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Section 249: Sections 239 to 266 [Repealed by the Indian Partnership Act, 1932]

Indian Contract Act • Official Statutory Text & Practice Guide

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Act 1872
Section 75 All 266 Sections of Indian Contract Act Section 77

Legal Commentary & Landmark Judgments: Section 249

Section 249 historically codified the bedrock commercial rule of unlimited joint and several liability of every partner for all debts and obligations incurred by the firm while he is a partner, now reenacted as Section 25 of the Indian Partnership Act, 1932.

  • Unlimited Personal Liability: Every partner is liable without limit out of his entire personal estate for all contractual debts, commercial borrowings, and obligations incurred by the firm.
  • Joint and Several Character of Firm Debts: Creditors are entitled to enforce payment against all partners jointly, or against any individual partner severally, without being required to exhaust the assets of the firm first.
  • Modern Reenactment in Section 25 IPA 1932: Repealed by Act 9 of 1932 and reenacted verbatim as Section 25 of the Indian Partnership Act, 1932, forming the central distinction between partnerships and limited liability entities.
Key Landmark Precedents:
  • Her Highness Maharani Mandalsa Devi v. M. Ramnarain (P) Ltd. AIR 1965 SC 1718: The Supreme Court held that under Section 249 / Section 25 of IPA 1932, a decree against a firm is a decree against all individuals who were partners at the time the liability accrued, enforceable against their personal assets.
  • Kendall v. Hamilton (1879) 4 App Cas 504: The landmark House of Lords precedent on the nature of joint partnership debts, recognized in Indian jurisprudence as establishing the scope of creditor remedies against co-partners.
  • CIT v. Bagyalakshmi & Co. AIR 1965 SC 1708: The Supreme Court reiterated that under the general law of partnership, a firm is not a legal entity separate from the partners, each of whom bears joint and several liability for firm obligations.
Courtroom Practice & Strategic Litigation Guidance:

In drafting suits for the recovery of trade debts against a partnership, sue both the firm and all individual partners by name under Order XXX CPC. In execution, execute the decree directly against the personal bank accounts or immovable properties of any wealthy partner under Order XXI Rule 50 CPC.

Section 75 All 266 Sections of Indian Contract Act Section 77