TaxTMI 
TaxTMI 
1982 (10) TMI 225
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....al. The decree was to the effect that all the timber in compartments Nos. 16 and 18A in Batote range of Ramban Forest Division, whether standing, felled or sawn, including saw bands installed therein, were his exclusive property and that respondents 1 to 3 could not transfer, or agree to transfer the aforesaid property to any person, nor could they remove the same from there and nor could they operate the aforesaid forest compartments. Execution of this decree was taken out by him against the aforesaid three respondents in the court of Sub-Judge (C.J.M.) Jammu the court that had passed the decree by making an application to it on 12-12-1979 that their property, including the sawn timber lying in their depot at Canal Road, Jammu, be attached and sold, as they had failed to obey the decree. On this, notices were issued to them. In the meantime, three persons, namely, P. L. Dua, Ravinder Dua, and Smt. Usha Gupta on 17-12-1979, made an application to the Executing Court, seeking time to file objections to the aforesaid execution application, as the decree sought to be executed had, according to them, been obtained by fraud. This prayer was granted by the court. They filed their objecti....
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....depot, which they intended to remove and sell outside the jurisdiction of the court in flagrant disregard of the terms of the decree, and prayed that as provided by Order 21, Rule 32, C.P.C., they may be arrested and the acants lying in their depot be attached. On this, the court on 14-11-1981 itself, issued a notice to the judgment-debtors to show cause as to why they be not arrested for not obeying the command of the decree, and in the meantime attached all the timber lying in their depot. The next date was fixed for 30-11-1981. This order was, however, recalled by the court on 27-11-1981 on an application made to it on behalf of P. L. Dua and others, alleging that the timber lying in the depot belonged to them, which they had already sold to a third party for cash consideration. This order, which was passed ex parte, read as under: "In partial modification of the court order dated 14-11-1981, timber mentioned above will stand released pending disposal of stay application on 30-11-1981'." Aggrieved by this order, Hardatt Sharma challenged it in an appeal before the District Judge at Jammu, who stayed its implementation by his order dated 30-11-1981. 6. In the m....
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....against the mandate of Order 21, Rule 32, C.P.C. as pointed out by Mr. V S. Mal-hotra and rightly so because by the order judgment-debtor has been condemned unheard without returning any finding about disobedience of decree by him by the court. Hence the order dated 14-11-1881 is withdrawn." This order too was challenged in appeal by Hardatt Sharma before the District Judge on the same day, who stayed its implementation as well, by his order dated 2-12-1980. 8. The learned Judge heard all the three appeals against the aforesaid three orders dated 27-11-1981, 30-11-1981, and 2-12-1981 and disposed of the same by a common judgment, dismissing all the three appeals by his order dated 23-12-1981. It is this order which is the subject-matter of Civil Miscellaneous Appeal No. 90. The appellant, it may be stated, did not challenge it by way of appeal, but by way of a revision petition, which was, however, admitted as an appeal and implementation of the aforesaid three orders dated 27-11-1981, 30-11-1981, and 2-12-1981 stayed by this court vide its order dated 24-11-1881. 9. Right at the stage of the admission of the appeal, Mr. V. S. Malhotra put in his appearance on behalf of the f....
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....pon it, 10. All these contentions were negatived by the Court and P. L. Dua, Rajinder Dua and Smt Usha Gupta were impleaded as party respondents to the appeal by its order dated 29-1-1982. On the first ground it was held on the general principle of law that a party could not be deprived of its valuable right of hearing, merely because rule nisi for contempt of court had been issued against it. In the alternative, it was held that rule nisi having been issued against their attorney, the applicants P. L. Dua and others could not be deprived of their right of hearing. As regards the second ground it was in the first instance held that the firm name being merely a compendious way of describing all the partners in it, a suit against a firm would automatically be a suit against all its partners. Secondly, it was held that one of the orders impugned in the appeal having been passed in the suit filed by P. L. Dua and others themselves, they had every right to defend it by being impleaded as respondents to the appeal. The third ground was repelled on the short point that the partnership-deed having been admittedly executed at Pathankot, the J, & K. Registration Act, could have no applica....
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....cial Leave Petition was however, dismissed by their Lordships with these observations : "The impugned order against which this special leave petition has been filed is an interlocutory order implead-ing respondents Nos. 4 to 6 as parties to the litigation. We do not want to interfere with that order. Special leave petition is accordingly dismissed. It is, however, made clear that the question whether these persons were properly joined or not which depended upon several aspects including the aspect whether the partnership was registered under the Jammu and Kashmir Law will be permitted to be raised at the final hearing of the suit and expression of any opinion by any court in suit or appeal at the interlocutory stage will not prejudice the final decision of the matter. It is further directed that so far as the removal of timber which is either lying in the compartment or that may be brought in the compartment or depots is concerned the parties not to remove that timber without obtaining prior order from the concerned court." While arguments in the appeal were being heard, the State moved an application for being impleaded as a party to it. This is CMP No. 152/82. Objecti....
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....ken by the other partners. It was further contended that Jai Kishen and Sham Lal having admitted the execution of the partnership dated 22-7-1978 in arbitration proceedings pending in this court between them and P. L. Dua and others, the said admission was binding on the appellant Who claimed right to the forest through them and could not be heard to say that P. L. Dua Ravinder Dua and Smt. Usha Gupta were not partners in the firm. They also disputed the proposition that the judgment of the learned Addl. District Judge dated 21-5-1981 operated as res judicata and maintained that P. L. Dua and others having had no opportunity to obey the decree, it was not, in any event, binding on them on the plaint terms of Order 21 Rule 32. 13. Before dealing with the merits of the appeal, it is necessary to first of all dispose of CMP No. 152/82. The State has invoked the provisions of Order 1 Rule TO C.P.C., in particular, Sub-section (2) thereof for being impleaded as a party-respondent to the appeal. Sub-section (2) reads as under :-- "(2) The court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the c....
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....s partners in the firm, the State cannot be added as a party to the appeal to raise the new questions as to whether or not the lease period has expired, or whether or not Jai Kishen and Sham Lal had any right to transfer to the appellant their rights under the lease, much less, when none of the parties has questioned the State's paramount title in the forest. The State not being a party to the suits, cannot obviously be bound by the decrees passed therein and is fully competent to take all steps under law that it may deem necessary to protect its interests. 15. Turning now to the other contention raised on behalf of the State, the case of P. L. Dua and others, there can be no manner of doubt, is clearly distinguishable from that of the State. They having claimed to be partners in the firm Messrs Jai Kishen Sham Lal & Sons, which was admittedly a party to the suit, in which a consent decree was passed, were held to be already on the record on the ground that the firm name being a compendious way of describing all the partners in it, a suit against a firm would in fact he a suit against all its partners. The law that a suit against a firm is a suit against all its partners is ....
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....inal hearing of the appeal on the ground that it required registration Under Section 17 of the Jammu and Kashmir Registration Act and nor was it disputed that P. L. Dua, Ravinder Dua and Smt. Usha Gupta had been properly added as party respondents to the appeal. What was, however, disputed was the binding effect of the admission relating to the execution of the aforesaid partnership deed dated 22-7-1978, made by Jaikishen and Sham Lal in the arbitration proceedings pending between them and P. L. Dua and others in this court on the appellant, to which he was admittedly not a party. There appears to be some force in Mr. Gupta's contention that this admission cannot bind the appellant, even granting that he claims his right to the forest through Jai Kishen and Sham Lal. True, Under Section 18 of the Evidence Act, statements made by persons from whom the parties to the suit have derived their interest in the subject matter of the suit, are binding on such parties as their admissions, nevertheless, before the same may bind them, it has further to be shown that the statements were made by those persons during the continuance of their interest in the subject matter, and obviously so, ....
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....ties to the suit, but also on the ground simpliciter that they were not made parties to the suit. Incidentally, both sides have placed reliance upon two Supreme Court decisions viz. : Gambhir Mal Pandiya v. J. K. Jute Mills Co. Ltd., AIR 1963 SC 243, and Her Highness Maharani Man-dalsa Devi v. M. Ramnarain Private Limited, AIR 1965 SC 1718 to support their rival contentions. 18. In my opinion, neither of the parties is wholly correct. In Gambhirmal Pandiya's case (supra) a decree against a firm was sought to be executed against one of its partners, who had not been made a party to the suit in which the decree had been passed. He had challenged it on the twin ground that be not being a party to the suit, the decree was not binding on him and could not be executed against him, and that his other partner having no right to enter into an agreement with the decree-holder that contained the arbitration clause, pursuant to which the impugned decree came to be passed, the same was inexecutable. Both these contentions were negatived by their Lordships. It was no doubt observed therein : ".....The law is thus not concerned with a right between the partners inter se, and an ac....
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...., in terms of Order 21, Rule 50 (2). 19. Mr. Gupta then contended that P. L. Dua and others could have no right to challenge the decree even on the ground of fraud or collusion, so long as it was not sought to be executed against them by seeking the necessary leave in terms of Sub-rule (2) of Rule 50. I am not impressed with this argument either. Right of a partner to challenge on these grounds, a decree against the firm, passed in a suit to which he is not a party, does not depend upon the decree holder's application seeking leave to execute the decree against him in terms of Sub-rule (2), but it exists independently of it, and may be exercised by him even by filing a regular suit. Such a right he may exercise not only to resist the execution of the decree against him, but also to resist its execution against the firm as well, for to envisage a right in him to challenge the decree only when it is sought to be executed against him, will have the effect of negativing this right, by placing his interest in the partnership at the mercy of his other partners, who, to his detriment, are in collusion with the decree-holder. 20. Messrs P. L. Dua and others having pleaded fraud a....
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....gainst whose order the appeal had been taken, Some High Courts had taken the view that the lower court would retain its jurisdiction to pass any order in the case before the stay granted by the appellate Court was communicated to it, and some High Courts had taken the view that its Jurisdiction would be taken away the moment the stay was issued. This conflict was finally set at rest by their Lordships in Mulraj v. Murti Raghunath Maharaj, AIR 1967 SC 1386, wherein it was held that the lower court would retain its jurisdiction to pass any order in the case pending before it, till the stay issued by the appellate Court was communicated to it. The locus classicus in the judgment reads as under (para 10) :-- "As we have already indicated, an order of stay is as much a prohibitory order as an injunction order and unless the court to which it is addressed has knowledge of it, it cannot deprive that court of the jurisdiction to proceed with the execution before it. But there is one difference between an order of injunction and an order of stay arising out of the fact that an injunction order is usually passed against a party while a stay order is addressed to the court. As the st....
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....tions from the appellant. The appellant is, therefore, still at liberty to take all such pleas as would compel the court to order its execution after determining the mode and extent of its execution. It would be thus more appropriate that what the appellant has urged before this court, he urges before the executing Court itself, which is still to apply its mind in order to finally dispose of the plea. There is, therefore, no reason to interfere with the order dated 30-11-1981. 26. In so far as the order dated 27-11-1981 is concerned, it has undoubtedly been passed with undue haste. The court ought to have issued notice to the decree-holder before modifying its earlier order dated 14-11-1981. Be that as it may, the order having merged with the later order dt. 2-12-1981, there is no point in either upholding or setting aside the same. 27. This brings me to the third order dt. 2-12-1981. Notice for the arrest of respondent Jai Kishen and Sham Lal and attachment of the timber lying in their depot at Canal Road, Jammu, issued vide order dt. 14-11-1981, were withdrawn on the ground that the judgment-debtors had had no opportunity to obey the decree under execution. Here, the execut....