JUDGMENT K.K. Narendran, J. 1. In this appeal against the judgment and decree of the Subordinate Judge of Kozhikode in O.S. No. 142 of 1967 the plaintiff is the appellant. The defendants in the court below are the respondents. The above suit was one for the realisation of amounts alleged to live been given to a partnership firm by name The National Engineering Industries run by the defendants. The plaintiff's case is that the National Engineering Industries, a partnership firm run by the defendants, took loans for the purpose of its business on seven occasions spread over a period from 11th November 1965 to 23rd November 1966 and the total amount came to Rs. 8,900. Inspite of repeated demands and registered notice, the amount was not repaid and hence the suit was filed. The 1st defendant in his written statement admitted that the amount due to the plaintiff was borrowed for the purpose of the firm, the National Engineering Industries, of which he was also a partner. It is further stated that the firm was dissolved on 5th November 1966 and as per the agreement of dissolution the 2nd defendant was to pay off all the debts owed by the firm. It is also stated that neither the 1st defendant nor the 3rd defendant has any interest over the concern and it was being run by the 2nd defendant. The 2nd defendant in his written statement admitted that the National Engineering Industries has become a concern belonging to him alone and the other defendants have ceased to have any right in the business. It is also stated in his written statement that the business was originally conducted as a partnership by all the defendants together. The stand taken by this defendant in his written statement is that none of the partners of the firm was authorised to borrow amounts on behalf of the firm and I the transactions entered into individually by one partner was not valid and binding on the other partners or the firm. The 2nd defendant denies the loan transactions and contends that no amount was received on behalf of the firm or by all the partners. The 2nd defendant admits that he agreed to pay Rs. 700 to the plaintiff at the time of dissolution of the firm and that it was an amount which the 3rd defendant owed to the plaintiff. The 2nd defendant denies the loan transactions and contends that no amount was received on behalf of the firm or by all the partners. The 2nd defendant admits that he agreed to pay Rs. 700 to the plaintiff at the time of dissolution of the firm and that it was an amount which the 3rd defendant owed to the plaintiff. The stand taken by the 2nd defendant in the written statement is that defendants 1 and 3 and the plaintiff might have colluded together and concocted the documents and those documents are not valid and binding as far as he is concerned. The 3rd defendant remains ex parte. 2. In the court below Exts. A-1 to A-8 were marked on the side of the plaintiff and also the plaintiff was examined as P.W. 1 while on the defence side Exts. B-1 to B-8 were marked and D.Ws. 1 and 2 examined. D.W. 1 is the 2nd defendant himself. The court below after considering the evidence oral and documentary in the case came to the conclusion that the loans in question were not taken by the firm and the 2nd defendant is liable only to the extent of Rs. 700. It has also been found that the assets of the National Engineering Industries are not liable to be attached and sold for the debts claimed in the plaint except to the extent of Rs. 700. The court below also came to the conclusion that the suit was collusive. In the result, the suit was decreed for Rs. 700 with interest at the rate of 9 per cent from 13th October 1967 against the 2nd defendant. Against the 3rd defendant the court below gave a decree for the plaint claim except to the extent of Rs. 700 decreed against the 2nd defendant. 3. It is against the above judgment and decree of the court below that the plaintiff has come up in appeal. Before us the counsel for the appellant contends that the court below went wrong in not decreeing the suit as prayed for. According to the counsel for the appellant the court below ought to have found that the 3rd defendant was competent to incur the debts in question on behalf of the partnership firm and hence the debts are debts incurred for the partnership. 4. Ext. B-8 is the partnership deed dated 15th March 1965. From Ext. According to the counsel for the appellant the court below ought to have found that the 3rd defendant was competent to incur the debts in question on behalf of the partnership firm and hence the debts are debts incurred for the partnership. 4. Ext. B-8 is the partnership deed dated 15th March 1965. From Ext. B-8 the following facts are clear. Defendants 1 to 3 agreed to run an engineering workshop by name The National Engineering Industries. Rs. 12,000 is the capital of the partnership. There is to be a manager for running the business of the partnership and the Manager can be a partner or one who is not a partner. Clause 11 of the partnership deed provides that debts can be incurred only with the consent of all the partners. The partnership was dissolved by Ext. B-1 agreement dated 5th November I966 and all the defendants are parties to Ext. B-1. As per Ext. B-1 the business run by the partnership will thereafter belong to the 2nd defendant. By clause 3 of Ext. B-1 the 2nd defendant has undertaken to indemnify the other two partners from all liabilities to third parties for the acts of the firm due before the date of dissolution of the firm. Further in clause 8 of Ext. B-1 the 2nd defendant has undertaken to discharge all debts and liabilities of the partnership including 'the credit standing in the name of Kambolly Chandrasekharan' the plaintiff. For reasons not known what exactly was the amount due to the plaintiff is not stated in Ext. B-1. At the same time it is clear that as per the partnership accounts some amount must be due to the plaintiff on the date of the dissolution. 5. The plaintiff has produced Exts. A-1 to A-8 before the court below to prove his case. Exts. A-1 to A-7 are receipts passed by the 3rd defendant as Manager of the partnership firm. Ext. A-1 is for Rs. 4,000 received as deposit towards share and it is in the letter head of the firm whereas Exts. A-2 to A-7 are issued in the printed receipts of the firm and they are termed as loans. For the last payment of Rs. 200 on 23rd November 1966, as admitted by the plaintiff himself, there is no receipt. 4,000 received as deposit towards share and it is in the letter head of the firm whereas Exts. A-2 to A-7 are issued in the printed receipts of the firm and they are termed as loans. For the last payment of Rs. 200 on 23rd November 1966, as admitted by the plaintiff himself, there is no receipt. The plaintiff in his evidence as P.W. 1 has deposed that all the advances made to the firm find a place in the accounts kept by him. It is the 3rd defendant who has signed Exts. A-1 to A-7. The printed receipts are issued by him as Manager of the firm. The case of the 2nd defendant is that the 3rd defendant was not appointed as Manager and that he was never in management of the firm. The 2nd defendant does not say as to who was actually managing the affairs of the firm. It is pertinent to note that this contention of the 2nd defendant is belied by some of the documents produced by the 2nd defendant himself. Ext. B-3 is a letter dated 26th April 1966 sent to Swadeshi Tile Works, Feroke quoting Rs. 12,000 for the supply of a machinery to them and it is signed by none other than the 3rd defendant. Ext. B-5 dated 28th April 1966 is also signed by the 3rd defendant. There is also no evidence in the case to show that anybody other than the 3rd defendant was in management of the firm till its dissolution by Ext. B-1. 6. As partner who took over the business of the firm on the retirement of the other two partners and who continued the business of the firm, the 2nd defendant must be in possession of all the records and account books of the firm. The 2nd defendant also admits that the account books and other records were in his possession. But his case is that they were taken away by the 3rd defendant subsequently and not returned thereafter. The liability that the 2nd defendant has undertaken by Ext. B-1 is to repay the amount standing to the credit of the plaintiff. It can only be amounts due to the plaintiff from the firm as per accounts and production of the accounts of the firm is the best piece of evidence to disprove the plaintiff's case. The liability that the 2nd defendant has undertaken by Ext. B-1 is to repay the amount standing to the credit of the plaintiff. It can only be amounts due to the plaintiff from the firm as per accounts and production of the accounts of the firm is the best piece of evidence to disprove the plaintiff's case. The case of the 2nd defendant is that no amounts were due to the plaintiff from the firm. This cannot but be taken with a pinch of salt, because as per clause 8 of Ext. B-1 the debts and liabilities of the firm include 'the credit standing in the name of Sri Kambolly Chandrasekharan'. There is no evidence in the case that the 2nd defendant has made any legal steps or any attempt worth the name to get back the account books and other records of the firm alleged to have been taken from him by the 3rd defendant, even after the institution of this suit. The 3rd defendant was not even cited as a witness in the case. Instead of making any attempt to bring the account books to court the 2nd defendant has set up a case of collusion between defendants 1, 3 and the plaintiff. But we cannot but say that the evidence on this aspect is too slender to be acted upon. The only conclusion that is possible is that the 2nd defendant has not produced the account books of the firm as the production of the same may not further his case. An overall assessment of the evidence adduced in the case by both sides will only go to show that the plaintiff has proved his advances to the tune of Rs. 8,900 to the firm the National Engineering Industries before its dissolution. 7. It is not safe to rely upon the evidence of D.W. 2 who mediated in the dispute and drafted Ext. B-1 agreement of dissolution. First of all, D.W. 2 cannot have any direct knowledge of the things done by the partners when the partnership was in existence. D.W. 2 does not say as to what was the amount due to the plaintiff as per the partnership accounts. The statement in the deposition of D.W. 2 is that there was no record to show that the amounts were due to the plaintiff. But clause 8 of Ext. D.W. 2 does not say as to what was the amount due to the plaintiff as per the partnership accounts. The statement in the deposition of D.W. 2 is that there was no record to show that the amounts were due to the plaintiff. But clause 8 of Ext. B-1 agreement of dissolution drafted by him is as follows: "The debts and liabilities of the said partnership estimated to amount to the sum of Rs. 9,500 including the credit standing in the name of Sri Kambolly Chandrasekharan, Cheruvannur and all arrears of rent and future rent of the partnership business premises shall be paid and discharged by the said party of the second part who shall indemnify the said parties of the first and third parts from all actions, proceedings, costs, claims and demands thereof." If as per the books of accounts of the partnership amounts were not due to the plaintiff there is no reason why among the debts and liabilities to be discharged by the 2nd defendant is included 'the credit standing in the name of Sri Kambolly Chandrasekharan'. The said Chandrasekharan is none other than the plaintiff. As per clause 8 of Ext. B-1 extracted above, the 2nd defendant is liable for all debts and liabilities of the firm. Moreover, in clause 3 of Ext. B-1 the 2nd defendant has given an undertaking to indemnify the retiring partners from all liabilities to the third parties for the acts of the firm due before the date of retirement. The 1st defendant, who was one of the partners of the firm, in his written statement has admitted that the plaint claim consists of amounts borrowed by the partnership and that the partnership is liable for the same. 8. Clause 11 of Ext. The 1st defendant, who was one of the partners of the firm, in his written statement has admitted that the plaint claim consists of amounts borrowed by the partnership and that the partnership is liable for the same. 8. Clause 11 of Ext. B-8 partnership deed is as follows: "Either partner shall without the consent in writing of the other release or compound any debts owing to the firm diminish the security to the firm without receiving the full amount thereof or lend any money or deliver goods belonging to or otherwise give credit on behalf of the firm otherwise than in the usual course of business of the firm or make himself liable as bail or surety for any person or make any assignment either absolute or by way of mortgage declaration of trust of his share or interest in the firm or do or knowingly permit to be done anything whereby the properly of the firm may be exposed to the danger of being seized attached or taken in execution or employ or dismiss any servant of the firm." Relying on the above stipulation in Ext. B-8 partnership deed the court below has come to the conclusion that as Exts. A-1 to A-7 receipts are not signed by all the three partners the firm is not liable for the amounts advanced as per the said receipts. We have already pointed out that as per Ext. B-8 there was provision for appointing one of the partners as the manager and as a matter of fact the 3rd defendant partner was actually managing the firm. Exts. B-3 and B-5 produced by the 2nd defendant will also show that it was the 2nd defendant who was managing the firm. Then the question is whether the firm will be liable for debts incurred by the Manager of the firm. Section 19(1) of the Partnership Act, 1932 reads: "19 (1) 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'." Section 20 of the Act reads: "20. The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. The authority of a partner to bind the firm conferred by this section is called his 'implied authority'." Section 20 of the Act reads: "20. 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 on believe that partner to be a partner." Section 19 deals with the implied authority and section 20 with the extension and restriction of partners implied authority. Borrowing money on the credit of the firm is one of the most important powers of a partner of a firm. The implied authority of a partner extends to taking of loans for the purpose of the business if the business is of such a kind that it cannot be run in the usual way without such a power. The extent of the implied authority of the partner to bind the firm depends upon things done in the usual way of the business of the kind carried on. So the test of the implied authority of the partner to bind the firm is what is it that is necessary to carry on the business of the partnership in the usual way. In Lindley on partnership on the implied authority of a partner to borrow money on the credit of the firm it has been said that the sudden exigencies of commerce render it absolutely necessary that such power should exist in the members of a trading partnership. According to Wharton's Law Lexicon, trade is 'traffic; intercourse; commerce; exchange of goods for other goods or for money'. So, manufacturing and selling goods will be trade and an engineering firm which manufactures goods and sells the same will be a trading firm. Section 20 of the Act makes provision for the restriction of the implied authority of a partner of a firm. But the section itself contains a safety clause which says that a firm will be bound by any act done by a partner on behalf of the firm which falls within his implied authority to bind the firm if the person with whom the partner is dealing is not aware of the restrictions imposed by the partnership deed. But the section itself contains a safety clause which says that a firm will be bound by any act done by a partner on behalf of the firm which falls within his implied authority to bind the firm if the person with whom the partner is dealing is not aware of the restrictions imposed by the partnership deed. In this case, it goes without saying that the partnership was a trading concern. In the nature of the business of the firm also borrowing is necessary. As per Ext. B-8 the total share capital was only Rs. 12,000. It can be seen from Ext. B-3 that the firm quoted for the manufacture of a machinery costing Rs. 12,000. In the absence of any evidence in the case that the plaintiff was aware of the restrictive covenant contained in Ext. B-8 there is no reason to come to the conclusion that the 3rd defendant partner had not the implied authority to contract the debts in question for the partnership. If the partnership is liable for the amounts advanced by the plaintiff then as per the undertaking in Ext. B-1 the 2nd defendant is liable for the amounts. 9. In coming to the above conclusion we are fortified by a number of authorities placed before us by the counsel appearing in the case. It will be only fit and proper that we refer to some of those decisions in this judgment. In Jayanthilal v. Popatlal A.I.R. 1937 Bombay 262 it has been held that regarding the implied authority of a partner to borrow money the law in India is similar to that in England. In the above decision it is also held as follows: "Where a partner can borrow money for the purpose of the business on the credit of the firm, no duty is cast on the person advancing the money to make any further inquiries. If the act belongs to an authorised class, it is not material whether the agent intends the principal's benefit or not, nor whether the principal in fact derives any benefit." In Mating he Thaung v. Toungoo Timber Co. A.I.R. 1932 Rangoon 118 also it has been held that debts incurred by the Managing Partner of a firm for partnership purposes are binding on other partners even though the same is wrongfully applied for non-partnership purposes. A.I.R. 1932 Rangoon 118 also it has been held that debts incurred by the Managing Partner of a firm for partnership purposes are binding on other partners even though the same is wrongfully applied for non-partnership purposes. In Hari Shankar v. Firm Bansilal Abirchand A.I.R 1946 Nagpur 266 it has been held: "The appointment of a partner as managing partner clothes him with all the powers of managing the partnership business including the power to borrow money and acknowledge the borrowings from time to time, and all the partners are bound by the acts of the managing partner and are responsible for the debts contracted by him." In this case it has also been held that a partner who knew about the loans incurred by the Managing Partner but kept quiet at that time is not entitled to challenge those transactions after the lapse of years. On the implied authority of a partner to incur debts there is Bench decision of this Court in V. Perumal v. A. Mohammed A.I.R. 1958 Kerala. 257. The implied authority of a partner in a trading firm has been upheld in this decision in the following words: "Every partner is, in contemplation of law, the general and accredited agent of the partnership, or, as it is sometimes expressed, each partner is preposilus negotiies societatis, and may, consequently, bind all the other partners by his acts, in all matters which are within the scope and objects of the partnership. Thus a firm would be a trading firm if its business consists in buying and selling and in such a firm any partner would have an implied authority to borrow money for the purpose of the business on the credit of the firm and the other partners also would be liable for the amount so borrowed by him. This rule of law is based on section 251 of the Contract Act and is well recognised." In this decision the liability for debts incurred after the dissolution of a firm where there was no public notice regarding the dissolution of the firm also was found. In the case before us also there is nothing in evidence to show that public notice was given regarding the dissolution of the firm. 10. On the question as to what is a trading firm, we will refer to a few of the decisions cited by the counsel. In the case before us also there is nothing in evidence to show that public notice was given regarding the dissolution of the firm. 10. On the question as to what is a trading firm, we will refer to a few of the decisions cited by the counsel. In Alexander v. Kuruvilla 1963 K.L.T. 8 this Court has held that 'trade in its primary sense means buying and selling and if that meaning is clear from the context in which it is used it is not necessary to search for and select a wider meaning'. In Higgins v. Beanchamp (1914) 3 K.B. 1192 it has been held that a firm carrying on the business of cinematographic theatre proprietors is not a trading firm. In Gorthandas v. Raghuvirdasji A.I.R. 1932 Bombay 539 it has been held that a partnership conducting a ginning factory is a trading firm. 11. The business of the partnership in question consisted of manufacturing of engineering goods as per orders and supplying them. There is no reason why such a firm should not be classed as a trading firm. In the nature of the business conducted by the firm also borrowing was necessary. The share capital of the firm was only Rs. 12,000. From Ext. B-3 it can be seen that the firm was submitting quotation for the supply of machinery worth Rs. 12,000. Except the payment evidenced by Ext. A-1, all the other advances are loans. What is seen from Ext. A-1 is that the payment of Rs. 4,000 was deposit towards share. But even though the amount was received by the 3rd defendant partner on behalf of the firm, it is a fact that the plaintiff was not taken as a partner in the firm. As the partnership was enriched by the above advance there is no reason why the partnership should not be held liable for the above sum of money also. 12. By Ext. B-1 the 2nd defendant has undertaken the liability to pay all the debts and liabilities of the firm and also to indemnify the other partners, defendants 1 and 3, from all liabilities to third parties for the acts of the firm prior to its dissolution. Under section 25 of the Partnership Act, 1932 every partner is liable, jointly with all the other partners and also severally for all the acts of the firm done while he was a partner. Under section 25 of the Partnership Act, 1932 every partner is liable, jointly with all the other partners and also severally for all the acts of the firm done while he was a partner. 13. In the result, the judgment and decree of the court below are set aside and the suit is decreed as prayed for. The appeal is allowed with costs.