Officer and Others, is of no relevance to any of the issues involved.
So far as the claim of the appellant regarding non-maintainability of the suit, in that respect the relevant plea which he raised in the Court below is as follows :
"The suit is also hit under the provisions of the Indian Partnership Act, the right to enforce have not arisen from a contract on behalf of the firm which is unregistered."
To understand the plea and to decide the same, a ready reference to the relevant provision i. e., Sub-section (2) of Section 69 of the Indian Partnership Act, 1932 (in short ''the Act 1932'') is beneficial and that reads as hereunder:
"(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm."
The above quoted provision makes it clear that compliance to the aforesaid provision is mandatory in character when a suit to enforce a right arises from a contract by or on behalf of a Partnership Firm against any third party that such firm should be a registered one. No doubt the appellant did not take a specific plea in his written statement regarding non-maintainability of suit because of the Act, 1932 but evidence was led in the Court below and such contention was advanced in the Trial Court with reference to Section 69. Sub-section (2) of the Act, 1932. In that respect, defendant heavily relied on Exts. A, B and C series to nullify the claim of the plaintiff on the ground of the plaintiff being a partner of an unregistered firm. That was dealt with by the Trial Court under Issue No. 3. Learned Subordinate Judge with reference to the evidence on record and the provisions of law so also the case of Sankar Kumar Bhattar and Others Vs. Tehsildar-cum-Revenue Officer and Others, and Sk. Kabir and Another Vs. Narayandas Lachman Das Ltd. and Another, recorded the finding that inter se dealing amongst the plaintiff and his co-sharers in the erstwhile joint family property which the plaintiff possessed exclusively by the date of the suit transaction cannot be treated as a loan advanced by an unregistered partnership firm and, therefore, Section 69(2) of the Act, 1932 does not put an embargo to the claim for recovery of money which had been advanced by the plaintiff.
Learned Counsel for the appellant argued that the evidence on record was not properly appreciated by the Court below which resulted in such erroneous finding. According to him, defendant''s liability is on the basis of advance taken by him, so also cloth purchased on credit during 13.1.1965 to 5.10.1968 and that was acknowledged in the suit pronote on 8.10.1968. That being so the averments in the plaint, Ext. A instituted by the father of the plaintiff and the statement of the plaintiff before the Arbitrator Ext. C series clearly indicate that plaintiffs brother Srinivas was a partner of the cloth shop with effect from 1.7.1966 till about June, 1968, during which period that cloth shop was the partnership property of the said two brothers. According to him, because of that evidence on record, the transactions which made the defendant liable was advanced by the unregistered partnership firm and, therefore, the suit is hit under Sub-section (2) of Section 69.'' That argument was repelled by the respondent adopting the line in which the Trial Court assessed the evidence and recorded the finding that the cloth shop was not a partnership firm but the proprietary property of the respondent.
The case is to be decided on the basis of preponderance of probabilities if the evidence on record does not lead to a clean cut factual finding on the disputed question as to whether the concerned cloth shop was or was not a property of the partnership firm. Appellant in his evidence claimed to be the proprietor of the cloth shop. Though he was cross-examined at length but no clear circumstances emerge from that evidence that the cloth shop was a partnership firm of the plaintiff and his brother Srinivas. The plaint averment in Ext. Ashows that it was a suit brought by the plaintiffs father with a claim of recovery pf certain amount from his other son B. Srinivas Subudhi (brother of the present plaintiff/respondent). In paragraph 12 of his evidence (during cross-examination) plaintiff s evidence has remained unchallenged that since 1954, there is a partition in the joint family consisting of his father, himself and the three brothers. Averments in that plaint also clearly describes that the cloth shop was the self-created and self-managed property of the plaintiff and, therefore, at the time of family partition that was left in his share. Attempt was made by the defendant to elicit from the plaintiff that during 1.7.1966, till November, 1558, the cloth shop was the partnership business and in that connection, confronted to the plaintiff his previous statement before the Arbitrator marked Exts. C, C/l and C/2 but the plaintiff denied to the said suggestion. He, however, admits in paragraph 17 of his deposition that in December, 1967, out of the funds of the cloth shop a house was purchased on 21.12.1967 in the name of the plaintiff and his brother Srinivas and that they divided the profits of both the shops between themselves on 1.7.1967 and 1.7.1968. Such dealing by itself cannot be construed to hold the cloth shop as partnership firm. Ext. B is a letter addressed by the respondent to the appellant with a request to repay the debt. That document does not give any indication that the cloth shop was a partnership firm or the money due on appellant was advanced by anybody other than the respondent.
It is thus found on re-appreciation of evidence that appellant has not been able to prove even by preponderance of probabilities that the cloth shop was the partnership firm of the respondent and his brother. In that respect the statement before the Arbitrator regarding sharing of tax cannot be flinchingly connected with the cloth shop when the parties had other joint family business. Apart from that all the above noted relationship between the respondent and his brother Srinivas with respect to the cloth shop does not fulfil the definition of "Partnership" as defined in Section 4 of the Act, 1932.
For all the reasons discussed and indicated above, appellant''s plea on Issue No. 3 is not sustainable whereas the findings recorded by the Trial Court is found to be correct. Accordingly, it is held that respondents'' claim is not barred u/s 69 of the Act, 1932.
Since all the pleas raised by the appellant has failed, therefore, the appeal is dismissed on merit with cost all throughout. Advocate''s fee be assessed at contested scale.