Back
2006(1) Bankmann 37
MADRAS HIGH COURT
S. Ashok Kumar, J.
AP V. Sundaram — Petitioner
versus
E. Santhalingam — Respondent
Crl R.C.No.2002 of 2003 and Crl M.P. Nos. 13234 and 13235 of 2003
Decided on 8.3.2004
Counsel for the Parties:
For the Petitioneer:Mr.AR.L. Sundaresan, Advocate.
For the Respondent: None.
IMPORTANT POINT
A retiring partner will be liable for any subsequent act on behalf of firm and even for prosecution under Section 138 Negotiable Instruments Act which would bind the firm until public notice envisaged under Section 72 of Partnership Act was given.
Headnote:Negotiable Instruments Act, 1881—Section138—Partnership Act, 1932—Sections 45 and 72—Dishonour of cheque dated 21-1-2003 issued by partnership firm—Petitioner sought discharge on ground that ever since 30.11.1999 he was not a partner in firm and produced Form A dated 4-12-2003 to that effect—Trial Court dismissed the application for discharge—Revision—There was no publication in official Gazette or proof of notice to Registrar and thus no public notice as contemplated in Sections 45(iv) and 72 of Partnership Act—Retiring partner would be liable for any subsequent act on behalf of firm which would bind firm until public notice as prescribed under Section 72 of the Act was given —Impugned order called for no interference.
Result: Revision dismissed.
S. Ashok Kumar, J.—This Criminal Revision has been filed by the petitioner against the Order of the learned Judicial Magistrate in Crl. M.P. No. 5307 of 2003 in C.C. No.341 of 2003 dated 09.10.2003.
2. The brief facts of the case are as follows: The respondent has filed a complaint against the petitioner who was a partner of the company for dishonour of cheque dated 21.01.2003 for a sum of Rs. 5 lakhs. The revision petitioner filed Cr. M.P. No. 5307 of 2003 under Section 245 of Cr. P.C., to discharge the petitioner on the ground that ever since 30.11. 99 he was not a partner in the firm viz., M/s Shree Arunachaleswarar Mills and that therefore he is not liable for the liability of the partnership firm. The learned Judicial Magistrate No.2, Coimbatore dismissed the application filed by the revision petitioner. Aggrieved over the same this revision has been filed.
3. Learned counsel for the petitioner would contend that on the date of issue of the cheque which is the subject matter of this case, the petitioner was not partner in the firm and in support of the said contention has produced Form-A dated 4.12.2003. He has not produced any paper publication to show that the partnership was dissolved with effect from 25.10.2002 or he retired from the partnership from 30.11.1999. Learned counsel for the petitioner though did not dispute the signature in the cheque, would contend that in as much as the petitioner was not a partner of the firm, he could not be held liable for the liability of the firm and therefore, he should be discharged from the offence alleged against him under Section 138 of Negotiable Instruments Act. In the Form A dated 4.12.2003 name of the petitioner does not find a place. But the borrowal of the amount was on 27.12.2001 and according to the complaint, after repeated demand the petitioner is said to have issued the cheque only on 21.01.2003 for a sum of Rs. 5 lakhs. Section 72 Indian Partnership Act runs as follows:
“A partnership continues, as to third persons who deal with the members thereof as partners, until due notice of dissolution is given even though as between the partners, the firm has been dissolved prior to such notice, especially as to persons who dealt with the firm or extended credit prior to the dissolution as between partners. Accordingly, each member of a former firm is bound, and continues liable .for the acts of any partner within the ordinary scope of the business of the firm, until due notice of such dissolution has been given. But, in case of dissolution by operation of law, notice thereof need not be given, nor is notice necessary where a valid partnership has never existed. Wherever a notice is required by law to be given, it ought to be given in such manner, as the law deems sufficient. In India notice is regulated by the Act.”
4. As per Section 72 of the Partnership Act, a public notice should be given by publication in the official gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place of principal place of business. Admittedly in this case, no publication was made in the official gazette. Therefore the retirement from the partnership by the partner cannot be held legal.
5. In the decision reported in C. Assiamma v. State Bank of India1, a Division Bench has held as follows:
“23.In this connection, reference has also to be made to Section 23(3) of the Partnership Act, it 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) provides that 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 publi
