PAILY AND COMPANY Vs. STATE OF KERALA

JUDGEMENT

(1.) 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.