HIGH COURT OF CALCUTTA
G. K. Mitter
JUGGILAL KAMLAPAT - Appellant
Versus
SEW CHAND BAGREE - Respondent
Award 36 Of 1951
Decided On : JULY 30, 1959
PARTNERSHIP - DISSOLUTION - LIABILITY OF RETIRED PARTNERS - SECTION 45 OF THE INDIAN PARTNERSHIP ACT, 1932 - INTERPRETATION - PROVISO TO SUB-SECTION (1) - SCOPE AND APPLICABILITY.
Fact of the Case:
The case involved an application in execution of a decree on an award made by the Bengal Chamber of Commerce against Sew Chand Bagree, a firm, and its partners, Manik Chand Bagree, Moti Chand Bagree, and Jankidas Bagree. The decree was based on a contract entered into between Sew Chand Bagree and Juggilal Kamlapat in 1948. The Bagree brothers contended that the firm had been dissolved in 1945 by mutual consent and that they were no longer liable for the firm's debts.
Finding of the Court:
The court found that the firm of Sew Chand Bagree had indeed been dissolved in 1945, based on evidence such as a deed of agreement, trade license, bank account, and correspondence. The court also noted the absence of any public notice of the dissolution or any attempt to update the records of the Registrar of Firms.
Issues: 1. Whether the firm of Sew Chand Bagree had been dissolved in 1945 as claimed by the Bagree brothers. 2. Whether the Bagree brothers were still liable for the firm's debts despite the dissolution, considering the provisions of Section 45 of the Indian Partnership Act, 1932.
Ratio Decidendi: The court interpreted Section 45 of the Indian Partnership Act, 1932, particularly the proviso to Sub-section (1), which exempts the estate of a partner who retires from the firm and was not known to the person dealing with the firm from liability for acts done after the date of retirement. The court held that the proviso applied to the case at hand since Manik Chand Bagree and Moti Chand Bagree were not known to Juggilal Kamlapat as partners of Sew Chand Bagree and had retired from the firm before the contract in question was entered into.
Final Decision: The court dismissed the application for execution against Manik Chand Bagree and Moti Chand Bagree, holding them not liable for the decretal amount. However, the court allowed the decree-holder to proceed against Jankidas Bagree, the remaining partner.
( 1 ) THIS is an application in execution of a decree on an award made by the Bengal Chamber of Commerce dated Tune 14, 1950 on a dispute between Juggilal Kamlapat, the award holders, and Sew Chand Bagree, against whom the award was made. The decree was pased on Mav 28, 1951 for a total sum of over Rs. 31,000/ -. The application is one under Order 21 Rule 50 (2) of the Code of Civil Procedure to execute the decree against Manik Chand Bagree, Moti Chand Bagree and Jankidas Eagree as partners of the firm of Sew Chand Bagree.
( 2 ) THE award was given in respect of a con- tract entered into between Sew Chand Bagree and Juggilal Kamlapat on September 25, 1948. The application is being opposed by Manik Chand Bagree and Moti Chand Bagree whose case is that the firm of Sew Chand Bagree was dissolved in October 1945 by mutual consent of its partners and that thereafter their brother Jankidas Bagree started a new business in the name of Sew Chand Bagree with which they the other brothers had no concern. Sew Chand Bagree the individual was the father of the three persons already mentioned. From a copy of entries in the Register of firms maintained by the Registrar of Firms, West Bengal, it appears that the business of Sew Chand Bagree was established in the year 1924, that it was formerly a joint Hindu family business and that the partnership firm was started on October 28, 1933. The three partners, shown in the said record are Manik Chand Bagree, Moti Chand Bagree and Jankidas Bagree. This document does not show that there has been any change in the constitution of the firm ever since its inception. It is contended by the award holders that no change in the constitution of the firm having been notified and no public notice of the dissolution of the firm having been given under the provision of the Indian Partnership Act, all the partners continue to be liable for any act done by any of them. The award holders further do not admit that there was a dissolution of the firm in the year 1945 as alleged by the Bagrees. On the evidence adduced I must hold that there was a dissolution of the firm, On this finding the question is whether Sub-section (1) of Section 45 of the Partnership Act is brought into play or whether the point is covered by the proviso to the said Sub-section.
( 3 ) AS the matter could not be determined on. affidavits it was set down for trial on evidence of the issue as to the liability of Manik Chand Bagree and Moti Chand Bagree under the decree based on the award.
( 4 ) (HIS Lordship examined the evidence of the witnesses and proceeded:)Mr. Tibrewalla, Counsel for the Juggilal Kamlapat, argued that it had not been established by the evidence that the firm of Sew Chand Bagree had ever been dissolved. He submitted that no attempt had been made to get any alteration in the constitution of the firm noted in the records of the Registrar of Firms upto the year 1959 although dissolution is alleged to have taken place in the year 1945. Counsel submitted that the Bagrees had not examined any disinterested third party to show that the dissolution, if any, was known to outsiders, that no advertisement of the dissolution had appeared in any newspaper, that there was no evidence of the issue ot any circular with regard to it and that no broker other than Sriratan Damani had been examined. He relied strongly on the absence of the books of account of Sew Chand Bagree and contended that the same, if produced, would have established that the firm had never been wound up. There is certainly some force in these contentions, specially the comment on the non- production of the books of account. But I must hold on a consideration of the entire evidence adduced that the firm had been dissolved. The deed of agreement prepared by Messrs. Dutt and Sen and signed by the Bagree brothers, the issue of the trade license by the Corporation of Calcutta, the opening of the account with Hindusthan Commercial Bank Ltd. , and the lette
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