Whether non signatory- active ( nowretired) partner and sign

Madhu Mittal (Querist) 18 July 2021 This query is : Resolved
Whether non signatory- active ( nowretired) partner and signatory partner liable u 138 after dissolution of firm

Mr A and B are two brothers having wife Mrs. X and Mrs. Y respectively. They have two partnership Firms.
One “A & co” having partners Mr. A and Mrs. Y. Another one is “B and co” having partner Mr. B and Mrs. X.
Both Firms took loans from a number of persons. Many of them filed cases against them also some cases u/s 138 N I Act , some for recovery of money suit under Order 37 CPC, some Regular Recovery Suits after the death of Mr. A on 30.07.2019.
Specific case:
Both Firms took loan from a lender of Rs. On lac each at different time through Cheque, and on the basis of post dated cheque of Firm signed by Mr. A for “A & co.” and by Mr B for “B & co. for each loan .

post dated cheques were dishonored in July 2021 reason being due
to stoppage of account operation due to death signatory/ partner.
Interest cheques were also given from time to time from the account of firm “A & co” signed by Mr. A from time to time after deducting TDS from interest amount till May 2019.
Interest cheques were also given from time to time from the account of firm “B & co” signed by Mr. B from time to time after deducting TDS from interest amount till May 2019.
Now Development :
Development in the case is that on 30.07.2019, Mr. A expired.
About on 28.09.2029, A paper publication is given by which Mrs. Y retired from the Partnership of “A and co” on the basis of “Partnership reconstituted Deed dated 03.07.219” in which Mrs. Y retired on 03.07.2019 and Mr. B is inducted as new partner on 03.07.2019 notarized as S. no. 500A at Norary Register.
About on 28.09.2029, another paper publication is given by which Mrs. X retired from the Partnership of “B & co” on the basis of “Partnership reconstituted Deed dated 03.07.219” in which Mrs. X retired on 03.07.2019 and Mr. A is inducted as new partner on 03.07.2019 duly notarized as S. no. 500 B at Same Norary Register.
Mr. A expired on 30.07.2019.After his death, business ‘shop is almost closed, Partners do not want to meet Lenders and actually no sufficient fund in bank account.
Now
Thus in my view above both Partnership Dissolved on 30.07.2019 (because there were only two partner before death of Mr. A , if “Partnership reconstituted Deed dated 03.07.219” taken to be true or otherwise also)
1. Now cheque given in reimbursement of loan at the time of taking loan, presented and returned unpaid, whether in “ A & co”, Mrs.Y will be held liable or not u/s 138 N I Act.
2. Now cheque given in reimbursement of loan at the time of taking loan, whether in “ A & co”, Mr. B will be held liable or not u/s 138 N I Act as debt was taken before his entering in partnership.

3. Now cheque given in reimbursement of loan at the time of taking loan, presented and returned unpaid, whether in “ B & co”, Mrs.X will be held liable or not u/s 138 N I Act.

4. As per Notary Act, every document should be numbered serial. So it appears prima facie that “Partnership reconstituted Deed dated 03.07.219” was made after death of Mr. A and to absolve two ladies of family from the clutches of law. Can it be challenged on this ground,
3(a) if Partners can not prove it “genuine” can a case under IPC be filed,or 3(b) it should be disproved by lender for getting them punished in a case under IPC.

5. Can section 420 IPC alonghwith Section 138 N I Act be added as Firms has taken loan from a lot of persons, and not paying them after the death of Mr. A on 30.07.2019, as record was got from the official sight of Court?

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Quick Summary

This discussion examines the liability of partners, both signatory and non-signatory, under Section 138 of the Negotiable Instruments Act following the dissolution of their firms. It addresses scenarios involving the death of a partner and the validity of partnership reconstitution deeds dated after a partner's demise. The core questions revolve around whether retired or newly inducted partners can be held liable for dishonoured cheques issued before their involvement or after dissolution.

Dr J C Vashista (Expert) 19 July 2021
Be brief and specific for consideration and obligation of experts.
It is better to consult and engage a local prudent lawyer for appreciation of facts. documents, professional advise and necessary proceeding

Madhu Mittal (Querist) 19 July 2021
Respected Sir,
With due respect to y, whatever you have advised is correct. But there is difference opinions on this point.So it compelled to come on this thread. So please guide, if y can guide on above matter.With Regards

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