Decided on June 20,1974

RAMKISHORE Respondents


- (1.) The question for decision here is quite an interesting one. Whether the suit by a partner of an unregistered firm for recovery of money claimed on the dishonour of a cheque endorsed in favour of the firm would be maintainable is the question in controversy. It was contended that the suit is barred by S.69(2) of the Indian Partnership Act. The court below, while holding in favour of the plaintiff on the merits of the case, dismissed the suit accepting this contention. The plaintiff has, hence, come up to this court in appeal.
(2.) The plaintiff company claims to be a firm registered under the Indian Partnership Act. The plaintiff is said to be the managing partner. Admittedly the first defendant issued three cheques, one for Rs. 7500/-, another for Rs. 5000/- and yet another for Rs. 2500/-, all of the date 21 4 1965 in favour of the second defendant firm and the second defendant firm receiving consideration endorsed these cheques to the plaintiff. These were sent for collection by the plaintiff to the Canara Bank Limited, but they were dishonoured and returned to the plaintiff, The plaintiff therefore claims the amount of the cheque together with the interest and also the amount collected by the Bank from the firm as discount.
(3.) The suit was contested by the first defendant firm. Its case was that the cheques were issued as security on a promise by the second defendant to supply pepper to the first defendant and the understanding was that the cheques were to be cashed only after such supply. The case is that the goods were not actually supplied, but nevertheless second defendant collusively endorsed the cheques in favour of the plaintiff. In short, the plea is that the cheques are not supported by consideration and the plaintiff is not a holder in due course. There was further contention that the plaintiff was not a registered firm and the person who has filed the suit as managing partner was not a partner at all.;

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