Question
Basir was a sleeping partner in a business of cinema proprietors carried on by another partner named Maslam. The partnership agreement provided that no partner
Basir was a sleeping partner in a business of cinema proprietors carried on by another partner named Maslam. The partnership agreement provided that no partner should contract any debt on account of the partnership without the consent of the other partners except in the usual and regular course of business. Maslam borrowed money from Haris, stating that it was for the purposes of the firm. In fact, he never had the intention of using the money in the business and misapplied it. Haris then sued the firm to recover the sum lent.
(a) Advise Haris as to his rights against the firm.
(b)Explain if your answer would be different if Haris knew about the restriction on the borrowing power of the partners.
Support your answer with relevant statutory provisions of the Partnership Act 1961 and decided cases.
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