Mrs. Purabi Deka And Anr vs. The State Bank Of INDIA And 3 Ors

Facts

The petitioners, Mrs. Purabi Deka and Naba Kanta Bora, along with respondent no. 4, Paresh Kumar Gogoi, were partners in a firm named M/s. Pragati. A partnership agreement dated 01.12.2011, later amended on 23.03.2022, governed their relationship. The accounts operating mandate allowed any two partners to sign cheques. A dispute arose, leading to advocate's notices. Subsequently, at the request of respondent no. 4, the State Bank of India (respondent nos. 1, 2, and 3) stopped operations on two bank accounts of M/s. Pragati. The petitioners claim the partnership was dissolved on 23.05.2023, after a notice for dissolution was served. They filed a suit (T.S. No. 323/2023) for rendition of accounts, and this writ petition seeks to allow them to operate the bank accounts, at least for making government payments, due to accumulated statutory dues and other business debts.

Held

The Court held that the writ petition was misconceived and an abuse of the process of law. It reasoned that the partnership firm was dissolved as per Section 43(2) of the Partnership Act, 1932, from 23.05.2023, the date of receipt of the dissolution notice. Consequently, under Section 53 of the Partnership Act, 1932, any partner could restrain another from using the firm's property for their own benefit until the affairs were completely wound up. The Court found that the money in the bank accounts constituted firm property, and respondent no. 4 was within his rights to stop their operation. The bank's action in stopping transactions was therefore justified. The Court noted that the legality of the letters from respondent no. 4 requesting the bank to stop operations was not challenged. Therefore, the relief sought by the petitioners could not be granted. The Court dismissed the writ petition but clarified that this judgment would not preclude the trial court in the pending civil suit from passing appropriate orders regarding the appropriation of funds in the bank accounts during the winding-up process.

Key Issues

1. Whether the writ petition is maintainable against private respondents (bank and partner) for directing the operation of bank accounts, considering the existence of a partnership dispute and a pending civil suit? The petitioners argued that a writ petition is maintainable against private individuals in certain circumstances, citing Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust & Ors. v. V.R. Rudani & Ors. They contended that the bank's action of stopping operations at the request of respondent no. 4 was contrary to the mandate given by the partners. The respondents (bank) argued that they stopped operations upon receiving a request from respondent no. 4 and in the absence of mutual consent from all partners to allow operation. Respondent no. 4 argued that stopping operations was justified due to the partnership dispute, pending resolution as per the agreement. 2. Whether the action of the bank in stopping the operation of the partnership bank accounts is justified in light of the dissolution of the partnership and the provisions of the Partnership Act, 1932? The petitioners argued that the accounts should be operated to clear statutory dues. The respondents argued that post-dissolution, a partner has the right to restrain others from using firm property, including bank accounts, until affairs are wound up.