Liability of partnership firm on collateral security
06-Jul-2023 (In Civil Law)
We were five partners in a Partnership Firm when, in 1999,the firm created an equitable mortgage on its landed property as a collateral security for bank facilities availed by a company in which two of the partners were promoter directors.In the last 20 years there have been various events – two of the partners died,one partner resigned and one partner joined. In legal proceedings by the bank upon default by the company in loan repayment,the bank impleaded the firm.The two partners,who were also Directors in the company,have been individually impleaded as guarantors in the proceedings but not the other partners.The partnership firm is unregistered.At present we are three partners.I wish to know the following :
(1) Since the firm is unregistered,is legal action valid without impleading all partners?
(2) Will the partner who resigned have any liability ?
(3) is the firm liable only to the extent of collateral property mortgaged
or can its/partners' other assets also be attached ?
Hello Sir,
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