Decided on December 01,1944



Patanjali Sastri, J. - (1.) THIS second appeal arises out of a suit brought by the appellant to enforce a promissory note executed by the respondent and his deceased brother Abdul Latif Sahib on the 10th May, 1937. The trial Court decreed the suit but the lower appellate Court dismissed it as barred by limitation, holding that a payment of Rs. 500 for principal and Re. 0 -10 -8 for interest made by Abdul Latif on the 24th December, 1937 and duly endorsed by him on the note does not operate to save the suit as against the respondent.. Hence this appeal.
(2.) THE preamble to the note describes the executants as "Tobacco mandy" (1) Mahamod Ghouse Sahib (respondent), (2) his brother Abdul Latif Sahib and it recites that the amount was borrowed "on account of our urgency for the tobacco trade and for our family expenses." It is the appellant's case that the executants were carrying on tobacco trade in partnership and that Abdul Latif one of the partners having made the part payment and endorsement, the debt is kept alive against the other partner, the respondent, as well. The latter, however, denied that he was a partner in the mandy business which he said was carried on by his brother exclusively for his own benefit. But the evidence discussed by the trial Court amply establishes that the respondent was a partner in the business. The recitals in 4he suit note itself support the appellant's case and the respondent's explanation that he signed the note without reading it cannot be accepted for a moment. As the lower appellate Court has not recorded a clear finding on the point, I have been taken through the evidence on 1 both sides and I entirely agree with the learned District Munsiff's conclusion that the respondent was a partner. The lower appellate Court has, however, taken the view that this fact cannot assist the appellant as the endorsement or payment made by Abdul Latif was made only in his individual capacity and not as a partner on behalf of the firm. The question, for consideration accordingly is whether the payment made and endorsed by Abdul Latif operates to extend the period of limitation as against the respondent also. The endorsement is question runs as follows: "Amount paid on the 24th December, 1937, for principal Rs. 500, for interest Re. 0 -10 -8, total Rs. 500 -10 -8 has been paid. M.A. Abdul Latif." Now, Abdul Latif being a person liable to pay the debt and the payment having been endorsed in his own handwriting and duly signed by him, the payment satisfies the requirements of Section 20 of the Limitation Act, and would operate as a fresh starting point for limitation against all persons liable under the note (see Thayyanayaki Ammal v. : AIR1942Mad200 unless Section 21(2) deprives it of such effect. This sub -section reads thus: Nothing in the said sections renders one of several joint contractors partners, executors or mortgagees chargeable by reason only of a written acknowledgment signed or of a payment made by, or by the agent of, any other or others of them. It has often been pointed out that the word "only" is important and that all that the sub -section means is that, where there is nothing else than an acknowledgment or payment by any one member of the classes of persons mentioned therein, the other members of the class will not be affected by such acknowledgment or payment. Although the provision thus operates in respect of such classes of persons as an exception to Section 20, it leaves untouched the effect of a payment by a joint contractor, etc., where he can be shown to be the duly authorised agent of his co -contractors, etc., who are sought to be affected. Such authority, it has been held, need not be express but can be inferred from other circumstances, Veeranna v. : (1918)34MLJ373 and it has often been recognised that a partner running a mercantile concern has authority to borrow money to settle accounts and to make payments and acknowledgments in the usual course of the business so as to bind the firm, Mahadeva Iyer v. Ramakrishna Redidiar, (1925) 50 M.L.J. 67, It follows, therefore, that Abdul Latif who, according to the respondent's own showing, was conducting the mandy business had authority to make a part payment on behalf of the respondent who has been found to be a partner.
(3.) IT has, however, been argued that under Section 19 of the Indian Partnership Act the general rule of implied agency applicable to partnerships is subject to the condition enacted in Section 22 that one partner cannot bind the others by his acts unless they are done in the firm name or in any other manner expressing or implying an intention to bind the firm and that Abdul Latif not having signed the0 endorsement as a partner the respondent cannot be bound. It is true that there was no provision in the Indian Contract Act corresponding to Section 22 but, in my opinion, that section has not effected any change in the law; for, it does no more than state what I apprehend, was always the law, vis., that the act of a partner, in order to bind the firm, should be done on behalf of the firm. But it was not necessary that it should also purport to be so done. Section 22 is evidently based on Section 6 of the English Partnership Act, 1890, which has been considered to be only declarat6ry of the common law.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.