JUDGMENT Banerjee, J. - This is an appeal by the defendant, which is a firm, from a judgment of Sinha, J., delivered on 16th December, 1948. 2. The appeal raises an interesting question of law as to the liability of a trading firm for a loan taken by one of its partners professing to act on behalf of the firm, from a person who lent the money in the belief that he was lending it to an individual and not to the firm. 3. The facts which are not in dispute and in so far as they are material, may be shortly stated. 4. One Ridkaran Surana was at all material times a partner of a trading firm which carried on business under the name of "Lal Chand Dugar." Ridkaran had also his own business which he carried on in the name of "Begraj Dugar." In this business Ridkaran had dealings and transactions with a firm of the name of "Ramgopal Ganeriwalla & Co." Ridkaran wanted to raise a loan of Rs. 5,000 for his own business of "Begraj Dugar." He approached the Plaintiff's durwan one Ganga Kissen whom he knew, and asked him to negotiate the loan of Rs. 5,000 with the Plaintiff. Ganga Kissen went to the Plaintiff's brother and munim, one Sugan Chand, for the loan. Sugan Chand lent the money by a cheque drawn in favour of "Mr. Lal Chand Dugar." The drawer of the cheque was the Bengal Trading Company, in which name the Plaintiff carries on business. The cheque was cleared through the Hindusthan Mercantile Bank. The cheque had three endorsement on the back, "Lal Chand Dugar," "Begraj Dugar," "Ramgopal Ganeriwalla & Co." There was no individual of the name of Lalchand Dugar but there was the firm of that name. 5. It is not disputed that the money obtained by encasement of the cheque was utilised by Ridkaran for the purposes of his own business. 6. The loan was taken on April 23, 1946. It was a loan for a short time. After that time, demands were made for its repayment. The loan was not repaid. On June 4, 1946, the Plaintiff's attorney wrote a letter to the Defendant firm addressed as "Babu Lal Chand Dugar," demanding repayment of the loan. The Defendant firm denied the loan and the liability therefor by its solicitor's letter dated June 11, 1946. 7. After that time, demands were made for its repayment. The loan was not repaid. On June 4, 1946, the Plaintiff's attorney wrote a letter to the Defendant firm addressed as "Babu Lal Chand Dugar," demanding repayment of the loan. The Defendant firm denied the loan and the liability therefor by its solicitor's letter dated June 11, 1946. 7. The suit out of which this appeal arises was filed on June 14, 1946, for the recovery of the money lent. It was filed originally against "Lal Chand Dugar carrying on business at No. 5/1, Lucas Lane, Calcutta." The cause title was subsequently amended by adding the words "a firm" after the name "Lal Chand Dugar." 8. It is clear, therefore, that originally the suit was against an individual. By amendment, it became a suit against a firm. 9. The learned trial Judge found as facts: (i) the defendant firm was a trading firm, (ii) Ridkaran was, at all material time, a partner of the firm, (iii) he had in fact authority to borrow, (iv) Ridkaran borrowed the money purporting to act on behalf of the firm, (v) he utilised the money in his own business, (vi) the Plaintiff lent the money in the belief that he was lending it to Lal Chand Dugar, in individual, and not to the firm Lal Chand Dugar. 10. On these findings, the learned Judge held that the defendant firm was liable and made a decree for Rs. 5,000 with interest on the decretal amount at 6 per cent. per annum, in favour of the Plaintiff. Against this decree, the Defendant has appealed. 11. The relevant portion of the judgment of the learned Judge is as follows:- "I am of opinion that Ridkaran had authority to raise a loan on behalf of the firm. In a trading partnership, any partner has implied power to borrow money. One of the most important of the implied powers of a partner is that of borrowing money on the credit of the firm. The sudden exigencies of commerce render it absolutely necessary that such power should exist in the members of a trading partnership. Lindley on Partnership, 10th Edition, p. 185. (See also Stroy on Agency, section 124, quoted in Mulla on Partnership, page 54). A trading partnership is one whose business consists of buying and selling goods. The sudden exigencies of commerce render it absolutely necessary that such power should exist in the members of a trading partnership. Lindley on Partnership, 10th Edition, p. 185. (See also Stroy on Agency, section 124, quoted in Mulla on Partnership, page 54). A trading partnership is one whose business consists of buying and selling goods. The firm of Lal Chand Dugar must be held on the evidence to be a trading partnership. Apart from the fact that a partner in a trading partnership has implied power to borrow, Ridkaran had in fact power to borrow. He was entering into contracts, signing cheques for the firm and drawing money by means of such cheques from the overdraft account of the firm in the banks. He was, therefore, borrowing money from the banks for the firm, to the knowledge of Inder Chand, the other partner." 12. The learned Judge held, as I have already said, that Ridkaran had in fact authority to borrow. We ourselves have read the evidence and are in complete agreement with the learned Judge's finding. 13. On the basis of express authority or what is sometimes called actual authority, no difficulty arises. 14. A, a firm authorises one of its partners to raise a specific loan. the partner raises the loan. It cannot be doubted for a moment that the loan is binding on the firm. Again, A, a firm gives a general power of attorney to one of its partners to raise loans on behalf of the firm. That partner raises a loan. The only question that arises in this case is whether the partner has acted within the four corners of the authority given him. If the partner has acted within his authority, the loan is binding on the firm. That is also obvious. 15. But, in this case, Counsel for the Appellant, though he does not challenge the findings of fact of the learned trial Judge, has argued the case on the basis that the finding on the learned Judge as to authority is a finding as to the existence of implied authority and not of express authority. Assuming that is so, what is the position? 16. The decision turns on the construction of sections 18, 19(1), 20 and 22 of the Indian Partnership Act. 17. Assuming that is so, what is the position? 16. The decision turns on the construction of sections 18, 19(1), 20 and 22 of the Indian Partnership Act. 17. Section 18 provides that subject to the provisions of the Act, a partner is the agent of the firm for the purposes of the business of the firm. 18. Section 19(1) is in these words:- "Subject to the provisions of section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a partner to bind the firm conferred by this section is called his 'implied authority'." 19. Section 22 provides that in order to bind a firm, an act done by a partner shall be done in the firm name, or in any other manner expressing or implying an intention to bind the firm. 20. Implied authority is not the result of any contract. It follows from the relationship of partnership. What are the limits of this implied authority? 21. In Lindley on Partnership, 9th Edition, at page 179, we find this statement on the subject. "What is done in carrying on the partnership business in the usual way in which businesses of a like kind are carried on, is made the test of authority where no actual authority or ratification can be proved. The probably means the same thing as saying that what is necessary to carry on the partnership business in the usual way is the test of a partner's implied authority to bind the firm." 22. The question whether a given act can or cannot be said to be done in carrying on a business in the way in which it is usually carried on must evidently be determined by the nature of the business, and by the practice of persons engaged in it. Consequently, no answer of any value can be given to the abstract question - Can one partner bind his firm by such and such an Act? unless, having regard to what is usual in business it can be predicted of the act in question either that it is one without which no business can be carried on, or that it is one which is not necessary for carrying on any business whatever. 23. unless, having regard to what is usual in business it can be predicted of the act in question either that it is one without which no business can be carried on, or that it is one which is not necessary for carrying on any business whatever. 23. In this case, the firm has been found to be a trading firm. 24. One of the most important of the implied powers of a partner is that of borrowing money on the credit of the firm. The sudden exigencies of commerce render it absolutely necessary that such power should exist in the members of a trading partnership, and accordingly, this power has been clearly recognised. 25. Appellant's Counsel's contention is that the Plaintiff did not give credit to the firm, because he did not known that he was lending the money to the firm: on the Plaintiff's own showing, he lent the money to an individual and, therefore, the firm is not liable. 26. Counsel rests his contention on the words "does not know or believe that partner to be a partner," in section 20. That section is as follows:- "The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Notwithstanding any such restriction, any act done by a partner on behalf of the firm which falls within his implied authority binds the firm, unless the person with whom he is dealing knows of the restriction or does not know or believe that partner to be a partner." 27. According to Counsel, if the person with whom the partner in the exercise of his implied authority is dealing, does not know or believe that partner to be a partner, he cannot hold the firm liable for the loan incurred by its partner. 28. I do not agree with this construction of the section submitted by Appellant's Counsel. My reasons are these. 29. Section 20 says that the implied authority of a partner may be extended or restricted by contract between the partners. 30. The first part of section 20 deals with extension and restriction of partner's implied authority. The second part of the section beginning with the word "Notwithstanding" deals only with cases where restriction is imposed on the implied authority. 31. Section 20 says that the implied authority of a partner may be extended or restricted by contract between the partners. 30. The first part of section 20 deals with extension and restriction of partner's implied authority. The second part of the section beginning with the word "Notwithstanding" deals only with cases where restriction is imposed on the implied authority. 31. In my judgment, the section means that, if there is restriction on the implied authority of a partner, any act done by a partner with such restricted implied authority would still be binding on the firm unless, (1) the person with whom he is dealing knows of the restriction or, (2) the person with whom he is dealing does not know that partner to be a partner or, (3) the person with whom he is dealing does not believe that partner to be a partner. 32. This section has no reference to "any partner" it deals only with the case of a partner whose authority has been restricted. The word "that" in "that partner" is important. "That partner" means the partner whose implied authority has been restricted by contract between the partners. Any other interpretation of the section does not make any sense of it. 33. In Pollock and Mulla's Edition of the Indian Partnership Act, 1934 Edition, the learned authors in the note to that section says: "The case of a partner having neither real nor apparent authority - that is, not being authorised in fact and not known or believed to be a partner by the person he is dealing with - is now expressly dealt with, following the English Act. There is no reason to think that the law was formerly otherwise." 34. There is no reason to think that the law was formerly otherwise." 34. Turning to the English section, we find it is in these words: Section 5 of the English Partnership Act, 1890:- "Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority, or does not know for believe him to be a partner." 35. It is clear that our sections 18, 19(1) and 20 are reproductions of the English section, split up into three parts. Therefore, we can refer to the English law and the English decisions on the point in had for guidance. 36. Lord Lindley in his book commenting on the English section states the law thus: (9th Edn., p. 178): "The consequences of the general rule contained in this section (sec. 5) are:- 1. That if an act is done by one partner on behalf of the firm, and it was done for carrying on the partnership business in the ordinary way, the firm will prima facie be liable, although in point of fact the act was not authorised by the other partners. 2. That if an act is done by one partner on behalf of the firm, and it was not done for carrying on the partnership business in the ordinary way, the firm will prima facie be not liable. In the first case the firm will be liable unless the one partner had in fact no authority to bind the firm, and the person dealing with him either was aware of that want of authority or did not know or believe him to be a partner, whilst in the second case the firm will not be liable unless an authority to do the act in question, or some ratification of it, can be shown to have been conferred or made by the other partners." 37. In the foot-note, he adds, "in the latter case there is neither real nor apparent authority to bind the firm" and relies on Farquharson Bros. & Co. v. King & Co. (1902) A.C. 325, 341. 38. This statement of the law by the great author supports the construction I have put upon section 20 of the Indian Partnership Act. And this construction accords with the principle. 39. In Watteau v. Fenwick (1893) 1 Q.B. 346 the Plaintiff sued the Defendants for the price of cigars supplied to a hotel. The house was kept, not by the Defendants but by a person named Humble, whose name was over the door. The Plaintiff gave credit to Humble, and to him alone, and had never heard of the Defendants. The business, however, was really the Defendants', and they had put Humble into it to manage it for them, and had forbidden him to buy cigars on credit. The cigars, however, were such as would usually be supplied to and dealt in at such an establishment. The learned county Court Judge held that the Defendants were liable, and his judgment was upheld by the Court of Appeal. Wills, J., observed as follows:- "The principal is liable for all the acts of the agent which are within the authority usually confided to an agent of that character, notwithstanding limitations, as between the principal and the agent, put upon that authority. It is said that it is only so where there has been a holding out of authority - which cannot be said of a case where the person supplying the goods knew nothing of the existence of a principal. But, I do not think so." 40. In Fenwick's case (1893) 1 Q.B. 346, the goods obtained on the credit of the agent were brought into the business and the principals got the benefit of the goods. But, in the case before us, the money obtained by encasement of the cheque was utilised by Ridkaran for his own business and not for the firm for which he professed to take the loan. But that in my judgment does not make any difference. 41. But, in the case before us, the money obtained by encasement of the cheque was utilised by Ridkaran for his own business and not for the firm for which he professed to take the loan. But that in my judgment does not make any difference. 41. In Hambro v. Burnand (1904) 2 K.B. 10 the agent had authority from his principals to underwrite policies for the purpose of carrying on the principals' business which was that of an underwriter at Lloyd's. The agent in underwriting certain policies acted for himself and in furtherance of his own interests, and not for or in the interests of his principals, yet the principals were held liable. It was held in that case that where an agent, in contracting on behalf of his principal, has acted within the terms of a written authority given to him by the principal, but the existence of which was not known to the other party to the contract, the principal cannot, if the other party has acted bona fide, repudiate liability on the contract on the ground that the agent, in making it, acted in his own interests, and not in those of his principal. 42. In this case, the authority was given in writing but I do not think it would make any difference if the authority were given otherwise. 43. The principle is that if an agent professes to contract for his principal and has authority so to contract, the state of his mind cannot be enquired into, in order to show that he was not really exercising his authority, and did not so contract. this principle also applies to the case of a partner for he is the agent of the firm for the purposes of its business. 44. It seems, therefore, that the state of mind of the lender as to whom he was lending the money is an irrelevant consideration for the decision of this case. The pertinent question is whether the partner borrowing the money had the authority and acted within the scope of his authority. If he has done so, the firm is liable. 45. In the case before us, as I have said, the firm is a trading firm. Ridkaran had, therefore, an implied authority to borrow. The pertinent question is whether the partner borrowing the money had the authority and acted within the scope of his authority. If he has done so, the firm is liable. 45. In the case before us, as I have said, the firm is a trading firm. Ridkaran had, therefore, an implied authority to borrow. There is no evidence before us that he purported to act on behalf of an individual of the name to whom the lender thought he was lending the money, but there was the firm of that name. Therefore, Ridkaran professed to act on behalf of the firm. So, the firm is liable. 46. It is true that Ridkaran utilised the money for his own purposes, but the loan transaction was complete and became binding on the firm as soon as the money reached the hands of Ridkaran who had unrestricted implied authority to borrow and professed to borrow on behalf of the Defendant firm. Though in fact the money was received by the hands of Ridkaran, in law it was received by the firm. Subsequent application of the money does not affect the right of the lender. The case is the same as if the money had been put into the till of the firm, and then taken out by the partner and converted to his own use. 47. For these reasons, I think that the learned Judge was right in giving a decree against the Defendant firm. 48. I dismiss the appeal with costs. 49. Certified for two Counsel. 50. In conclusion, we may add that we received valuable assistance from the Counsel of the parties who ably argued the case. Harries, C.J. - I agree.