Wednesday, 16 July 2025

Partnership runs as per deed

 The question of law when the partnership firm having two partners and one died during business then  partnership would have  dissolved  and reconstitution of firm required as per law

Partnership act 1932 sec :42 :that the partnership will stand dissolved inter Alia on the death of partner but  this is applicable in cases where there are only two partners constituting the partnership firm 

The aforesaid principle would not apply where there are more than two partners in firm and the deed of partnership provides otherwise that firm will not stand automatically dissolved on the death of one of partners 

Supreme Court in case title  Special leave petition (civil) 1381/2025 decided on dt 14 July 2025 title Indian  oil corporation Limited &ors v/s M/s Shree Niwas Ram Gopal & others up held the decision of  single Bench and division Bench of High court of Calcutta  and  dismissed  with observation while relying upon case M/s Wahid Ali Abid Ali v/s commissioner of income tax Lucknow 1988(supp)SCC 193

This latest authority is important in relevancy to facts of the case which were : In this case IOC has refused to recognise the reconstituted firm on the pretext that all the heirs of the deceased partners have not joined or expressed their willingness either way to join or not to join the firm 

The Supreme Court up held that IOCL has no role to play in determining as to who is the competent heir of the deceased partner , it should be left on the  wisdom of the existing partner

 



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