Bombay High Court
SHARAD MANOHAR
Jayantilal Mohanlal - Appellant
Versus
Narandas - Respondent
Decided On : 09/29/1982
PARTNERSHIP - EXECUTION OF DECREE - LIABILITY OF RETIRED PARTNER - O.21, R.50(2) OF THE CIVIL P.C. - A retired partner of a firm is liable for the dues of the partnership till the date of his retirement, even if he has given notice of retirement, unless the creditor acquiesced in that position and agreed to get his dues satisfied from the newly constituted partnership firm.
Fact of the Case:
A retired partner of a firm challenged an order passed by the Executing Court under O.21, R.50(2) of the Civil P.C., which allowed the execution of a decree against him individually for a debt owed by the firm. The petitioner claimed that he had retired from the partnership before the suit transaction and that the decree could not be executed against him.
Finding of the Court:
The Court held that the petitioner was liable for the decree passed against the firm as he was a partner at the time of the suit transaction. The Court further held that the petitioner's retirement from the partnership did not absolve him from his liability towards the creditor of the firm, as he had not given notice of retirement and the creditor had not acquiesced in his retirement.
Issues: 1. Whether a retired partner of a firm is liable for the dues of the partnership till the date of his retirement? 2. Whether the petitioner's retirement from the partnership absolved him from his liability towards the creditor of the firm?
Ratio Decidendi: 1. A retired partner of a firm is liable for the dues of the partnership till the date of his retirement, even if he has given notice of retirement, unless the creditor acquiesced in that position and agreed to get his dues satisfied from the newly constituted partnership firm. 2. The petitioner's retirement from the partnership did not absolve him from his liability towards the creditor of the firm, as he had not given notice of retirement and the creditor had not acquiesced in his retirement.
Final Decision: The Court dismissed the revision application and upheld the order of the Executing Court.
2. The facts relevant for the purpose are as follows :-
For the sake of convenience, the parties will be referred to with reference to their position in the trial Court save and except that the petitioner, who was respondent No. 4 in the trial Court will be referred to as 'petitioner' only.
One Miss Geetaben N. Jatania who was defendant No. 2 in the suit had deposited a sum of Rs. 7,000 with the firm M/s. Damodar Vithaldas, which was defendant No. 1 in the suit. The firm/defendant No. 1 executed a deposit receipt in favour of said Miss Jatania/defendant No. 2. It is not disputed that said Miss Jatania/defendant No. 2 assigned her right, title and interest in the said deposit receipt in favour of the plaintiff.
About the next fact there is a slight ambiguity. Contention of the present petitioner is that he retired from the partnership firm/defendant No. 1 on 31-10-1976. However, this date is also referred to as 24-10-1976 in the judgment of the trial Court. Whatever that may be, it is an admitted fact that the present petitioner retired from the partnership firm/defendant No. 1 after the execution of the deposit receipt by the firm in favour of defendant No. 2.
On 15-10-1979 the plaintiffs filed a suit against the firm-defendant No.1 and also against defendant No. 2, Miss Jatania for recovery of the amount due under the deposits. In the said suit decree was passed on 17-6-1980 against the firm/defendant No.1 for a sum of Rupees 9,992.91 ps. The decree directed that amount was to be refunded by instalment of Rs. 300 each. The first instalment was to be paid on or before 15th day of each month. On 26-9-1980, the plaintiffs took out Miscellaneous Notice No. 1781/80 against the present petitioner Jayantilal Mohanlal, who was shown as respondent No. 4 in the said notice and against some other respondents. By the application in question the plaintiffs sought to bring on record the partners of the firm/defendant No. 1 so that the plaintiff could execute the decree against the said partners also. Evidently, the application was made under O.21, R.50(2) of the Civil P.C. The learned Judge who heard the notice, however, appears to have taken the view that such an application was not competent because the original judgment-debtor, defendant No.1, had not made any default in payment of the decretal instalment. The learned Judge observed that the original judgment-debtor, defendant No. 1, was always ready and willing to pay the amount. I may state here that the fact that on the date when the said application viz. Miscellaneous Notice No. 1781/80 was made, the firm/defendant No. 1 was ready and willing to pay the amount of decretal instalment, is not disputed before me. As a matter of fact it has been the specific contention of the present petitioner in the trial Court that the original firm/defendant No. 1 against whom the decree was passed had in fact offered the amount of the instalments to the plaintiff but that the plaintiff themselves refused to accept the amount. This positi
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