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2021 (7) TMI 1392 - HC - Indian LawsDoctrine/principle of pristine Hindu law - privity of contract between the respondents and the petitioner or not - whether the basic principles of the laws relating to partnerships and contracts will not apply when one of the contracting parties is the State? - HELD THAT:- The undisclosed principal in the present case is the partnership firm represented by the petitioner. In the light of the agreement executed between the respondents and Smt. P. Syamala, the respondents cannot contend that she had executed the document with any intention to bind the firm or in her capacity as a partner of the firm. This is all the more evident from the reading of Ext.R4(a) which had preceded the agreement. Even though in Ext.R4(a) the legal heirs of Late Sathyapalan had expressed the willingness of the firm to carry out the work, the respondents chose to execute the agreement with Smt. P. Syamala in her individual capacity. As such, neither Smt. P. Syamala nor the respondents have intended the agreement to bind the firm. It follows therefore that no liability alleged to have been incurred as a result of Ext.P6 agreement can be fastened on the petitioner. Whether the partnership assets can be made liable for a debt allegedly owed by a partner? - HELD THAT:- There can be no doubt that if a partner owes any money, the creditor will be entitled to proceed against the profits that may be earned by the debtor, in his capacity as a partner of a firm or against the debtors' interest in the partnership firm. In the case on hand, Smt. P. Syamala had retired from the partnership as can be seen from Ext.P4 deed dated 31.03.2013, whereby the partnership was reconstituted. There is nothing in the pleadings of the parties to show that the retiring partner had any rights subsisting in the partnership, on the date of issuance of Ext.P3 letter by the Assistant Executing Engineer, proposing to withhold the amounts due to the firm, towards the risk and cost liability of Smt. P. Syamala. Ext.P3 proceeds on the basis that Smt. P. Syamala is a partner of the firm, which does not appear to be correct on the basis of Ext.P4 deed - Since the question whether Smt. P. Syamala has any "cost and risk" liability to the respondents is admittedly pending consideration of the competent civil court, it is not necessary in these proceedings to go into the question as to the modes of recovery that can be resorted to by the respondents, if they are able to succeed in the civil court. The decision contained in Ext.P3 to withhold the payment due to the petitioner's firm is set aside. There will be a direction to the respondents to release the credit received in favour of the petitioner's firm for payment of CC8 and final bill amounting to Rs. 30,01,268/- immediately, at any rate within a period of one month from the date of receipt of a certified copy of this judgment - the writ petition is allowed.
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