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TMI Blog2021 (7) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... ing parties is the State !!! 2. Heard Sri S. Sreekumar, Senior Advocate, instructed by Sri P. Martin Jose, on behalf of the petitioner and Smt. Deepa Narayanan, Senior Government Pleader, on behalf of the respondents. 3. One Sri Sathyapalan had been undertaking civil works entrusted by the State, both in his individual capacity as well as through a partnership firm, which had been reconstituted on several instances from 1979. He had undertaken a work on 16.6.2000, which was designated as "IIP - Constructing Lower-level canal from CH. 9000m to 9455m, including Construction of pressure siphon, flume and aqueduct". The work was entrusted to him in his personal capacity as can be seen from Ext.P8 letter dated 13.4.2000. Soon after the execution of the agreement relating to the work, he died on 7.7.2001, leaving behind his wife and two sons. In the agreement executed, Sri Sathyapalan had named his wife Smt. P. Syamala as his nominee, and it can be seen Ext.P8, which contains the nomination, that the nomination is for the purpose of receiving all or any sums due to her husband, under the terms of the agreement dated 16.6.2000. After the death of Sri Sathyapalan, his legal heirs wrote E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm with effect from 31.03.2013. The firm had undertaken the work IIP-Constructing main canal from Ch-24442m to 25000m, including CD works, which had nothing to do with the work which had originally been undertaken by late Sathyapalan and later by the petitioner's mother in her individual capacity. By Exhibit P3 letter dated 4.8.2014, the petitioner was informed that the final bill towards the above work amounting to Rs. 30,01,268/-, has been withheld to realise the risk and cost liability of Rs. 93,03,057/- allegedly incurred by their mother towards the work she had undertaken as the nominee of their deceased father. Exhibit P3 letter has apparently been issued on a wrong notion that the mother was still a partner of the firm. The petitioner has produced Exhibit P4 Deed of Reconstitution of the partnership firm after the retirement of his mother, which shows that no further amount is due to her from the partnership firm. It is the contention of the petitioner that the respondents can proceed against the firm only with respect to amounts that are owed by the firm to his mother. It is further submitted that even in cases where a partner of the firm is to be proceeded against fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nominee to carry on the balance work involved, it can be seen from Ext.P6 supplemental agreement executed between the nominee Smt. P. Syamala and the Superintending Engineer that the work was entrusted only to the nominee and not to the partnership firm. When there is a written agreement existing between the parties, the respondents cannot gainsay that the work was undertaken by the firm. 8. The manner in which acts done by a partner can bind a partnership firm are statutorily laid down in sections 19 and 22 of the Partnership Act, which read as follows:- "19. Implied authority of the partner as agent of the firm.--(1) Subject to the provisions of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a partner to bind the firm conferred by this section is called his "implied authority". (2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to-- (a) submit a dispute relating to the business of the firm to arbitration, &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted below: "6. In view of the fact that both the courts below have found concurrently that the sub-lease in question was taken by respondent 4 alone, the only point urged by Mr. Sarjoo Prasad in support of the appeal is that respondent 4 being a partner in the Saurashtra Coal Concern, all the partners of the firm are liable under the lease inasmuch as the firm admittedly came into possession of the demised colliery. He points out that even according to respondents 1 to 3, they came into possession of the demised colliery immediately after the execution of the sub-lease, and wants this Court to infer from this that the partnership had already come into existence before the lease was obtained. This, however, has never been the case of the appellant in the courts below. The only case which he put forward was that the lease was taken by respondent 4 on behalf of all the respondents. In other words his case was that respondent 4 was a benamidar for the partnership firm. It is only this case which the respondents had to meet, and in our judgment, it would not be proper to permit the appellant to make out an entirely new case at this stage. Apart from that, Section 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 13. The next question that would arise is whether the partnership assets can be made liable for a debt allegedly owed by a partner. 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 issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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