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2011 Supreme(Kar) 47
High Court of Karnataka (Circuit Bench At Dharwad)
THE HONOURABLE MR. JUSTICE N.K. PATIL & THE HONOURABLE MR. JUSTICE A.N. VENUGOPALA GOWDA
M/s. Kamangar & Company
Versus
M/s. A.L. Byahatti & Sons & Others
RFA No.304 of 2005 (MON)
Decided on : 19-01-2011
For the Petitioner:Ravi S Hegde, S.V. Shastry, Advocates.
For the Respondents:Iqbal Patel, Advocate.
Headnote:CODE OF CIVIL PROCEDURE, 1908 - Order 41 Rule 1 r/w Section 96: [N.K. Patil & A.N. Venugopala Gowda,JJ] Transaction by the 3rd Defendant., a partner representing 1st Defendant partnership firm - Default in making payment - Suit for recovery of amount against partnership firm represented by its partners - 3rd Defendant was placed Ex-parte - Defence of the remaining partner that the 3rd Defendant was not a partner of the firm on the date of transaction since he had retired from the firm - Dismissal of suit - Appeal against - Held, Section 32(3) of the Act lays down that, notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them, which would have been an act of the firm if done before the retirement until public notice is given of the retirement. - Section 45(1) of the Act provides that, notwithstanding the dissolution of a firm, the partners continue to be liable was such to third parties for any act done by any of then which would have been an act of the firm if done before dissolution until public notice is given of the dissolution. - Further held, Un-deniably, no notice was given to the Registrar of Firms of the retirement of the 3rd Defendant from the 1st Defendant firm and its reconstitution. No publication was got made in the Official Gazette/vernacular newspaper circulating in the District. DW-1 has admitted the fact of not notifying the Registrar of Firms about reconstitution of the firm vide Ex.D-9 and the of not taking out the publication in the Official Gazette and the newspaper. It is clear that, no public notice as contemplated under Sections 45(1) and 72 of the Act has been issued and published. In the circumstances, the retirement of 3rd Defendant, even if to be true, cannot affect the rights of the plaintiff, who is a third party in view of Section 32(3) of the Act.
INDIAN PARTNERSHIP ACT,1932 - Sections. 72 & 63: [N.K.Patil & A.N.Venugopala Gowda,JJ] Mode of giving Notice and Publication in the Official Gazettee - Held, The mode of giving notice has been laid down in Section 72 of the Act, which says that, a public notice has to be given by intimation to the Registrar of Firms under Section 63 and by publication in the official gazette in at least one vernacular newspaper circulating in the District where the firm to which it relates has its place or principal place of business. - Further held, The appellant, who was unaware of the alleged retirement of the 3rd Defendant, has sold and delivered the goods to the 3rd Defendant, has acted as partner of the 1st Defendant, has executed Ex.P-4. The alleged retirement of 3rd Defendant, having been neither notified to the Registrar of Firms under Section 32(3) of the Act nor having been notified under Section 72 of the Act, the plaintiff being under the impression that the 3rd Defendant continues to be the partner of the 1st Defendant, has delivered the goods. The payment of the balance amount having not been made, the suit instituted against the respondents for recovery was well-founded. On facts, held, The Trial Court, without noticing the said material facts and also the fact that the 1st Defendant is a family partnership firm, in that the 2nd Defendant is the father and Defendants 3 & 4 are his sons, has erroneously dismissed the suit. Neither on facts nor in law, the Trial Court was justified in dismissing the suit.
INDIAN PARTNERSHIP ACT, 1932 - Sections 32(3), 45 (1), 63 & 72: [N.K. Patil & A.N. Venugopala Gowda, JJ] Suit for recovery of money - Plaintiff was unaware of alleged retirement of partner, sold and delivered goods to him as he acted as partner of firm and executed acknowledgment deed - Payment of balance amount, from firm was sought to be recovered - Neither notice to Registrar of Firms nor publication in official Gazette/vernacular newspaper was given regarding retirement of partner and reconstitution of firm - Held, Alleged retirement leading to alleged reconstitution of firm could not affect rights of plaintiff, who was third party in view of Section 32(3). Payment of balance amount having not been made, suit for recovery is well founded and decreed.
VENUGOPALA GOWDA, J
1. Plaintiff is the appellant. The suit was filed for recovery of money. 1st defendant is a registered partnership firm constituted by defendants 2-4, under Ex.D-8. The firm was carrying on business in produces like onions, garlic etc. the 3rd defendant, representing the 1st defendant, purchased onions from the plaintiff between 08.11.1999 to 10.01.2000, to the tune of Rs.5,26,336.58 and paid Rs.3,02,737/-and retained the balance of Rs.2,23,599.58. A cheque dated 24.01.2000 for Rs.25,000/-(Ex.P-5) was issued towards payment of part of the outstanding amount. The cheque was returned unhonoured (Ex.P-6). A legal notice as per Ex.P-7 was sent, which was served on defendants 1 & 2 (Ex.P-7(a) & Ex.P-7(b)). The notices sent to defendants 3 & 4 were returned (Ex.P-7(c) to (f)). Suit for recovery of Rs.2,23,599.58 was instituted. Defendants 1, 2 & 4 appeared through their Learned Counsel. 2nd defendant filed the written statement, which was adopted by defendants 1 & 4. 3rd defendant though served with suit summons, did not appear and hence was placed exparte. In the written statement, it was contended that, 3rd defendant was not a partner at the time of the transaction and also at the filing of the suit and hence, his acts and deeds are not binding on defendants 1, 2 & 4. It was stated that, 3rd defendant retired voluntarily from 1st defendant – partnership firm on 02.09.1999 and the cheque for Rs.25,000/-has not been issued by the partner and the cheque will not bind the 1st defendant and that, the issuance of cheque by Aizaz Ahmed may be being in respect of his personal transaction. It was contended that, the alleged acknowledgement deed dated 19.03.2000 is not binding on defendants 1, 2 & 4 and in view of retirement of 3rd defendant, the suit instituted is malafide; that it has no cause of action and is also bad for non-joinder of necessary parties. It was prayed that the suit be dismissed with exemplary costs.
2. Based on the material pleadings, issues were raised and during course of trial, for the plaintiff, its Managing Partner deposed as PW-1, through whom Ex.P-1 to Ex.P-10 were marked. For the defendants, the 2nd defendant deposed as DW-1, through whom Ex.D-1 to Ex.D-9 were marked. Finding merit in the contentions of defendants 1, 2 & 4, the suit was dismissed. Feeling aggrieved, the plaintiff has filed this appeal.
3. Sri Ravi. S. Hegde, Learned Advocate appearing for the appellant contended that, the 3rd defendant being a partner of the 1st defendant as per Ex.D-8 being not in dispute and the 3rd defendant being not even a signatory to Ex.D-9, the alleged reconstitution of the 1st defendant-partnership firm and the fact of reconstitution having not been notified to the Registrar of Firms as required under Section 32(3) of the Act and there being no public notice as mandated under Section 72 of the Act, dismissal of the suit by the Learned Trial Judge, by relying upon reconstituted partnership deed (Ex.D-9), without even taking into constitution and appreciating the deed of acknowledgment executed by the 3rd defendant (Ex.P-4), is wholly erroneous and illegal. Learned Counsel contended that, the Learned Trial Judge by misdirecting himself has recorded erroneous findings on facts and has failed to apply the law in the correct perspective, in view of which, interference in the matter is called for.
4. The respondents though have entered appearance through their Learned Counsel, none appeared and made submissions despite the matter being adjourned more than once.
5. We have perused the record of the suit received from the Trial Court.
6. The trial Court noticing the fact that the purchase of onion from the plaintiff was between 08.11.1999 to 10.01.2000 and that the 1st defendant firm constituted under Ex.D-8 as having been reconstituted on 02.09.1999 vide Ex.D-9, as per which the 3rd defendant voluntarily retired from the partnership, has held that, the suit is devoid of merit and has dismissed the
