Mere writing or signing of an acknowledgment by one partner does not necessarily of itself bind his co-partners

 Mere
writing or signing of an acknowledgment by one partner does not necessarily of itself bind his 
co-partners, unless also it can be shown that he had power to bind that partner for the purpose 
of making such an acknowledgment, and in effect purported as to bind him.’’ This is in the 
light of sub-sec. (2) of Sce. 20 which lays down that partners are not chargeable by reason 
‘‘only’’ of a written acknowledgment signed by one of them
The meaning of the word " only " in that section, in our opinion, is that the mere writing or signing of an acknowledgment by one partner does not necessarily of itself bind his co-partners, unless also it can be shown that he had power to bind that partner for the purpose of making such an acknowledgment, and in effect purported so to bind him.

Allahabad High Court

Gadu Bibi And Ors. vs Parsotam on 23 March, 1888

Equivalent citations: (1888) ILR 10 All 418

Bench: Brodhurst, Tyrrell

1. The appellants are owners of a cloth, business in Mirzapur. They sued the members of a firm called Sheoambar Ram Narain for a balance, due on an account signed for the firm, by a member thereof named Mata Prasad. The Subordinate Judge of Mirzapur, who tried the original suit, gave the plaintiffs a decree against Mata Prasad only, exempting the other member of the firm, named Durga Prasad. The learned District Judge of Mirzapur in first appeal confirmed this view and refused the plaintiffs, relief against Durga Prasad.
2. Durga Prasad died after the institution of this appeal in this Court, and upon the application of the appellants Parsotam, a minor under the guardianship of his mother, was brought into the appeal as respondent by an order of one of the Judges of this Court. A preliminary objection was taken to-day to the hearing of this appeal by the learned pleader of the respondent, who contended that the application to bring the legal representative of the deceased Durga Prasad on the record, not having been made within the period allowed by law, the appeal had abated. We disallowed this objection, as we held that the appellants had shown sufficient cause why the application was not made within the term allowed. We are satisfied that the appellants had no knowledge of the death of Durga Prasad, and under their peculiar circumstances, had no-ordinary means of knowing about the death of Durga Prasad, until after the period of limitation for making the application had expired.
3. As to the appeal itself, the learned District Judge found upon the evidence before him that Durga Prasad was a member of the Sheoambar-Ram Narain firm. He also found that Mata Prasad had unquestionably acknowledged a balance of Rs. 1,086-9-0 to be due on Pus badi 15, Sambat 1940, from the firm of Sheoambar-Ram Narain to the plaintiffs in this case. He said: "I have compared and found this correct--Mata Prasad." The learned Judge also found that this examination, comparison, and acknowledgment of the debt due by the Sheoambar-Ram Narain firm to the plaintiffs, was effected by this Mata Prasad in the ordinary course of the partnership business of that firm. He foundi that Durga Prasad had similarly signed for the firm and made acknowledgments, for the firm on other occasions. He held that Durga Prasad by his conduct indicated that he had authority to act as the agent of his partner, Mata Prasad, and similarly Mata Prasad had authority to act as the agent of his partner Durga Prasad. In other words, the learned Judge found that the acknowledgment and signature of this entry was a transaction such as is contemplated in Section 251 of the Indian Contract Act. Having found these facts, the learned Judge would have proceeded to give the plaintiffs the relief they claimed against Durga Prasad, if he had not conceived that he was precluded by the terms of Section 21 of the Indian Limitation Act, from giving effect to the acknowledgment against Durga Prasad, We think that in this point the learned District Judge was wrong. The section in question is as follows:
4. " Nothing in Sections 19 and 20 renders one of several joint contractors, partners. executors or mortgagees chargeable by reason only of a written acknowledgment signed, or of a payment made by, or by the agent of, any other or others, of them."
5. Apparently the Court below reads this section as if the word " only " did not stand in it--that is to say, reads the section as prescribing that nothing in Section 19 and 20 would render a written acknowledgment of one joint contractor an acknowledgment on behalf of his brother contractors. But the word "only" is not to be treated as surplusage. The meaning of the word " only " in that section, in our opinion, is that the mere writing or signing of an acknowledgment by one partner does not necessarily of itself bind his co-partners, unless also it can be shown that he had power to bind that partner for the purpose of making such an acknowledgment, and in effect purported so to bind him. This view of the section has been taken in the ruling of Premji Ludha v. Dossa Doongersey I. L. R., 10 Bom., 358, and is in conformity with the law laid down in similar cases by the English Courts. It appears to us, that upon the finding of the learned District Judge, Mat a Prasad was competent to acknowledge the balance, not only for himself, but for his partner, and that he did do so when he wrote the words " Pus badi 15, sambat 1940, balance of Rs. 1,086-9-0, signed by Sheoambar-Ram Narain, compared and found correct by pen of Mata Prasad."
6. This being so, the decree of the Court below was wrong, and the appellants should have obtained the relief they sought, not only against Mata Prasad, but against his deceased partner Durga Prasad. We set aside the decree of the Court below and decree the plaintiffs' claim and also this appeal with costs.