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April 2010

Liability of legal heirs — Partner — Loan borrowed by firm on mortgage — Partnership Act 1932 section 18 and section 22.

By Dr. K. Shivaram
Ajay R. Singh
Advocates
Reading Time 1 mins

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1 Liability
of legal heirs — Partner — Loan borrowed by firm on mortgage — Partnership Act
1932 section 18 and section 22.


[Smt. Bramaramba v. T.
Madhawarao & Co. & Ors., AIR 2010 (NOC) 244 (Mad.)]

Loan was borrowed by firm on
mortgage. Promissory note was executed by partners in name and on behalf of
firm. Partners admitted borrowing and execution of promissory note.
Subsequently, partnership dissolved on account of death of one of partners. The
Court held that remaining partners were personally liable to discharge the debt.
The estate of deceased partner also answerable to suit debt apart from mortgaged
property. However, legal heirs of deceased partner were not personally liable
for suit debt, but were entitled to share of balance amount of sale proceeds of
mortgaged property in auction. Amount due under promissory note, not binding on
legal heirs.

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