JAMAL USMAN KACHI Vs. FIRM UMAR HAJI KARIM SHOP

JUDGEMENT

(1.) IN the year 1926 the firm of Umar Haji Karim, respondent, obtained a decree against the appellant. The decree was a consent decree and several infructuous attempts were made to execute it. This present appeal arises out of an attempt made in the year 1933 after the Partnership Act came into force. The judgment-debtor contended in the executing Court that since the firm was not registered it was incompetent to execute the decree. The executing Court agreed with this Contention and consequently did not come to any decision on various other issues raised and held, that the execution application could not be entertained. This decision was reversed by the Additional District Judge by his order dated 14th July 1937. So far as is material for the, decision of this appeal, the order of the learned Additional District Judge was based on the ruling in Firm Narmada Ginning Factory v. Kastoormal and the case was remanded for disposal on its merits. Against this order the judgment-debtor appealed to this Court and the matter was heard by Niyogi J., who concurred in the order of the learned Additional District Judge and dismissed the appeal. He gave leave however to appeal under the provisions of the Letters Patent and that is how the question comes before us. What was decided in Firm Narmada Ginning Factory v. Kastoormal was that a right acquired before the commencement of the Partnership Act is not affected by anything in that Act and that Section 74 of that Act saves the rights of unregistered firms where such rights had been acquired before the commencement of the Act. This view has received additional support in Hiralal Gulabchand Shop v. Amarchand Kisanlal Shop and in Syed Fakir v. Chandrabai. Both of these decisions are subsequent to the order of Niyogi J., which is dated 30th November 1938. The leave to appeal however was limited by Niyogi J., in the following words: Leave to file Letters Patent Appeal granted on the point whether "other proceeding" occurring in Section 69(3), Partnership Act, include an execution proceeding.

(2.) THE learned Counsel who appears for the appellant is apprehensive that the limited leave to appeal would exclude him from contending that Section 74 of the Act has no application and contends that the whole of the matter which was before the learned Judge is now open for appeal and that the Judge had no right to limit the subject-matter of the appeal, and, in support of this contention, he relies on a recent pronouncement of the Chief Justice of Madras in Ghulam Hussain Sahib v. Ayesha Bibi A.I.R. 1941 Mad. 481. We will deal with this point later but for the present content ourselves with saying that we do not conceive it to have been the intention of Niyogi J. to limit the appeal to a point which would be purely academic in view of the fact that the argument of the respondent throughout has been that any contention based on Section 69 of the Act is negatived by the saving Section 74. We therefore placed no bar on the appellant's learned Counsel as to the matter to be argued.

(3.) IN our opinion the words "other proceeding to enforce a right arising from a contract" are to be taken as sui generis of a claim of set-off; that is to say, when Sub-sections (1) and (2) relate to the right of bringing a suit the opening words of Sub-section (3) relate to the right of setting up a defence and have no relation to the entirely different question of a claim to enforce the execution of a decree. Not only may a claim of set-off be a partial defence to a suit but a claim arising out of a contract may be set up in defence to negative the right of suit altogether, and it is these claims in defence which, in our opinion, are placed under the same disabilities as the right to bring a suit at all in so far as unregistered firms are concerned. We do not conceive that there could be any intention on the part of the Legislature, in drafting Sub-section (3) in the manner it has, to deal with two such entirely different matters as a claim of set-off without reference to any other defence and execution proceedings in respect of a particular type of decree. In our opinion, Sub-section (3) of Section 69 has no application to the execution of decrees, whether consent decrees or decrees after contest. Moreover, there is no reason why in execution proceedings a consent decree should be treated differently from any other decree. In so far as a consent decree remains a matter of contract, it is to be attacked in a suit for that purpose or by an application to the Court which passed the decree. For purposes of execution a consent decree is subject to the rule that the contract merges in the decree as much as in a decree after contest, and we are in respectful agreement with the phrase in which Niyogi J. has enunciated the principle-"In execution proceedings the decree-holder is not concerned with the contract but only with such rights as have been granted to him by the decree."