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1972 Supreme(Cal) 252
HIGH COURT OF CALCUTTA
Hazra
TALAKCHAND KANJI VORA - Appellant
Versus
KESHAVLAL DULLABAJJI SHETH - Respondent
Suit 123 Of 1972
Decided On : OCTOBER 05, 1972
P.K.DAS, P.K.DUTT
A partnership is a partnership at will if there is no provision in the partnership agreement for its duration or determination.
Headnote:
PARTNERSHIP - DISSOLUTION - NOTICE - WAIVER - DELAY - RECEIVER - APPOINTMENT - PARTNERSHIP AT WILL - DETERMINATION - DURATION - CLAUSE FOR RETIREMENT - INTERPRETATION - INDIAN PARTNERSHIP ACT, 1932 - SECTIONS 7, 32, 43, 46, 47.
Fact of the Case:
The plaintiff, Kanji Vora, and the defendant, Keshavlal Duliabhji Sheth, were partners in a firm called "The Western Trading Corporation." On March 17, 1971, Vora gave Sheth a written notice of dissolution of the partnership, effective April 16, 1971. Sheth continued to carry on the business of the firm, and Vora filed suit for injunction and appointment of a receiver. Sheth contended that the partnership was not a partnership at will and could not be dissolved by notice, that Vora had waived his right to dissolve the partnership by continuing to participate in the business after the notice, and that the delay in filing the suit and application for a receiver was prejudicial to him.
Finding of the Court:
The court found that the partnership was a partnership at will, as there was no provision in the partnership agreement for its duration or determination. The court also found that Vora had not waived his right to dissolve the partnership, as his continued participation in the business was for the purpose of beneficial winding up of the partnership. The court further found that the delay in filing the suit and application for a receiver was not prejudicial to Sheth.
Issues: 1. Whether the partnership was a partnership at will and could be dissolved by notice. 2. Whether Vora had waived his right to dissolve the partnership by continuing to participate in the business after the notice. 3. Whether the delay in filing the suit and application for a receiver was prejudicial to Sheth.
Ratio Decidendi: 1. A partnership is a partnership at will if there is no provision in the partnership agreement for its duration or determination. 2. A partner does not waive his right to dissolve a partnership by continuing to participate in the business after giving notice of dissolution, if the continued participation is for the purpose of beneficial winding up of the partnership. 3. Delay in filing a suit and application for a receiver is not prejudicial to the defendant if the defendant has not suffered any loss or damage as a result of the delay.
Final Decision: The court granted Vora's prayers for injunction, appointment of a receiver, and dissolution of the partnership.
( 1 ) THIS is a petition by one partner Talakchand Kanji Vora (hereinafter referred to as "kanji Vora") against another partner Keshavlal Duliabhji Sheth (hereinafter referred to as 'sheth') for injunction and for appointment of receiver, Kanji Vora and Sheth entered into an agreement to carry on business in co-partnership under the name and style of "the Western Trading Corporation" or "western Trading Corporation" (hereinafter referred to as the said "firm" ). The business carried on by the firm was in sundry goods, inter alia, as importers at 55, Canning Street. Calcutta. The partnership deed is annexure 'a' to the present petition,
( 2 ) ON March 22, 1954, the partnership agreement was modified by a Deed. Vora and Sheth carried on the said business in co-partnership and on March 17. 1971 Vora gave a written notice to Sheth under Section 43 of the Indian Partnership Act dissolving the firm with effect from April 16, 1971.
( 3 ) THIS suit was filed on March 22, 1972, that is after a year of the said notice of dissolution. After filing the suit, on March 25. 1972 this petition has been filed by Kani Vora. In the petition Kanji Vora is praying that order may be passed for injunction restraining the Sheth from carrying on the business or using the firm name or partnership properties or quota certificates or quota licence or acting or giving effect to any letter of authority issued in favour of third parties or letter of credit issued under the said quota certificate or quota licence or dealing in any manner with the partnership properties, assets, funds, moneys goodwill, quota certificates and/or quota licences belonging to the said firm and/or issued in the name of the said firm. Kani Vora is also praying, inter alia, for an order of injunction restraining Sheth from dealing with and/ or disposing of and/or selling and/or encumbering the partnership properties, moneys, assets, goodwill, quota certificates end quota licences. Kanji Vora is further praying that receiver may be appointed over the partnership properties, amount lying in the account of the said firm with National City Bank, Brabourne Road. Calcutta and in respect of quota certificate, licences, letters of authority letters of credit books of accounts and documents and for directions on the receiver to collect and realise partnership properties, moneys, quota certificates, quota licences etc.
( 4 ) ADMITTEDLY, the parties carried on the partnership business. Admittedly, the plaintiff Kanii Vora has 7 annas share end the defendant Sheth has 9 annas share.
( 5 ) THREE clauses in the partnership agreement dated May 5. 1936 which is annexed to the petition are important for the purpose of this application. These are Clauses 5, 6 and 11 which are set out hereunder:"clause 5; That if a partner desires to retire from the business, he must give six months notice in writing of his intention to do so to the other partner to enable accounts of the business to be taken for ascertaining the assets and liabilities and it will be optional for the other partner to continue the business in the firm name on paying unto him the value of the dues in his share. Clause 6: Should one of the partners the during the continuance of the partnership business then the surviving partner shall be entitled to carry on the business in the firm name entirely at his own risk from the death of the deceased partner and the heirs of the deceased partner shall get an adjustment of accounts of capital and profits of the business and shall be liable for the loss if any, in the share of the deceased partner upto the time of his death, clause 11: All business, namely, selling, buying, giving or taking credits, incurring expenses and similar operations shall be done by mutual consent of the partners.
( 6 ) APPEARING for the petitioner Mr. P. K. Dutt referred to me Section 7 of the Indian Partnership Act and submitted that this is a 'partnership-at-will'. He also referred to me Section 43 of the
