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Gujarat High Court
Judgename :A.D.DESAI, P.N.BHAGWATI
KESHAVLAL LALLUBHAI PATEL - Appellant
Versus
PATEL BHAILAL NARANDAS - Respondent
First Appeal 350 of 1966
Decided On : 08/31/1966
Partnership Act –sec. 43 , 7, 32, 39, 31, 36 (1) , 33, 42, 34 and 35 , 38, 47 – Partnership –The main dispute as the issues for determination in a preliminary decree are concerned therefore was as to what was the date of dissolution of the partnership – The trial Court on a consideration of the provisions of the partnership deed held that the partnership was a partnership at will and must therefore be held to be dissolved from 18th December 1956 being the date of receipt of the notice dated 15th December 1956 by the defendants – The trial Court accordingly passed a preliminary decree on the basis that the partnership was dissolved from 18th December 1956 – Defendants Nos. 5 to 7 were aggrieved by this determination of the trial Court and hence they preferred the present appeal in this Court – Held, The partnership was therefore clearly a partnership at will and it was validly dissolved on 18th December 1956 by the plaintiff giving the notice dated 15th December 1956 to the defendants –The learned trial Judge was therefore right in taking the view that the partnership was dissolved on 18th December 1956 and passing a preliminary decree on that basis – These were the only contentions urged in support of the appeal and since in court view there is no substance in them the appeal fails and is dismissed –The appellant will pay the casts of the appeal to respondent No. 1 respondents Nos. 2 and 6 and respondents Nos. 3 and 4 in three separate sets – Respondent No. 5 shall not be entitled to any costs of the appeal since he has supported the appellant –Appeal Dismissed
( 1 ) THE short question that arises for determination in this appeal is as to the date of dissolution of a partnership constituted of the plaintiffs and the defendants. By a deed of partnership dated 4th July 1954 the plaintiffs and the defendants agreed to carry on business in partnership in the firm name of National Construction Company on the terms and conditions recorded in the partnership deed. The business of the partnership was stated in Clause 1 of the partnership deed to be construction of buildings roads dams canals and other structures in various parts of India and production and transport work in connection with the same. Clause 2 of the partnership deed provided that none of the partners should withdraw the amount of capital invested by him until all the construction works undertaken by the firm were completed. The partners were divided into three groups: the first group consisting of the plaintiff and defendant No. 8 the second group consisting of defendants Nos. 2 and 3 and the third group consisting of defendants Nos. 4 to 7 and under Clause 5 of the partnership deed the management of the partner ship business was entrusted to three Managing Partners one drawn from each group. Clauses 6 and 7 of the partnership deed which are material Clauses for the determination of this appeal were in the following terms as translated in English:-6 The duration of this partnership is not fixed and it will therefore be a partnership at will. 7 Each partner will be entitled to a share in the goodwill of the firm according to his share in the partnership. If any partner wishes to retire from the firm he can do so by Giving Notice in writing to the other partners of his intention to retire after completion of the pending construction works and the retirement shall take effect after the pending construction works are completed accounts in respect thereof are taken and the amount due at the foot of the accounts is paid or received by him as the case may be. If the continuing partners take up any new construction work after receipt of such written notice from the retiring partner the retiring partner shall not be liable in any manner in respect of such construction work. The retiring partner will have no claim in respect of the goodwill of the firm and the goodwill shall belong to the continuing partners according to the shares mutually agreed between them. The partnership obtained a contract for the construction of Raigadh Rattan Pole Section of National Highway No. 8 but before the completion of construction of the said work the plaintiff gave a notice dated 15th December 1956 to the defendants dissolving the firm This action was taken by the plaintiff because according to him various irregularities and illegalities were being committed by defendant No. 6 in the management of the business of the partnership but we are not concerned with this allegation of the plaintiff since it has no bearing on the question whether the notice operated to dissolve the partnership. That question depends entirely on the construction of the partnership deed. The notice was received by all the defendants and the last date of receipt was 18th December 1956. The plaintiff therefore contended that the partnership was dissolved on 18th December 1956 and he filed a suit in the Court of the Civil Judge Senior Division Ahmedabad against the defendants for taking accounts of the dissolved partnership. The plaintiffs also prayed in the alternative that in any event by reason of the facts and circumstances set out in the plaint the partnership be dissolved by the Court. Originally in the suit apart from the partners one Ratilal Dahyabhai Patel was also impleaded as defendant No. 9 on the ground that he was a cashier in charge of the account books of the firm but at the hearing of the appeal before us Mr. J. M. Shah learned advocate appearing on behalf of the plaintiff applied that he may be permitted to drop defendant No. 9 from the suit and
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