EDIGA HANUMANTHAPPA AND ANR. Vs. EERANTI SEETHAYYA AND COMPANY CONSISTING OF EERANTI SEETHAYYA AND ANR.

JUDGEMENT

(1.) THE question referred to the decision of the Full Bench is,

(2.) BOTH the Courts below, the learned Judge here, and counsel on either side before us, argued this question on the assumption that the decree in favour of the firm must be deemed to be a joint decree in favour of the two partners of the firm, namely, Eeranti, Seethayya and Tallam Suryanarayanappa. Actually, the name of the latter did not find a place in the decree or in the execution application, but it is common ground, that he was at all material times a partner of the firm.

(3.) TAKING the case of partners, which is the case on hand, Section 18 of the Partnership Act declares what has always been understood as a principle of universal application that a partner is the agent of the firm for the purposes of the business of the firm. The implied authority of every partner to bind the firm by any act of his done to carry on in the usual way the business of the firm, is subject to other provisions of the Act, limiting such power. It has never been doubted that ordinarily one of the partners of a firm can receive a debt due to the firm and the payment to him would be a valid discharge of the debt, binding on the entire firm. The question is whether there is any principle, either expressly laid. in, or necessarily to be implied from, any enactment, which overrides and puts an end to this implied agency of a partner. Any express provision to that effect I have been unable to discover. But it is contended that this limitation on the power of a partner as an agent of the firm necessarily flows from the provisions of Order 21, Rule 1(1)(b) and Rule 15. On the other hand it is urged by the appellants that logically there is no impediment to applying the general law of partnership, under which one partner is the agent of the other partners even to rights declared by a decree of court. A partner is not expressly prohibited from receiving money due under a decree. to the firm out of court, nor is it stated that such a payment would not bind the other partners. If the decree -holder is the firm composed of the several partners, that payment to one of them, would be in law a payment to the firm. If one of the partners could have given a discharge by accepting payment in favour of the claim which is the subject matter of the suit before the decree, it does not stand to reason - -so the argument ran. that he cannot do so once a decree is passed. As the several aspects of the question find support in one or other of the decisions cited to us, I shall now deal with them chronologically.