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44. The Partnership Act treats the dissolution of the partnership firm on account of death of a partners on a totally distinct and different manner from the dissolution due to the causes other than death of a partner. The conjoint reading of Section 37, 50, 16(a) of the Partnership Act read with Section 88 of the Trusts Act and more particularly Illustration (f) thereof clearly stipulates a set of rights in favour of a legal heir or representatives of the deceased partners and sets up a fiduciary obligation or the obligation by which the trustee is bound to the surviving partners. The surviving partner after the death of the deceased partner holds the share of the deceased as his share in the partnership ARBP792_18.doc business and the property in trust and for the benefit of legal heir and / or legal representatives of the deceased partner. In law, the surviving partner is bound to apply for the profits of the firm in payment of debts and liabilities, if any, and to distribute the surplus among the partner and the representative of the deceased partner. The winding up of the firm is complete only upon the dissolution of certain assets. When a surviving partner carries on the business of the partnership with the property of the firm without final settlement of accounts, the estate of the deceased partner is entitled to share of profits or to the interest @ 6% on the amount of the share. In the present case, the surviving partner did not wind up the firm or settle the accounts.

45. Section 88 of the Trusts Act gives the fiduciary charter to the surviving partner and mandates the surviving partner to protect the interest of the deceased partner. In the present case, neither the accounts were made up nor did the surviving partner pay to the heirs of the deceased partner his share. On dissolution, winding up is to take place only after the assets have been shared. Section 95 of the Trusts Act requires a surviving partner, who is holding the assets of the firm without winding up of the firm after the death of the other partner to perform same duties and subject to the surviving partners to the same liabilities and disabilities as if the surviving partner is a trustee of the property of the deceased partner for the benefit of legal representatives or the estate of the surviving partner. The Arbitral Tribunal found that as Mohamad Shafik retained the assets, he was holding the shares of Yakubali and the properties of the firm as a trustee or for the benefit of Zarina and Fatima. After the death of Mohamad Shafik, Laljees are holding the shares as a trustee.