The Administrator General Of … vs Haji Sultanalli Sushtary And … on 28 June, 1926

Last Updated on

Bombay High Court
The Administrator General Of … vs Haji Sultanalli Sushtary And … on 28 June, 1926
Equivalent citations: (1927) 29 BOMLR 396
Author: Mirza
Bench: Mirza


Mirza, J.

1. This is a chamber summons taken ont by the defendant firm against the plaintiff” for an order that satisfaction may be entered up in full on the decree herein and on the decree in Suit No. 3872 of 1924 and that the plaintiff may be ordered to pay the costs of the summons.

2. The summons is taken out under the provisions of Order XXI, Rule 18, of the Code of Civil Procedure. By consent of parties the mutual application for execution contemplated by Order XXI, Rule 18, is dispensed with. The facts which have given rise to the summons are as follows :-

3. On June 17, 1925, a decree was passed in Suit No. 3872 of 1924, in favour of three persons, namely, (1) Aga Mahomed Hassan Shushtary, (2) Aga Mahomed Jaffer Shustary, and (3) Aga Mahomed Hussein Shustary, for a sum of Rs. 4,800, costs of the suit and simple interest at six per cent against the plaintiff herein who is the executor of the last will and testament of one Mirza Mahomed Shirazi, deceased.

4. On February 2, 1926, a consent decree was passed herein for Rs. 38,500 in favour of the plaintiff as executor of the last will and testament of Mirza Mahomed Shirazi against the defendant firm. Prior to the date of the consent decree, it appears that the defendant firm had paid to the plaintiff a sum of Rs. 32,619-12-0 towards his claim, and if the defendant firm were allowed to set off the decree in favour of the three persons against the plaintiff, there would have been no occasion for the passing of any decree. I am unable to understand why a decree for Rs. 38,500 was passed in the suit when prior to the date of the decree the defendant firm had already paid to the plaintiff Rs. 32,619-12-0. The consent decree recites that plaintiff had received Rs. 32,619-12-0 prior to its date. It is possible to conjecture that at the date of the passing of the consent decree, the defendant firm felt some doubt as to its right to set off the amount of the decree in Suit No. 3872 of 1924 against the plaintiff and preferred to rest its claim with regard to the set-off in execution proceedings under Order XXI, Rule 18.

5. The Presidency Towns Insolvency Act, Section 47, provides that :-

Where there have been mutual dealings between an insolvent and a creditor proving or claiming to prove a debt under this Act, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of the account, and no more, shall be claimed or paid on either side respectively.

6. It appears that there is no such provision in the Administrator General’s Act. Section 40, sub Clause (2), provides that :-

If any such suit is decreed in favour of the creditor, [against the Administrator General, the creditor] he shall, nevertheless, unless he is a secured creditor, be only entitled to payment out of the assets of the deceased equally and rateably with the other creditors.

7. The three persons who obtained the decree against the plaintiff constitute all the partners in the defendant firm. The question which I have to determine is whether for purposes of this appliestion it can be regarded that the parties to the two suits and decrees are the same.

8. Order XXI, Rule 18, provides that :-

Where applications are made to a Court for the execution of cross decrees in separate suits for the payment of two sums of money passed between the same I parties and capable of execution at the same time by such Court, then-

(a) If the two sums are equal, satisfaction shall be entered upon both decrees ; and

(b) If the two sums are unequal, execution may be taken out only by the holder of the decree for the larger sum and for so much only as remains after deducting the smaller sum, and satisfaction for the smaller sum shall be entered on the decree for the larger sum as well as satisfaction on the decree for the smaller sum.

9. Sub-rule (3) provides that :-

This rule shall not be deemed to apply unless –

(a) the decree-holder in one of the suits in which the decrees have been made is the judgment-debtor in the other and each party fills the same character in both suite.

10. This leads me to examine the nature of a firm under our law. Order XXX, Rule 1 (1), of the Code of Civil Procedure provides as follows:-

Any two or more persons claiming or being liable as partners and carrying on business in British India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct.

11. Rule 2 (1) of Order XXX provides that :-

…where a suit is instituted by partners in the name of their firm, the plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant, forthwith declare in writing the names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted.

12. Rule 4 (1) of Order XXX provides that:-

…where two or more persons may sue or be sued in the name of a firm … 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.

13. It would appear, however, that if all the partners constituting the firm were to die during the pendency of the suit, it would be necessary to bring the representative or representatives at least of one deceased partner on the record to enable the suit to continue.

14. The rules under Order XXX of our Code of Civil Procedure are taken and adopted from the rules of the Supreme Court. The position of a firm under the English rules is by now well defined. Halsbury in Volume XXII, page 5, thus summarises the result of the English cases on the point:–

The word ‘firm’ is a short, collective name for the individuals who constitute the partners, and the name under which they trade is their firm name. It is not the name of a corporation ; it is a short name for X, Y and Z. carrying on business in partnership. In English law, a firm is not a persona.

15. Similarly Lindley on Partnership, 9th Edn., p. 344, has them following comment on the wording of the English rule corresponding with Order XXX, Rule 1 :-

With reference to this last rule, it is to be observed that the firm’s name when used in any action, is merely a convenient method of expressing the names of those who constituted the firm when the cause of action accrued. The rule does not incorporate the firm.

16. In In re Frances Handford & Co.: Ex parte Frances Handford [1899] 1 Q.B. 566 Lindley M.R., in the Court of Appeal, remarked as follows (p. 570):

When you have a rule which enables you for the sake of convenience to bring an action and to obtain judgment against a firm, you are in truth bringing an action against the persons who constitute the firm, and the judgment is really a judgment against the individuals. That is all that the rule means.

17. Applying the principle of the English cases to the construction of the rules under Order XXX, I have come to the conclusion that the defendant firm is identical with the three individuals who constitute all its partners and the two decrees can be set off one against the other under the provisions of Order XXI, Rule 18.

18. The summons will, therefore, be made absolute with costs. Counsel certified. The Administrator General will take his own costs out of the estate and pay the defendant’s costs out of the assets in his hands.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

* Copy This Password *

* Type Or Paste Password Here *