RUDRARAJU SATYANARAYANARAJU Vs. VENKATAKRISHNA RAO

JUDGEMENT

(1.) The plaintiffs-appellants have come to this Court in Second Appeals against the Judgment of the Subordinate Judge, Amalapuram dated 31st August, 1967.

(2.) The plaintiffs instituted four suits for recovery of certain amounts in each suit alleging inter alia that defendants 1 to 7 are partners oi Sri Sitarama Lax man Rice Mill in Anantuavaram village in Amalapuram taluk. Defendants. 2, 3, 4 and 7 are the sons of the 1st defendant. The 6th defendant is the 1st defendant's elder brother's son: The 5th defendant is a close relation of the other defendants. Defendants 1 to 5, who are the partners of the said firm, borrowed the amounts from the plaintiffs for the purpose of mill business and executed promissory notes in favour of the plaintiff in each suit. Since the debt was incurred for the purposes of partnership, the non-executant partners, defendants 6 and 7, are also liable.

(3.) Defendants 1 to 4 were willing to suffer a decree The 5th defendant remained exparte. The 6th defendant in his written statement contended that he has been a dormant partner and never took active part in the partnership business as he had implicit confidence in the 1st defendant Some three months before the partnership firm was closed without the knowledge of the 6th defendant, the 1st defendant along with bis sons started executing indiscriminately promissory notes in favour of third parties to the tune of several thousands; They also secreted large sums of money for themselves. Several suits were filed. He denied the execution of the promissory notes by defendants 1 to 5. His contention was that they were not supported by consideration' They were not executed on behalf of the firm. Therefore the firm cannot be made liable nor can the 6th defendant be held responsible when he has not joined in the execution of the promissory notes, The debt was not incurred for necessity of the partnership firm.