Decided on March 28,2003



Ashok C.Parkash, - (1.)BY this LA. No. 255/02 (Dated 7th November, 2002) the petitioners i.e. defendants 3 and 4 in the Main O.A./T.A. has prayed for discharging them from the claims made by respondent Nos. 1 and 2, i.e. Applicant Bank in Main O.A./T.A. The petitioner has filed Affidavit stating therein, that O.A. was filed by respondent Bank claiming amount from them and other defendants, i.e. respondents 3 to 5. respondent 4 is the father of respondent 5, and is Managing Partner of respondent 3 firm and they have reconstituted respondent 3 and carried on business under the name and style of C.P.R.M. Steels Ltd., after their retirement a limited company came into existence, with the knowledge of respondent 1; they have excluded the petitioners from company, to the knowledge of the Banks. Reply Statement has already been filed, by the petitioners (D-3 and D-4) and the petitioners have further prayed, that the averments made in the Reply Statement may be read as part and parcel of this Affidavit. The Affiant, has further solemnly affirmed that respondent 3 herein was a registered Partnership firm and they were also partners along with respondents 4 and 5 and retired from defendant 1 firm w.e.f. 2.4.1994, as per Retirement Deed, dated 10.10.1994, and after their retirement firm D1 and respondents 4 and 5 herein continued the business and they undertook to discharge all the liabilities and took over all the assets, other defendants took over entire assets and liabilities of the firm and the petitioners were relieved from all liabilities. The petitioners have duly informed about their retirement and they have also handed over a copy of Retirement Deed dated 10.10.1994 to the plaintiff, who are respondents 1 and 2 herein. The plaintiff is also aware of the retirement and have also accepted the retirement. Respondents 4 and 5 herein, took over the entire assets of respondent 3 (firm) and released the petitioners from all the liabilities. After having accepting the retirement of the petitioners, the plaintiff cannot enforce the suit claim against the petitioners. Further respondents 1 and 2, have already transacted the business with respondents 3 to 5, i.e. C.P.R.M. Steels Ltd., without any consent and knowledge of the petitioners. The petitioners have further submitted that respondent 3 firm itself was merged with C.P.R.M. Steels Ltd., Registered under Companies Act, 1956. The entire assets and liabilities were taken over by the said C.P.R.M. Steels Ltd., as going concern and respondents 1 and 2 recognised and accepted the taking over of the business. The petitioners are in no way concerned and connected with the said C.P.R.M. Steels Ltd. The petitioners have further submitted that new directors were inducted into the said company and respondents 1 and 2 recognised C.P.R.M. Steels Ltd. in place of respondent 3 firm and advanced separate loan along with the other loan facilities. BY allowing respondent 3 firm to be reconstituted as CRPM Steels Ltd., respondents 1 and 2 have accepted the retirement of the Petitioners impliedly. The petitioners, have further reiterated that the loan on L.C. basis was sanctioned to the company CRPM Steels Ltd., over which they had no control or right. All these transactions have taken place after their retirement vide retirement deed dated 10.10.1994. Not only this the respondents have also executed Indemnity Bond in their favour. So there is no privity of contract between petitioner and the partnership firm in respect of loan transaction availed either by respondent 3 firm or the company C.P.R.M. Steels Ltd. They are also not parties to the loan transaction and have nothing to do with any advances. Though the plaintiff is aware of all the above captioned facts, yet respondent Bank have filed this collusive suit against the other defendants including the petitioners. So, the petitioners cannot be fastened with the liability in any way. The plaintiffs have filed this O.A. against the petitioners, knowing well that the petitioners have already been retired w.e.f. 2.4.1994. Suit is otherwise bad for misjoinder and non-joinder of the necessary parties i.e. C.P.R.M. Steels Ltd. In view of the above, the petitioners are in no way responsible for the loan availed by the 3rd respondent firm. Therefore, it is just and necessary to discharge the petitioners from the above O.A. Moreover, respondents 4 and 5, have also filed a petition accepting the contention of the petitioners, so they would suffer irrepressible loss, if they are not discharged from the liability.
(2.)Respondent 1, in the common counter statement (dated 5th February, 2003) have solemnly affirmed, that the petition filed is belated and have been filed only to protract the proceedings. The answering respondent 1 has also submitted that it is false to state that the petitioners were retired from 2.4.1994. as per Retirement Deed, dated 10.10.1994. It is further submitted that the said deed has only been brought about to defeat the rights of the respondent. Respondent 1 has denied regarding the Retirement Deed. The Affiant has further solemnly affirmed, that no documentary evidence in support of their theory regarding retirement have been produced by the petitioners. It has been further submitted by respondent No. 1, that they stood Personal-Guarantor for the loan availed of by 3rd respondent firm. No letter of consent have been produced by the petitioner. The respondent have also denied filing of suit as collusive. The respondent Bank have further submitted that the liability of the petitioners will come only, for the shortfall after the assets of the Partnership firm are sold. It is further reiterated by respondent Bank, that how, the rights will be defeated, when continuing Partners have executed Indemnity Bond. There is no merit in the contention of the petitioners here. The petition lack merits and is liable to be dismissed with costs.
In the Reply Statement (dated 24.02.99), 3rd defendant, has submitted that Partnership firm, is no longer in existence, and with the addition of new partners, the firm was converted into a limited company and all the facilities, assets and liabilities of the erstwhile Partnership firm were transferred to the newly constituted Company. Defendant 3 has further submitted, that the plaintiff Bank is also aware of this. Infact, the plaintiff Bank, had opened (Letter of Credit) L/C in the name of C.P.R.M. Steels Ltd. on 21.7.1995, 18.12.1995, 25.1.1996, 23.4.1996, and 5.6.1996 and on various other dates. Not only this the answering respondent has also submitted, that D-3 stands retired from defendant 1 firm as far back as on 2,4.1994 by entering into an "instrument of Retirement" from Partnership firm vide Retirement Deed dated 10.10.1994. which provided the retirement could be effective w.e.f 2.4.1994. Furthermore respondent 3 has admitted that the Retirement of defendants 3 and 4. which has also been notified to the plaintiff and the plaintiff have asserted thereof. It has been further submitted that defendant 3 has got indemnity bond from other defendants in respect of claims made or to be made against them, in his capacity as Partner of the erstwhile firm. It is worthwhile to mention here that the respondent 3, has further admitted that any obligation under these security document would stand transferred to the company, C.P.R.M. Steels Ltd.

(3.)THE entire assets and liabilities of defendant 1 have been transferred to the said C.P.R.M. Steels Ltd., with the consent of the plaintiff. All this has been done with the full knowledge and consent of the plaintiff Bank and the assets and liabilities of the firm had also been transferred to the company. In these circumstances, the filing of present O.A. against the other defendants as Partners is misconceived and mala fide and made only with a view to harass the defendants. THE answering respondent has further submitted that the filing of O.A. against the other defendants as Partners is misconceived and mala fide and made with a view to harass these defendants also and at any rate, has been done by sheer negligence on the part of the Bank officials. Lastly, respondent 3 has reiterated, that defendant 3, has got a valid and enforceable indemnity from other defendants in respect of Suit Claim. As such defendants 3 and 4, i.e. petitioners have got to be exonerated here from the liability.

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