The central legal point established in the judgment is that partners continue to be liable to third parties for acts of the firm before its dissolution until public notice is given of the dissolution.

( 1 ) THIS appeal is filed by the appellant who was plaintiff in the trial court against the judgment and decree dated 3-12-1986 passed by the iv additional city civil judge, Bangalore in o. s. no. 1921 of 1980 decreeing the suit of the appellant against defendants 1 and 4 only.

( 2 ) WE have heard the learned counsel for the appellant andthe learned counsel for respondents 2 and 3 fully and perused the records of the case.

( 3 ) THE appellant is a banking company constituted under thebanking companies (acquisition and transfer of undertakings) Act, 1970 and it filed a suit for recovery of Rs. 59,775-95 paise against All the defendants on the ground that the defendants approached the plaintiff-bank for a loan of Rs. 40,000/- for the purpose of their industry and it was sanctioned and the loan was availed of by the defendants on 5-12-1974, after executing the requisite documents. It is also further averred by the plaintiff that the loan was required to be repaid after 9 months at the rate of Rs. 500/- and thereafter at the rate of Rs. 1,000/- per month. In spite of the repeated demands of plaintiff the defendants did not pay instalments and hence the plaintiff filed the suit.

( 4 ) DEFENDANTS 2 and 3 have admitted that they are partners ofdefendant No. 1-firm which borrowed Rs. 40,000/- from the plaintiff. The execution of the document is also admitted, but defendant No. 3 has contended that he has executed the document only as a partner. Defendants 2 and 3 have further contended that firm-defendant No. 1 was dissolved under a dissolution deed under which defendant 4 took over All the assets and liabilities and thereafter defendants 2 and 3 are discharged from their liabilities. Their advocate on the basis of this contention among others have prayed for the dismissal of the suit.

( 5 ) THE defendant no. 4 remained ex parte.

( 6 ) TRIAL court on the basis of the contentions raised thefollowing issues: 1. What amount is due to the plaintiff towards the loan (rs. 40,000) advanced to the 1st defendant on 5-12-1974? 2. Whether defendants 2 and 3 prove that they are not liable to pay the amount due to the firm, the 1st defendant? 3. Whether defendant 2 proves that the claim is barred by time? 4. What decree or order?

( 7 ) THE trial court has decreed the suit of theappellant-plaintiff for a sum of Rs. 59,485-58 paise against defendants 1 and 4 and it dismissed the suit as against defendants 2 and 3.

( 8 ) THE main contention of the appellant in this appeal is thatthe trial court could not have dismissed the suit as against defendants 2 and 3 and it ought to have decreed the suit of the appellant against them also. It is not disputed in this case that defendant no. 1 is a partnership firm and defendants 2 and 4 were its partners. It also cannot be disputed in this case as it is borne out by the records that on 28-7-1976 defendant no. 3 retired from the partnership firm under exh. D. 1. On that very day some time after exh. D. 1, defendant no. 2 also retired under exh. D. 4, leaving the entire firm to defendant no. 4 only. The contention of respondents 2 and 3 is that since they retired from the firm under exhs. D. 1 and d. 4 and the assets and liabilities of the firm had been taken over by respondent no. 4, they stand discharged, from any liability to the plaintiff-bank. It is also their contention that their retirement from the firm was brought to the notice of the plaintiff-bank by notices issued by them and the plaintiff-bank has by its conduct accepted the retirement of the said defendants from the partnership firm and that amounts to discharge under section 32 (2) of the indian partnership act (which will hereinafter be referred to as the act for short) and section 45 of the said act. On the other hand the learned counsel for the appellant has contended that though the plaintiff-bank had knowledge of the retirement of defendants 2 and 3 from the partnership firm, it has no acquiescence in the act of partners' reti