BHAISHANKAR MOTIRAM Vs. LAKSHMI DYEING WORKS

JUDGEMENT

(1.) The question here is whether defendant No. 2 is liable for a debt contracted by the Lakshmi Dyeing Works, of which firm defendants Nos. 1 and 2 had both been partners, but of which at the date of the transactions in question defendant No. 1 was the sole partner or proprietor, and defendant No. 2 had retired. The learned Judge held that it was doubtful whether Section 264 of the Indian Contract Act applied, as defendant No. 1 dealt with the plaintiff for the first time after a change in constitution, and that accordingly defendant No. 2 was not liable. The exact dates are as follows. The dissolution was on August 20,1926; the goods in question were supplied by the plaintiffs on November 12, 1926 ; and notice of dissolution was given on January 2, 1927.

(2.) As regards the ground taken by the learned Judge, viz., that Section 264 of the Indian Contract Act does not apply to new customers, that section runs : "Persons dealing with a firm will not be affected by a dissolution of which no public notice has been given, unless they themselves had notice of such dissolution". The question then is whether the words persons dealing with a firm" are confined to persons dealing with a firm before dissolution, or whether it also includes persons dealing with a firm after the dissolution. In other words, does it include new customers as well as old ones ? In Jwaladutt Pillani V/s. Banailal Motilal this point was discussed in this Court, and there it was conceded in argument that Section 264 applied to new customers as well as old ones. There a recent decision in Jagat Chandra Bhattacharjee V/s. Gunny Hajee Ahmed (1925) I.L.R. 53 Cal. 214 was referred to, in which Sir Lancelot Sanderson stated (p. 227):- In the first place the section says persons dealing with a firm, It does not say persons dealing with a firm before its dissolution , and, I see no reason why the words before its dissolution should be interpolated in the section. In my judgment it is clear that the above-mentioned case is an authority for the proposition that the section applies not only to persons who dealt with the firm before the dissolution, but also to persons dealing with the firm after the dissolution or Change of partners. This, as already stated, is the natural construction of the section giving the ordinary meaning to the words used in the section.

(3.) This Court accepted that view of the law in Jwaladutt Pillani's case. Therefore, we think that in the present case the learned trial Judge's decision on that point cannot be upheld.