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B.NARASHIMHA RAO versus T.RAGHAVALU

High Court of Madras

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B.Narashimha Rao v. T.Raghavalu - CRP.NPD.No.1693 of 2005 [2007] RD-TN 1531 (20 April 2007)

IN THE HIGH COURT OF JUDICATURE AT MADRAS



Dated : 20-4-2007

Coram

The Honourable Mr.Justice K. VENKATARAMAN

C.R.P.(NPD)No.1693 of 2005

and

C.M.P.No.15013 of 2005

B.Narashimha Rao .. Petitioner Vs.

T.Raghavalu Naidu & Company,

rep. by its Partner

T.Raghavalu Naidu,

No.16, Chinnathambi Mudali Street,

Chennai 600 079. .. Respondent Civil Revision Petition filed under Section 115 C.P.C. against the fair and decretal order dated 1.8.2005 in E.A.No.1050 of 2005 in E.P.No.1892 of 2004 in O.S.No.1892 of 2002 on the file of the X Assistant Judge, City Civil Court, Chennai. For Petitioner : Mr.S.J.Jagadev

For Respondent : Mr.T.Skandakumar

O R D E R



The present Civil Revision Petition is directed against the fair and decretal order of the learned X Assistant Judge, City Civil Court, Chennai made in E.A.No.1050 of 2005 in E.P.No.1892 of 2004 in O.S.No.1892 of 2002 dated 1.8.2005.

2. The short facts of the case, which are relevant for the disposal of the present revision, are as follows:- The respondent herein has filed the suit in O.S.No.1892 of 2002 against one M/s.T.Madhava Rao and Company represented by its 3 partners including the petitioner herein and obtained a money decree. The petitioner herein has been arrayed as 3rd defendant in the said suit. The suit was decreed on 30.12.2002. Thereafter, the respondent has filed the execution petition in E.P.No.1892 of 2004 against the above referred firm and its partners including the petitioner herein. In the said execution petition, the petitioner filed an application in E.A.No.1050 of 2005 in E.P.No.1892 of 2004 under Section 47 C.P.C. to dismiss the execution petition filed by the respondent herein. The said application has been contested by the respondent by filing a detailed counter. The learned X Assistant Judge, City Civil Court, Chennai, after considering the merits and demerits of the application filed by the petitioner, dismissed the said application by his order dated 1.8.2005. The present revision is directed against the said order.

3. Mr.S.J.Jagadev, the learned counsel appearing for the petitioner, contended that (a) the petitioner has retired from the partnership firm on 1.8.2001 much before the suit instituted against the partnership-firm in the year 2002; Hence, the petitioner is not liable to pay any amount claimed by the respondent. (b) The petitioner-judgment debtor had already intimated respondent/decree-holder about his resignation from the partnership firm through a letter dated 31.8.2001. Further, public notice was issued by the petitioner in Tamil daily 'Malai Malar" on 31.8.2001 regarding his retirement. Hence, the execution petition that has been levied against the petitioner is not valid in law. (c) The Court below failed to see that the respondent/judgment debtor has obtained an exparte decree against the petitioner suppressing the fact that he has retired from the partnership-firm before the institution of the said suit.

4. Per contra, Mr.T.S.Skandakumar, the respondent/ decree-holder contended that (a) The cause of action for the suit arose much prior to the alleged retirement of the petitioner on 1.8.2001 and hence, the suit that has been instituted by the respondent against the firm and the petitioner is perfectly valid. (b) As per Section 32(3) of the Indian Partnership Act, 1932 (hereinafter called "the Act"), the partners continue to be liable to third parties if any act done by them prior to their retirement. (c) The petitioner has not given any notice as contemplated under Section 72 of the said Act and hence, the plea of the petitioner that he has retired from the firm and he is not liable to pay any amount to the respondent after his retirement on 1.8.2001 cannot be accepted.

5. I have heard the the learned counsel appearing for the petitioner and the respondent.

6. It is an admitted case that the cause of action for the suit arose on 12.11.1998, 14.1.2000, 20.11.2000 and 30.3.2001. It is further admitted that the petitioner retired from the firm on 1.8.2001. Hence, the petitioner, in spite of the fact that he has retired from the partnership firm on 1.8.2001, is liable to third parties for any act of the firm done before his retirement. Since the petitioner has retired from the firm only on 1.8.2001, subsequent to the cause of the action arisen for the suit, the petitioner cannot be discharged from liability to third parties. But, the retiring partner may be discharged from any liability from any third party for the acts of the firm done before his retirement, through an agreement made by him with such third party and partners of the reconstituted firm. But, in the given case on hand, admittedly, there was no agreement between the petitioner and the respondent-third party. Further, the petitioner has not filed any agreement which has been entered into between him and the partners of the reconstituted firm. In this connection, it will be relevant to extract Section 32 of the Indian Partnership Act, 1932. Section 32 of the said Act reads as follows:- "32. Retirement of a partner.-- (1) A partner may retire,-- (a) with the consent of all the other partners, (b) in accordance with an express agreement by the partners, or (c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire. (2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement. (3) 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; Provided that a retired partner is not liable to any third party who deals with the firm without knowing that he was a partner. (4) Notices under sub-section (3) may be given by the retired partner or by any partner of the reconstituted firm."

7. The said provision makes it clear that the retiring partner may be discharged from any liability to any third party for the acts of the firm done before his date of retirement by an agreement with the third party and with the partners of the reconstituted firm. Further, the said provision makes it very clear that notwithstanding the retirement from the partnership firm, the partner continued to be liable to third parties until public notice is given with regard to his retirement. Admittedly, in the case on hand, there was no agreement with third party and with the partners of the reconstituted firm. Then, the only question that remains to be answered is whether public notice is given about the retirement of the petitioner from the firm.

8. It is no doubt true that the petitioner had made paper publication as could be seen from Ex.P-4. Ex.P-4 is the paper publication made in 'Malai Malar'. Further, the petitioner said to have sent a letter to the respondent dated 31.8.2001 about his retirement which has been marked as Ex.P-5. Ex.P-6 is the certificate of posting sheet to show that it has been sent to the respondent. The learned counsel appearing for the petitioner contended that the respondent was intimated about his retirement under Ex.P-5. Ex.P-6 will show that it has been sent to the respondent. The learned counsel appearing for the respondent contended that Ex.P-5 was not at all sent to the respondent and Ex.P-6 certificate of posting sheet will not establish that it has been served on the respondent. Before going into the aspect whether the letter sent by the petitioner through certificate of posting to the respondent can be construed as proper notice or not, it has to be seen whether sending of such notice is sufficient or not.

9. In this connection, it will be useful to refer to Section 72 of the said Act which deals with the mode of giving public notice. The said provision reads as follows:- "72. Mode of giving public notice.-- A public notice under this Act is given-- (a) where it relates to the retirement or expulsion of a partner from a registered firm, or to the dissolution of a registered firm, or to the election to become or not to become a partner in a registered firm by a person attaining majority who was admitted as a minor to the benefits of partnership, by notice to the Registrar of Firms under section 63, and 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 or principal place of business, and (b) in any other case, 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 or principal place of business."

10. The said provision makes it very clear that in case of retirement or expulsion or dissolution, etc., it should be by notice to the Registrar of Firms under Section 63 of the Act and by publication in the official gazette in al least in one vernacular newspaper circulated in the district where the firm does its business. Thus, the public notice as contemplated under this Section makes it very clear that the above three modes have to be carried out relating to the retirement or expulsion of the partner, etc.

11. Now, when we look at the present case, admittedly, the petitioner did not produce any document to show that he had sent a notice to the registrar of firms and he has made publication in the official gazette. Hence, it can be safely concluded that the petitioner has not followed the mode of public notice as contemplated under Section 72 of the Act. Section 72 does not contemplate notice only to the Registrar of Firms or publication in the official gazette or in one vernacular newspaper. The said Section makes it very clear that all the modes referred to above have to be followed when it relates to the retirement or expulsion of partner, etc. Since the petitioner has not followed two modes, namely, notice to the Registrar of Firms under Section 63 of the Act and publication in the official gazette, it can be safely concluded that the petitioner has not followed the mode of giving public notice as contemplated under Section 72 of the said Act.

12. The next question that has to be gone into is whether the petitioner has sent any notice to the respondent/decree-holder about his retirement. The petitioner as P.W.1 has deposed that such notice has been sent to the respondent and the same has been marked as Ex.P-5. Admittedly, according to P.W.1, the same has been sent through Ex.P-6 certificate of posting. R.W.1 denied about the receipt of the said notice. Though an attempt has been made by the learned counsel for the petitioner that serving of notice by certificate of posting is sufficient to be construed as proper service and an attempt has been made on behalf of the respondent's counsel, such service is not proper service and further, it has been denied on the side of the respondent that such notice has been served on the respondent, I am not inclined to go into that aspect. Since even assuming that individual notice has been given by the retiring partner, namely, the petitioner herein, he is not liable only for the subsequent dealing of the remaining partners with the third party. As already discussed, the cause of action in the suit was on 12.11.1998, 14.1.2000, 20.11.2000 and 30.3.2001 much prior to the petitioner's retirement on 1.8.2001. These factors seems to have weighed in the mind of the learned Trial Judge while dismissing the application filed by the petitioner under Section 47 C.P.C.

13. In short, I am constrained to hold that:-- (a) The cause of action arose on 12.11.1998, 14.1.2000, 20.11.2000 and 30.3.2001, much prior to the petitioner's retirement from the partnership firm on 1.8.2001. (b) The petitioner's retirement notice to the respondent even if it is taken that it has been sent and even if it has been taken that the certificate of posting is a proper mode, the said notice is dated 31.8.2001 which is subsequent to the cause of action for the suit. (c) The petitioner could be said to be discharged from liability to third party like the respondent only if there is an agreement with the respondent and the partners of the reconstituted firm. Admittedly, there is no agreement between the respondent and the petitioner or the partners of the reconstituted firm. Furthermore, such agreement cannot be treated impliedly also, since the respondent denies about the receipt of the notice under Ex.P-5 dated 31.8.2001. (d) The petitioner has not followed the mode of public notice as contemplated under Section 72 of the Act by giving notice to the Registrar's of Firms under Section 63 of the Act and by publication in the official gazette. (e) Furthermore, the petitioner, who ought to have raised all these objections at the time of trial, failed to do so. The above factors will clearly show that the petitioner cannot escape liability for the claim made against him.

14. Thus, for the foregoing reasons, I am constrained to hold that the order of the X Assistant Judge, City Civil Court, Madras made in E.A.No.1050 of 2005 in E.P.No.1892 of 2004 in O.S.No.1892 of 2002 dated 1.8.2005 does not suffer any illegality or infirmity and hence, the same is liable to be confirmed and accordingly confirmed. The Civil Revision Petition stands dismissed. Consequently, C.M.P.No.15013 of 2005 is closed. However, there will no order as to costs. dpp

To

1. The Registrar,

City Civil Court,

Chennai.

2. The Section Officer,

V.R.Section,

High Court,

Madras.


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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