IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN WEDNESDAY, THE 21ST JANUARY 2009 / 1ST MAGHA 1930 AS.No. 761 of 1994() ----------------------------- OS.172/1992 of ADDL.SUB COURT, ALAPPUZHA .................... APPELLANT(S): PLAINTIFF --------------------- ST.GEORGE FINANCE & KURIES, GOONALAND DAL LAKE, KASHMIR- REP.BY ITS MANAGING PARTNER CHERIAN GEROGE KAILAEETTIL, PACHE MURI, EDATHUA. (PLAINTIFF) BY ADV. SRI.JOSEPH A.VADAKKEL SRI.GEORGE K.VARGHESE RESPONDENT(S): DEFENDANTS 1TO 3 ------------------------ 1. P.PREMAKUMAR, THOTTUMKARA MADOM, AMBALAPUZHA P.O., NOW EMPLOYED AS CLERK, STATE BANK OF TRAVANCORE, PUNNAPRA. 2. K.SIVAKUMAR, S/O. KRISHNA IYER, SOUTH NALUKAYYALACKAL, MADOM, SOUTH GATE, AMBALAPUZHA NOW EMPLOYED AS CLERK, STATE BANKI OF TRAVANCORE, PERUMBAVOOR. 3. T.INDIRAKUMARI, W/O.RAVINDRANATHAN NAIR, CHERUKUMARAPPALLIL, PUNNAPRA, ALAPPUZHA- 4 EMPLOYED AS CLERK, STATE BANK OF TRAVANCORE , PUNNAPRA, (DEFENDANTS 1 TO 3 RESPECTIVELY). ADV. SRI.G.S.REGHUNATH SRI.A.K.ALEX FOR SRI.P.VIJAYARAGHAVAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21/01/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.N. KRISHNAN, J ----------------------- A.S.No. 761 OF 1994 --------------------------------- Dated this the 21st day of January, 2009 JUDGMENT This is an appeal preferred against the judgment and decree of the Additional Sub Judge, Alappuzha in O.S. 172/1992. The suit is one for realisation of money due under a chitty transaction. It is the case of the plaintiff that the 1st defendant joined in a kury conducted by plaintiff and bid the kury in auction and received the amount and executed an agreement at Edathua for due payment of the amount with interest. Defendants 2 and 3 stood as sureties. The defendants committed default of the payment of the amount and therefore the suit is filed for realisation of the amount. 2. The 1st defendant remained exparte. Defendants 2 and 3 filed a separate written statements contending that the suit is not maintainable. It is hit by the provisions of the Chitty's Act and they also denied the acknowledgment of liability executed by the 1st defendant. 2. In the trial court Exts. A1 to A8 were marked and PW1 was examined. The trial court found that the plaintiff is not entitled to any relief and dismissed the claim. It is against that decision the A.S. 761/1994 -2- plaintiff has come up in appeal. The point that arise for determination are: 1. Whether the plaintiff is entitled to the decree as prayed for? 2. Whether the suit is not maintainable as on one or any of the grounds raised by the defendants 2 and 3? 3. Points 1 &2: For the sake of convenience, both these points are answered together. The plaintiff is a registered chitty company having the head office at Sreenager in Jammu and Kashmir. The chitty was registered as No. 402/85. The 1st defendant had joined in a kury conducted by the plaintiff. The 1st point that is found against was regarding the registration of the partnership. It can be seen from the documents available that the head office of the chitty company is at Sreenagar in Jammu and Kashmir and as per the provisions of the Jammu and Kashmir Partnership Act, the firm is registered. It is also seen that the principle place of business is at Sreenagar and it has branches all over India. Ext. A2 is the partnership deed relating to the company. Ext. A1 would show that the partnership was registered in 1984 with three partners namely Cherian George, A.S. 761/1994 -3- Kuriackose Joseph and Saji George. It is Cherian George as the managing partner had instituted the suit. The partnership deed produced will show that he is the managing partner. As per Clause 11 he is appointed as the managing partner and is competent to represent the firm in all the matters. The learned trial Judge found that since the partnership is not registered under the Indian Partnership Act, it is not competent to initiate action. But it has to be stated when the partnership and the head office is at Jammu and Kashmir and it is registered therein, it is sufficient and being a part and parcel of this country it can spread the business to any part in India. Therefore the registration of the partnership under the Jammu and Kashmir Partnership Act will be sufficient for the purpose of running the business in India. 4. The next question is regarding the transaction. Materials are placed and the 1st defendant has not even entered appearance. It is the case of the plaintiff that the 1st defendant had joined in a kuri, bid in auction and received the amount and for the future payment of the subscription and the amount due had executed a document and as he had committed default the suit is instituted. This cannot be disputed and there is also a document in the form of A.S. 761/1994 -4- Ext. A8 acknowledging the liability. Ext. A8 is dated 31.1.1990 whereby the 1st defendant had undertaken to pay the said amount without any further delay. The suit transaction is not barred by limitation as well. 5. The legal point considered by the Subordinate Judge is that since the chitty is not registered under the Kerala Chitties Act and no sanction or permission is obtained under the provisions of the Act, the transaction is hit by the provisions of the Act and so the plaintiff cannot claim any amount. This question had been precisely considered by a learned Judge of this Court in the decision reported in John v. Oriental Kuries Ltd. [1994 (2) KLT 353]. This court held that: “The Kerala Chitties Act applies only to kuries started in Kerala and has no application to a kuri started from Mangalore in Karnataka State. The Central Chitties Act 1982 was brought into force in the State of Karnataka only in January 1984 and S.85 of that Act saved chitties which had been started prior to the commencement of that Act. Since the kuri in question was started by the Mangalore branch of the plaintiff company in the year 1978, it is clear that the conduct of the A.S. 761/1994 -5- chitty is not hit by Chitties Act of 1982”. There is no materials placed before me as well to show that the Chitties Act of 1982 had been extended to the State of Jammu and Kashmir and further Section 1 Sub Section 2 clearly states that it extend to the whole of India except the State of Jammu and Kashmir. Therefore the requirement under Act of 1982 nor the requirement under the Kerala Chitties Act 1975 is necessary. So there is no legal bar for instituting the suit. From these discussions it can be seen that the plaintiff's company is registered under the Partnership Act of Jammu and Kashmir as early as in 1984 which is having its head office at Sreenagar in Jammu and Kashmir. It has started a kuri from there and it is having a branch at Edathua. The 1st defendant has joined a kuri conducted by the plaintiff and had bid the kuri in auction and obtained the money and had executed the document for payment and also acknowledged the liability by Ext. A8. Therefore when the amount is not paid the plaintiff is competent to institute the suit for realising the amount. Defendants 2 and 3 are only sureties and they are liable under Section 128 of the Contract Act as their liability is coextensive with that of the principle debtor. When the debt against the principle debtor A.S. 761/1994 -6- survives, sureties are bound to comply and therefore defendants 1 to 3 are jointly and severally liable. From these discussions I hold that the plaintiff is entitled to the reliefs prayed for. In the result, the judgment and decree of the trial court are set aside and the plaintiff is given a decree for realisation of Rs. 20,340/- with 6% interest on the said sum from the date of suit till realisation with costs. Considering the facts and circumstances, I direct the parties in the appeal to bear their respective costs. M.N. KRISHNAN,JUDGE vkm