{"id":1218,"date":"2009-11-05T00:00:00","date_gmt":"2009-11-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/smt-parvatibai-shivajrao-vs-the-sangali-sahakari-bank-ltd-on-5-november-2009"},"modified":"2018-06-28T17:22:00","modified_gmt":"2018-06-28T11:52:00","slug":"smt-parvatibai-shivajrao-vs-the-sangali-sahakari-bank-ltd-on-5-november-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/smt-parvatibai-shivajrao-vs-the-sangali-sahakari-bank-ltd-on-5-november-2009","title":{"rendered":"Smt. Parvatibai Shivajrao … vs The Sangali Sahakari Bank Ltd on 5 November, 2009"},"content":{"rendered":"
Bombay High Court<\/div>\n
Smt. Parvatibai Shivajrao … vs The Sangali Sahakari Bank Ltd on 5 November, 2009<\/div>\n
Bench: Dr. D.Y. Chandrachud<\/div>\n
                                         1\n\n               IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n                   ORDINARY ORIGINAL CIVIL JURISDICTION\n\n\n\n\n                                                                                \n                       WRIT PETITION NO.1902 OF 2009\n\n\n\n\n                                                        \nSmt. Parvatibai Shivajrao Shendge               )\nwidow, senior citizen, aged about 70 years      )\n\n\n\n\n                                                       \nresiding at Flat No.101, First floor, Sukhada   )\nCo-operative Housing Society Limited,           )\nSir Pockakhanwala Road, Worli Mumbai-18         )..Petitioner \n\n\n\n\n                                               \n      Vs.\n                               \n1.The Sangali Sahakari Bank Ltd. \na Co-operative Bank registered under the\n                                                )\n                                                )\nthe Maharashtra Co-operative Societies Act,     )\n                              \n1960 having office at 151, Sangli Sahakar       )\nBhavan, S.K.Bole Marg, Dadar, Mumbai-28         )\n\n2. M.B.Shinde, Special Recovery Officer and     )\n              \n\n\nSales Officer, Sangali Sahakari Bank Ltd.,      )\nhaving office at  151, Sangli Sahakar           )\n           \n\n\n\nBhavan, S.K.Bole Marg, Dadar, Mumbai-28         )\n\n3. The Divisional Joint Registrar, Co-operative )\n\n\n\n\n\nSocieties, Mumbai Divisiion, Mumbai             )\n\n4. Messrs Vilas Transport, a firm having        )\naddress at 309, Navratan Building, 69,          )\nP'Dmello Road, Carnac Bunder, Mumbai-09         )\n\n\n\n\n\n5. The State of Maharashtra through             )\nGovernment Pleader, High Court, Bombay          )..Respondents\n\n\n\n\n                                                        ::: Downloaded on - 09\/06\/2013 15:16:10 :::\n                                                2\n\nMr. V. R. Dhond with Mr. T. N. Tripathi and Ms. Sapana Rachure i\/b T. N. Tripathi \n& Co. for the Petitioner\n\n\n\n\n                                                                                        \nMr. V. A.Thorat, Sr. Advocate with Mr. Harinder Toor i\/b Mr. Subhash Bane for \nRespondents No.1 & 2 \n\n\n\n\n                                                                \nMs. Imam Calcuttawala, AGP \n\n                                     CORAM: DR. D.Y. CHANDRACHUD, J. \n<\/pre>\n
                                        DATE:  5th November ,  2009<\/p>\n
ORAL JUDGMENT :\n<\/p>\n
    1. Shivajirao Krishnaji Shendge was a partner of a firm by the name of Vilas <\/p>\n
      Transport Company which was constituted on 16th September 1992, under <\/p>\n
      a Deed of Partnership. One of the partners was his son, Prakash Shivajirao <\/p>\n
      Shendge and two others were Vilas Shendge and Jaysingrao Shendge. The <\/p>\n
      partnership firm submitted an application on 23rd March 1998 to the First <\/p>\n
      Respondent for the grant of a loan in the amount of Rs.1.30 crores. The <\/p>\n
      application was signed by all the partners including Shivajirao. The loan <\/p>\n
      was  sanctioned  by the  Chairman of  the  Bank  on 30th  March 1998, who <\/p>\n
      incidentally also happened to be one of the partners of the firm. The bank <\/p>\n
      had also extended an over draft facility in the amount of Rs.30 lacs to the <\/p>\n
      partnership   firm.   All   the   four   partners   confirmed   an   outstanding   of   Rs.\n<\/p><\/blockquote>\n
      212.26  lacs  as  on  31st  March 2001  and furnished  undertakings that the <\/p>\n
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\n                                                  3<\/span><\/p>\n
       account would be regularised before 30th  June 2001. Shivajirao Shendge <\/p>\n
       died on 23rd December 2001. Upon his death a letter was addressed by one <\/p>\n
       of his sons, Prakash Shendge, who also happened to be a member of the <\/p>\n
       Legislative Assembly in the State of Maharashtra, on 27th July 2005 to the <\/p>\n
       Chairman   of   the   Bank   recording   that   he   had   been   unable   to   fulfill   the <\/p>\n
       understanding   that   had   been   arrived   at   between   the   parties   for   the <\/p>\n
       repayment of the amount of Rs.5 crores, due to his pre-occupation as a <\/p>\n
       member of the Legislative Assembly. By a letter, an assurance was held out <\/p>\n
       to the bank that an amount of Rs.5 crores would be paid within a period of <\/p>\n
       15 days. That assurance was not complied with. The Bank, it may be noted <\/p>\n
       is   a   co-operative   Bank   registered   under   the   Maharashtra   Co-operative <\/p>\n
       Societies Act, 1960.\n<\/p><\/blockquote>\n
    2. The   Bank   instituted   two  applications  for  the   recovery  of  its  dues  under <\/p>\n
       section 101 of the Maharashtra Co-operative Societies Act, 1960. On 13th <\/p>\n
       September 2002, the Assistant Registrar of Co-operative Societies allowed <\/p>\n
       both the applications by decreeing the claim of the bank. In one recovery <\/p>\n
       certificate   the   total   amount   decreed   was   Rs.2.68   crores   approximately, <\/p>\n
       while in the second, the amount was Rs.2.25 crores. The claim for interest <\/p>\n
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\n                                                   4<\/span><\/p>\n
       was   allowed.   Both   the   recovery   certificates   attained   finality,   since   no <\/p>\n
       Revision Application was filed under section 154 of the Maharashtra Co-\n<\/p><\/blockquote>\n
       operative Societies Act, 1960. Execution proceedings were initiated by the <\/p>\n
       Bank.   An   attachment   has   been   levied   by   the   bank   on   a  residential  flat, <\/p>\n
       being flat 101, situated at Sukhada Co-operative Housing Society Ltd. at <\/p>\n
       Worli. The attachment was questioned by taking out an Application under <\/p>\n
       Rule 107(19) of the Maharashtra Co-operative Societies Rules, 1961. The <\/p>\n
       application was rejected by the Special Recovery and Sales Officer by an <\/p>\n
       order   dated   29th  April   2009.   The   order   rejecting   the   applications   was <\/p>\n
       questioned in Revision before the Divisional Joint Registrar under section <\/p>\n<\/blockquote>\n
       154.   By   an   order   dated   3rd  August   2009,   the   Divisional   Joint   Registrar, <\/p>\n
       dismissed   the   Revision   Application.   Proceedings   have   been   instituted <\/p>\n
       before this Court under Article 226 of the Constitution by the widow of <\/p>\n
       Shivajirao Shendge.\n<\/p><\/blockquote>\n
    3. On   behalf   of   the   Petitioner,   it   has   been   submitted   that   in   the   recovery <\/p>\n
       proceedings that were instituted in 2002, the husband of the Petitioner was <\/p>\n
       not impleaded as a party. The Petitioner was not a party as an heir of her <\/p>\n
       deceased   husband   who   had   died   on   23rd  December   2001.   The   flat   in <\/p>\n
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\n                                                5<\/span><\/p>\n
    question, which has been attached was not offered as security to the Bank <\/p>\n
    and the share certificate, at present stands in the name of the Petitioner. <\/p><\/blockquote>\n
    The   bank   has   attached   the   flat   on   the   ground   that   the   husband   was   a <\/p>\n
    partner of the firm. It is urged that, the assets of the Petitioner’s deceased <\/p>\n
    spouse can be proceeded against only to the extent to which they were <\/p>\n
    assets   to   the   partnership.   The   residential   flat   was   not   an   asset   of   the <\/p>\n
    partnership and could not have been attached, in execution of the recovery <\/p>\n
    certificate. Reliance was placed on a Judgment of a Division Bench of this <\/p>\n
    Court in  Mathuradas Canji Matani Vs. Ebrahim Fazalbhoy  1  and on a <\/p>\n
    Judgment   of   the   Supreme   Court   in  Her   Highness   Maharani   Mandalsa <\/p>\n
    Devi Vs. M. Ramnarain Private Ltd.,  2 in support of the proposition that, <\/p>\n
    if the Plaintiff takes the risk of not joining the legal representatives of a <\/p>\n
    partner of a partnership firm who is dead on the date of the institution of <\/p>\n
    the   proceedings,   the   right   of   recourse     is   restricted   only   as   against   the <\/p>\n
    assets   of   the   partnership   and   not   the   personal   assets   of   the   deceased <\/p>\n
    partner. In the present case, it was urged that, on the date on which the <\/p>\n
    recovery proceedings were instituted under section 101 the spouse of the <\/p>\n
    Petitioner  had died.  His  heirs  were  not brought  on the record and as  a <\/p>\n
1AIR 1927 BOM 581<\/p>\n
2AIR 1965 SC 1718<\/p>\n
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\n                                                 6<\/span><\/p>\n
      consequence   the   recovery   certificate   can   be   executed   only   against   the <\/p>\n
      assets of the partnership and against the separate properties of the partners <\/p>\n
      who were impleaded as parties to the proceedings. The recovery certificate, <\/p>\n
      it   was   urged,   cannot   be   executed   as   against   the   personal   assets   of   the <\/p>\n
      deceased partner.\n<\/p>\n
    4. On behalf of the Bank, it was urged that in the present case, the loan was <\/p>\n
      granted and the over draft facility was sanctioned on the application of all <\/p>\n
      the   partners   during   the   life   time   of   Shivajirao   Shendge.   The   loan <\/p>\n
      application came to be sanctioned by the Chairman of the Bank, who also <\/p>\n
      happened to be one of the partners of the partnership firm. During his life <\/p>\n
      time, Shivajirao Shendge subscribed an undertaking together with all the <\/p>\n
      partners   agreeing   to   regularise   the   account.   Even   after   the   death   of <\/p>\n
      Shivajirao,   one   of   the   partners,   who   happened   to   be   the   son   of   the <\/p>\n
      deceased partner and a member of the Legislative Assembly, had assured <\/p>\n
      that the account would be regularised within a period of 15 days.  Counsel <\/p>\n
      submitted that the recovery certificates attained finality. The Petitioner has <\/p>\n
      not   challenged  the   recovery   certificates.   The   Petitioner   moved   the   State <\/p>\n
      Government   in   a   second   Revision   Application     and   at   the   same   time <\/p>\n
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\n                                                7<\/span><\/p>\n
      instituted Writ proceedings before this Court. Moreover, it was urged that <\/p>\n
      the   recovery   certificates   would   establish  that   the   estate   of  the   deceased <\/p>\n
      partner was substantially represented by the presence of his son Prakash <\/p>\n
      Shendge,   who   was   already   on   the   record   of   the   recovery   proceedings <\/p>\n
      initiated under section 101 and by the three other sons of the deceased.\n<\/p>\n
      Counsel stated that on 27th April 2002, the Bank had during the pendency <\/p>\n
      of the proceedings before the Assistant Registrar, drawn the attention of the <\/p>\n
      authority   to   the   circumstance   that   Shivajirao   had   died   and   placed   on <\/p>\n
      record the names of the legal representatives. The Bank requested that his <\/p>\n
      legal representatives should be brought on record and both the recovery <\/p>\n
      certificates   dated   13th  September   2002   record   the   names   of   his   heirs <\/p>\n
      namely, Ramesh, Suresh and Sandip, as being on record.\n<\/p>\n
    5. In considering the merits of the rival contentions, it would be appropriate <\/p>\n
      to refer to the   relevant statutory provisions on the subject. Rule 1 of the <\/p>\n
      order 30 of the Civil Procedure Code, 1908, provides that any two or more <\/p>\n
      persons claiming or being liable as partners and carrying on business in <\/p>\n
      India may sue or be sued in the name of the firm, if any, of which, such <\/p>\n
      persons are partners at the time of the accrual of the cause of action. Rule <\/p>\n
      4 provides that notwithstanding anything contained in section 45 of the <\/p>\n
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\n                                                  8<\/span><\/p>\n
       Indian Contract Act, where two or more persons may sue or be sued in the <\/p>\n
       name of a firm and any of such persons dies, whether before the institution <\/p>\n
       or during the pendency of any suit, it shall not be necessary to join the <\/p>\n
       legal representatives of the deceased as a party to the suit. Rules 49 and 50 <\/p>\n
       of Order 21 respectively deal with attachment of partnership property and <\/p>\n
       the execution of a decree against a firm. Rule 50 stipulates that, where a <\/p>\n
       decree has been passed against a firm, execution may be granted i)against <\/p>\n
       any property of the partnership; ii) against any person who has  appeared <\/p>\n
       in his own name or who has admitted on the pleadings that he is, or  has <\/p>\n
       been   adjudged   to   be,   a   partner;   iii)   against   any   person   who   has   been <\/p>\n
       individually served as a partner with a summons and has failed to appear.\n<\/p>\n
       Under sub rule (2) of Rule 50, where a decree holder seeks to execute a <\/p>\n
       decree against any person other than one specified in (ii) and (iii) above, <\/p>\n
       he may apply to the Court which passes a decree for leave to do so.\n<\/p>\n
    6. A   Division   Bench   of   this   Court   held   in  Mathuradas   Canji   Matani   Vs. <\/p>\n
       Ebrahim Fazalbhoy,3  that where a partner was dead on the date of the <\/p>\n
       institution of the suit and a liability is sought to be fixed on the private <\/p>\n
       estate   of   a   deceased   partner   apart   from   his   interest   in   the   partnership <\/p>\n
3AIR 1927 BOM 581<\/p>\n
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\n                                                 9<\/span><\/p>\n
    assets then, the legal representatives must be added. The Division Bench <\/p>\n
    took note of the fact that there was substantial similarity in the language <\/p>\n
    used in Order 30 and Order 21 Rules 49 and 50 with the corresponding <\/p>\n
    rules of practice in England, The Division Bench cited the dictum of Romer <\/p>\n
    L.J. In Ellis Vs. Wadeson to the effect that,  if the legal representatives of a <\/p>\n
    deceased partner are not added expressly as Defendants and the action is <\/p>\n
    brought against the firm in the name of the firm, then judgment can only <\/p>\n
    be obtained as against the surviving partners and be enforced against them <\/p>\n
    and against the assets of the partnership. The issue was considered by the <\/p>\n
    Supreme Court in  Her Highness Mandalsa Devi (Supra).  The Supreme <\/p>\n
    Court   held   that   in   a   normal   case   where   all   the   partners   of   a   firm   are <\/p>\n
    capable of being sued a suit may be filed and a decree obtained against the <\/p>\n
    firm under Order 30 and such decree may be executed against the property <\/p>\n
    of the partnership and all the partners by following the procedure of Order <\/p>\n
    21 Rule 50 of the Code of Civil Procedure. However, the Court noted that, <\/p>\n
    there may be certain cases where it is found that one of the partners cannot <\/p>\n
    be sued or cannot be adjudged a Judgment Debtor.  Dealing with the case <\/p>\n
    of a partner who has died, the Supreme Court observed as follows:\n<\/p>\n
               “Again take a case where the creditor of a firm institutes a suit <\/p>\n
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\n                                        10<\/span><\/p>\n
             against a firm and one of its partners at the time of the accrual of <\/p>\n
             the cause of action is dead at the time of the institution of the suit.\n<\/p><\/blockquote>\n
             The suit against the firm is really a suit against all the partners <\/p>\n
             who were its partners at the time of the accrual of the cause of <\/p>\n
             action, including the dead partner. Order 30 Rule 4 of the Code of <\/p>\n
             Civil Procedure enables the creditor to institute the suit against <\/p>\n
             the firm in the firm name without joining the legal representative <\/p>\n
             of the deceased partner. The suit is, therefore, competent, but no <\/p>\n
             suit can be instituted nor can a decree be obtained against a dead <\/p>\n
             person. The decree passed in such a suit will, therefore, bind the <\/p>\n
             partnership and all the surviving partners, but will not affect the <\/p>\n
             separate property of the deceased partner”\n<\/p><\/blockquote>\n
    The Judgment of the Supreme Court enunciates the proposition that, Order <\/p>\n
    30 Rule 4 enables the creditor of a partnership firm to institute a suit in the <\/p>\n
    name of the firm without joining the legal representatives of a deceased <\/p>\n
    partner and such suit would be competent. The decree that is passed in <\/p>\n
    such suit would bind the partnership and the surviving partners. However, <\/p>\n
    the decree would not affect the separate property of the deceased partner.\n<\/p>\n
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\n                                                11<\/span><\/p>\n
      The Supreme Court, it may be noted, cited with approval the dictum of <\/p>\n
      Romer   L.J.   in  Ellis   Vs.   Wadeson,   which   had   been   relied   upon   in   the <\/p>\n
      judgment of the Division Bench of this Court in Mathuradas’s case.\n<\/p>\n
    7. In the present case, the crux of the issue is as to whether, as a matter of <\/p>\n
      fact,   the   estate   of   the   deceased   partner   was   validly   represented   in   the <\/p>\n
      proceedings which led up to the issuance of a recovery certificate.\n<\/p>\n
    8. In companion Writ Petition No.2020 of 2009, which has been filed by the <\/p>\n
      Bank   in   order   to   impugned   the   correctness   of   the   order   passed   by   the <\/p>\n
      Minister,   Co-operation,   granting   stay   of   the   recovery   proceedings   on   7th <\/p>\n
      August 2009, the bank has specifically averred in paragraph 9(v) of the <\/p>\n
      Petition that, on 27th April 2002, it had addressed a letter to the Assistant <\/p>\n
      Registrar of Co-operative Societies informing him that Shivajirao Shendge <\/p>\n
      who   was   a   partner   of   the   firm   had   died   on   23rd  December   2001   and <\/p>\n
      mentioned there the names of his legal representatives. A copy of the letter <\/p>\n
      addressed   by   the   Bank   to   the   Assistant   Registrar,   which   bears   an <\/p>\n
      endorsement   of   the   Registrar  dated  29th  April 2002  has  been   placed  on <\/p>\n
      record.   The   Recovery   certificates   which   were   issued   on   13th  September <\/p>\n
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\n                                                  12<\/span><\/p>\n
       2002 clearly show the presence of i) Ramesh Shendge; ii) Suresh Shendge;\n<\/p>\n
       iii)Sandipan Shendge, in their capacity of heirs. Obviously these persons <\/p>\n
       could have been present only as heirs of the deceased partner Shivajirao <\/p>\n
       Shendge. Apart from his three sons as aforesaid, the fourth son, Prakash <\/p>\n
       Shendge, who was a partner of the partnership firm was already on record.\n<\/p>\n
       In   these   circumstances,   the   material   before   the   Court   is   sufficient   to <\/p>\n
       establish   that   the   estate   of   the   deceased   partner   was   substantially <\/p>\n
       represented   in   the   proceedings   before   the   Assistant   Registrar   of   Co-\n<\/p>\n
       operative Societies.\n<\/p>\n
    9. Indeed,   the   loan   in   the   present   case   was  taken   by   the   partnership   firm <\/p>\n
       during   the   life   time   of   the   deceased   partner.   The   loan   application,   as <\/p>\n
       already noted, was signed by all the partners including the partner who <\/p>\n
       died, subsequently.  The loan was sanctioned by the Chairman of the Bank <\/p>\n
       who   also   happened   to   be   a   partner   of   the   firm.   All   the   partners   had <\/p>\n
       furnished an undertaking to regularise the account. Even after the death of <\/p>\n
       his   father,   one   of   the   partners   who   was   a   member   of   the   Legislative <\/p>\n
       Assembly had by his letter dated 27th July 2005, assured the Bank that he <\/p>\n
       would   pay   an   amount   of   Rs.5   crores   within   a   period   of   15   days.   That <\/p>\n
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\n                                                    13<\/span><\/p>\n
       assurance has not been fulfilled. Section 25 of the Indian Partnership Act <\/p>\n
       1932,   provides   that   every   partner   is   liable,   jointly   with   all   the   other <\/p>\n
       partners   and   also   severally   for   all   acts   of   the   firm   done   while   he   is   a <\/p>\n
       partner. In Dena Bank Vs. Bhikhabhai Prabhudas Parekh & Co. (2000) 5 <\/p>\n
       SCC 694 and in Ashutosh Vs. State of Rajasthan & ors. (2005) 7 SCC <\/p>\n
       308,  the   Supreme   Court   observed   that   a   partnership   firm   is   only   a <\/p>\n
       compendious   name   for   all   the   partners.  It   does   not   have   any   existence <\/p>\n
       apart from its partners. A decree in favour of or against the firm in the <\/p>\n
       name of the firm has the same effect as a decree in favour of or against the <\/p>\n
       partners. While the firm is incurring a liability it can be assumed that all <\/p>\n
       partners   were   incurring   that   liability   and   so   the   partners   remain   liable <\/p>\n
       jointly and severally for all the acts of the firm.\n<\/p>\n
    10.In   the   present   case   the   concurrent   finding   of   both   the   adjudicating <\/p>\n
       authorities below is that, the  residential flat in question was the property <\/p>\n
       of the deceased partner. It is an admitted fact that the residential flat was <\/p>\n
       originally allotted by HUDCO to the deceased partner in his life time.\n<\/p>\n
    11.In   these   circumstances,   the   plea   for   the   raising   of   attachment   was <\/p>\n
       misconceived and the Application was correctly rejected by the Competent <\/p>\n
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\n                                              14<\/span><\/p>\n
      Authority.   The   order   of   the   Divisional   Joint   Registrar,   dismissing   the <\/p>\n
      Revision does not called for interference.\n<\/p>\n
    12.The Petition shall accordingly stand dismissed.\n<\/p>\n
                                   ig                (Dr. D.Y.Chandrachud, J)\n                                 \n               \n            \n\n\n\n\n\n\n                                                              ::: Downloaded on - 09\/06\/2013 15:16:10 :::<\/span>\n <\/pre>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Smt. Parvatibai Shivajrao … vs The Sangali Sahakari Bank Ltd on 5 November, 2009 Bench: Dr. D.Y. Chandrachud 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1902 OF 2009 Smt. Parvatibai Shivajrao Shendge ) widow, senior citizen, aged about 70 years ) residing at Flat […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-1218","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nSmt. 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