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14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932?
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14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, w...
Liability of Partners for Unauthorized Borrowing
Introduction:
Under the Indian Partnership Act, 1932, partners in a firm are jointly and severally liable for all the debts and obligations of the firm. However, this liability is subject to certain conditions and exceptions. In the given scenario, we need to determine whether Suresh and Dinesh can be held liable for the loan taken by Mahesh without their knowledge or consent.
Liability for Unauthorized Borrowing:
According to Section 19 of the Indian Partnership Act, 1932, every partner is an agent of the firm and his other partners for the purpose of the business of the partnership. This means that each partner has the authority to act on behalf of the firm and bind the other partners in matters related to the partnership business.
Exception to Liability:
However, there is an exception to this general rule. As per Section 19(2) of the Act, if a partner acts outside the scope of his authority and without the consent of the other partners, the firm is not bound unless the act is done in the usual course of business of the firm.
Analysis of the Given Scenario:
In the given scenario, Mahesh borrowed Rs. 50000 from Ramesh without the knowledge or consent of Suresh and Dinesh, and he did it in the name of the firm. However, Mahesh's action of borrowing the money for his personal use does not fall within the usual course of business of the trading firm. Therefore, Suresh and Dinesh cannot be held liable for the loan taken by Mahesh.
Liability of Ramesh:
Ramesh, being a customer of the firm, should have been cautious while lending money to the firm. Since Mahesh acted outside the scope of his authority and without the consent of the other partners, Ramesh cannot hold Suresh and Dinesh liable for the loan. Ramesh's remedy lies against Mahesh personally for the repayment of the loan.
Conclusion:
In conclusion, Suresh and Dinesh cannot be held liable for the loan taken by Mahesh without their knowledge or consent. They are only liable for the debts and obligations of the firm that arise in the usual course of business. Ramesh's remedy lies against Mahesh personally for the repayment of the loan.
Introduction:
Under the Indian Partnership Act, 1932, partners in a firm are jointly and severally liable for all the debts and obligations of the firm. However, this liability is subject to certain conditions and exceptions. In the given scenario, we need to determine whether Suresh and Dinesh can be held liable for the loan taken by Mahesh without their knowledge or consent.
Liability for Unauthorized Borrowing:
According to Section 19 of the Indian Partnership Act, 1932, every partner is an agent of the firm and his other partners for the purpose of the business of the partnership. This means that each partner has the authority to act on behalf of the firm and bind the other partners in matters related to the partnership business.
Exception to Liability:
However, there is an exception to this general rule. As per Section 19(2) of the Act, if a partner acts outside the scope of his authority and without the consent of the other partners, the firm is not bound unless the act is done in the usual course of business of the firm.
Analysis of the Given Scenario:
In the given scenario, Mahesh borrowed Rs. 50000 from Ramesh without the knowledge or consent of Suresh and Dinesh, and he did it in the name of the firm. However, Mahesh's action of borrowing the money for his personal use does not fall within the usual course of business of the trading firm. Therefore, Suresh and Dinesh cannot be held liable for the loan taken by Mahesh.
Liability of Ramesh:
Ramesh, being a customer of the firm, should have been cautious while lending money to the firm. Since Mahesh acted outside the scope of his authority and without the consent of the other partners, Ramesh cannot hold Suresh and Dinesh liable for the loan. Ramesh's remedy lies against Mahesh personally for the repayment of the loan.
Conclusion:
In conclusion, Suresh and Dinesh cannot be held liable for the loan taken by Mahesh without their knowledge or consent. They are only liable for the debts and obligations of the firm that arise in the usual course of business. Ramesh's remedy lies against Mahesh personally for the repayment of the loan.
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14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932?
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14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932?.
14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932?.
Solutions for 14.Mahesh, Suresh and Dinesh are partners in a trading firm. Mahesh, without the knowledge or consent of Suresh and Dinesh borrows himself Rs. 50000 from Ramesh, a customer of the firm, in the name of the firm. Ramesh, then buys some goods for his personal use with that borrowed money. Can Mr. Ramesh hold Mr. Suresh and Mr. Dinesh liable for the loan? Explain the relevant provisions of the Indian Partnership Act, 1932? in English & in Hindi are available as part of our courses for CA Foundation.
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