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Padmavathi Finance Corporation Vs. S.V. Metal Unit and ors. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtAndhra Pradesh High Court
Decided On
Case NumberA.S. No. 929 of 1992
Judge
Reported in2009(6)ALT544
ActsIndian Partnership Act, 1932 - Sections 19, 19(1), 19(2), 20 and 22; Negotiable Instruments Act, 1881 - Sections 26 and 27
AppellantPadmavathi Finance Corporation
RespondentS.V. Metal Unit and ors.
Appellant AdvocateR.V. Prasad, Adv.
Respondent AdvocateS.V. Sunder Rajan, Adv. for Respondent Nos. 2, 3, 4, 6 and 9,; C. Sadasiva Reddy, Adv. for Respondent No. 7 and; None appeared for Respondent Nos. 1, 5, 8 and 9
DispositionAppeal dismissed
Excerpt:
- cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. teacher employed in the school run by cantonment board being covered under.....p.s. narayana, j.1. padmavathi finance corporation, a registered partnership firm being aggrieved of the decreeing the suit as against defendants 2 and 5 only and dismissing the suit as against the other defendants without costs had preferred the present appeal.2. the plaintiff, the present appellant filed the suit o.s. no. 58 of 1986 on the file of the subordinate judge, nandyal as against m/s. s.v. metal unit, a registered firm, the first defendant and the partners shown as defendants 2 to 9 for recovery of a sum of rs. 70,175/- being the principal and the interest due on the strength of a promissory note. the learned subordinate judge, nandyal, on appreciation of the evidence of p.w.1, d.w.i and d.w.2, exs.a-1 to a-4 and exs.b-1 to b-10, ultimately decreed the suit against defendants 2.....
Judgment:

P.S. Narayana, J.

1. Padmavathi Finance Corporation, a registered partnership firm being aggrieved of the decreeing the suit as against defendants 2 and 5 only and dismissing the suit as against the other defendants without costs had preferred the present appeal.

2. The plaintiff, the present appellant filed the suit O.S. No. 58 of 1986 on the file of the Subordinate Judge, Nandyal as against M/s. S.V. Metal Unit, a registered firm, the first defendant and the partners shown as defendants 2 to 9 for recovery of a sum of Rs. 70,175/- being the principal and the interest due on the strength of a promissory note. The learned Subordinate Judge, Nandyal, on appreciation of the evidence of P.W.1, D.W.I and D.W.2, Exs.A-1 to A-4 and Exs.B-1 to B-10, ultimately decreed the suit against defendants 2 and 5 only and dismissed the suit against the other defendants. Aggrieved by the same, the plaintiff-Padmavathi Finance Corporation, a registered firm presented the appeal on the file of the learned District Judge, Kurnool and inasmuch as the same was returned to be represented to proper Court, the said appeal had been presented before this Court and thus, this appeal is coming up for hearing today.

3. Contentions of Sri R.V. Prasad:

Sri R.V. Prasad, the learned Counsel representing the appellant had specifically pointed out to the promissory note in controversy and the contents thereof and would maintain that when the partners representing the partnership firm executed the promissory note in question, the partnership firm and also the partners of the firm would be liable and decreeing the suit partly against only two partners and dismissing the suit against the firm and the other partners cannot be sustained. The learned Counsel also pointed out to Sections 19, 20 and 22 of the Indian Partnership Act and Sections 26 and 27 of the Negotiable Instruments Act and would maintain that the trial Court had not appreciated these provisions properly. The learned Counsel also would maintain that a cursory glance of the contents of the promissory note itself would go to show that the promissory note in question had been executed by the partners representing the firm and on behalf of the firm and different interpretation which had been given by the trial Court in relation thereto cannot be sustained. The learned Counsel also would further maintain that the trial Court totally erred in observing that Ex.A-2 does not contain the words that the loan was taken on behalf of the firm and the mere fixing of the stamp of the firm in the operative portion would not bind the firm and on the other hand, the promissory note should have appreciated that D-2 and D-5 executed the promissory note on behalf of the first defendant-firm and by duly signing the promissory note on behalf of the firm and in their capacity as partners of the firm and further the learned Counsel would point out that D-2 and D-5 had described themselves as partners of the first defendant firm while executing the promissory note and the individual names had not been mentioned. The learned Counsel also commented relating to the findings recorded by the trial Court in the context of the non-production of the relevant account books and would maintain that in the light of the clear evidence of P.W.1 such findings cannot be sustained. The learned Counsel also had further taken this Court through the other evidence available on record, the evidence of P.W.1 and also D.W.1 and D.W.2 and further had taken this Court through Exs.B-1 to B-10 as well and would maintain that the mere fact of the change of one of the partners for the purpose of borrowing loans under Ex.B-2 would not alter the situation in any way and it is not their case that this change was within the knowledge of the plaintiff firm. At any rate, by such internal changes, the partnership firm cannot escape the liability in the light of the different provisions of the Indian Partnership Act. Hence, the learned Counsel would conclude that in the facts and circumstances of the case, the findings of the trial Court negativing the relief as against the firm and the other partners to be set aside and the suit to be decreed in toto as prayed for.

4. Contentions of Sri S.V. Sundara Rajan:

Sri S.V. Sundara Rajan, the learned Counsel representing the contesting respondents would maintain that in the light of the convincing findings recorded by the trial Court just fastening the liability as against, who executed the promissory note in question and negativing the decree against the partnership firm and the other partners cannot be found fault with. While elaborating his submissions, the learned Counsel also had taken this Court through the oral and documentary evidence available on record and also specifically emphasized on the aspect that even by the date when this promissory note was executed by two of the alleged partners, the firm was not functioning and the business was closed. This is a clear finding recorded by the trial Court. The learned Counsel pointed out to the specific suggestions put to P.W.1 in this regard and also the evidence of D.W.1 and D.W.2 on this aspect. While further elaborating the submissions, the learned Counsel also had taken this Court through the Sections 19, 20 and 22 of the Indian Partnership Act and Sections 26 and 27 of the Negotiable Instruments Act as well and would maintain that in the light of the evidence available on record, the trial Court recorded appropriate findings granting decree against those, who had executed the promissory note and not beyond that. The learned Counsel also further emphasized on Ex.B-2, the change of one of the partners by the firm for the purpose of borrowing the amounts. Further the learned Counsel pointed out relating to the findings recorded on the aspect of the non production of the relevant account books by the plaintiff and this non production definitely would go to show that in all probability the amounts after the closure of the business of the firm might have been borrowed by these individuals, the alleged partners for their own business and in the light of the same, the trial Court is well justified in recording such findings and the appeal is liable to be dismissed. The learned Counsel also would maintain that several of the creditors like this creditor, Padmavathi Finance Corporation, a registered firm had filed similar suits against M/s. S.V. Metal Unit and all these suits had been disposed of recording similar findings and except in one matter, in all other matters the said decrees had attained finality. However, in one matter the said decree partly decreeing the suit had been challenged by way of appeal before this Court. Hence, viewed from any angle, this is not a fit matter to be interfered with in this appeal.

5. Heard the learned Counsel.

6. Perused the oral and documentary evidence available on record and the findings recorded by the trial Court. In the light of the submissions made by Sri R.V. Prasad, the learned Counsel representing the appellant and Sri S.V. Sundara Rajan, the learned Counsel representing the respondents, the following points arise for consideration in this appeal:

1. Whether the findings recorded by the learned Subordinate Judge, Nandyal fastening the liability and decreeing the suit as against D-2 and D-5 only and dismissing the suit as against the firm and the other defendants the partners of the firm to be confirmed or liable to be set aside in the facts and circumstances of the case?

2. If so, to what relief the parties would be entitled to?

POINT NO. 1:

7. The parties hereinafter for the purpose of convenience would be referred to as shown in O.S. No. 58 of 1986 on the file of the Subordinate Judge, Nandyal.

8. The unsuccessful plaintiff being aggrieved of the decreeing the suit only against the two alleged partners, the executants of the promissory note in question and dismissing the suit against others had preferred the present appeal.

9. The suit was instituted by the plaintiff for recovery of a sum of Rs. 70,175/- being the principal and the interest due on a promissory note. The averments of the plaint, in brief, are as follows:

The plaintiff is a registered firm doing money lending business at Nandlya. The defendant No. 1 is also a registered firm with its factory at Udumalapuram near Nandyal and defendants 2 to 9 are its partners. On behalf of the first defendant firm and for the purpose of its business, defendants 2 and 5 borrowed a sum of Rs. 50,000/- for the purpose of the business of the first defendant firm and executed a pro note on 13.09.1983 in favour of the plaintiff agreeing to repay the said loan amount with interest at 18% p.a. Towards the suit debt, they paid Rs. 2,2507- on 13.09.83, Rs. 750/- on 17.12.83, Rs. 750/-on 18.01.74, Rs. 750/- on 15.2.84, Rs. 1500/- on 20.6.84 and Rs. 750/- on 23.6.84 towards interest and these payments were appropriated towards interest. The defendants did not pay the balance amount due in spite of demands and notice. Subsequently, the plaintiff and another creditor of defendant filed I.P. No. 17/84 in this Court against the defendant and the same is pending. As the original pronote was filed in that IP., Photostat copy is filed in this suit. As the defendants did not pay in spite of demands and notice, this suit is filed to recover the amount due under the pro note seeking decree against the first defendant firm and its partners defendants 2 to 9 jointly and severally.

10. Defendants 1, 3, 6, 8 and 9 filed a joint written statement with the following averments:

It was pleaded that under the original partnership deed only defendants 2 and 3 were empowered to borrow money for the firm but the said term was modified by means of agreement dated 02.03.83 wherein the borrowing power of defendants 2 and 3 individually had been curtailed and they were empowered to borrow for the purpose of the firm only jointly. The defendants are not aware of the borrowing under the suit promissory note and the consideration and the execution of the suit promissory note. It is also pleaded that it is false to allege that defendants 2 and 5 borrowed the amount on behalf of the first defendant firm. These defendants do not admit the payments said to have been made. Neither the second defendant nor the fifth defendant had been managing partners of the first defendant firm. So the loan obtained by defendants 2 and 5 cannot be said to be either on behalf of the firm or for the business or for the benefit of the firm. Even though defendants 2 to 9 are the partners of the first defendant firm, they are not carrying on business from April, 1983 and they had stopped the business from April, 1983 since it was running in loss. Hence, when the business was stopped even in April, 1983 it is false to say that defendants 2 and 5 obtained a loan of Rs. 50,000/- from the plaintiff is for the purpose of the business of the first defendant firm under the suit promissory note. After the business was stopped by the end of March, 1983, there was considerable quantity of crushed concrete and other material in the factory. The second defendant was entrusted with the liability of disposing of the said stock and to keep the accounts from then onwards. The fifth defendant has no authority to borrow any amount for the purpose of the firm. The second defendant along with the third defendant had got power to borrow jointly for the purpose of the firm by virtue of the addendum, dated 02.03.83. Hence, the borrowing by defendants 2 and 5 under the suit promissory note is unauthorized and it was not for the business of the firm and hence, the same is not binding on the first defendant firm and the other partners of the said firm other than the executants. Defendants 2, 5 and 7 are inter-related and they have got their own other businesses. The second defendant in connivance with defendants 5 and 7 borrowed the amounts with all misrepresentation to a tune of several lakhs from March, 1983 to defraud the other partners. The borrowing by defendants 2 and 5 under the suit promissory note was not for the trade purpose of the first defendant firm and the alleged amount was not utilized at any time for the business purpose of the first defendant. It is an individual transaction of defendants 2 and 5 and so only defendants 2 and 5 can be made liable for the same. Further, it was pleaded that the defendants are agriculturists and the debt is liable to be scaled down.

Defendant No. 2 filed the written statement taking a specific plea that the plaintiff has to prove that it is a registered firm and the partner, who signed the plaint, is competent to do so. D-2 and D5 have not actually borrowed the amount of Rs. 50,000/- on 13.09.1983. The said amount includes future interest and miscellaneous charges. The partners of the firm are agriculturists and interest is liable to be scaled down.

The fourth defendant filed the written statement denying the execution of the suit promissory note by defendants 2 and 5 and the borrowal of Rs. 50,000/- by them. Further, it was pleaded that the borrowing even if true was not for the purpose of the first defendant firm and there was no necessity to borrow and it was for the personal benefit of defendants 2 and 5.

The fifth defendant filed the written statement taking a plea that he did not borrow Rs. 50,000/- for and on behalf of the firm and the amount was borrowed by second defendant for his personal use and D-2 alone is liable and interest is liable to be scaled down.

The seventh defendant filed the written statement taking a plea that the plaintiff has to prove that it is a registered firm and the person, who signed it as a partner or the manager of the firm. It is also further pleaded that the borrowing by defendants under the promissory note for the purpose of the first defendant firm is not true. The firm stopped its business from April, 1983 as it had incurred loss. Hence, there was no necessity on the date of the suit promissory note to borrow any amount as the business was stopped by the end of March, 1983. There was stock of crushed material and other goods in the factory and the partners postponed the dissolution of the partnership deed. Hence, it is false to say that defendants 2 and 5 borrowed for the purpose of the firm after the business was stopped. Originally, defendants 2 and 3 were empowered to borrow for the firm either jointly or individually. The authorization was changed authorizing defendants 2 and 3 to borrow jointly only for the purpose of the firm. As stated above, the borrowing by defendants 2 and 5 being not made for the purpose of the first defendant firm. Even if it is to be true, such transaction is binding on defendants 2 and 5 only and the other partners are not liable for the said suit debt.

11. On the strength of these pleadings, the following issues had been settled by the trial Court:

1. Whether the plaintiff is a firm registered under the Indian Partnership Act?

2. Whether the suit pronote dt.13.09.83 is true and valid?

3. Whether the modification of the authority of the defendants 2 and 5 by a modification deed dt.2-3-83 as alleged by defendants 3, 6, 8 and 9 is true, valid and binding on plaintiffs and whether they are liable for the suit amount?

4. Whether the defendants 3, 4, 6, 8 and 9 are not liable for the suit amount as contended by them?

5. Whether the borrowing is not for the business of the first defendant firm as contended by defendants?

6. To what relief?

12. On behalf of the plaintiff, the Managing Partner of the plaintiff firm was examined as P.W.1 and Exs.A-1 to A-4 were marked. On behalf of the defendants, 9th and 7th defendants were examined as D.W.1 and D.W.2 and Exs.B-1 to B-10 were marked.

13. The plaintiff herein is Padmavathi Finance Corporation, a registered firm and the plaint was signed by one Y.V. Nagabhushanam, the managing partner of the firm. The said Y.V. Naganhushanam was examined as P.W.1, who had deposed about the registration of the firm and the registration certificate and the statement of partners have been marked as Ex.A-1. This witness further deposed that he is the managing partner of the firm. Even though the defendants had raised a dispute to the effect that the plaintiff is not a registered firm, there being no cross-examination on this aspect, the trial Court recorded findings in favour of the plaintiff to the effect that theplaintiff is a registered firm and P.W.1 is competent to file the suit. The plaintiff has been running the money lending business and the suit is filed for recovery of the amount on the strength of the promissory note-Ex.A-2, and the contents of the same are as hereunder:

14. P.W.1 also deposed relating to the execution of Ex.A-2 and that D-2 has power to execute promissory note on behalf of the firm and they agreed to pay interest at the rate of 18% per annum. The interest was paid up to 13.06.1984. D-1firm is responsible for the loan along with all the other partners. P.W.1 also deposed that they filed I.P. 17/84 against the defendants and the same is pending. This witness also deposed that he also noted the part payments in para 6 of the plaint and he does not know as to the partnership changing the addendum by adding D-3 also responsible for taking amounts. There is no notice of such addendum. The firm and the partners are liable to pay the amount. This witness also deposed that they brought the suit promissory note by sending for the same from I.P.17/84 and they also attached the properties of the defendants. In the cross-examination of D-4, this witness deposed that he has not seen the partnership deed of S.V. Metal Unit. The promissory note was not executed in the capacity of managing partner by the executant. They got accounts. This witness further deposed that it is not true to say that the account is in the name of D. Kondaiah and not in the name of S.V. Metal Unit. He does not know the relationship of D. Kondaiah and Mohan Rao. They got the partnership deed wherein the name of managing partner, who could act on behalf of the firm, also stated that D-2 and D-5 made part payments. He does not know whether D-4 got agricultural lands. They also attached the lands of D-4. The first defendant firm is income tax assessee. He does not know for which year D-1 firm was income tax assessee. No doubt, certain suggestions were denied in the cross-examination by D-3, D-6, D-8 and D-9. This witness deposed that D-3, D-6 and D-8 got agricultural lands and they were attached. The suggestions put to this witness relating to the non-liability of the firm had been specifically denied. In the cross examination of D-7, this witness deposed that D-2 and D-5 only made application for loan then they had not asked to bring the other partners. They paid in cash, but not in cheque. This witness also deposed that it is not true to say that by the time of payment, D-1 firm was closed and it is not true to say that D-2 and D-5 borrowed personally and not for the firm. In the cross-examination of D-2, certain suggestions also had been denied. P.W.1 was recalled and in the further chief-examination, P.W.1 deposed that before taking loan, defendants made application i.e., Ex.A.3. The application was filed as per the partners on behalf of D-1 firm. After taking the loan, the defendants executed the receipt. It is Ex.A-4. Both Ex.A-3 and A-4 contain the seal of the firm. In the cross-examination of D1, D3, D6, D8 and D-9 this witness deposed that the promissory note was executed by D-2 and D-5 and D-2 and D-5 only filed application. They had not paid the money through the cheque. This witness further deposed that it is not true to suggest that the amount was given towards personal loan of D-2 and D-5 and not to the firm. This is the evidence of P.W.1

15. The ninth defendant was examined as D.W.1. He deposed that the first defendant is a registered firm and D-2 to D-9 are the partners of the D-1's firm. He deposed in O.S. No. 116 of 1984 and filed the original certificates in that suit. Hence, he was filing certified copies of the said documents. This witness also deposed about the certified copy of the partnership deed Ex.B-1. As per Exs.B-1, D-2 and D-3 are entitled to raise loans on behalf of D1 jointly and severally. As they were getting loans on 2.3.84, they wrote addendum to avoid the loss. The addendum is Ex.B.2. As per Ex.B.2 it was stipulated that D2 and D-3 jointly borrowed on behalf of D-1 firm and not individually. This witness also deposed that the firm stopped the business on 01.04.1983. The Commercial Department also issued proceedings under Ex.B-3. He used to maintain accounts till 31.03.1983. Thereafter, D-2 maintained the accounts. He handed over factory to D-2 after 01.04.1983. The dissolution of partnership deed was postponed, as there was a material to be disposed of. D-2 and D-5 had no authority to borrow on behalf of the firm under Ex.A-1. There was no necessity to borrow for the firm. He filed original day book in O.S. No. 116 of 1984 and the certified copy of the same is Ex.B-4. The certified copy of the ledger account extract is Ex.B-5 from.01.04.1982 to 09.10.1982. Ex.B-6 is the certified copy of the daybook from 01.10.1983 to 31.3.1983. Ex.B-7 is the certified copy of ledger, dated 10.10.82 to 31.03.1983. Ex.B-8 is the certified copy of the stock register from 01.04.1982 to 09.10.1982. Ex.B-9 is the certified copy of the stock register from 10.10.1982 to 31.03.1982. Ex.B-10 is the certified copy of the daybook page No. 190 closing the account on 31.03.1983. The defendants have got agricultural lands, they are not paying income tax, hence, the interest is to be scaled down. D-2 and D-7 are brothers. D-2 and D-7 are the partners in Vimal showroom cloth business. D-5 is the brother-in-law of D-2. D-2 and D-5 are running Andhra Chicory Factory. The borrowing of money had been invested in that business. Therefore, the partners of D-1 firm are not liable for the suit debt. This witness was cross examined by D-7 and cross examination on behalf of D-2 reported nil and cross examination of D-5, it was recorded called absent and treated as no cross examination. In the cross examination made by the plaintiff, this witness deposed that they advanced a cash of rupees four lakhs as a capital. They also borrowed from Nandyal S.B.I for D-1 firm. The modification copy of addendum was not registered. There are eight members as partners by 2.3.83. Two partners did not sign in Ex.B-2. They had not issued gazette publication about the addendum. They had not informed to the Registrar of firms about this addendum and not published in the newspapers. As per the original partnership, D-2 had borrowed individually for the firm. In the said addendum they had removed the word 'joint' and the rest of the conditions were similar. In the debts taken on behalf of D-1, Kondaiah signed and one of the partners of the firm also signed, except Satyannarayana. This witness also deposed that it is not true to say that they had taken this addendum in order to avoid the responsibility relating to debts. Several other suggestions put to this witness also had been denied.

16. Apart from the evidence of D.W.1, the evidence of D.W.2 was also available on record. D.W.2 is the 7th defendant and one of the partners of D-1 firm. This witness specifically deposed that the firm was closed on 31.03.1983 and D-9 was looking after the accounts of D-1 firm at the relevant point of time. Before the closure of the firm, D-2 and D-3 are jointly eligible to take loan for D-1 firm. By the closure of the firm, there was stock of the material of the firm. After the closure of the firm there was no necessity to borrow the amounts. D-2 and D-5 had taken the loan in their individual capacity and not for the firm. This witness in the cross examination stated that they have to inform the C.T.O. office intimating that the firm was being closed on 31.03.1983, he # had not filed any such record. No accounts were settled. They had not filed any suit for dissolution of the firm. Several of the suggestions put to this witness had been specifically denied.

17. Section 26 of the Negotiable Instruments Act, 1881 dealing with capacity to make, etc., promissory notes, etc., reads as under:

Every person capable of contracting, according to the law to which he is subject, may bind himself and be bound by the making, drawing, acceptance, endorsement, delivery and negotiation of a promissory note, bill of exchange or cheque.

18. Likewise, Section 27 of the aforesaid Act dealing with Agency, reads as under:

Every person capable of binding himself or of being bound, as mentioned in Section 26, may so bind himself or be bound by a duty authorized agent acting in his name.

19. The learned Counsel representing the parties made further elaborate submissions on the strength of the Sections 19, 20 and 22 of the Indian Partnership Act as well.

20. Section 19 of the Act, deals with implied power of partner as agent of the firm.

Sub-section (1) of Section 19, reads as under:

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.

21. Likewise, Sub-section (2) of Section 19, reads as hereunder:

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.

(b) open a banking account on behalf of the firm in his own name.

(c) compromise or relinquish any claim or portion of a claim by the firm.

(d) withdraw a suit or proceeding filed on behalf of the firm.

(e) admit any liability in a suit or proceeding against the firm.

(f) acquire immoveable property on behalf of the firm.

(g) transfer immoveable property belonging to the firm, or

(h) enter into partnership on behalf of the firm.

22. It is pertinent to note that the opening words of Sub-section (1) of Section 19 of the Act aforesaid reads as hereunder:

subject to the provisions of Section 22

23. Section 20 of the Act deals with extension and restriction of partner's implied authority and the said provision reads as hereunder:

The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner.

Notwithstanding any such restriction, any act done by a partner on behalf of the firm which falls within his implied authority binds the firm, unless the person with whom he is dealing knows of the restriction or does not know or believe that partner to be a partner.

24. Section 22 of the Act deals with mode of doing act to bind firm and the said provision reads as hereunder:

In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm-name, or in any other manner expressing or implying an intention to bind the firm.

25. It is needless to say that in the light of the language of the Section 19(1) of the Act aforesaid may have to be read along with Section 22 of the Act. The essentials to be satisfied for the applicability of Section 22 of the Act are as hereunder:

In order to bind a firm, an act or instrument done or executed by a partner or other person to be binding upon the firm, the following essentials are to be satisfied:

(1) The act or instrument should have been done or executed by a partner or other person on behalf of the firm.

(2) It must have been done or executed in the name of the firm.

(3) The act or instrument must have done in any other manner, it must be expressly or impliedly done with an intention to bind the firm

(4) It may relate to the business of the firm.

26. In the light of the recitals of Ex.A-2- promissory note and also the evidence of P.W.1 in particular, it may be that certain of the essentials to be satisfied for the applicability of Section 22 of the Act can be said to have been satisfied. But, however, this Court is of the considered opinion that the condition of intention to bind the firm and also yet another condition it must relate to the business of the firm, these conditions are satisfied.

27. It is no doubt true that the change made by virtue of Ex.B-2, the certified copy of the addendum, it might have not been within the knowledge of the plaintiff firm. It is also true that there is a clear evidence of P.W.1 to the effect that these partners, who had executed Ex.A-2, the suit promissory note on behalf of the firm. Strong emphasis has been laid down on the seals affixed both on Ex.A-1, A-3 and A-4 as well. Though certain suggestions were put relating to the closure of the business by the firm, P.W.1 specifically denied such suggestions. But however, both D.W.1 and D.W.2 clearly deposed that there was no occasion or necessity to borrow any amount whatsoever for the sake of the firm or for running the business of the firm since the firm had already closed even by that time and further specific stand had been taken that the amounts, if any, borrowed by those individual partners should have been for the purpose of their personal business and not for the benefit of the firm. On appreciation of the evidence available on record and also taking into consideration the fact that the relevant records, the account books had not been produced by P.W.1 and also further considering Exs.B-4 to B-10 as well, clear finding had been recorded. In the light of the facts and circumstances, it cannot be said that this amount had been borrowed by the individual persons, against whom the decree had been made, for the purpose of the firm or for utilizing the same for the business of the firm. In the light of the several facts and circumstances and also the series of events, this Court is satisfied that the findings recorded by the trial Court on appreciation of evidence of P.W.1, Exs.A-1 to A-4, D.W.1 and D.W.2 and also Exs.B-1 to B-10 cannot be found fault with. Accordingly, the said findings are hereby confirmed.

POINT NO:2:

28. In the result, the appeal being devoid of merit, the same shall stand dismissed. However, in the peculiar facts and circumstances of the case, the parties to bear their own costs.


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