JWALADUTT R PILLANI Vs. BANSILAL MOTILAL

JUDGEMENT

(1.) The facts in this case are not in dispute. The appellant Pillani was a partner of a firm of Hussein-bhai Pillani Wadia & Co. On April 3, 1923, that firm along with Wadia Woollen Mills, Limited, granted in respect of a loan a promissory note for two lacs of rupees with interest Art. 7 3/4 per cent, in favour of the respondent Raja Bahadur Bansilal Motilal. On September 12, 1923, the firm dissolved partnership and the appellant retired. The firm continued to do business under the same name and by the deed of dissolution a certain interest in the business was secured to the appellant though he was no longer a partner.

(2.) On April 3, 1924, the old promissory note was cancelled and a new promissory note given by the company and the firm for the same sum of two lacs, interest on this note running at 8- per cent. It is admitted that the retirement of the appellant from the firm was advertised in the Bombay Gazette and in four other newspapers, and it was found by the trial Judge and has not since been questioned that no intimation was sent or conveyed in any way to the respondent. The sole question is whether the appellant is liable on the second promissory note, He has been so found by the Judge of first instance and by the Court of Appeal, There can be no question that the plaintiff being an old customer and no notice having been given to him of the dissolution of the partnership and the retirement of the appellant, the appellant is by English law liable. It would be otiose to quote authority for this, and this was undoubtedly the law of India, at least prior to the Indian Contract Act of 1872 : Shewram V/s. Bohomutoollah (1864) W.R. (Sup. Vol.) 94. The defence of the appellant is based on the terms of Section 264 of the Indian Contract Act of 1872, which is as follows :- Persons dealing with a firm will not be affected by a dissolution of which no public notice has been given, unless they thamselves had notice of such dissolution.

(3.) The appellant argues that "persons" includes both old and new customers, and that though the section is expressed in a negative form there must be extracted therefrom the positive proposition that persons will be affected by a dissolution of which public notice has been given. Against that it is urged that the section is merely negative and must be strictly limited to what it says, which is the offset of the dissolution of the firm on the rights of persons dealing with it, but not on the liabilities of the firm to the persons so dealing.