Judgment

SHAH, J.:- Dadiba Hormusji Boatwalla was one of the eight partners of Messrs Meghji Thobhan & Company - a firm of Muccadams and cotton brokers. Boatwalla died on February 20, 1957. By virtue of clause 8 of the deed of partnership the business of the firm was continued by the surviving partners. Khorshed and Nariman - widow and son respectively of Boatwalla - obtained letters of administration to the estate of Boatwalla and commenced an action in the High Court of Bombay for an account of the partnership between Boatwalla and the surviving partners and for an order paying to the plaintiffs the amount determined to be due to Boatwalla at the time of his death. The suit was resisted by the surviving partners who will hereinafter be called the defendants . Tarkunde, J., passed a preliminary decree declaring that qua Boatwalla the partnership stood dissolved on February 20, 1957, but not in respect of the surviving partners, and directed that an account be taken of the partnership up to February 20, 1957. Against that decree the defendants appealed under Clause 15 of the Letters Patent. In appeal the High Court modified the decree. The learned Judges held that the plaintiffs were not entitled to an account in the profits and losses of the firm after the death of Boatwalla, nor to exercise an option under Section 37 of the Partnership Act, but that the plaintiffs were entitled only to interest at six per cent per annum on the amount found due as Boatwalls s share in the assets of the partnership including the goodwill. They further declared that the interest of Boatwalla in the firm ceased on February 20, 1957, and deleted the direction with regard to the dissolution of the firm as between Boatwalla and the defendants. With special leave, this appeal has been filed by the defendants.

2. The defendants contend that the plaintiffs as legal representatives of Boatwalla were not entitled to a share in the value of the goodwill of the firm because the goodwill of a firm may be taken into account only when there is a dissolution of the firm and in any event because Boatwalla had agreed that this interest in the goodwill shall cease on his death and the business shall be continued by the surviving partners. The defendants do not challenge the decree of the High Court awarding to the plaintiffs Boatwalla s share in the assets of the firm other than goodwill, they contend that in the goodwill of the firm the plaintiffs had no share.

3. By Section 14 of the Partnership Act 1932, it is enacted that:

"Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm or acquired, by purchase or otherwise, by or for the firm or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business."

Goodwill of the firm is expressly declared to be the property of the firm.

4. Counsel for the defendants relied upon Section 55 of the Partnership Act which makes a provision with regard to sale of goodwill after dissolution. It is provided by sub-section (1) of Section 55 that:

"In settling the accounts of a firm after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm."

But it is not enacted thereby that goodwill may be taken into account only when there is a general dissolution of the firm, and not when the representatives of a partner claim his share in the firm, which by express stipulation is to continue notwithstanding the death of a partner. Nor do Sections 39, 42 and 46 which were relied upon by counsel for the defendants support that contention. Under Section 39 the dissolution of partnership between all the partners of a firm is called the "dissolution of the firm"; and by Section 42 a firm is said to be dissolved subject to the contract between the partners on the happ