The firm was constituted in 1960. The partnership deed shows that defendants 2
and 3 were the managing partners. The partnership was formed for the purpose of
carrying on business of purchase and sale of paddy and also rice after hulling
the same, to purchase ground-nut and sell groundnut oil after extracting the
same and also groundnut cake, kernel etc., obtained there from and to deal in
any other commodity as may be agreed upon by partners either on own account or
on commission basis. The plaintiffs demands to render proper accounts of the
business done by the partnership, defendants did not pay any heed and that
after a great deal of pursuasion and pressure, defendants 2 and 3 showed the
accounts which were being allegedly maintained by them. Then it was discovered
that the accounts are not properly maintained and that great fraud was played
by defendants 2 and 3 who included their private trade of turmeric also in the
account books of the firm while there was no agreement between the partners
that trade should be conducted in turmeric and that the first defendant-firm
has nothing to do with the said business in turmeric.
The
Appellate Court (Andhra High Court), concurring with the findings of the trial
Court, dismissed the appeal. It was held that the partner of a non-trading firm
has no implied authority to bind the firm by his individual act.
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