9911796707
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Issues Involved:
1. Limitation on the suit based on promissory notes. 2. Liability of the partnership firm for the amounts due on the promissory notes. 3. Validity of the acknowledgment of liability in Ext. A8. 4. Applicability of the Negotiable Instruments Act versus the Partnership Act in determining liability. Detailed Analysis: 1. Limitation on the Suit Based on Promissory Notes The defendants contended that the suit was barred by limitation. However, the trial court held that the plea of limitation was not available to the defendants because there was an acknowledgment of the liability as per the promissory notes by defendants 1, 2, and 3 in an agreement dated 27-12-1970, Ext. A8. The court confirmed the genuineness of Ext. A8, supported by the testimonies of P.W. 1 and P.W. 2, and held that the acknowledgment in Ext. A8 was sufficient to save the suit from being barred by limitation. The court concluded that the suit was not barred by limitation. 2. Liability of the Partnership Firm for the Amounts Due on the Promissory Notes The court below relied on Section 19 of the Partnership Act to hold that the promissory notes were executed, and amounts were raised for the partnership firm consisting of defendants 1, 2, and 3. Therefore, it held all the defendants liable for the amount. However, the appellants' counsel argued that the promissory notes did not show that the amounts were raised for the partnership firm, and the firm's account books did not reflect the receipt of the promissory note amounts. The court examined the promissory notes and found that the descriptions on the notes were insufficient to bind the firm. The court held that the mere use of a letterhead or description of the executant as a partner was not enough to create liability on the other partners or the firm. 3. Validity of the Acknowledgment of Liability in Ext. A8 The court confirmed the genuineness of Ext. A8, which included an acknowledgment of the liability by defendants 1, 2, and 3. Ext. A8 listed the assets and liabilities of the partnership, with the debt due to the plaintiff included as item No. 5 in the B schedule. The court held that the acknowledgment in Ext. A8 was valid and that the liability shown as No. 5 represented the promissory note amounts. Therefore, the acknowledgment in Ext. A8 was sufficient to save the suit from being barred by limitation. 4. Applicability of the Negotiable Instruments Act versus the Partnership Act in Determining Liability The court noted that the law as to negotiable instruments is different from the rule of law applicable to simple contracts in writing. Under the Negotiable Instruments Act, a negotiable instrument must indicate on its face the persons who are bound for its payment. The court cited several precedents to support the principle that the name of the person or firm to be charged upon a negotiable document should be clearly stated on the face or back of the document. The court concluded that the promissory notes in question did not clearly disclose the firm as the party liable. Therefore, the liability could not be fastened on the firm based on the promissory notes alone. Conclusion: The court held that the trial court was not justified in passing a decree against all the defendants. A decree could only be passed against the executants of the promissory notes. Accordingly, the court passed a decree against the 1st defendant for the amounts covered by Exts. A1 to A4 and against the 1st and 2nd defendants for the amount covered by Ext. A5. The appeal against the plaintiff by the 1st defendant failed, while the 3rd defendant succeeded in the appeal, and the 2nd defendant succeeded in part. The parties were directed to suffer their own costs.
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