LexASHUTOSH versus STATE OF RAJASTHAN AND ORS.
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ASHUTOSH A v. STATE OF RAJASTHAN AND ORS. AUGUST 30, 2005 B [RUMA PAL AND DR. AR. LAKSHMANAN, JJ.] Code of Civil Procedure, 1908 : Order 2 I Rules 49 & 50-Attachment of partnership property-Decree against a partnership firm-Execution of-Liability of partners for acts done C by the firn1-A decree for a certain amount was passed against the State in respect of construction work of irrigation departn1ent under the Arbitration Act, I 940--Firm filed execution and recovered the decretal amount-High Court allowed the appeal filed by the State against the judgment and decree- State moved application under S. 144 on 2.4. 1981-Against the said amount, D apart fron1 two surety bonds, a house was also furnished as securities- Partner of the firm, who was the exclusive owner of the said house, executed a Will in I 983 bequeathing the house in favour of her grandson and she died in I 985-A llachment order of the house was passed in I 99 2-The grandson 's application filed under 0.2 I R. 58 for release of the house was dismissed holding that the testator being a partner had no right to execute the Will in E respect of the disputed house-In appeal, the High Court held that the Will was prepared to defraud the creditor and not with an intention to bonafidely bequeath the property to the grandson and also to defeat the execution of decree obtained by the State-Deere/al amount was received by the State on I 7. I 0. I 992-Partnership firm did not dispute /iability--The only dispute was the claim of interest from I 7. I 0. I 992-Held: Execution under 0. 2 I &. 49 may be granted against the partners, in which case the decree~holder may proceed against the separate property of the partners-Claim of interest from 17. I 0.1992 is on the high side and excessive-Hence, debtor directed to pay a sum of Rs. 1,00,000 in full satisfaction of the claim-Partnership Act, 1932, Ss. 24 and 25. A decree for a certain amount was passed against the respondent- State and in favour of a partnership firm in respect of construction work F G of the irrigation department under the Arbitration Act, 1940. The said company filed execution and recovered the decretal amount. The appeal H 1057 1058 SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R. A preferred by the respondent-State against the aforesaid judgment and decree was allowed ex parte by the High Court. An application under Section 144 of the Code of Civil Procedure, 1908 was moved on behalf of the respondent-State on 2.4.1981. As against the decretaLamount, two. surety bonds and a house were furnished as securities. B The partner of the firm, who was the exclusive owner of the said house, executed a Will in 1983 bequeathing the house in favour of the appellant and died in 1985. Attachment order in respect of the house was passed in the Execution case in 1992. The appellant's application under Order 21 Rule 58 CPC for release of the house was dismissed C on the ground that the 'testator had no right to execute the Will in respect of the disputed house. The decretal amount was received by the respondent-State and the only dispute was with regard to interest from 17.10.1992. The High Court dismissed the appellant's appeal on the ground that the Will was prepared to defraud the creditor and not D with an intention to bonafidely bequeath the property to the appellant and to defeat the execution of the decree obtained by the respondent- State. Hence the appeal. Disposing of the appeal, the Court E HELD: 1.1. It is not in dispute that the decree was passed against the F firm in which the testator was also a partner. Under the provisions of the Partnership Act, 1932, one partner is the agent of the other. The partner is always liable for the partnership debt unless there is implied or express restriction. In the instant case, notice was duly served on the testator and her husband. 1.2. Se<;tion 24 of the Act is based on the principle that as a partner stands as an agent in relation to the firm, a notice to the agent is tantamount to the principals and vice versa. As a general rule, notice to a principal is notice to all his agents; and notice to an agent of matters connected with G his agency is a notice to his principal. 1.3. Under Section 25 of the Act, the liability of the partners is joint and several. It is open to a creditor of the firm to recover the debt from any one or more of the partners. Each partner shall be liable as ifthe debt H of t
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