NOOR MOHAMMECD Vs. HILL PRODUCE TRADING CO.

JUDGEMENT

(1.) THE petitioner is the same in both these revisions.He is the fourth defendant in two suits filed before the Subordi­nate Court,Badagara.The plaintiffs are different.Two suits were filed for money said to be due from a firm impleaded in both the suits as the first defendant.Both the plaintiffs had transactions with the firm.Defendants 2 to 4 were impleaded as partners of the firm.The suits were contested by the second defendant on behalf of the firm.The other defendants were set ex parte,and the suits were decreed.When execution steps were taken against the petitioner,he came forward with an application to set aside the decrees passed against him on the ground that summons were not served on him and he had no knowledge of the decree before the date alleged by him.Though this was opposed by both the plaintiffs the lower court found that defendant has made out sufficient cause for setting aside the ex parte decree against him.So both the suits were restored so far as the petitioner is concerned.Thereafter the petitioner filed an application under Order XXX,rule 8 which is a new provision introduced in the Civil Procedure Code with effect from 1st February 1977.That Rule reads as follows:" 8.( 1)Any person served with summons as a partner under rule 3 may enter an appearance under protest,denying that he was a partner at any material time. (2)On such appearance being made,either the plaintiff or the person entering the appearance may,at any time before the date fixed for hearing and final disposal of the suit,apply to the Court for determining whether that person was a partner of the firm and liable as such. (3)If,on such application,the Court holds that he was a partner at the material time,that shall not preclude the person from filing a defence denying the liability of the firm in respect of the claim against the defendant. (4)If the Court,however,holds that such person was not a partner of the firm and was not liable as such,that shall not preclude the plaintiff from otherwise serving a summons on the firm and proceeding with the suit,but in that event,the plaintiff shall be precluded from alleging the liability of that person as a partner of the firm in execution of any decree that may be passed against the firm. The petitioner 's case is that he was not a partner at the time of the transactions sued on and is also not liable as such for the plaint claims.His case is that he retired from the firm in 1969 and further that the plaintiffs had dealt with the firm without caring to know who the partners are and therefore he is not liable.The lower court did not accept this contention and has dismissed the applications.This is challenged in these revision petitions.

(2.) THE first defendant -firm is Messrs.K.M.Kader Batcha Saheb and Sons.K.M.Kader Batcha Saheb was the father of defendants 2 to 4.He was carrying on the business as a proprietory concern and on his death his sons continued the business constituting themselves as partners of the firm.The partnership is not evidenced by any document.Nor is there a case that the partnership was for any period or that any provision is made by contract between the partners for the duration of their partnership or for determination of their partnership. That being so it is only a partnership at will as mentioned in section 7 of the Indian Partnership Act. The case of the petitioner is that differences arose between him and the second defendant in 1969 and he retired from the partnership by giving notice in writing to all the partners of his intention to retire. If this is established he cannot be reckoned as a partner at the time of the transactions sued on by the plaintiffs.These transactions are of the year 1974.To prove this the petitioner relies on the copy of the plaint. The written statement and the judgment in O.S.344 of 1969 on the file of the Subordinate Judge,Coimbatore. That suit was filed by the petitioner for settlement of accounts of the firm and the defendants in that suit are defendants 2 and 3 herein. A reading of that plaint marked Ext.A -1 here shows that he had issued a notice of retirement to the other partners and copies of the notice and the acknow­ledgements by them are seen filed along with that plaint.Ext.A -2 is the written statement of the second defendant.That suit is seen to have seen transferred to the Udumalpet Sub Court and the suit was dismissed for default by that Court.Ext.A -3 is the copy of that judgment.These clearly show that the petitioner had given notice of his intention to retire and that constitutes retirement from the firm as provided for in section 32 of the Partnership Act. The relevant portion of that section reads as follows:" Where the partnership is at will,by giving notice in writing to all the other partners of his intention to retire. The respondent contends that he was not a party to that suit and that,that suit happened to be dismissed for default and therefore the statement in the plaint in that suit is not evidence or binding on the respondents.This plea is not sustainable because it is not necessary that the respondents 'should be parties to that suit.As a matter of fact the respondents are not seen to have any transactions with the first defendant firm until after the termination of that suit.Notice need be given by the retiring partner only to the other partners and the fact that he has given such a notice is evidenced by Ext.A -1 copy of the plaint.That is enough proof to show that the petitioner has given notice of his intention to retire and has retired.The lower court seems to have overlooked the nature of the partnership and section 32 of the Partnership Act.The Lower Court proceeds on the basis that a partnership will stand dissolved only by an order of court.That is incorrect.The part­nership here is a partnership at will as shown above and under section 43 of the Partnership Act a partnership at will is dissolved by the partner giving notice to all the other partners of his intention to dissolve.That is evidenced by Ext.A -1.Therefore the dismissal of that suit for default will not in any way affect the dissolution.

(3.) IT is true that a retiring partner will be bound to third parties in respect of dealings subsequent to the notice to retire and until public notice is given of the retire­ment or the dissolution.That is clear from section 32 clause(3)which reads as follows:" ( 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.