Effect of notice to an acting partner (Section 24)
Section 24: Notice to a partner who habitually acts in the business of the firm of any
matters relating to affairs of the firm operates as notice to the firm, except in the case of a
fraud, on the firm committed by or with the consent of the partner.
– Such a notice binds only such partners who are there at the time when the notice was given.
Therefore, if some notice had been given earlier, it will not bind a partner who is introduced
as a partner after such notice. Similarly, an outgoing partner cannot ordinarily bound by a
notice relating to subsequent matters. However, if public notice of dissolution of a firm or a
ceasing of a partner has not been given the partners continue to be liable as before and
notice in such cases – may affect even those partners who are no more partners.
– Notice to a dormant or a sleeping partner would not be considered to be notice to others.
Exception
If a fraud has been committed on the firm by or with the consent of a particular partner,
notice to such a partner regarding that matter is not deemed to be a notice to the firm.
Bignold v. Waterhouse – In a firm of carriers, one of the partners allowed to carry a parcel
of a personal friend without any consideration and without the notice of fact to his co- partners. In an action for loss of the parcel against the firm, it was held that firm was not liable as notice to one partner about carrying of the parcel was not deemed to be notice to the others because the particular partner who had the knowledge of the carrying of the parcel was a party to the fraud as no payment has been made for the transportation of the parcel.
