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2001 Supreme(Cal) 280
High Court Of Calcutta
AMITAVA LALA
RATHINDRA NATH DEY - Appellant
Versus
DILIP KUMAR DEY - Respondent
Suit 53 Of 1992
Decided On : 05/15/2001
D.K.SHOME, KINJAL BARAL, M.K.GHOSH, P.K.MUKHERJI, SHOVAN KUMAR CHAKRABORTY, SVARNENDU GHOSH
A partnership is considered a partnership-at-will when the partnership deed does not specify the duration or determination of the partnership, and in such cases, any partner can dissolve the partnership by giving notice to the other partners.
Headnote:
PARTNERSHIP - DISSOLUTION - PARTNERSHIP-AT-WILL - DETERMINATION OF PARTNERSHIP - INTERPRETATION OF PARTNERSHIP DEED - LEGAL FRAMEWORK - PARTNERSHIP ACT, 1932, SECTIONS 7, 32(1)(C), 43, 44(G).
Fact of the Case:
The plaintiffs filed a suit for dissolution of a family partnership known as 'Wooma Churn Dey,' claiming it to be a partnership-at-will. The defendant, a cousin of the plaintiffs, filed a separate suit seeking to carry on the business under the same name and style. Both suits were transferred to the High Court and heard together.
Finding of the Court:
The High Court held that the partnership was indeed a partnership-at-will, as there was no provision in the partnership deed for its duration or determination. The court interpreted the relevant clause of the partnership deed, which provided for the continuation of the business by the surviving partners in case of the death or retirement of a partner, as not implying a fixed duration or determination of the partnership.
Issues: 1. Whether the business of Wooma Churn Dey was a partnership-at-will? 2. Whether it was just and equitable to dissolve the firm of Wooma Churn Dey as claimed by the plaintiffs?
Ratio Decidendi: The court applied the provisions of the Indian Partnership Act, 1932, to determine the nature of the partnership. It held that Section 7 of the Act provides for partnership-at-will where there is no provision in the contract between the partners for the duration or determination of the partnership. The court found that the partnership deed in this case did not contain any such provisions, and therefore, the partnership was a partnership-at-will.
Final Decision: The court held that the business of Wooma Churn Dey was a partnership-at-will and directed that the suit be heard on all other issues.
( 1 ) THIS is a suit for : (A) A decree of declaration that the partnership under the name and style of Messrs. Wooma Churn Dey stood dissolved with effect from 17th January, 1992; (B) Alternatively, a decree directing dissolution of the said firm on and from such date as to this Hon'ble Court deem fit and proper; (C) Rendition of accounts ; (D) Payment of the respective shares of the plaintiffs in the profits, goodwill and assets of the said partnership after liquidation of the just debts and liabilities of the partnership business; (E) Attachment; (F) Receiver; (G) Injunction; (H) Costs; (I) Further and other reliefs.
( 2 ) IT appears from the description in the plaint that the said partnership is a registered family partnership in between the plaintiffs being step brothers and defendant beingcousin i. e. uncle's son of the plaintiffs. The aforesaid suit was registered and filed on 20th January, 1992.
( 3 ) ON the self-same day, i. e. 20th January, 1992 the defendant herein as a plaintiff instituted a suit in the City Civil Court at Calcutta as against the plaintiffs herein by making defendants therein praying inter alia (A) a Decree for Declaration declaring that the Plaintiff has right, title and interest to carry on business under the name and. style of "wooma Churn Dey" as is being carried on at present; (B) a Decree for Declaration declaring that the Defendants have no right, title and interest to stop the smooth running of the business as is being carried on; (C) a Decree for Declaration declaring that the Plaintiff has every right, title and interest to carry on business and to make operation of the Bank's account and to make payments to the persons concerned with supply, works and to recover payments for sales thereof; (D) a Decree for Permanent Injunction restraining the Defendants from creating any trouble to the smooth running of the business in any form of stopping Bank operation payments to Sales-tax, Income-tax, salaries whatsoever and/or from creating any trouble to its running in any manner whatsoever; (E) Such other relief or reliefs as the plaintiff may be found entitled to; (F) Costs and Advocate's fees ;
( 4 ) FROM the nature and character of the suits in between the parties herein it appears that both the suits are counter to each other as a result whereof the suit being title suit No. 53 of 1992 which was pending before the City Civil Court at Calcutta was transferred to this Court to avoid the Multiplicity of the proceedings and renumbered as extraordinary suit 7 of 1994. Both the Suits were taken up for analogous hearing at the appropriate joint suggestion of the parties.
( 5 ) THIS Court was pleased to frame the following issues for the purpose of disposal of both the suits. :1. Is the business of Wooma Churn Dey 'partnership-at-will?2. Is it just and equitable to dissolve the firm of Wooma Churn Dey as claimed by the plaintiffs?3. Are the plaintiffs unwilling to carry on the business as alleged in paragraph 3 of the Written Statement filed in a Suit No. 53 of 1992?4. Is Dilip Kumar Dey entitled to carry on the business of Woom Churn Dey without any let or hindrance by the plaintiffs as alleged in paragraphs 19 and 20 of the plaint in Extraordinary suit No. 7 of 1994?5. Are the plaintiffs entitled to pray for any other relief apart from seeking retirement from the business as alleged in paragraph 21 of the written statement in Suit No. 53 of 1992?6. To what reliefs the parties are entitled to in both the suits?
( 6 ) THE defendant in this suit filed his written statement almost taking the similar plea as he had taken in the plaint of the suit originally instituted in the City Civil Court and subsequently transferred to this Court.
( 7 ) AT the threshold, both the parties contended before this Court that the issue No. 1 as above is a preliminary issue as to the question of law which can be determined by this Court independently without going into the factual matrix relating to fur
