138 negotiable act
Dheeraj
(Querist) 09 January 2010
This query is : Resolved
Dear Experts, Please resolve my query. I am partner in a partnership firm (unregistered with only two partners) last year, now due to some happenings I retired from the firm and a mutual agreement has been made between us that from the date of my retirement the other partner will take over the business of the firm with current name, goodwill and all debtor and creditors. No dissolution deed has been entered between us as on date. In order to run the business we have given some blank cheques as security cheques for procurement of goods.
Now the continuing partner not making the regular payment to the said party to whom blank chwques were issued. The said party now with a view to recover the money present the blank cheque by filling it with Rs 109000/- and the said cheque was dishonoured. The outstanding as per our accounts is Rs 60000/- to which party has agreed we have written document with the signatures of the party in this regards.
Since I am retired partner and other partner is continuing the firm, now a notice under section 138 (CC marked) comes to me, what will I do in this case.
Please reply
A V Vishal
(Expert) 09 January 2010
If a person retires from the firm but does not give notice of retirement, he will be liable as a partner, if some third party deals with the firm on the assumption that he is still partner.
If third party files suit against the unregistered firm, the firm cannot claim set off or institute other proceeding to enforce a right arising from a contract. - - Suit or claim or set off upto Rs 100 can be made as per section 69(4)(b), but it is negligible in today’s standards. - - Criminal proceedings can be filed, but civil suit is not permissible.
Raj Kumar Makkad
(Expert) 10 January 2010
You have very limited options. Neither you prepared/executed retirement-deed nor intimated to the parties wherein the blank cheques were lying about your retirement in writing so you shall also to be treated as partner.
Have you also signed that cheque which has been bounced?
If yes, then be ready to face the consequences but if not then you have full chances to be exonerated of the charges being not involved in the process.
The complainant firm has also to establish its debt of Rs. 1,09,000/- which has actually only 60,000/- so contest the complaint on all these grounds.
Dheeraj
(Querist) 10 January 2010
Dear Experts, Thanks for your valuable opinions, but what if the dissolution deed is there and the parties are known that the firm is dissolved (verbally). The cheque prsented earlier also, but bounced back and later on after the dissolution. The fact that firm is dissolved is known to the party.
