[ Hukumchand Bhaulal
Patani & Ors. v. Dhanlal Premraj Kale & Ors., AIR 2010 (NOC) 1106 (Bom.)]
The Respondent Nos. 1 to 3
were the original plaintiffs. They had filed the suit for declaration that the
partnership firm in the name and style ‘H.B. Patani & Company’ had been
dissolved and for settlement of accounts with interest on the amount due. The
Trial Court decreed the suit declaring that the partnership had been dissolved
on 20-1-1980 and the share of the plaintiffs in the partnership firm was ½ and
that of the present appellants ( original defendants Nos. 1 to 5) was ½.
The partnership was for
dealing in kerosene and crude oil. Premchand Kale had ½ share and the appellant
Nos. 1 to 5 who formed a joint family had ½ share in the partnership. The
partnership was at will and therefore a partner had a right to terminate
partnership with three months’ notice. The appellant No. 1 Hukumchand had joined
the partnership as Karta of the Joint Undivided Hindu Family (‘HUF’) of the
appellant Nos. 1 to 5. By notice dated 26-10-1979, Premraj Kale terminated the
partnership. In the circumstances suit was filed. It was also stated that due to
death of Premraj Kale on 14-12-1980 also, the partnership had come to an end. It
was also said that after the dissolution of the partnership firm, the defendant
appellants did not have right to do business in the property of the plaintiffs.
The decree passed by the Trial Court for declaration and settlement of account
was confirmed, which was challenged in the second appeal. The Court held that S.
7 of the Indian Partnership Act, 1932 defines ‘partnership at will’ to mean that
where no provision is made by contract between the partners for the duration of
their partnership, or for the determination of their partnership, the
partnership is ‘partnership at will’. S. 43 prescribes the manner for
dissolution of partnership at will. It says that where the partnership is at
will, the firm may be dissolved by any partner by giving notice in writing to
all the other partners of his intention to dissolve the firm. As per S. 42(c),
subject contract between the partners a firm is dissolved by the death of a
partner. In the case, there was nothing to show that the partnership deed
indicates that even after the death of one partner, another partner was entitled
to continue the partnership firm. So, in the absence of any specific term in the
deed of partnership for its continuation after the death of one of the partners,
it is to be presumed that after the death of Premchand, the partnership firm
stood dissolved in terms of S. 42(c) of the Partnership Act.
There were only two partners
in the partnership firm, namely, Hukumchand who was admitted as Karta on behalf
of HUF and Premchand who was admitted in his individual capacity. There was no
provision in the partnership deed to include any new partner by either partner
or by the surviving partner. So, it does not appear that the partnership firm
was expected to continue even after the termination notice by Premchand or
subsequent to his death. There was no provision in the partnership deed for
taking a new partner in place of the retired or died deceased partner. The
partnership was at will and it had come to an end and stood dissolved as a
result of notice given by Premchand specifically stating that he was dissolving
the partnership firm, so also by his subsequent death.
