JUDGMENT
A.L. Bahri, J.
1. Vide this judgment two Regular Second Appeals No. 1421 and 1422 of 1978. filed by the same appellant against the same judgment and decree of the lower appellate Court, are being disposed of.
2. M/s Lal Chand Balwant Rai, a partnership concern of Moga, filed a suit for recovery of Rs. 8,96000 on the allegations that one Mange Ham acting as partner of Firm Pirthi Chand Bal Kishan Das had taken a loan of Rs. 7,000/- in the name of the aforesaid partnership firm against execution of a promote dated December 28, 1970 and the amount having not been paid the suit was filed chiming interest as agreed at the rate of Rs. 1/-per cent per mensem. The defendants contested the suit inter alia, alleging that defendants’ partnership had already been dissolved about seven years earlier and Mange Ram had no authority to raise the loan in the name of dissolved partnership firm. It may be noticed that the suit was filed after the death of Mange Ram. Some other pleas were also raised The trial proceeded on the following issues :-
(1) Whether the plaintiff-firm is a partnership firm and is duly registered under the Indian Partnership Act and Sh Balwant Rai is its partner ? OPP
(2) Whether defendant No. 1 through Mange Ram took a loan of Rs. 7,000 from the plaintiff and executed a pronote in lieu thereof on 28-12- 1970? OPP
(3) Whether the firm-defendant No. 1 was in existence at the time of the pronote ? If so, who were its partners ? OPP
(4) Whether the plaintiff-firm is a money lender ? If so, its effect ? OPD
(5) Whether defendants Nos. 2 and 3 were partners of the firm defendant. No that the time of execution of the pronote ? OPD
(6) Relief.
3. Issue No. 1 was decided in favour of the plaintiffs holding plaintiff-firm to be a registered partnership firm and Balwant Rai being one of the registered partners. Under issue No. 2 it was held that Mange Ram executed the pronote on December 28, 1970 while taking loan of Rs. 7,000/- from the plaintiffs. Under issue No. 3 it was held that the defendant firm was not in existence at the time of execution of the pronote The said firm was dissolved on April 3, 1963 and thereafter did not do any business Thus it was held that the defendant firm was not in existence at the time of execution of the pronote-Exhibit P. 2. Issue No. 4 was decided against the defendants holding that it was not proved that the plaintiff firm was a money lender. Under issue No. 5 it was held that defendants Nos. 7 and 3 Pirthi Chand and Bal Kishan Das were not the partners of the defen-dant-firm at the time of execution of the disputed pronote. Under issue No. 6, defendants Nos. 1 to 3 ware held liable for the debt. Thus, decree was passed for recovery of Rs. 8,960/- with 6% per annum interest from the date of institution of the suit till realisation. An appeal was taken against the aforesaid judgment and decree which was disposed of by the Additional District Judge, Faridkot on August 16, 1978 and was dismissed with costs. Cross-appeal filed by the plaintiff- firm was accepted. The plaintiff firm was allowed interest at @ 12% per annum from the date of the suit till realisation on the principal amount of Rs. 7,000/- instead of 6% per annum. Hence two appeals by the defendants.
4. The question raised on behalf of the appellants in this appeal concerns interpretation of Section 45 of the Indian Partnership Act, which is as under :-
“45. LIABILITY FOR ACTS OF PARTNER DONE AFTER DISSOLUTION :-(1) Notwithstanding the dissolution of a firm, the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution :
Provided that the estate of a partner who dies, or who is adjudicate an insolvent or of a partner who not having been known to the person dealing with firm to be a partner, retires from the firm, is not liable under this section for acts done after the date on which he ceases to be a partner.
(2) Notices under sub-section (1) may be given by any partner.”
Section 72 of the Indian Partnership Act provides the mode of giving public notice It could be by publication in the Official Gazette and in at least one vernacular newspaper.
5. The contention of the learned counsel for the appellant is that in the facts and circumstances of the present case the factum of dissolution of the pirtnership for which the loan was taken by Mange Ram was known to the plaintiff and even if no notice of dissolution was published as required under Section 72 of the Indian Partnership Act, the plaintiff- firm could not take any advantage of the provisions of Section 45 of the Act. The act of Mange Ram did not bind other partners of the dissolved firm. There is force in this contention. The Kerala High Court in Veena. Perumal Pdlai Padmanobha Pillai v. Avukkarummal Muhammad Pathummal, A. I. R. 1958 Kerala 257, held that where there is no allegation and no proof on the side of a partner that public notice of the dissolution was given or that the creditor was informed of dissolution before the date of the advance and had knowledge of it, when he made the advance, and the debt has been incurred for the purpose of the business by a partner who had implied authority to incur debts binding on the firm and the disputing partner, the incurring of the debt would be an act of the firm if it was incurred before the dissolution, and so under Section 45 it is bidding on both the firm and the other partner. In Thummala Rama Rao v. Chodacam Venkateswara Rao, 1963 A.P. 154, similar view was taken. It was observed that if a retiring partner who has not given notice in the mode specified under Section 72, wants to escape liability for any subsequent acts on behalf of the firm, it can only be on the basis of some other rule of law and not on the ground that public notice was gives in a manner different from that prescribed by Section 72. The rule that makes a retiring partner liable for acts done on behalf of the firm after retirement is based on estoppel, because the persons deal with it in the belief that all the partners of the firm still continue; but when the third parties in fact knew that some of the partners have in fact retired from the partnership, there is no scope for the application of the rule of estoppel to make the partners who had already retited liable for the subsequent acts on behalf of the firm. The matter was also under consideration of the Lahore High Court in Bar Bhajan Singh Sohan Singh v. Siri Gopal, A.I.R. 1933 Lah. 417, it was held as under :-
“In the case of dissolution of partnerships, of which to notice has been given, the liability of an ex-partner to an old customer for post dissolution transaction with the supposed old film does not depend on the customer knowing that such partner was a partner prior to the dissolution. If however at the time of the transaction in dispute the business was not a going concern, the balance struck by one of the partners, or a loan raised by him, does not bind the other partners, for in such circumstances it cannot be said that the executants was acting as the duly authorized agent of the firm.”
The position of law as has been laid down by the authorities referred to above that on dissolution of a partnership firm and notice of dissolution having been published, for the debts incurred thereafter by one of the partners, the other partners would not be liable. Even if such notice is not published if the person lending the money had the knowledge of dissolution, and more so, in the case of a dissolved firm not carrying on any business would not bind the other partners of the dissolved firm The evidence produced in the present case is sufficient to hold that the plaintiff firm and its partners namely, Balwant Rai who had actually advanced the loan had the knowledge of dissolution of the partnership firm of the defendants of which Mange Ram was the partner. The dissolution deed-Exhibit D 1 of the defendant-firm was produced. Earlier there were three partners, namely, Mange Ram, Pirthi Chand and Bal Kishan Das. Exhibit P 2 is the pronote and’ receipt Exhibit P. 2/3, dated December 28, 1970. Mange Ram died in October 1972 and the present suit was filed in May 1973. Balwant Rai appeared as PW. 3. He himself is the scribe of the pronote and the receipt. During cross-examination he admitted that their firm worked at Bagha Purana for about six months and his sons and Mange Ram were partners in the said firm. Mange Ram was in possession of the account books. The said firm was known as M/s Lal Chand Balwant Rai. No partnership deed was written. The said shop was opened in August 1963. His son Surinder Kumar and Mange Ram worked on the shop and some times he (Balwant Rai) worked there He admitted that he knew the Finn Gulzari Lal Sham Lal of Moga and denied knowledge that the said firm had business at Bagha Purana or that Mange Ram was partner therein. In 1964 their firm had business dealing with the firm Sikandar Singh Surinder Singh of Bagha Purana. The amount due to the aforesaid firm was partly taken away by Mange Ram and partly by Sikandar Singh. He further admitted that when pronote was executed by Mange Earn which is its dispute, the firm Sikandar Singh-Surinder Singh was functioning at Bagha Purana He admitted that there was shop of Pirthi Chand Bal- Kishan Dass at Moga but, however, be did not know when the same was closed There were no dealings with the aforesaid fir a at Moga. From perusal of the statement of Balwant Rai referred to above no manner of doubt is left that he had full’ knowledge that the defendant- firm had dissolved wherein Mange Ram was the partner as his own son and Mange Ram started a new firm at Bagha Purana. He himself also looked after the business of the aforesaid firm. It was in these circumstances that Balwant Rai had the knowledge of dissolution of the firm of the defendant and since he advanced the loan to Mange Ram, other partners would not be liable for the loan. Since Mange Ram had died leaving behind no legal heir who is party in this suit, the suit is liable to be dismissed against the other partners of the dissolved firm.
6. For the reasons recorded above these appeals are allowed with no order as to costs. The judgment and decree of the Courts below are set aside and the suit stands dismissed.