# Gambhir Ma! Pandiya v. J. K. Jute Mi!!$ Co. Ltd., Kanpur

- **Citation:** [1965] 3 S.C.R. 421
- **Court:** Supreme Court of India
- **Decided:** 1965-03-19
- **Case number:** Civil Appeal No. 130 of 1964
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gambhir-ma-pandiya-v-j-k-jute-mi-co-ltd-kanpur-3500
- **Pages:** 8

## Headnote

421
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HEit IDGHNESS MAHARANI MANDALSA DEVI AND ORS.
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March 19, 1965
IK. SuBBA RAo, J.C. SHAH AND R. S. BA<CHAWAT, JJ.J
Code of Civil Procedure, 1908 (Act 5 of 1908), ss. 87, 87-B Orde1
21, Rule 50(2) and Order 30-Execution against partners of a
firm-Ruler of Indian State a partner-Liability of partnersDefences available-Protection to Ruler of a State--If available to
rest.
Under Order 30 of the Code of Civil Procedure the respondent
No. 1 a firm sued another firm of which the appellants and a Ruler
of a former Indian State were partners. The consent of the Central
Government to the institution of the suit under s. 87-B of the Code
of Civil Procedure was not obtained. The firm admitted the liability
and the Court passed a decree and di.reeled that the cjecretal
.amount would be payable in certain instalments. On the firm's
default in paying the instalments an application was filed under
Order 21 Rule 50(2) of the Code of Civil Procedure for leave to
execute the decree against the appellants, excepting the Ruler as
partners of the firm. The Court allowed the application. The appellants' appeal was (lismissed by the High Court. On appeal by
certificate;
HELD: (i) The suit so far as it was one against the Ruler was
incompetent and the decree against the firm so far as it was a
decree against him personally was a nullity. In the absence of the
requisite consent ol the Central Goviernment a suit ag.,inst the
Ruler was barred by s. 87 read withs. 87-B. [425 F, G].
(ii) The application of respondent No. 1 under Order +1 Rule
50(2) for leave to execute. the decree against the other partners
was mainta·inable. (427 G].
A suit may be brought under the provisions of 0. 30 of the Code
a2ainst a firm of which a partner is not capable of being sued or
being adjudged a debtor, and in such a suit a decree enforceable
against the other partner and the partnership assets may be passed.
[427 B].

## Text

421
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HEit IDGHNESS MAHARANI MANDALSA DEVI AND ORS.
B
0
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G
v.
M. RAMNARAIN (P) LTD. AND ORS.
March 19, 1965
IK. SuBBA RAo, J.C. SHAH AND R. S. BA<CHAWAT, JJ.J
Code of Civil Procedure, 1908 (Act 5 of 1908), ss. 87, 87-B Orde1
21, Rule 50(2) and Order 30-Execution against partners of a
firm-Ruler of Indian State a partner-Liability of partnersDefences available-Protection to Ruler of a State--If available to
rest.
Under Order 30 of the Code of Civil Procedure the respondent
No. 1 a firm sued another firm of which the appellants and a Ruler
of a former Indian State were partners. The consent of the Central
Government to the institution of the suit under s. 87-B of the Code
of Civil Procedure was not obtained. The firm admitted the liability
and the Court passed a decree and di.reeled that the cjecretal
.amount would be payable in certain instalments. On the firm's
default in paying the instalments an application was filed under
Order 21 Rule 50(2) of the Code of Civil Procedure for leave to
execute the decree against the appellants, excepting the Ruler as
partners of the firm. The Court allowed the application. The appellants' appeal was (lismissed by the High Court. On appeal by
certificate;
HELD: (i) The suit so far as it was one against the Ruler was
incompetent and the decree against the firm so far as it was a
decree against him personally was a nullity. In the absence of the
requisite consent ol the Central Goviernment a suit ag.,inst the
Ruler was barred by s. 87 read withs. 87-B. [425 F, G].
(ii) The application of respondent No. 1 under Order +1 Rule
50(2) for leave to execute. the decree against the other partners
was mainta·inable. (427 G].
A suit may be brought under the provisions of 0. 30 of the Code
a2ainst a firm of which a partner is not capable of being sued or
being adjudged a debtor, and in such a suit a decree enforceable
against the other partner and the partnership assets may be passed.
[427 B].
Case law referred to.
(iii) In an application under 0. 21 Rule 50(2) the judgmentde btor could q uest10n the decree on the ground of collusion, fraud
or the hke but so as not to have the suit tried over again or to
raise issues between himself and his other partners. ( 428 A].
H
The Judgment-debtor was also entitled to raise a plea of special
protection under the law; and might also defend the application
on the. ground that the decree sought to be executed against him
is a nullity. But m the instant case none of the appellants was
entitled to any special protecmon; nor was it alleged that respondent
No. 1 was a party to any fraud or collusion or that it obtained the
decree by fraud or collusion. [ 428 B, CJ.
Gambhir Ma! Pandiya v. J. K. Jute Mi!!$ Co. Ltd., Kanpur
[lg63] 3 S. C. R. 190 relied upon.
422
SUPREME COURT REPORTS
(1965j a S.C.R.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 130 of 1964.
A
Appeal from the judgment and order dated November 21, 1958
of the Bombay High Court in Appeal No. 31 of 1958.
D. N. Mukherjee; for the appellants.
G. S. Pathak, S. N. Andley and Rameshwar Nath, for respondent No. l.
The Judgment of the Court was delivered by
Bachawat, J. Maharaja Sir Rajendra Prakash Bahadur
Maharaja of Sirmur, Maharani Mandalsa Kumari Debi Rajmata of
Sirmur, Maharani Premlata Debi of Chhota Udaipur, Maiyan Sahiba
Sheba Kumari Debi of Jharipani, Major Rao Raja Sirendra Singh,
Jagat Pershad, Shib Chander Kumar, Praduman Kumar and
Dayawati Rani carried on business in co-partnership under the firm
na/ne and style of Messrs. Jagatsons International Corporation
(hereinafter referred to as the firm) at New Delhi. Respondent
No. !, Ramnarain (Private) Ltd. instituted Summary Suit No. 162
of l 957 against Messrs. Jagatsons International Corporation on the
Original Side of the Bombay High Court claiming a money decree
for Rs. 1,96,831.58 N.P. The suit was·instituted on the allegation
that respondent No. 1 and the firm had entered into an agreement
in writing dated September 26, 1956, whereby respondent No. 1
agreed to provide finance to the firm, as a result of the dealings
under the agreement a sum of Rs. 1,96,831.58 N.P. was due to
respondent No. 1 from the firm, and in view of the breaches of the
agreement by the firm, the agreement has stood terminated. The
consent of the Central Government to the institution of the suit
was not obtained, though the Maharaja of Sirmur is a Ruler of
the former Indian. State within the meaning of s. 87B of the Code
of Civil Procedure. The summons of the suit was served on Shib
Chander Kumar as a partner ·of the firm and as a person having
the control or management of the partnership business. On July 15,
1957, at the hearing of the summons for judgment taken out by
respondent No. l, the firm admitted its liability as claimed in the
plaint and applied for instalments. and the Court passed a decree
for Rs. 1,89,643.98 N.P. and further interest, and directed that the
decretal amount would be payable in certain instalments. The firm
committed defaults in payment of the instalments payable under
the decree. On December 13. 1957. respondent No. 1 filed an application under 0. 21 r. 50(2) of the Code of Civil Procedure for
leave to execute the decree a2ainst (I) Maharani Mandalsa Kumari
Debi, (2) Maharani Premlata Debi, (3) Maiyan Sahiba Sheba Kumari
Debi, (41 Major Rao Raja Sirendra Singh, (5) Jagat Pershad. (6)
Praduman Kumar and (7) Dayawati Rani claiming that respondent
No. I was entitled to cause the decree to be executed against them
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.MLNDALSA DEV1 V. RAMNARAIN (P) L1'D.
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423
as being partners in the firm. The opposite parties to the application filed an affidavit alleging (!) that the suit and all proceedings
therein were incompetent in the absence of the requisite consent
of the Central Government under s. 86 of the Code of Civil Procedure; (2) Jagat Pershad and Shib Chander Kumar entered into the
agreement dated September 26, 1956 and utilised the moneys rl'-
ceived under it in fraud of the other partners and without their
authority, Shib Chander Kumar dishonestly and fraudulently concealed from the other partners the fact of the institution of the
suit and without the authority and knowledge of the other partners
submitted to a consent decree in the suit.
By an order dated March 18, 1958, a learned single Judge of
the High Court rejected all the contentions in the affidavit, and
allowed the application under 0. 21, r. 50(2) of the Code of Civil
Procedure. The learned single Judge held that (!) the defect of the
absence of the requisite consent under s. 86 read with s. 87-B did
not render the decree a nullity, and the objection could not be
taken in execution proceedings; (2) the other defences to the merits
of the claim in the suit could not be agitated in a proceeding under
0. 21. r. 50(2) of the Code of Civil Procedure. An appeatpreferred
by appellants, Maharani Mandalsa Kumar_i Debi, Maharani Premlata Debi, Major Rao Raja Sirendra Singh and Maiyan Sahiba
Sheba Kumari Debi was dismissed by a Bench of the High Court
on November 21, 1958. The appellate Court held thai (I) though
the decree against the firm was a decree against all its partners
including the Maharaja of Sirmur, and though the decree against
the Maharaja of Sirmur might be a nullity, the decree against the
other partners of the firm was valid, and (2) the appellants were
not entitled to raise other defences to the merits of rhc claim on
an application under 0. 21, r. 50(2) of the Code of Civil Procedure. The appellants now appeal to this Court under a certificate
granted by the High Court.
On behalf of the appellants Mr. D. N. Muli:herjee contended
that (11 the suit against the firm of Jagatsons International Corpora·
tion was a suit agaihst all its partners and in the absence of the
requisite consent under s. 86 read with s. 87-B of the Code of Civil
Procedure. the suit was not competent against the Maharaja of
Sirmur, and the decree against him was null and void: (2) consequently, the suit against the firm under the provisions of 0. 30
of the Code of Civil Procedure was not competent and the decree
passed in the suit was wholly void, the decree not being a decree
against the firm could not be executed by recourse to the machinery
of O. 21, r. 50, Code of Civil Procedure, and the application against
the appellants under 0. 21, r. 50(2), Code of Civil Procedure was
not maintainable; and (3) the appellants were entitled to dispute
their liability in an application under 0. 21. r. 50(2) of the Code
of Civil Procedure on all the grounds raised in the affidavit field
SUPREME COURT REPORTS
(1965) 3 S.C.R.
on their behalf and the court ought to have tried and decided all
those questions.
In answer to the first contention of Mr. D. N. Mukherjee, Mr.
Andley argued that for the purposes of a suit under 0. 30, Code
of Civil Procedure, the firm of Jagatsons International Corporation
is a legal entity separate and distinct from its partners, and no
question of obtaining the consent of the Central Government to
sue one of its partners under s. 86 read with s. 87-B of the Code
of Civil Procedure to the institution of such a suit arises. Mr.
Andley relied upon the observations of Das, J. in Dulichand
Lakshminarayan v. The Commissioner of Income-tax, Nagpur(')
that for the sake of convenience, 0. 30 of the Code of Civil Procedure permits a firm. to sue or be sued in the firm name "as if it,
were a corporate body". Consistently with this legal fiction, R. 3
permits service of the summons on a partner or a person havini:
control .or management of the partnership business, R. 4 permits
the institution and continuance cif the suit in the firm name in spite
of
death of a partner before the institution. or during the pendency of the suit without jcining the legal representatives of the
deceased partner as a party to the suit, and R. 9 permits a suit
between a firm and one or more of its partners and between firl)ls
having one or more common partners. But the legal fiction must
not be carried too far. For some purposes the law has extended
a limited personality to a firm, see Bhagangi Morarji Goculda.1· v.
Alembic Chemicals Works Co.('), but the firm is not a legal
entitv, see Purushottam Umedbhai & Co. v. M / s. Mani/al &
Sons('), Lindley on Partnership, 12th Edn., pp. 27-28. The persons
who are individually called partners are collectively called a firm,
and the name under which their business is carried on is called
the firm name: see s. 4 of the lnJian PHtncrohip Act, 1932. Order
30,
R. l of the Code of Civil Procedure enables two or more
perscns claiming or being liable as partners and carrying on business in India to sue or be sued in the name of the firm of which
they were partners at the time of the accrual of the cause· of action.
Rule I shows that the individual partners sue or are sued in their
collective firm name. Rule 2 provides that on disclosure of the
names of the partners of the plaintiff firm, the suit proceeds as if
they are named as plaintiffs in the plaint. Rule 6 provides that the
persons sued in the firm name must appear individually in their
own names. A suit by or in the. name of a firm is thus really a suit
by or in the name of all its partners, see Rodriguez v. Speyer
B1r'/:ers ('), Purushottam Umedbhai & Co. v. M /s. Manila/ &
Sons(') at pp. 991, 993, 995. So also a suit against the firm is really
(') [1956J s.r.R. 156, 162.
(') [1948] L.R. 75 I.A. 147.
(') [1961] I S.C.R. 982, 994.
(') [1919) A.C. 59.
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MANDALSA DEVI v. RAMNARAI!< (P) LTD. (Bachawat, J.)
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a suit against all the partners of the firm. In Western National Bank
of City of New York v. Pere;, Triana & Co.('), Lindley, LJ. said:
"When a firm's name is used, it is only a convenient
method of denoting those persons who compose the
firm at the time when that name is used, and a plaintiff
who sues partners in the name of their firm in truth
sues them individually, just as much as if he had set
out all their ·names".
The decree passed in the suit, though in form against the firm,
is in effect a decree against all the partners. In Lovell & Christmas v. Beauchamp(') Lord Herschell. L. C. said:
"Although the judgment Jllay be pronounced against
the firm in the firm's name, it is in reality a judgment
against all the persons who are in fact members of the
firm; and it is because such a judgment exists that the
right of execution follows".
The firm name of Jagatsons International Corporation
applies as much to the Maharaja of Sirmur as to the other
partners. When respondent No. 1 sued the firm of Jagatsons
International Corporation, it sued the Maharaja of Sirmur and
all the other partners as if the plaint had set out their namos,
and the decree passed in the suit is in reality a decree against
all the partners of the firm including the Maharaja of Sirmur.
Now, the Maharaja of Sirmur is the Ruler of a former Indian
State, and s. 86 read with s. 87-B of the Code of Civil Procedure
barred the institution of a suit against him except with the consent of the Central Government. No such consent was given for
the institution of the suit against the Maharaja of Sirmur. In
the absence of the requisite consent of the Central Government,
a suit, which is in reality, though not in form, a suit against the
Maharaja of Sirmur, is barred by s. 86 read with s. 87-B. See
Gaekwar Baroda State Railway v. Hafiz Habib-VI-Haq(').
Consequently, the suit so far as it was one against the Maharaja of
Sirmur was incompetent and the decree against the firm so far
as it is a decree against him μersonally was a nullity. The first
contention of Mr. Mukherjee is. therefore, sound and should be
accepted.
But we think that the second contention of Mr. Mukherjoe
should be rejected. Beyond doubt, in a normal case where all
the partners of a firm are capable of being sued and of being
adjudged judgment-debtors. a suit may be filed and a
decree
may be obtained against a firm under 0. 30 of the Code of Civil
Procedure, and such a decree may be executed against the orooerty of the partnership and against all the partners by following the procedure of 0. 21, r. 50 of the Code of Civil Procedure.
(') [l8Dl] l Q.B. 304.
('; "18D4] A.O. 607.
··1 1U38] T,,R. 65 J.A. 182, ms.
426
SUPREME COURT
(1965] 3 s.c.R.
But there may be abnormal cases where a suit is filed against a
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firm under the provisions of 0. 30, of the Code of Civil Procedure,
and it is found that one of its partners cannot be sued or cannot
be adjudged a judgment-debtor. Thus, take the case of an infant
who under the English law, can be a partner in a firm, but, though
a partner, cannot contract debts by trading and cannot be adjudged to be a debtor in respect of such debts. In Lovell &
Christmas v. Beauchamp('), the House of Lords held that a
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creditor of a firm of which an infant was a partner could issue
a writ
the firm in the firm's name, and in such
a suit judgment could be recovered against the defendant
firm other than the infant partner, and if a judgment had been
improperly signed against the firm simply, such a judgment could
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be suitably amended
so as to make it a judgment against the
firm· other than the infant partner. The precise point decided in
this case cannot arise in this country, because under our law, a
minor may not be a' partner in a firm, though he may be admitted to the benefits of the partnership. But the case shows
that a creditor of a firm of which or>e of the partners cannot be
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adjudged to be a debtor, may institute a suit against a firm in
the firm name under 0. 30 o{ the Code of Civil Procedure, and
may in such a suit obtain a decree against the firm other than
the partner who cannot be adjudged a debtor. Again, take a case
where the creditor of a firm institutes a suit against a firm and
one of its partners at the time of ·the accrual of the cause of
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action is dead at the time of the institution of the suit. The suit
against the firm is really a suit against ail the partners who were
its partners at the time of the accrual of the cause of action.
including the dead partner. Order 30, R. 4 of a Code of Civil
Prociedure enables the creditor to institute the suit against the
firm in the firm name
without joining the legal representative
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of the deceased partner. The suit is, therefore, competent, but
no suit can be instituted nor can a decree be obtained against a
dead person. The decree passed in such a suit will, therefore,
bind the partnership and all the surviving partners. but will not
affect the separate property of the deceased partner. In Ellis v.
Wadeson('), Romer, L J. observed:
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."Now consider the question of death. Suppose a
partner dies before action brought. and an acltion is
brought against the firm in the firm's name. The dead
man is not a party to the action, so far as his private
estate is concerned. for a dead man cannot be sued,
though the legal personal representative of a dead man
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can be sued in n proper case. Tn that case the action
would be an action solely against the surviving partners....
Tf the legal personal representatives of a deceased partner are not added expressly as defendants.
(') [IR941 A.O. 607.
(') [lR991 l Q.R. 714 at 718.
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H.!.llDALSA. DEVI V. IW!NA.lWN (P} LTJ;>. (Badiawat, J.)
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and the action is broui;ht against the firm in the firm's
name, then judgment oan only be obtained as against
the surviving partners and be enforced <igainst them
and against the partnership assets".
The above illustrations show that a suit may be brought
under the provisions of 0. 30 of the Code of Civil Procedure
against a furn of which a partner is not capable of bemg sued
or being adjudged a debtor, and in such a suit a decree entorceable against the other partners and the partnership assets
may be passed. Now, in the instant case, respondent No. I sued
the firm of Jagatsons International Corporation under the provisions of 0. 30 of the Code of Civil Procedure. The assets of the
firm as also all its partners jointly and severally are liable to
satisfy the debts of the firm. Even the Maharaja of Sirmur is
jointly and severally liable for the debts of the firm; only the
institution of a suit against him without the consent of the Central Government is barred by s. 86 read with s. 87-B of the Code
of Civil Procedure. As the suit. was instituted without the requisite consent of the Central Government, no decree could be
passed in the suit against the Maharaja of Sirmur. But the suit
against the firm other than the Maharaja of Sirmur was competent, and a decree could be passed against the firm other than
the Maharaja of Sirmur, and such a decree could be executed
against the partnership property and against the other partners
by following the procedure of 0. 21, r. 50 of the Code of Civil
Procedure. It is true that respondent No. I obtained a decree
against the _firm of Jagatsons International Corporation simply,
but the decree should be suitabli)' amended so as to make it a
decree against the firm of Jagatsons International Corporation
other than the Maharaja of Sirmur, and the decree so read is
a valid decree which may be executed against the partnership
property and the other partners of the firm by recourse to the
machinery of 0. 21, r. 50 of the Code of Civil Procedure. The
application of respondent No. 1 under 0. 21, r. 50(2) for leave
to execute the decree against the other partners is, therefore
maintainable. The second
of M'r. Mukherjee must,
therefore, be rejected.
The third contention of Mr. Mukherjee raises the question
as to what defences may be raised by a respondent to an application under 0. 21, r. 50(2) of the Code of Civil Procedure. The
law on this point is now well-settled. In Gambhir Mal Pandiya
v. J. K. Jute Mills Co. Ltd., Kanpur('), Hidayatullah, J. speaking on behalf of the Court observed:
"... primarily the question to try would be whether
the person against whom the decree is sought to be executed was a partner of the firm, when the cause of
action accrued, but he may question the decree on the
('l [I963J 2 s.c.n. mo.
SUPREME
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BEFOBT8
(1965] 3
ground of collusion, fraud or the like but so as not to
have the suit tried over again or to raise issues between
himself and his other partners''.
The respondent to an applioation under 0. 21, r. 50(2) of the
Code. of Civil Procedure is also entitled to raise a plea of special
protection under the law, and on this ground, the learned judge
at pp. 205-206 of the Report distinguished the case of Chhattoo
Lal Misser & Co. v. Naraindas JJaijnath Prasad('). We may add
that the respondent may also defend the application on the
ground that the decree sought to be executed against him is a
nullity.
Now, in the instant case, none of the appellant is entitled
to any special protection from the institution of the suit under
s. 86 read with s. 87-B, Code of Civil Procedure. The Maharaja
of Sirmur was entitled to this special protection, but he was not
a party to the application unden 0. 21, r. 50(2) of the Code of
Civil Procedure: Nor is the decree against the firm other than
the Maharaja of Sirmur a nullity. The affidavit filed on behalf
of the appellants does not sufficiently raise a plea that the decree
was the result of any collusion, fraud or the like. The affidavit
incorrectly assumes that the decree passed on admission of the
appearing partner, was a consent dec\ree. · Allegations of dishonesty and fraudulent concealment of the fact of the institution
of the suit are made against Shib Chander Kumar, one of th
partners of the firm, but no allegation of fraud or collusion is
made against respondent No. I. It was not alleged that respondent No. 1 was a party to any fraud or collusion or that it
obtained the decree by fraud or collusion. The
alleged
that their partners, Jagat Pershad and Shib Chander Kumar, had
entered into the agreement dated September 26, 1956, and had
utilised the moneys received under it in fraud of the appellants
and without their authority, but the appellants are not entitled to
raise these pleas in the application under 0. 21 r. 50(2) of the
Code of Civil Procedure. The appellants were admittedly partners
of the firm of Jagatsons International Corporation at the time
when the cause of action accrued. In the absence of any plea
questioning the decree on the ground of collusion, fraud or the
like, respondent No. 1 is entitled to an order under O. 21, r. 50(2)
of the Code of Civil Procedure giving it leave to execute the decree
against the appellants as partners in the firm. The third contention of Mr. Mukherjee must, therefore, be rejected.
In the result, the appeal is dismisse,d with costs.
(') [1928] I.L.R. 56 ral. 704.
l;fB(N)1SCl--2,500-22·3 66-GIPS
Appeal dismissed.
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