JUDGMENT Piggott and Walsh, JJ.
1. In this case an arbitration took place between Messrs. Clement Robson & Co., an English firm with a branch in Karachi, and an Indian firm known as Sital Prasad Sadhu Ram, of Muzaffarnagar and other places. An award was published in Karachi, on the 18th of December, 1918, and an application to file the award under Section 11 of the Indian Arbitration Act (IX of 1899), was made against the firm Sital Prasad Sadhu Ram, in the court of the Judicial Commissioner of Sind, and was disposed of by an order of the Additional Judicial Commissioner, dated the 3rd of March, directing the award to be filed. Both Sital Prasad and Sadhu Ram were served with notices of the application, and both appeared. Sital Prasad took the objection that he was not a partner. The Additional Judicial Commissioner, while observing that Sadhu Ram had signed the reference as sole proprietor of the firm, declined to deal with the questions as to what persons constituted the firm, and as to whether Sital Prasad was one of them. In taking this view he held that the firm had been a party to the arbitration proceedings, that it was duly represented at the hearing and that an order was applied for against the firm only, so that the constitution of the firm was irrelevant to the questions which he had to decide. The Additional Judicial Commissioner pointed out that the question might be raised in execution proceedings. He went on to hold that the signing of the submission and reference to arbitration, which was a necessary concomitant of the making of the contract, was clearly within the general authority of a partner of the firm. This was decided on an objection raised by Sital Prasad.
2. It being alleged that the firm, or the members thereof, resided or had property within the local limits of the court of the District Judge of Muzaffarnagar, an application to transfer the order was made to the Court of the Judicial Commissioner of Sind, at the instance of Messrs. Clement Robson & Co., who in reference to this award were now in the position of decree-holders. Sital Prasad was made a party to that application, so that the Court at Sind which made the order on the 9th of April, 1919, in the ordinary form for the transfer of a decree, certifying under Order XXI, Rule 6, of the Code that no satisfaction had been obtained by execution and that no execution application had been made to the Court, must have been aware that the object of the transfer was to enable the decree-holders to apply for execution in Muzaflfarnagar against Sital Prasad as a member of the firm.
3. Following upon this; an application was made in the court of the Additional District Judge at Meerut, to whom the order filing the award bad been thus transferred for execution of it, as of a decree, against the firm through its proprietors Sital Prasad and Sadhu Ram, asking for personal arrest of both and postponing any proceeding against their property. Sital Prasad filed an objection of a rambling character, the substance of which was that he was not liable. He did not distinctly allege, though he may have intended in a confused way to imply, that he was not a partner, and he did not contend that the application ought to have been made to the Court at Sind. On the contrary, his main objection was that his personal liability had been exempted under the order of that Court, an objection which he must have known, was contrary to the facts. He also objected that a decree ought to have been prepared, which is an idle objection. It is possibly due to the nature of his objections that the court below has gone wrong, and overlooked the really vital question of fact which had to be decided.
4. The Subordinate Judge of Meerut has not only rejected the objection, but has held the decree-holders to be entitled to enforce their order or decree against Sital Prasad, without deciding, what the Court at Sind expressly declined to decide, whether he is a member of the firm, and therefore personally liable unless the firm discharges the debt. To this extent the appeal succeeds. It is obviously wrong that a person should be liable either to arrest or to have his property sold, for the debt of a firm, without a judicial determination of the question whether he is a member, if he chooses to dispute his membership. The right to have the question decided either for or against him is an elementary one. If the matter rested there we might content ourselves by taking a narrow and technical view, and simply allow the appeal and dismiss the application.
4. It is, however, obvious that this course would only put both parties to further expense and trouble when the whole matter can be disposed of by a finding on this simple issue of fact, and that a difficulty is certain to arise sooner or later, to which the attention of the court below was not drawn, as to whether the court of Meerut to which this order or decree has been transferred is competent to try it. The appellant himself did not choose to raise this difficulty, which has more in it than his other objections. It is clear that only one of two [courts can try the question, Sind or Meerut. It is probable that the Court of Sind having already held that it is a matter which may be decided in execution proceedings, and having transferred the decree for the purpose of execution, would find some difficulty in holding that it had any further jurisdiction in the matter.
5. The question, which is the proper Court, depends on the combined operation of Order XXI, Rule 50, and Section 42 of the Code. The appellant, Sital Prasad, is a person described in Sub-clause (2) of Rule 50. Rules 49 and 50 are new, and are machinery adopted from the English rules of the Supreme Court, "for the protection," it has been slid, "of commercial enterprise", and for simplifying and expediting recovery against individuals who are either dormant, elusive or evasive under the shelter of a firm name. The application for leave to issue execution against such a person is made against him "as being a partner in the firm." The decree-holder is enabled to go to the Court for leave in order to force an issue upon the question of such membership. If the liability is not disputed, the Court, unless some valid objection of another kind appears, grants leave as a matter of course. If the liability is disputed, the issue must be tried and determined as an issue in a suit. The decree-holder is thus enabled to obtain what amounts to a decree--see Sub-clause (3)--upon the question of the liability, without resorting to hazardous and infructuous proceedings against a person whose liability is doubtful.
6. But the application for leave must be made to the court "which passed the decree," Which is the court answering this description when the decree has been transferred from the original court? Section 42 provides that the court executing a decree so sent to it "shall have the same powers in executing such decree as if it had been passed by itself." In other words, for the purpose of execution it is to be deemed to be the court which passed the decree. No limitation is contained in this enactment, which is clearly intended to be of general application, and which must, we think, have been intended as a matter of general convenience to remove all questions arising out of the decree, such as those dealt with by Section 47 of the Code, and the like, from the cognizance of the court which made the transfer and which "passed the decree." No authority appears to exist upon the point, but this view seems to follow from the view taken in Adhar Chandra v. Pulin Behari (1914) 20 C.L.J. 129.
7. We hold, therefore, that the court to which this order was transferred, namely the court of the Subordinate Judge of Meerut, is for the purpose of Order XXI, Rule 50(2), the court "which passed the decree."
8. The appeal must be allowed and the application must be remanded to the court below to try and determine the issue "whether Sital Prasad at the time of the making of the contract was, or had held himself out to be, a partner of the firm Sital Prasad, Sadhu Ram." If the issue is determined in the negative the application must be dismissed. If it is determined in the affirmative leave must be granted to issue execution in accordance with the application. The costs in the court below and in this Court must abide the event.