Sri Bhagavathi Textiles Ltd. vs Lakshmi Textile Brokers And Ors.

1. The appellant had filed a suit for recovery of money against the respondents. Respondent 1 was described by the appellant as a partnership firm of which Respondents 2 and 3 were partners. Incidentally, Respondent 2 is the father of Respondent 3.

2. The trial court decreed the suit for a sum of Rs 1,03,061.22 plus interest thereon at the rate of 18 per cent per annum from 30-9-1975 till the date of the decree and thereafter interest was to be at the rate of 12 per cent per annum till the date of realisation and proportionate costs.

3. The respondents had filed an appeal before the High Court. One of the contentions which was raised was that Respondent 1 was not a partnership firm. The High Court by the judgment under appeal came to the conclusion that Respondent 1 was the trade name of the business which was being carried on by Respondent 2. It then held that as the relief had been directed against wrong parties, the appellant herein should amend the suit. The appeal of the respondents was allowed and the case was remitted to the trial court for fresh disposal according to law.

4. We fail to understand the course adopted by the High Court. Even if Respondent 1 was not a partnership firm but was a business owned by Respondent 2, there was no reason why the High Court could not have proceeded with the hearing of the appeal in order to find out whether Respondent 2 was liable to pay any money to the appellant herein. It was not the case of the defendants in the suit that anyone other than Respondents 2 and 3 had any interest in Respondent 1. If Respondent 1 was a duly constituted partnership firm, as was the case of the appellant herein, then Respondents 2 and 3 were stated to be its partners. Assuming the appellant was wrong, the case of the defendants themselves was that it is Respondent 2 who was the sole proprietor of Respondent 1. Even if this be the case, Respondent 2 was a defendant in the suit which had been filed by the appellant and if the appellant had succeeded, as it did before the trial court, a decree was liable to be passed against Defendant 2. To put it differently, if the appellant had made out his case on merits, then Defendant 2 was liable whether as a partner or as the sole proprietor of Defendant 1. There was, therefore, no need for the High Court to set aside the trial court's judgment and remit the case. The High Court, therefore, fell in error.

5. The High Court did not consider the other contentions which were raised by the respondents herein. We, therefore, allow this appeal, set aside the judgment of the High Court and direct it to hear the appeal being AS No. 711 of 1981 along with cross-objections de novo. It will be open to the appellant herein to contend that apart from Respondent 2, the other respondent, namely, Respondent 3 is also liable.

6. Parties shall bear their own costs.