2007 (4) TMI 771 - HC - Indian Laws

Summary

Issues Involved:
The issues involved in this judgment include the liability of a retired partner in a partnership firm for acts done before retirement, the validity of the execution petition against the retired partner, the requirement of public notice upon retirement, and the necessity of an agreement to discharge liability to third parties.

Liability of Retired Partner:
The petitioner, a retired partner, claimed he was not liable for the amount claimed by the respondent as he retired before the suit was filed. However, the court held that even though the petitioner retired after the cause of action arose, he remained liable for acts of the firm before retirement unless discharged through an agreement with third parties and the reconstituted firm partners.

Validity of Execution Petition:
The respondent argued that the suit against the firm and the petitioner was valid as the cause of action arose before the petitioner's retirement. The court noted that the petitioner's retirement notice was sent after the cause of action, and without an agreement with the respondent, the petitioner could not be discharged from liability.

Requirement of Public Notice:
The court examined the mode of giving public notice upon retirement as per Section 72 of the Indian Partnership Act. It was found that the petitioner did not follow the required modes of public notice, such as notifying the Registrar of Firms and publishing in the official gazette, rendering his retirement notice insufficient.

Necessity of Agreement to Discharge Liability:
The judgment emphasized that the petitioner could only be discharged from liability to the respondent through an agreement with the respondent and the reconstituted firm partners. Since no such agreement existed, and the respondent denied receiving the retirement notice, the petitioner could not escape liability.

Conclusion:
The court held that the order of the X Assistant Judge dismissing the petitioner's application did not have any illegality. The petitioner failed to follow the required public notice procedures, did not have an agreement to discharge liability, and raised objections belatedly. Consequently, the Civil Revision Petition was dismissed, confirming the lower court's order without costs.