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1 - 10 of 10 (0.27 seconds)Section 41 in The Indian Partnership Act, 1932 [Entire Act]
Section 40 in The Indian Partnership Act, 1932 [Entire Act]
Section 43 in The Indian Partnership Act, 1932 [Entire Act]
Section 44 in The Indian Partnership Act, 1932 [Entire Act]
Section 13 in The General Clauses Act, 1897 [Entire Act]
Karumuthu Thiagarajan Chettiarand ... vs E. M. Muthappa Chettiar on 27 February, 1961
In this connection Mr. Sanghavi, learned Counsel for the plaintiff, drew my attention to certain observations of the Supreme Court in the case of Thiagarajan v. E. M. Muthappa . The Court in that case was concerned with the question whether the partnership was a partnership at Will or whether it was a partnership to carry on a specific undertaking. In the latter case the partnership would come to an end when the purpose for which the partnership was constituted came to an end. In order to decide whether the deed of partnership provided for any duration of the partnership either expressly or by implication, the Court examined various provisions of the partnership deed. The Supreme Court examined a term in the contract to the effect that either party may withdraw from the partnership by relinquishing his right of management to the other partners. It held that the relinquishment of one partner's interest in favour of the other was different from the right of a partner to dissolve the partnership by giving a notice. It said : "It is true that in this particular case there were only two partners and the partnership will come to an end as soon as one partner relinquishes his right in favour of the other. That however is a fortuitous circumstances; for, if (for example) there had been four partners in this case and one of them relinquished his right in favour of the other partners, the partnership would not come to an end. That clearly shows that a term as to relinquishment of a partner's interest in favour of another would not make the partnership one at will. Clearly these observations are in connection with construing a clause in the partnership deed to determine whether the partnership was a partnership at will or not. It does not throw any light on the question whether the partnership business should be wound up as on a dissolution when only one partner remains and all the other partners retire from the partnership.
Erach F. D. Mehta vs Minoo F. D. Mehta on 9 September, 1970
13. As against these observations, Mr. Kapadia, learned Counsel for the defendants, drew my attention to the observations of the Supreme Court in the case of Erach v. Minoo . In this case the partnership was between only two partners. The partnership deed provided expressly that the duration of the partnership was at will. There were disputes between the two partners. The respondent claimed that the parties reached an oral agreement stipulating that the appellant shall retire from the partnership and shall assign and transfer to the respondent his right, title and interest in the partnership business against payment of the price to be fixed by a named arbitrator. Clause 15 of the partnership deed had provided that the disputes he referred to arbitration. One of the contentions raised was that the reference to arbitration was not covered by Clause 15 of the partnership deed. The Supreme Court held that a dispute whether the partnership was dissolved by mutual agreement was clearly a dispute between the parties touching the partnership agreement. They negatived the contention that the agreement which was set out was not an agreement which was covered by the arbitration clause because it was not an agreement for dissolution of the partnership. In this limited context the Supreme Court observed : "When the partnership consisted of only two partners and one partner agreed to retire, there can be no doubt that the agreement that one of the partners will retke amounts to dissolution of the partneship." These observations have to be read in the context in which they were made namely whether the reference to arbitration was covered by Clause 15 of the partnership deed in that case. These observations do not deal with the question whether the partnership is dissolved by operation of law when all partners but one retire.
Section 42 in The Indian Partnership Act, 1932 [Entire Act]
Keshavlal Lallubhai Narnadas And Ors. vs Patel Bhailal Narandas And Ors. on 31 August, 1966
8. Neither the partnership deed nor any of the above sections of the Partnership Act dealing with the dissolution of a firm provide for dissolution of a firm on retirement of one or more partners. In fact, it is an accepted position in law that retirement of a partner' from the partnership firm is distinct from the dissolution of a firm. As observed by Bhagwati J. (as he then was) in the case of Keshavlal Lallubhai v. Patel Bhailal Narandas, reported in AIR 1968 Guj l57at P. 161 "...........the law of partnership in India represents a compromise between the strict view of the English law which refuses to accord a legal personality to a firm and regards it merely as a compendious name for the partners and the merecantile usage which recognises a firm asa distinct entity or quas-corporation........". Thus, on the retirement of a partner the partnership firm continues to exist as such, which is not the case when a partnership is dissolved. In a strict sense, on retirement of one of the partners the firm which continues would be a firm consisting of different partners with possibly different shares. In this sense it would be a different firm from the firm which existed prior to retirement of one of the partners. The Partnership Act, however, makes a distinction between the retirement of a partner and dissolution of the firm. Chapter VI of the Partnership Act deals with dissolution of a firm white Chapter V deals with incoming and outgoing partners.
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