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1974 Supreme(Del) 53

High Court Of Delhi
VIDYA DEVI - Appellant
Versus
MANI RAM - Respondent
Interim Application 2065 of 1973
Decided On : 03/03/1974

Advocates Appeared:
ARUN MOHAN, K.C.Sharma, P.Malhotra, R.M.LAL

A partner in a partnership at will has the right to dissolve the partnership by giving notice in writing to all the other partners.

Headnote:

PARTNERSHIP - DISSOLUTION - RIGHT TO RETIRE - COMPULSORY RETIREMENT - APPOINTMENT OF RECEIVER - JUST AND CONVENIENT - PARTNERSHIP AT WILL - NOTICE OF DISSOLUTION - WINDING UP - DISTRIBUTION OF ASSETS - PAYMENT OF DEBTS AND LIABILITIES.

Fact of the Case:

Plaintiff Vidya Devi, widow of Basheshar Nath, instituted two suits for dissolution of partnership and rendition of accounts. Basheshar Nath had started partnership businesses with Mani Ram and Raj Narain in Delhi Printers and Process Syndicate. After his death, Vidya Devi agreed to carry on the business with the partners under new deeds. However, she found it difficult to continue and issued a notice dissolving the partnership. The defendants denied her right to dissolve and offered to refer the matter to arbitration. Vidya Devi filed applications for the appointment of a receiver, arguing that her assets were in danger of being dissipated.

Finding of the Court:

The court held that the partnership was at will and could be dissolved by any partner giving notice in writing. The clause regarding retirement in the partnership deeds was not a bar to the plaintiff's right to dissolve the partnership. The court also held that the plaintiff could not be compelled to retire and that the partnership businesses stood dissolved. The court further held that the affairs of the partnership businesses had to be wound up in accordance with Sections 46, 48, and 49 of the Partnership Act.

Issues: 1. Whether the partnership was at will and could be dissolved by the plaintiff? 2. Whether the plaintiff could be compelled to retire? 3. Whether the partnership businesses stood dissolved? 4. Whether the affairs of the partnership businesses had to be wound up in accordance with Sections 46, 48, and 49 of the Partnership Act?

Ratio Decidendi: 1. A partnership is at will if no duration is fixed for the partnership and any partner may put an end to the partnership at any time. 2. A partner cannot be compelled to retire unless there is a provision in the partnership agreement for compulsory retirement. 3. A partnership is dissolved by notice if the partnership is at will and a partner gives notice in writing to all the other partners of his intention to dissolve the partnership. 4. The affairs of a dissolved partnership must be wound up in accordance with Sections 46, 48, and 49 of the Partnership Act.

Final Decision: The court appointed a receiver to take charge of the assets and property of the partnership firms and to proceed in accordance with the law as enunciated in Sections 46, 47, 48, and 49 of the Partnership Act.

( 1 ) AVADH Behari Rohtagi, The plaintiff Vidya Devi has instituted two suits in this court for dissolution of partnership and rendition of accounts.

( 2 ) IN or about 1960 Basheshar Nath the husband of the plaintiff started partnership business for printing and block making with his partners. These were two partnerships. One was called Delhi Prin- ters. The other was called Process Syndicate. Process Syndicate is engaged in making blocks. The Delhi Printers are engaged in printing. During his life time in Delhi Printers his partners were Mani Ram and Raj Narain. In Process Syndicate he had three partners, viz. , Mani Ram, Raj Narain and N. C. Dutta. Everything went well during the life time of Bashesbar Nath. On March 21, 1973 Basheshar Nath died. The plaintiff is his widow. On March 23, 1973 two deeds of partner- ihip were executed one in respect of Delhi Printers and the other in respect of Process Syndicate. The terms of both the documents are substantially the same. Under the new deeds Vidya Devi agreed to carry on the business of her husband in partnership with Mani Ram and Raj Narain in caie of Delhi Printers. In case of Process Syndicate she agreed to continue the besiness with Mani Ram, Raj Narain and Shoba Rani the wife of N. C. Dutta. The accounts of both the partnurship businesses were settled on March 30, 1972 when Basheshar Nath was alive. In 1973 accounts could not be taken as Basheshar Nath died during the month of March itself and the parties agreed that the accounts will be settled in March 1974. This is expressly provided in the partnership deed.

( 3 ) HARDLY three months passed when plaintiff Vidya Devi found that it was not posilble for her to carry on business in partnership. On June 18,1974 she issued a notice to her partners dissolving the partnership business. The defendants on June 27, 1973 sent a reply to the notice denying the plaintiff s right to dissolve the partnership and contending that the plaintiff, if she desired, could retire from the partnership busi- ness and offered to refer the matter for settlement to arbitration. It may also be mentioned here that in addition to the notice dissolving ihe partnership firm the plaintiff gave a public notice of dissolution of the partnership business in the Hindustan Times, Hindi Hindustan and Daily Pratap in Urdu newspapers on June 22,1973. These notices were in accordance with Section 45 read with Section 72 of the Partnership Act.

( 4 ) ON August 27, 1973 the plaintiff instituted the two suits and made applications under Order 41 Rule 1, Code of Civil Procedure in both the suits for appointment of receiver. . These applications came up before me on November 19, 1973 and I passed a consent order. I app- ointed a chartered accountant to go in to the accounts of the partnership businesses from April 1, 1972 till June 18,1973 and to value the assets of the partnerships. The defendants appeared before the chartered accountant. The plaintiff appeared only on two hearings and then absented herself. The chartered accountant was directed by Chawla, J. to proceed in the absence of the plaintiff if she did not choose to attend the proceedings. The Commissioner went on with his work. He made his report in respect of both the businesses on January 22,1974.

( 5 ) APPARENTLY dissatisfied with the report of the commissioner and what had happened before the plaintiff mad two new applications for appointment. of receiver. These applications are substantially the same as were made by her earlier at the commencement of the suit. The plaintiff s prayer is that her assets in the partnership business are in danger of being dissipated as she has been excluded from the partner- ship and therefore a receiver should be appointed in respect of both the businesses. This is opposed by the defendants. This order will govern the applications made in both the suits.

( 6 ) MR. K. C. Sharma appearing for the defendants has sub- stantially raised one argument. His submission is that






































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