The petitioner is a partnership firm challenging the recovery effected as per Exhibit P2 from a bill payable to the firm. Admittedly, the Managing Partner of the petitioner firm, in his individual capacity, had taken a contract work in the year 1994 which involved blasting operations to be carried out. The operations were carried out successfully, allegedly under the supervision of the officers of the Government and the entire amounts due were paid to the contractor.

2. Subsequently, certain residents of the locality filed suits to recompensate the damages, caused to their residences by reason of the blasting operations. The suits stood decreed against the Government, the Contractor and the Insurance Company, the latter of whom insured the Contractor. Execution petitions were filed first against the Government and then the Contractor was impleaded. The Government then recovered an amount of Rs.4,41,623/- from the amounts due to the petitioner firm.

3. The writ petition impugn Exhibit P2 order which attempts such recovery. The learned Counsel for the petitioner contends that the dues against an individual, the accrual of which and the cause of action too occurred, long prior to the constitution of the firm cannot be proceeded with against the assets of the firm or its income. It is also contended that going by Section 15 of the Partnership Act, 1932 the assets of the firm has to be used for the businesses of the firm and not otherwise. In such circumstance, the recovery made with respect to the contract earlier carried out by one of the partners, in his individual capacity, is bad and illegal is the contention.

4. Section 15 comes under Chapter III "Relations Of Partners to One Another"' and mandates that subject to contract, the property of the firm shall be held and used by the partners for the purposes of the business. This decides the relationship between those persons who are in the status of partners, inter-se. It is trite that a partnership firm has no separate existence from that of its partners and does not have the status even of a legal entity. Section 15 at best would regulate the relationship between the partners and does not affect a third party who claims against one of the partners. The reliance placed by the learned Counsel on the decision in Narayanappa v. Bhaskara Krishnappa, [AIR 1966 SC 1300]; is specious.

5. Narayanappa (supra) was a decision on whether a deed of dissolution of partnership, the assets of which included immovable properties, would compulsorily require a registration, for reason only of the inclusion of immovable properties. Therein, there was a partnership dispute and a suit was filed by two of the partners, making the other partners defendants and claiming declaration with respect to certain suit properties and for division of the same into four equal shares. In the alternative, a dissolution of the partnership was also sought. Certain partners, who were defendants, alleged a dissolution of the partnership based on an agreement between the parties. The agreement was not registered and it was argued that Section 17(1)(c) of the Registration Act, 1908 provides for compulsory registration and, hence, the unregistered document was inadmissible in evidence.

6. The Hon'ble Supreme Court categorically held that "a firm has no legal existence under the Act and the partnership property will, therefore, be deemed to be held by the partners for the business of the partnership". Again this only speaks of rights and liabilities of the partners with respect to each other and not with respect to a recovery made as against one of the partners, by a third party. The concept of partnership was succinctly stated to be the following:

"It seems to us that looking to the scheme of the Indian Act no other view can reasonably be taken. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is