Surendran vs Cochin Shipyard

Varghese Kalliath, J.—This is an appeal by defendants 2 and 4 against the judgment of a learned single Judge of this Court. Suit was one for realization of repairing charges of a marine engine of a vessel. The Ist defendant is a partnership firm and defendants 2 to 4 are paid - to the partners of the said firm. The firm requested the plaintiff to repair the marine engine on the assurance that the repairing charges would be paid as and when the work was completed. Plaintiff issued a bill on 1.8.1979 claiming Rs. 44,000/ - as repairing charges with a request to settle the bill. Defendants declined to make payment and the plaintiff sent notice through lawyer on 19.1.1981 demanding payment of the amount with interest within a week. No payment was made. Hence the plaintiff filed the suit for realizing the plaint amount.

The 3rd defendant, in a separate written statement, admitted the plaint allegations and pleaded that it is because of the financial difficulties that the payment was not made. Defendants 2 and 4 filed a joint written statement stating that they ceased to be the partners of the Ist defendant firm with effect from 3.1.1978 and that they are not liable to pay the repairing charges. The trial court after considering the evidence in the case, found that the plaintiff has established its case and that the plaintiff is entitled to a decree and the suit was decreed.

Before the learned single Judge, the main ground urged by the appellants herein, viz. defendants 2 and 3 is that they retired from the partnership and so they are not liable to pay the amount due to the plaintiff. The learned single Judge considered the matter in great depth and found that the contentions raised by defendants 2 and 4 are unsustainable and confirmed the judgment and decree of the trial court and dismissed their appeal.

From the narration of the facts we have made, it is clear that the only question that has to be considered in the appeal is whether defendants 2 and 4 are liable for the decree amount on their plea that they have retired from the partnership.

Counsel for the appellants submitted that the partnership was not a registered one and not being a registered one, public notice is not required for effecting retirement of a partner. Sub-S.(3) of Section 32 of the Partnership Act is very clear as regards the liability of a retiring partner. Defendants 2 and 4 relied on Ext. B1, copy of the original of a deed of retirement of defendants 2 and 4. The learned single Judge has considered the effect of Ext. B1 and ultimately found that Ext. B1 cannot be safely relied on. So the very question of retirement itself is doubtful. Even if there is a clear case for defendants 2 and 4 regarding retirement, the question still remains whether the retirement was duly published as per the provisions of the Partnership Act. When once the fact of partners in a partnership is admitted, it is for the defendants to establish that they have retired from the partnership after giving notice and that too as required by the statute.

Section 32(3) of the Partnership Act explicitly provides that 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. Section 32 of the Partnership Act does not speak anything abut the need of registration and does not make the provision applicable only to a registered firm. We say so, because it was contended by counsel for the appellants that since the firm was not registered, the provision as such is not applicable.

Section 72 of the Partnership Act provides the mode of giving public notice. In Section 72(a) of the Partnership Act as regards the retirement or expulsion of a partner from a registered firm, apart from giving notice in the official gazette, notice should be given to the Registrar of Firms u/s 63 of the Partnership Act. Section 72(b) of the Partnership Act says that in any other case, notice can be made by publication in the official gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place or principal place of business. The words ''in any other case'' in Section 72(b) of the Partnership Act would take in a partnership which is not registered.

Counsel submitted that Section 72 of the Partnership Act has no application, if the partnership is not a registered one. We cannot agree. In fact, there is evidence in the case that notice was published in a Malayalam Daily Deshabhimani'' on 5.5.1980. This is ore than two years after the alleged retirement, because the date of retirement was said to be on 3.1.1978. It has to be remembered that the bill was sent on 1.8.1979 and the transaction was prior to 1.8.1979. Notice of retirement was published only 5.5.1980. All the circumstances are against defendants 2 and 4. Defendants 2 and 4 are also liable for the decree amount. The learned Single Judge has rightly confirmed the judgment and decree of the trial court.

We see no merit in the appeal and the appeal is only to be dismissed. We do so.