RAJENDRAN AND OTHERS versus SHANKAR SUNDARAM AND OTHERS

Citation: [2008] 2 S.C.R. 209 · Decided: 30-01-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

-+-
[2008] 2 S.C.R. 209 
~ 
{ 
RAJENDRAN AND OTHERS 
A· 
v. 
SHANKAR SUNDARAM AND OTHERS 
I ... 
(Civil Appeal No. 802 of 2008) 
JANUARY 30, 2008 
B 
r 
[S.8. SINHA AND HARJIT SINGH BEDI, JJ.] 
.. 
' 
Code of Civil Procedure, 1908 - 0. 38 r. 5 - Attachment 
before judgment -Application for, against partnership firm and 
its partners - Challenge to, on the ground that borrower was c 
not a partner and borrowal of money was not for the benefit of 
the firm - Held: All of them were partners at the relevant time -
Plaintiff could enforce his claim against the firm as a/so its 
partners - Lender filed application for attachment to protect 
his interest in the event suit is decreed - Cburt was to form D 
prima facie opinion at that stage without going into the 
correctness of the contentions raised - On facts, partners would 
' 
not be seriously prejudiced on furnishing security, thus, 
"""' 
interference under Article 136 not called for - Constitution of 
India, 1950-Article 136 - Partnership Act, 1932. 
E 
. The appellant-defendant nos. 4 to 7 were partners of 
the defendant no. 1 firm. Defendant no. 3 was also the 
-1 
partner. It is alleged that defendant no. 2, who was 
described as the managing partner of the firm fraudulently 
~ 
obtained loan from the plaintiff-respondent and also F 
furnished a personal guarantee. The cheque was issued 
in the name of defendant No. 1. Defendant no. 3 executed 
a pronote. Plaintiff-respondent filed suit for realisation of 
the amount against all the defendants. It also filed 
application under 0. 38 r. 5 CPC for attachment before 
G, 
judgment. The High Court rejected the application since 
' 
~ 
~ 
the defendant no. 2 took the loan in connivance with 
defendant no. 3 and 8 not for the benefit of partnership 
firm. Aggrieved, plaintiff filed appeal which was allowed . 
. Hence the present appeal. 
209 
H 
--+-
210 
SUPREME COURT REPORTS 
[2008) 2 S.C.R. 
A 
Appellants-defendants contended that in obtaining 
_,,;-
the loan from the plaintiff-respondent, defendant Nos. 2, 
3 and 8 played a prime role; that a defendant No.2 was 
stated to be the Managing Partner of the firm, which he 
': 
was not; that only defendant No.3-son of defendant No.2 
8 was a partner; and that the purported loan was granted 
by the plaintiff without even caring to ascertain as to who 
are the partners of the said firm. 
, 
f 
' 
Dismissing the appeal, the Court 
\ 
c 
HELD: 1.1 The firm would be bound only when a 
transaction is entered into by a partner of the firm subject 
to the limitations contained in the Partnership Act, 1932. 
[Para 9] (213-G] 
1.2 The amount of loan was advanced by a cheque. 
D The said cheque was drawn in the name of the partnership 
firm. Concededly again, the appellants were the partners 
thereof at the relevant time, although an endeavour was 
made before the Single Judge of High Court to show that 
_;-
,,.... 
they ceased to be so .. Having regard to the fact that they 
'" 
E 
purported to have retired from the partnership firm in the 
year 2001 and the transaction between the parties are of 
the year 2000, prima facie the liability of the appellants 
could not have been ignored. [Para 11] (214-A, B, C] 
1.3 The application for attachment before judgment 
F 
was filed by the plaintiff so as to protect his interest in the 
~-
event the suit is decreed. In such a situation, the court 
exercises jurisdiction under Order XXXVlll Rule 5 CPC. It 
need not go into the correctness or otherwise of all the 
contention.s raised by the parties. Allegations against 
defendant Nos. 2, 3 and 8 are required to be gone into at 
G the hearing of the suit. The plaintiff is entitled to secure· 
his interest keeping in view the amount involved in the 
)-
' ...
suit. A cheque had been issued in the name of the firm. 
The appellants are partners thereof. A pronote had been 
executed by a partner of the firm. Thus, even under the 
H Partnership Act prima facie the plaintiff could enforce his 
-+ 
RAJENDRAN AND OTHERS v. SHANKAR SUNDARAM 
211 
AND OTHERS [S.B. SINHA, J.] 
claim not only as against the firm but also as against its A 
partners. [Paras 12, 13 and 14] [214-D, F, G, H; 215-A] 
1.4 In any view of the matter as the appellants are 
not seriously prejudiced if they furnish the security, this, 
is not a fit case where this Court should exercise its 
jurisdiction under Article 136 of the Constitution of India. B 
.... 
[Para 15] [215-8] 
. , 
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 802 
of 2

Excerpt shown. Read the full judgment & AI analysis in Lexace.