V.Andraiah & 2 others v. M/s Deepthi Finance

THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY CRP No.3721 of 2006 ORDER: This revision petition is directed against the order dated

12.07.2006 in EP No.191 of 2001 in OS No.42 of 1999 on the file of the Additional Senior Civil Judge, Kurnool, wherein, the arrest of the JDrs 1, 2 and 4/petitioners herein, was ordered in execution of the EP under Order XXI Rule 37 CPC.

Heard the learned counsel for the petitioners/JDrs 1, 2 and 4 and the learned counsel for the respondent-DHr. Perused the record.

The first respondent herein filed suit against petitioners herein and others and obtained a decree. In execution of the decree, the first respondent herein filed EP No.191 of 2001 seeking arrest of the JDrs. The JDrs 2 and 4 remained ex-parte. The first JDr filed counter contesting the execution petition, inter-alia, on the ground that the person, who signed the execution petition, is not competent to conduct litigation and the EP is not maintainable and the firm was not in existence. Earlier, aggrieved by the order of arrest issued on 29.11.2002 passed by the execution court, the petitioner herein filed CRP No.6056 of 2002, and this Court by order dated 22.02.2006 set aside the order of arrest and remanded the matter to the executing Court with a direction to record a definite finding whether the respondent-firm is in existence and whether the business is being continued and if so, the exact person who is authorized in law to operate the same. After a month, the executing Court by impugned order allowed the E.P. recording a finding to the effect that firm is still in existence and is doing business and the person Mr. Chandrasekhar, who signed in the plaint and EP has got authorization and he can represent the firm.

The main contention of the petitioners 1, 2 and 4 is that Mr. Chandrasekhar, who is said to have signed EP was not a partner, but is only a Manager and he has no valid authorization to file EP on behalf of the firm, which stood dissolved under a dissolution deed dated 16.01.2001. The suit was filed in the year

1999. The decree was passed on 30.03.2001. During pendency of the suit, the partnership is said to have been dissolved under a deed of dissolution on 16.01.2001. The executing Court in the impugned order states that the authorization was proved in the suit itself and though Chandrasekhar in his evidence in the EP has deposed that he has no authorization, it does not mean that he cannot take execution proceedings. It is no doubt true that in the suit also the defendants raised the contention that the person who signed the plaint is not duly authorized. An issue was framed in that regard under Issue No.2 and the same was answered in favour of the plaintiff. The execution Court cannot go beyond the decree nor the finding recorded in that judgment. The finding recorded under Issue No.2 is only the effect Chandrasekhar, who signed the plaint, was duly authorized to do so. Subsequent to filing of the suit, the partnership was dissolved under deed of dissolution. It is not the case where the E.P. is filed by the firm represented by any partners so as to construe that though the firm was dissolved, it continues its legal existence till it is wound up.

Now the question to be considered is whether subsequent to dissolution of the firm and in the absence of any specific authorization, can Chandrasekhar sign the E.P. and prosecute the execution proceedings on behalf of the firm? Mr. Chandrasekhar in his evidence in the EP categorically admitted that he has no authorization to file the E.P. The original authorization given by the firm in his favour was only to sign the plaint. Subsequently, the firm got dissolved. There is no further authorization in his favour by the partners of the dissolved firm. He was only an employee being the Manager of the firm. Simply because, he was authorized to sign the plaint, it cannot be said that the said authorization holds good in the execution proceedings also in spite of the dissolution of the firm. In the circumstances, it is held that the finding recorded by the execution Court that Chandrasekhar is authorized to sign EP and he can represent the firm in the EP also is unsustainable and the same is accordingly set aside. It is however, open to the DHr-firm to file fresh EP through duly authorized representative of the dissolved firm and recover the decretal amount in accordance with law. The present E.P. is however not maintainable and the same is accordingly dismissed.