Meenakshi Achi V P.S.M. Subramanian Chettiar 13 February, 1956

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1956 SCC OnLine Mad 40 : (1956) 69 LW 704 : AIR 1957 Mad 8
MEENAKSHI ACHI and another

v.
P.S.M. SUBRAMANIAN CHETTIAR and others.
GOVINDA MENON AND RAMASWAMI, JJ.
Appeal No. 1004 of 1952 and A.A.O. Nos. 15 and 26 of 1953.

Appeals (disposed of on 13-2-1956) against the decree of the Sub Court,
Devakottai, in O.S. No. 137 of 1951 etc.
13-2-1956
Partnership Act, S. 32—Retirement of a partner—Liability thereafter — Rights of third parties—
Incoming partner if and when liable.
Under S. 32, a partner may retire (i) with the consent of all the partners, (ii) by virtue of an
express agreement between the partners and (iii) in case of a partnership at will, by giving notice in
writing to all other partners of his intention to retire. Such a partner, however, continues to be liable
to third parties for acts of the firm, after his retirement, until public notice for acts of the firm, after
his retirement, as required by S. 72 has been given, either by himself or by the other partners [Cls.
(3) and (4) of S. 32]. As regards liability for acts of the firm done before retirement, the partner
remains liable for the same, unless as S. 32(2) provides. Retirement is not the same as dissolution.
On retirement of a partner, the firm continues to exist as such, which is not the case when a
partnership is dissolved.
To determine whether an incoming partner becomes liable to an existing creditor of the firm, two
questions have to be answered; firstly, whether the new firm has assumed the liability to pay the
debt; secondly, whether the creditor has agreed to accept the new firm as his debtor and to
discharge the old partnership from its liability.
Page: 705
A creditor cannot rely merely on an agreement between the partners inter se such as that the new
partner would be liable for antecedent debts. He must prove novation of contract, that is to say, he
must prove both the conditions stated above in order to hold the new firm as liable for his debts.
There must be evidence which must be sufficient to establish privity between the newly constituted
firm and the creditor, if an incoming partner is to be held liable for any old debt of the firm.
Messrs. R. Kesava Iyengar and K. Parasaram for Appts.

Messrs. R. Gopalaswami Iyengar and M. Natesan for Respts.
JUDGMENT
(Delivered by RAMASWAMI, J.)
This is an appeal preferred against the decree and judgment of the learned
Subordinate Judge of Devakottai in O.S. No. 137 of 1951.
2. The facts are: Defendants 1 and 4 and the late Palaniappa Chettiar, husband of the
2nd defendant and the adoptive father of the 3rd defendant, were carrying on a money
lending business in partnership under the name and style of P.S. SM. firm in Sitkwin
in Burma. Palaniappa Chettiar died on 30th December 1932 surviving him his widow,
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who is the 2nd defendant. It is the case of the plaintiff that the widow was taken in as
a partner in the place of her deceased husband and that the firm continued to function
with defendants 1 and 4 and the 2nd defendant Meenakshi Achi as partners.
3. The plaintiff P.S.M. Subramanian Chettiar's moneys were in deposit with this firm
through the Maral of V.V. of Ariyakudi, since deceased. This depositing was in April
1928. It is the case for the plaintiff that the new firm assumed liability to pay the debt
and consequently that he, the creditor, has agreed to accept the new firm as his
debtor and to discharge the old partnership from its liability. The new firm has been
making payments now and then towards this deposit and by 13th April 1941 the
plaintiff's money in deposit in this firm had amounted to Rs. 787366 the interest
stipulated being the current rate of interest prevailing in Rangoon plus one anna.
Towards the balance of the amount due under this deposit a Kaiyeluthu letter,
described as a promissory note, was executed under date 13th April 1941, Ex. A-1
which is reproduced below:
“P.S. SM. Sitkwin Ariyakudi V.V. Maral, Karaikudi P.S.M. Subramanian Cettiar, 1st
Chitrai of Vishu year, 13-4-1941 Executed by Muthukaruppan Chettiar.
The amount due from us in settlement of our previous accounts is Rs. 7873-6-6. We
have oredited in your name the said sum of rupees seven thousand eight hundred
seventy three, annas six and pies six only with interest at Re. 0-1-0 over and above
the Rangoon nadappu rate of interest. On the money being demanded we shall pay to
your order the principal together with interest thereon and take return of this letter.
Sd. P.S. SM. Agent Muthukaruppan Chettiar.”
Payments have been made subsequently and those payments have been endorsed on
the back of Ex. A.1. These payments save the bar of limitation. Though the balance
was demanded by a registered notice dated 20th October 1951, to defendants 1 to 4,
they have been evading and no payments have been made.
… … … …
(After dealing with further facts. His Lordship proceeded):
17. Bearing these factors in mind we have got to examine only the contentions of the
2nd defendant Meenakshi Achi in these appeals.
The contentions of Meenakshi Achi are as follows:
(1) The Maral has not been proved;
(2) The suit document is not a promissory note and the endorsements on its back are
forgeries;
(3) The 2nd defendant has never been a partner of this firm;
(4) Even if she is considered to be a partner during the interregnam between her
husband's death and before her adopted son, the third defendant, was taken in as a
partner (date unspecified), this debt is not binding on her because it has not been
shown that the new partnership assumed the liability to pay the debt and secondly,
the creditor has not been shown to have agreed to accept the
Page: 706
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new firm as his debtor and to discharge the old partnership from its liability; and,
(5) The suit is, in any event, barred by limitation.
18. Point 1: It is idle to contend that the Maral has not been proved. Two of the
partners who were equally liable, viz., Subramanian Chettiar (1st defendant) and
Somasundaram Chettiar (4th defendant) admit the deposit. The telegram Ex. A.34
dated 1st April 1928, the letter Ex. A.35 dated 12th April 1928, the Vaddi Chittai Ex.
A.36 and the Vaddi Chittai Ex. A.37 referring to the Kaiyeluthu letter relating to the
Maral deposit, the Ex. A.18 dated 8th September 1932 referred to the Kaiyeluthu
letter in the name of V.V. Maral P.S.M. Subramanian Chetti of Ariyakudi as having
been delivered to the said person, the Vaddi Chittai Ex. A.38, Ex. A.19 the letter
written by Meenakshi Achi calling for the particulars of Maral debts, the Vaddi Chittais
Exs. A.19 and A.40 and the entry in the account book Ex. A.41 evidencing the suit
transaction and the endorsements on the back of Ex. A.1, marked as Exs. A.2 to A.7,
all clearly show that the deposit pleaded by the plaintiff is true. In fact it is not the
case for this Meenakshi Achi that there was no depositing and improving of the
amount of the plaintiff but her case is only that the first defendant was managing and
she knowns nothing, which is found to be false, and she is putting the plaintiff to strict
proof. The depositing was spoken to during the trial by the plaintiff Subramaniam
Chettiar as well as by the iirst defendant Subramanian Chettiar. Their evidence stood
unshaken in cross-examination and has been accepted by the learned Subordinate
Judge. This plaintiff has given a registered lawyer notice preceding the suit under Ex.
A.12 and it is significant that there has been no denial of liability by the 2nd
defendant. It is in evidence that this Meenakshi Achi was receiving through out the
balance sheets etc., from the suit firm showing thereby that she could not have been
ignorant of the suit transaction as pretended to by her now. Therefore the learned
Subordinate Judge who had an opportunity of seeing this Meenakshi Achi in the box as
D.W. 1 has rightly disbelieved her evidence and this is a circumstance entitled to
weight. On point (1) we therefore find that the depositing of the amount for
improvement as pleaded by the plaintiff is true.
19. Point 2: That the suit document is not a promissory note has not been raised in
the lower Court and both parties have proceeded only on the footing that it was a
promissory note. But even assuming for the sake of of arguments that it is not a
promise sory note, the plaintiff cannot be straightaway non-suited because the suit
has been tried as one based upon the depositing of the amount, it was being treated
as such and utilised as such by the Sitkwin firm and payments were being made
thereunder as such and the suit was filed setting out all these facts for recovery of the
money due under that original debt. This suit also has not been disposed of under
presumptions arising under the Negotiable Instruments Act. In fact it was the plaintiff
and his witness who first got into the witness box and filed all the relevant
documentary evidence and the 2nd defendant has then got into the box and filed her
documentary evidence. There is no question of any bar of limitation by this suit not
being treated as a suit on a promissory note, because it is common ground that the
demand for the return of the deposit amount was well within the period of limitation
prescribed. The only two points of substance urged in this connection are that the suit
document has been signed by P.S.S.M. Agent Muthukaruppan Chettiar and secondly,
that the endorsements on the back of Ex. A.1 appear to have been written at a stretch.
In regard to the first point, we have the evidence of the plaintiff and we are unable to
see why the agent of the firm should not sign the promissory note on behalf of the
firm. Secondly, though some of the endorsements on the back of the promissory note
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look like having been
Page: 707
made with the same ink, it is significant that not a single question was put to the
plaintiff or the first defendant in the lower Court about this. The trial has gone on the
footing that these endorsements had been made on different dates and not at one
stretch. Otherwise, it stands to common sense that when the 2nd defendant was
straining to disown her liability, she would not have neglected this aspect of the
matter. In addition some of the endorsements in the middle appear to be in different
inks. There are also corresponding entries in the account books of the firm in regard to
the payments made under these endorsements and they are not denounced as non-
genuine. Therefore point (2) also fails.
20 Point 3: A partnership is defined by S. 4 replacing the repealed S. 239, Contract

Act and widening it [Bridchand v. Harakchand (1) ] as “the relation subsisting between
persons who have agreed to share the profits of a business, carried on by all or any of
them acting for all.” As the definition shows, a partnership consists of three essential
elements; (i) it must be the result of an agreement between several persons; (ii) the
agreement must be to share the profits of a business and (iii) the business must be
carried on by all or any of them acting for all. All the three above essentials must exist
before a partnership can come into existence; and there must be an intention to
become partners per Lord Esher Sutton v. Grey (2) . As to (i) we have to remember that
a partnership cannot be the result of status but only of a contractual agreement
between the various parties (See 40 Am. Jur. p. 145—Tests of Indicia of partnership).
It is pointed out by S. 5 which further goes on to say that the members of an
undivided Hindu family carrying on a joint family business are not necessarily
partners. Of course this does not mean that there can be no partnership between the
members of a joint Hindu family to carry on a family business in partnership:
Jamunadhar v. Jamunaram (3) . But this is not the case here.
Partnerships are of two kinds: namely, (i) partnerships at will and (ii) partnerships for
a fixed period (see S. 7).
On the death of a partner in the absence of a contract, express or implied, to the

contrary, a firm is dissolved: See S. 42(c), even though the partnership be for a
definite number of years.
In the absence of a contract to the contrary, no person shall be introduced as a new

partner into a firm without the consent of all the existing partners; see S. 31(1). The
general idea is that the consent of all the existing partners is required to the
introduction of a new partner so that the firm may work harmoniously. Lindley, pages
435—436; Lovegrove v. Nelson (4) , Byrne v. Reid (5) .
In addition, a new partnership may be by an oral agreement or in writing. Again, it

may be express or implied. It need not be express and can arise out of mutual
understanding evidenced by a consistent course of conduct and by express admission
of the parties concerned. Tajmal Hussain v. Ahmed Ali (6) , In re. Kakerla Narasayya (7) ,
Jackuddin v. Vittoka (8) , Chottelal v. Rejmal (9) , Isa Haji v. Saranbal (10) : see Lindley
page 105.
21. In determining whether a particular group of persons constitutes a partnership,

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regard is to be had to the real relation between the parties as shown by all relevant
facts taken together. The question whether a particular group of persons constitutes a
partnership or not, is often a difficult one to decide. No general rule can be laid down
in this connection. No doubt sharing of profits will be an important criterion but
Page: 708
as laid down by the House of Lords in Cox v. Hickman (1) , it is not conclusive. Taking
part in the conduct of the business is another important element to be considered,
though with a similar qualification. This can be shown by books of account by
testimony of clerks, agents and other persons, and letters and admissions and in short
by any of the modes by which facts can be established. The books of account will
usually give a good indication as to whether the parties are partners or not. The reason
is that partnership accounts are generally maintained in a different way than is the
case where one or more of the parties are lenders. Even this however is not an
infalliable guide. As S. 6 says all the relevant facts must be scrutinised in each case in
order to determine whether a particular set of persons are partners or not. [Tajmal
Hussain v. Ahmed Ali (2) ; Commissioner of I.T. v. Okhebai (3) ; British Cotton Growers
Association v. Commissioner, I.T. (4) , Debi Prasad v. Jairam Das (5) ; Madho Prasad v.
Ganeshlal (6) ; Motilal v. Joganlal (7) ; Baghumal v. O.A. Calcutta (8) , Hakamrai v.
Gangaram (9) , Chokkalinga v. Muthuswami (10) ; English Cases: Davis v. Davis (11) ; In re
Young (12) ; Walker v. Hirsch (13) ; Adam v. Newkiggins (14) . For detailed discussion and
cases see Lindley pages 105 et seq.
22. Once admitted as partner, the rules as to relations of partners with third persons
are contained in Ss. 18 to 30. S. 18 lays down the fundamental rule of the law of
partnership, viz., that subject to the provisions of the Act, a partner is the agent of the
firm for all purposes of the business of the firm. The authority of a partner is defined in
Ss. 19 to 22 and the effect of admission by a partner in S. 23 and the effect of notice
to a partner in S. 24. Ss. 25 to 27 deal with the question of the firm's liability for (i)
contract, (ii) for torts and (iii) for misappropriation of third person's property by a
partner. As regards the contractual liability, S. 25 provides that every partner is jointly
and severally liable for all acts of the firm while he was a partner. Every partner is
liable to the utmost farthing of his property for the debts and the engagements of the
firm and the decree-holder is under no obligation to levy execution against the
property of the firm before having recourse to the separate property of the partner;
nor is he under any obligation to levy execution against the partners rateably; but he
may select any one or more of them to levy execution against him or them until the
decree is satisfied leaving all questions of contribution to the partners themselves.
Lindley pages 260-61; S. 11, 49 and 50 of O. 21, C.P.C. No device or contrivance will
enable a partner to escape from his or her liability under the partnership. As stated in
the Repcrt of the Special Committee making a departure from the English Act of 1890
this Section makes the liability of partners joint and several in accordance with S. 43
of the Indian Contract Act: See Lukmidas v. Khimji (15) ; Motilal v. Cellabhai (16) ;
Narayanan v. Lakshmanan (17) ; Md. Askari v. Radharatn (18) , Hemendro v. Bajendro (19) .
23. Under S. 32 a partner may retire (i) with the consent of all the partners; (ii) by
virtue of an express agreement between the partners and (iii) in case of a partnership
at will, by giving notice in writing to all other partners of his intention to retire. Such a
power, however, continues to be liable to third parties for acts of the firm, after his
retirement, until public notice of his retirement as required by S. 72 has been given,
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Page: 709
either by himself or by the other partners (clauses 3 and 4 of S. 32). As regards

liability for acts of the firm done before retirement, the retiring partner remains liable
for the same, unless, as S. 32(2) provides. On the words of Underbill (page 79) a
tripartite agreement is made by him with the third parties concerned and the partners
of the reconstituted firm, discharge him from such liability. Even where partners agree
amongst themselves that the continuing partners shall be liable for the obligation of a
retiring partner, such an agreement cannot per se affect the rights of the creditors
being res inter alios acta. Such agreement may be either express or may be implied by
a course of dealing between the third parties and the new firm, after knowledge of his
retirement. But it will not be presumed and if it exists will have to be strictly proved.
Benson v. Hatfield (1) . This refers to the subject of “novation” for which S. 62 of the
Contract Act provides. Scarf v. Jardine (2) . Retirement is not the same as dissolution.
On retirement of a partner, the firm continues to exist as such, which is not the case
when a partnership is dissolved.
24. Bearing these principles in mind if we examine the facts of this case, we find that
on the death of Palaniappa, the partnership at will stood automatically dissolved.
Thereupon two of the remaining partners have taken in this Meenakshi Achi as a
partner and the old business has been run under a different style and vilasam. It will
be remembered that at that stage Meenakshi Achi had not adopted the third
defendant and it was only in 1937 that she did so. That this Meenakshi Achi thus
became a partner of the new firm is evidenced by the following facts. She gives her
own version as to how she became a partner in the agreement of 1941. The
correspondence which has been filed in this case, in the shape of letters written by
this Meenakshi Achi, shows that she was taking an active interest in the management
of the business of this firm as a partner. It is also clear” that balance-sheets etc., were
being sent to her and she was scrutinising them. In fact she has appointed one of her
own nominees as an agent in Burma in order to improve the conduct of the business
there, realise the outstandings and discharge the liabilities. It is also the admitted
case of this Meenakshi Achi, and in fact it is on that footing that she filed her suit on
the two deposit letters, O.S. No. 22 of 1950, that she became a partner in the Khajang
firm and had an eight anna share therein. There is no reason why when she admittedly
became a partner of the Khajang firm, she should not have become a partner of the
Sitkwin firm. The partnership of this Meenakshi Achi in the Sitkwin firm is in addition
spoken to by the plaintiff and the first defendant and nothing has been elicited in their
cross-examination to discredit their testimony. It is unnecessary to multiply these
details to show that this Meenakshi Achi was admitted as a partner in the Sitkwin firm
after the death of her husband and when the new firm was constituted that she
actively participated in the management of the business as a partner and that she had
not retired from that partnership in accordance with the provisions of the Indian
Partnership Act. It need not be pointed out that this Meenakshi Achi could not have
occupied herself legally the dual role of guardian and a partner. There can be no
partnership between the same individual acting on the one hand as the guardian of
the minor and on the other as a partner in his or her individual capacity. In re
Mohanlal (3) . See also Lachmandas, In re (4) . The only point of substance urged in
favour of the contention that Meenakshi Achi was not a partner is twofold viz., that in
the other suits filed against Meenakshi Achi as well as in the present suit allegations
have been made suggesting as if Meenakshi Achi was not a partner but only the
guardian of her minor, adopted son, the present third defendant. Secondly, in O.S. No.
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131 of 1944 the three
Page: 710
partners who were found entitled to shares were held to be Somasundara, Subramania
and Meyyappa. In regard to the former, the plain provisions of the Partnership Act can
only be displaced by contracts to the contrary and the alleged custom of the
Nattukottai Chetties is neither here nor there. In regard to the suit O.S. No. 131 of
1944, it will be remembered that the present plaintiff was not a party to that suit and
he will not be bound by what the three persons alleged as between themselves
adjudicated and got.
25. Therefore, on point (3) it has to be held that the 2nd defendant Meenakshi Achi
continued throughout as a partner of the Sitkwin firm and is therefore liable for the
suit debt both out of the assets of the firm and also personally.
26. Point (4): When a person has been introduced as a partner into an existing firm,
as in the case of Meenakshi Achi, she does not thereby become liable for any act of the
firm done, i.e., any obligation of the firm incurred, before she became a partner; see
S. 31(1). This rule, however, does not apply where a minor admitted to the benefits of
partnership of a firm elects to become a partner therein on attaining majority or ipso
facto becomes so on the expiration of six months from the date of his attaining
majority, under the provisions of S. 30. see S. 31(2).
27. Though the mere fact that a certain person has been introduced as a partner into a
firm does not make him liable for the obligations incurred by the firm before he was so
introduced, he may, by agreement between the partners, become liable for such
obligations. But to determine whether an incoming partner becomes liable to an
existing creditor of the firm, two questions have to be answered:
Firstly, whether the new firm has assumed the liability to pay the debt, secondly,
whether the creditor has agreed to accept the new firm as his debtor and to discharge
the old partnership from its liability.
A creditor cannot rely merely on agreement between the partners inter se such as that
the new partner would be liable for antecedent debts. He must prove novation of
contract, that is to say, he must prove both the conditions stated above in order to
hold the new firm liable for his debts. Rolfe v. Flower (1) , B.D. Sharma v.
Phanindranath (2) , Russa Engineer, ing Works v. Kanara Transport (3) , Madho v. Gouri
(4)
.
28. In regard to proof of such agreement between the old partners and the incoming
partner Lindley observes:
“The Courts, it has been said, lean in favour of such an agreement, and are ready to
infer it from slight circumstances; and they seem formerly to have inferred it
whenever the incoming partner agreed with the other partners to treat such debts as
those of the new firm. But this certainly is not enough, for the agreement to be proved
is an agreement with the creditor; and of such an agreement an arrangement between
the partners is of itself no evidence.”
The American Law is also the same. Whether an incoming partner assumed liability
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expressed by or implied by as can be deduced from the facts and circumstances

attendant upon his entry is a question of fact and circumstances indicating assumption
or non-assumption have to be gathered from the treatment of the existing debts by
the firm to the knowledge of the incoming partner as the debts of the new firm or from
other facts and circumstances which just by raise an implication and its assumption
(40 Am. Jur. S. 219 et seq). The result of the Indian authorities on the subject also
appears to be that there must be evidence which, though not much must be sufficient
to establish privity between the newly constituted firm and the creditor if an incoming
partner is to be held liable for any old debt of the firm. Rolfe v. Flower(1) B.D. Sarma v.
Panindranath (2) , Jagannath and Co v. Gresswell (5) , Russa Engineering Works v.
Kanara Trans, port (3) , Shewak Mahtom v. Saint Joseph (1) ,
Page: 711
Ex. P. Shitmore(2) British Hatnes Assarp v. Peterson (3)

, Crawford v. Cox (4)
, Pandurang
v. Krishnan Nair (5) , Smith v. Patrick (6) .
29. In this case Meenakshi Achi after she has been admitted as a new partner and the
firm has been reconstituted, has assumed the liability to pay the plaintiff's debt. It is
unnecessary to repeat the evidence already set out above as to how the balance-
sheets were drawn, how the account entries have been made and how Vaddi Chittais
have been sent. Then in the agreement of 1941 there is a narration of this Meenakshi
Achi as to how the new business assumed the liabilities of the old business and how
Meenakshi Achi was a consenting party thereto and how the business was continued.
The correspondence of Meenakshi Achi shows that she was fully aware of these Maral
debts and how she assumed liability for the same and at no time thought of
repudiating them. It is clear in the circumstances of this case that the new firm has
assumed the liability to pay the plaintiff his debt.
30. That the creditor had agreed to accept the new firm as his debtor and to discharge
the old partnership from its liability is evident from this plaintiff receiving payments
and Vaddi Chittais and his continuing the deposit without making any demand for its
return. The option is that of the plaintiff on the constitution of the new firm to either
continue the deposit or not. Therefore, it has been proved in this case that the creditor
had agreed to accept the new firm as his debtor and to discharge the old partnership
from its liability and which can be safely deduced from the circumstances of this case.
31. Before closing this aspect of the case, we must briefly refer to the position of the
third defendant who has not, as we have already stated, disputed through his learned
Advocate Mr. Kesava Aiyangar, his liability for the suit debt and the decree passed
against him. This position is understandable both in view of the fact that, the mother
and the son are sailing together and it suits the third defendant's purpose to make out
that he alone is liable and not his adoptive mother for this partnership debt. Secondly,
though the third defendant has been taking up inconsistent positions, the substance of
his claim seems to be that he was admitted to the benefits of the partnership when he
was a minor and in fact, as set out by his adoptive mother in the 1950 suit, after he
attained majority he became a partner and gave notice in 1941 that nothing should be
done without consultation with him and that it was on that foot that the 1944 suit filed
by Somasundaram Chettiar has been decreed making him a partner in regard to an
one-third of the partnership business of the P.S. SM. firm. Therefore, this Meyyappa
Chettiar, in any event, under S. 29 of the Partnership Act, can be construed as holding
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out as a partner and the, two essential elements emphasised under S. 28, viz., (i) that
there must be a representative and (ii) credit must be given to the firm on the faith of
such representation, have been made out. That Meyyappa Chettiar has been making
representations to all and sundry, including this plaintiff who is a close relative and
living in the vicinity, has been made out. That on the faith of such representation the
present plaintiff has given credit to the firm in the sense that he has not withdrawn
the deposit and allowed the firm to make use of that money and enjoy that credit has
also been made out. This Meyyappa Chettiar by reason of his adoption also has
become entitled to the right, title and interest of his adoptive father in the firm.
Therefore, apart from the fact that Meyyappa Chettiar has not been opposing here the
decree passed against him, it is obvious that be has been rightly made liable along
with Meenakshi Achi.
32. Point (5):—The suit is not barred by limitation for the reasons
Page: 712
set out by the learned Subordinate Judge in paragraph 38 of his judgment. The
acknowledgment by one partner is good as against the other partners and saves
limitation against all. Veeramma v. Veerabadraswami (1) , Mahadeva Iyer v.
Ramakrishna Reddiar (2) , Chagamul v. Govindaswant (3) .
33. In this connection an attempt was made both in the lower Court and here to show
that the acknowledging partner did so not as a partner but in his individual capacity
and only initialled the endorsements. But an investigation shows that this contention
is nothing more than the proverbial mare's nest and the first defendant has given an
explanation regarding the mode of his signing. He has stated:
“I made all payments, Exs. A.2 to A.7. The initials refer to me and are not contractions
of vilasams of the firm. I have power-of-attorney executed in favour of Muthukaruppan
Chetti……I affixed my initials only acting on behalf of the firm. The moneys were paid
only on behalf of the firm………If a partner acts, he would affix his own signatures and
not vilasam of the firm……My vilasam is S.M.S.M. The ledger will show these vilasams…
My (family deity) is Panchala Moorthi.”
The plaintiff as P.W. 2 deposes:
“The partner will sign his own name and only agents will pay on behalf of the firm……I
did not ask the first defendant to sign on behalf of the firm. I have worked as assistant
in my uncle's shop on three occasions ………I was present each time when Exs. A.2 to
A.7 were written ……My thunai is Annamalai.”
There can be no difference as to the binding nature or legality of the endorsements

merely because they bear the initials instead of full signature. Rajah of Tarla v. Gudur
Ramana (4) . The fact that the acknowledgments were made when no active money-
lending was carried on would not make any difference because even if no fresh
business is dons, unless the premises of the shop are surrendered to the landlord and
no business is actually carried on the dissolution of the partnership, the partnership
would not stand dissolved. Therefore, the suit, looked at from any point of view, is not
barred by limitation.
34. The jurisdiction of the Devakottai Sub Court is the last point for determination and
-----------------------------------------------------------------------------------------------------------------------------------------------------------
this has been effectively dealt with by the learned Subordinate Judge in paragraph 41
of his judgment. There can be no doubt that under S. 20, C.P.C. the suit could be filed
in the Devakottai Sub Court.
35. In the result, the decree and judgment of the lower Court are affirmed subject to
the modification that the plaintiff will be entitled to recover one-third of the decree
amount from the first defendant, another one-third from defendants 2 and 3, and the
remaining one-third from the fourth defendant and that only in the event of the one-
third of the amount not being recovered, after all legitimate steps have been taken,
from the fourth defendant, that that one-third will be recoverable from defendants 2
and 3 and from the first defendant in moieties, as conceded by the learned Advocate
for the plaintiff Mr. R. Gopalaswami Ayyangar. This appeal is dismissed with half costs.
36. On these findings it follows that the plaintiff was fully justified in attaching the
decree and the amount in deposit in O.S. No. 22 of 1950. Therefore, there are no
merits in the civil miscellaneous appeals and they are also dismissed with half costs.
V.C.S.
———
(1)
1940 N. 211.
(2) (1894) 1 Q.B. 285.
(3)
(1944) Cal. 138 = 48 C.W.N. 203.
(4)
(1834) M. and K. 20.
(5) (1902) 2 Ch. 735.
(6)
A.I.R. 1937 Oudh. 438.
(7)
A.I.R. 1953 Mad. 516.
(8) A.I.R. 1939 Nag. 301.
(9) A.I.R. 1951 Nag. 448.
(10)
A.I.R. 1938 Nag. 324.
(1)
(1860) 38 H.L.C. 268.
(2) A.I.R. 1937 Oudh. 438.
(3)
(1930) 4 I.T.C. 178.
(4) (1937) 5 I.T.R. 279.
(5) A.I.R. 1952 Punj. 284.
(6)
A.I.R. 1939 Pat. 323.
(7) A.I.R. 1939 Bom. 410.
(8)
1924 Cal. 424.
(9)
1926 Lah. 340.
(10) 1925 Mad. 768 = 21 L.W. 541.
(11) (1894) 1 Ch. 393.
(12)
(1896) 2 Q.B. 484.
(13) (1884) 27 Ch. D. 460.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
(14) (1888) 13 App. Cases 308 at p. 315.

(15)
(1882) 6 Bom. 700.
(16) (1892) 17 Bom. 6.
(17) (1897) 21 Mad. 256.
(18)
(1900) 22 All. 307.
(19) (1878) 3 Cal. 353.
(1) 4 Hare 37.
(2)
(1882) 7 A.C. 344 at p. 350.
(3) (1942) 10 I.T.R. 229.
(4) (1948)16 I.T.R. (P.C.)
(1)
(1865) L.J.P.C. 38 = L.R. 1 P. O. 27 = 146 E.R. 104.
(2) 35 C.W.N. 593.
(3) 49 Mad. 930 = 24 L.W. 546.
(4)
(1939) P. 323.
(5) 40 Gal. 814.
(1) 9 Cal. L.R. 21.
(2)
3 Deac, 365.
(3) (1862) 2 Ch. 404.
(4) 6 Ex. 287.
(5)
(1927) Mad. 889.
(6) (1901) A.C. 282.
(1) 41 Mad. 427 =7 L.w. 552 (P.B.).
(2) 50 M.L.J. 67 = 23 L.W. 199.
(3) A.I.R. 1928 Mad. 972.
(4)
(1942) 2 M.L.J. 242 = 55 L.W. 398.
Disclaimer: While every effort is made to avoid any mistake or omission, this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/
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rule/ regulation/ circular/ notification. All disputes will be subject exclusively to jurisdiction of courts, tribunals and forums at Lucknow only. The
authenticity of this text must be verified from the original source.

Meenakshi Achi V P.S.M. Subramanian Chettiar 13 February, 1956

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Meenakshi Achi V P.S.M. Subramanian Chettiar 13 February, 1956

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Page 1 Saturday, December 04, 2021

1956 SCC OnLine Mad 40 : (1956) 69 LW 704 : AIR 1957 Mad 8

MEENAKSHI ACHI and another

Appeal No. 1004 of 1952 and A.A.O. Nos. 15 and 26 of 1953.

Messrs. R. Kesava Iyengar and K. Parasaram for Appts.

(Delivered by RAMASWAMI, J.)

(After dealing with further facts. His Lordship proceeded):

The contentions of Meenakshi Achi are as follows:

(1) The Maral has not been proved;

(5) The suit is, in any event, barred by limitation.

look like having been

20 Point 3: A partnership is defined by S. 4 replacing the repealed S. 239, Contract

On the death of a partner in the absence of a contract, express or implied, to the

In the absence of a contract to the contrary, no person shall be introduced as a new

In addition, a new partnership may be by an oral agreement or in writing. Again, it

21. In determining whether a particular group of persons constitutes a partnership,

either by himself or by the other partners (clauses 3 and 4 of S. 32). As regards

131 of 1944 the three

expressed by or implied by as can be deduced from the facts and circumstances

Ex. P. Shitmore(2) British Hatnes Assarp v. Peterson (3)

The plaintiff as P.W. 2 deposes:

There can be no difference as to the binding nature or legality of the endorsements

(14) (1888) 13 App. Cases 308 at p. 315.

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