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2002 Supreme(SC) 907

(2009) 16 Supreme Court Cases 322
V.N. KHARE AND ASHOK BHAN, JJ.
KOVAI YARN TRADERS – Appellant
Versus
P. SUBRAMANIAM AND OTHERS – Respondents
Civil Appeal No. 1417 of 1995
Decided on : September 11, 2002

Headnote:Partnership Act, 1932, Section 72 - Retirement from partnership - Notice of - One partners retired from the firm - Firm continued as proprietary concerns – Constitution of new firm - Registered - Business transactions with newly constituted firm – Suit for recovery regarding non-payment of price by firm to appellant - Suit filed against firm and against partners of old firm – No notice of retirement as required under Section 72 - Retiring partner also held to be jointly and severally liable for firm - High Court reversed finding on the ground that once firm was reconstituted and appellant had dealt with said firm, no proceedings can be taken against retiring partner for want of notice - Order upheld.

       [Para 6]

ORDER

1. One A.P. Palaniappan and N.C.C.A. Palanisamy were the partners of a registered partnership firm known as M/s Annapoorna Textiles. It was constituted on 7-6-1976. It is alleged that on 16-2-1977, A.P. Palaniappan retired from the said registered partnership firm, relinquishing all his rights in M/s Annapoorna Textiles. It is further alleged that from 17-2-1977 the dissolved firm was run by a proprietary concern comprising of the left out partner and his heirs. On 1-4-1978, N.C.C.A. Palanisamy constituted a new partnership firm with his sons and the said partnership firm was registered under the Partnership Act, 1932.

2. It is not disputed that the plaintiff-appellant herein had several business transactions with the newly constituted firm during the period i.e. 29-7-1978 to 31-8-1979. It is also not disputed that the appellant-plaintiff was not paid the price of materials supplied to the firm. It appears that under such circumstances the appellant-plaintiff filed a suit for recovery of money amount against M/s Annapoorna Textiles as well as A.P. Palaniappan and N.C.C.A. Palanisamy.

3. The trial court was of the view that assuming A.P. Palaniappan had retired in the year 1977 from the partnership firm, since no notice under Section 72 of the Partnership Act, 1932 was given by him, his retirement was invalid and the original partnership would not dissolve and, therefore, A.P. Palaniappan, jointly and severally, was bound for the liability of the firm.

Consequently, the suit was decreed.

4. A.P. Palaniappan preferred an appeal before the High Court. The High Court was of the view that since the appellant-plaintiff had business transactions with the newly constituted firm, the want of notice for retirement from the partnership firm by A.P. Palaniappan under Section 72 of the Partnership Act, 1932 was totally irrelevant. In that view of the matter, the appeal preferred by A.P. Palaniappan was allowed and the suit against him to that extent stood dismissed. However, the High Court permitted the appellant-plaintiff to proceed for recovery of money against N.C.C.A. Palanisamy and his heirs. It is against the said judgment of the High Court, the appellant-plaintiff is in appeal before us.

5. Learned counsel appearing for the appellant-plaintiff urged that the findings as regards the retirement of A.P. Palaniappan in the year 1977 were totally fraudulent and based on inadmissible evidence and as such the High Court has committed an error in setting aside the decree of the trial court. We do not find any merit in this argument.

6. We have gone through the judgment and found that the High Court has a considered the entire evidence and has come to the conclusion that, in fact, A.P. Palaniappan had retired on 16-2-1977 and thereafter N.C.C.A Palanisamy ran the said dissolved firm as a proprietary concern and on 1-41978 a newly registered partnership was constituted. In that view of the matter, we do not find any infirmity in the said finding. Once it is held that the firm was reconstituted on 1-4-1978 and the appellant-plaintiff had dealt b with the said firm, the High Court was right in its conclusion that no proceeding can be taken against AP. Palaniappan and his heirs.

7. For the aforesaid reasons, we do not find any merit in this appeal. It fails and is, accordingly, dismissed. There shall be no order as to costs.

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