Order XXI Rule 49 CPC - Attachment of Partnership Property
Understand when partnership property can be attached in execution, how a creditor can obtain a charging order against an individual partner's interest, and the protections available to other partners.
Order XXI Rule 49: Legal provision explained
Order XXI Rule 49 of the Code of Civil Procedure, 1908 (CPC), governs the attachment of partnership property during execution of civil decrees. It distinguishes between a decree against the firm or partners in their capacity as partners and a decree against an individual partner personally.
Rule 49(1): Protection of partnership property
Except as permitted by Rule 49, property belonging to a partnership cannot be attached or sold in execution of a decree unless the decree is against the firm or against the partners in the firm as such. A creditor holding a decree against only one partner therefore cannot ordinarily seize specific assets of the firm to satisfy that partner's personal debt.
Rule 49(2): Charging order against a partner's interest
On the application of a decree-holder against an individual partner, the executing court may charge that partner's interest in partnership property and profits with payment of the decretal amount. The court may also appoint a receiver over the partner's share of profits, whether declared or accruing, and other money payable to the partner. It may direct accounts and inquiries, order sale of that partner's interest, or issue other appropriate directions.
Rule 49(3): Right to redeem or purchase
The other partner or partners may redeem the charged interest at any time. If a sale is directed, they may purchase the interest. This protects the remaining partners' ability to preserve their commercial relationship and control over partnership interests.
Rule 49(4): Service of decree-holder's application
An application under sub-rule (2) must be served on the judgment-debtor and on the judgment-debtor's partners who are within India.
Rule 49(5): Service of a partner's application
Where a partner applies to redeem or purchase under sub-rule (3), the application must be served on the decree-holder, the judgment-debtor, and any non-applicant partners who are within India.
Rule 49(6): Effect of service
Service under sub-rule (4) or (5) is deemed service on all partners; orders made on those applications are to be served in the same manner.
Firm property versus a partner's personal interest
A partnership asset and an individual partner's economic interest are not interchangeable. Where the decree is personal to one partner, Rule 49 ordinarily channels execution through a charge on that partner's interest rather than direct attachment of firm assets. The amount ultimately available can depend on partnership accounts, liabilities, and the partner's entitlement.
How a decree-holder may proceed
- Identify whether the decree is against the firm, the partners as such, or only an individual partner.
- For a personal decree against a partner, apply to the executing court for relief under Order XXI Rule 49(2).
- Request a charging order and, where justified, a receiver, accounts, inquiries, or sale of the debtor-partner's interest.
- Serve the application on the judgment-debtor and partners as required by Rule 49(4).
- Comply with any court directions concerning valuation, payment, redemption, or sale.
Related statutory provisions
Order XXI Rule 50 CPC addresses execution of decrees against firms. Order XXX CPC contains procedural provisions for suits by or against firms. Section 60 CPC concerns property liable to attachment and sale in execution, subject to exemptions. The Indian Partnership Act, 1932, particularly Sections 14, 15, 29 and 48, provides additional context on firm property, a partner's transferable interest, and settlement of accounts upon dissolution.
For the statutory texts, consult the official India Code repository and search for the Code of Civil Procedure, 1908 and the Indian Partnership Act, 1932. Local amendments, procedural rules, and case-specific court orders should also be checked.
Frequently asked questions
Can partnership assets be attached for one partner's personal debt?
Ordinarily not directly. Under Order XXI Rule 49, the decree-holder may seek a charge over that partner's interest and profits, subject to the court's directions.
Can a receiver be appointed over partnership profits?
Yes. Rule 49(2) expressly empowers the court to appoint a receiver over the judgment-debtor partner's share of profits and other money payable to that partner.
Can the other partners prevent an outside sale?
Rule 49(3) permits the other partners to redeem the charged interest or, if sale is ordered, to purchase that interest.
This article provides general legal information. The outcome of an execution proceeding depends on the decree, the partnership arrangement, applicable amendments and the facts before the court.