1987 Supreme(AP) 679
Andhra Pradesh High Court
Judges : P.KODANDA RAMAYYA
KAMUTALA LAXMINARAYANA - Appellant
Versus
LAXMI VENKATA SATYANARAYANA PADDY - Respondent
A.S.No.355/81
Decided On : 11-23-87
Advocates Appeared :
Mr. T. Veerabhadraiah,Mr. P. Gangarami Reddy
Headnote:PARTNERSHIP ACT, Sec. 45, Proviso and 72 - Suit against Partnership firm and its Partners for recovery of value of certain goods supplied by Plaintiff - Public notice of dissolution under Sec. 72 not given prior to transaction partners are liable under a decree.
Held : In this case of a dissolution simpliciter the proviso to Sec.45 has no application. The proviso applies only in the case of retirement connected with the dissolution. When it is a dissolution simpliciter, it is not retirement and the proviso cannot operate in favour of such retiring partner dispensing with the public notice on the ground that third party who is dealing with him has no knowledge of his partnership of the firm. In the absence of public notice under Sec. 72 the liability in respect of the transaction of the firm continues to operate.
A.S. Partly Allowed
( 1 ) THE plaintiff is the appellant in this appeal. The suit filed against the first defendant firm and also the partners, defendants 2 to 6, for recovery of rs. 18,500/- for the goods supplied by the plaintiff. Defendants 2 to 6 are said to be the partners of the firm. Defendants 2 to 5 filed a separate written statement stating that the firm was dissolved with effect from 31-3-77 and that the suit transaction took place on 7-9-77 and 8-9-77 and hence they are not liable and they are not aware of the transaction also. The 6th defendant admitted the transaction but disputed the quantum and also pleaded that he will pay the amount in instalments. On this controversy the court below held that the 6th defendant alone is liable for the transaction, the dissolution took place as pleaded by the defendants and as the plaintiff is not aware that defendants 2 to 5 are the partners, it exonerated D-2 to D-5 and dismissed the suit with costs so far as they are concerned and decreed the suit as against D-1 and D-6. Against the said judgment and decree the present appeal is filed.
( 2 ) LEARNED counsel for the plaintiff contended that the decree so far it exonerated defendants 2 to 5 is unsustainable as the partners have registered the firm and there was no public notice as contemplated under Sec. 72 of the indian Partnership Act, Act 9/32 (hereinafter called the Act) This is refuted by the learned counsel fqr the defendant stating that che proviso to Sec. 45 of the Act is attracted to the facts of the case as the plaintiff is not aware of the fact that D-2 to D-5 are partners of the first defendant firm, their retirement prior to the transaction in question would not give him a right to sue.
( 3 ) IT is seen that the controversy depends upon the fact whether the proviso to Sec. 45 is attracted or not. It is necessary to look to Sec. 45 of the Act which reads as follows:"liability for acts of partners done after dissolution: (1) Not withstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution until public notice is given of the dissolution : provided that the estate of a partner who dies, or who is adjudicated an insolvent, or of a partner who not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable under this section for acts done after the date on which he ceases to be a partner. (2) Notices under sub-section (1) may be given by any partner. "this provision enjoins the liability on the retired partner or partners of a dissolved firm not with standing the dissolution or retirement in respect of the transaction of the firm until a public notice is given by them as contemplated under S. 72 of the Act. The proviso engrafts exceptions. They are the cases of (1) death of a partner (2) insolvency of a partner or (3) where partner retires from the firm whose presence in the partnership is not known to a third party dealing with the firm. It is pertinent to note in this connection that Sec. 32 (3) indicates a rule imposing the liability on the retiring partner notwithstanding retirement in respect of the transactions of the firm until public notice is given. The proviso to sub-sec. (3) similarly engrafts an exception saying that a retired partner is not liable to a third party who deals with the firm without knowing that he was a partner. It is seen that proviso to Sec. 32 (3) and Sec. 45 also speaks of retirement of partners of the firm. It is clear so far as Sec. 32 is concerned, it must be confined to the retirement simpliciter without any dissolution. This conclusion is also forfeited with reference to the statement and objects relating to this section which reads as follows:"in this section, the word retire is properly confined to cases where a partner withdraws from a firm and the remaining partners continue to carry on