Retired partners remain liable for partnership debts incurred while they were partners unless public notice of retirement is provided; absence of demand notice does not invalidate claims against them.

ORDER

1. This appeal is filed under Section 20 of RDDB & FI Act against the order passed by Learned Presiding Officer, DRT, Bangalore in OA No.1458/2013 on 27.1.2016.

2. Respondents 3 and 4 before the Tribunal below are the appellants. The first respondent bank filed OA 1458/2013 against respondents therein for recovery of an aggregate sum of Rs.41,32,064.05p. towards Term Loan of Rs.24,96,059.69p together with interest at 18.25 % p.a with monthly rests and Over Draft amount of Rs. 16,36,004.36p together with interest at 16.25% p.a. from 28.2.2013 till date of realization and sale of hypothecated movables, along with costs.

3. The case of the first respondent bank is that second respondent, viz. M/s Srishti Components is a partnership firm. Second respondent through its partners, viz., Smt. Preetha Menon, first appellant, Sri Sreekumar and the second appellant, Mrs. Shalini N. Menon approached the bank on 16.6.2008 for a Term Loan of Rs.35.00 lakhs for purchase of machinery and working capital of Rs.15.00 lakhs. Accordingly, first respondent bank sanctioned the said Term Loan of Rs.35.00 lakhs and an Overdraft facility of Rs.5.00 lakhs in favour of respondents 2 to 6 and appellants. Partners of the second respondent firm executed Composite Hypothecation Agreement dated 4.7.2008 in favour of the first respondent bank. Smt. Preethi Mohan and Shri P. Sreekumar stood as guarantors for the amount borrowed by the partnership firm by executing necessary guarantee agreements. Partnership firm represented by its Managing Partner Mrs.Preethi Menon approached the first respondent bank in the month of April, 2009 and informed about the change in the constitution of the partnership firm to the effect that Sri C. Naresh Babu and Sri T. Janeeth Kumar have replaced Sri Sreekumar and Smt. Shalini M. Menon as per the fresh partnership deed dated 18.2.2009. They executed fresh set of documents in support of financial facility availed by the partnership firm earlier on 4.7.2008. They executed new composite hypothecation agreement dated 16.4.2009 in favour of the first respondent bank. Smt. Preetha Mohan, Sri C. Naresh Babu and Sri T. Janeeth Kumar executed fresh guarantee agreement on the same day. The firm represented by Shri C. Naresh Babu approached the bank on 4.10.2009 for enhancement of OD facility towards working capital requirement upto a limit of Rs.14.00 lakhs. Accordingly, OD Limit was enhanced to Rs.14.00 lakhs. Shri Naresh Babu and Shri T. Janeeth Kumar executed fresh composite hypothecation agreement on 23.12.2009 and they also executed additional guarantee agreement on 23.12.2009. The 2^nd respondent firm represented by Shri C. Naresh babu and Sri C. Raghavendra approached the bank with an application dated 11.3.2011 for renewal of working capital facility upto a limit of Rs.14.00 lakhs for a further period of one year. They represented that the partnership firm had been further reconstituted and that Shri T. Janeeth Kumar retired from the partnership firm. Their request was considered and the firm and Shri Naresh Babu issued a letter of renewal dated 25.3.2011 acknowledging the loan liability. Second respondent Firm and its partners defaulted in making payments and therefore notice dated 19.11.2012 was issued. Despite that loan repayment was not repaid. Therefore, Legal Noti