Lecture No.

4
Partnership
Definition and Nature of Partnership
 
The term “partnership” is defined in Section 4 of the
Partnership Act, 1932, as follows:
 
“Partnership is the relation between person who
have agreed to share the profit of a business
carried on by all or any of them acting for all.”
• Persons who have entered into partnership
with one another are called individually
“partners” and collectively “ a firm” and the
name under which their business is carried
on is called the “firm name”.
 This has been described to be the most businesslike
definition of the term. It quite clearly portrays the
following four essential elements of a partnership,
namely-
(1)     This is the result of an agreement.
(2)     That is organized to carry on a business.
(3)     That the persons concerned agree to share the
profits of the business.
(4)     That the business is to be carried on by all or any
of them acting for all.
 Test of Partnership
• A firm whether a partnership firm or not
can be assessed by examining all the
essential elements of a partnership firm.
 1. Agreement

• Section 5 declares that a partnership is created by

contract, not by status. It may be too elementary to
say that a partnership can only by agreement
between the parties concerned and in no other way,
yet the point is important. It is one of those elements
which clearly display the distinction between a
partnership an the other business relations, like joint
family carrying on business, which do not arise by
agreement, but are the result of status, operation of
law, succession or inheritance.
 2.Business

• a partnership can exist in business and business

alone, “Business” being essential to partnership,
the question arises what does it mean? Section 2
only says that it “includes every trade, occupation,
and profession.” This definition cannot be taken
literally, because while every trade may be a
business, every occupation or profession is not.
Nor is there any judicial definition of the term,.
• In Smith vs. Anderson James LH only said that the
term “business” must be taken in a practical sense,
that is, in a sense in which men of business would use
that term. Speaking broadly, it is taken to refer to any
activity which if successful would result in profit.
Where certain person joined in the purchase of wheat
and oil with the intention of dividing and paying for
it equally, it was held that, they being not interested
in profit or loss, were not patterns. Where, on the
other hand, two persons horsed a coach with their
individual horses and shared the profits, this was held
to be a business (Fromont v Coupland, 1824).
•  
 3. Sharing of Profits

• The word “partnership” is derived from the word

“to part” which means “to divide”. The division of
profits is an essential condition of the existence of
a partnership. No man is a partner unless he has
the right to share the profits of the business. But
every man who receive profits in not necessarily a
partner. Thus, sharing of profit is prima facie
evidence of partnership. The conclusive test is that
of a mutual agency.
 4. Mutual Agency

• The definition of partnership in Section 4

concludes with the words that the business
may be carried on “by all or any of them
acting for all”. Thus, if the person carrying
on the business acts not only for himself but
for others also, so that they stand in the
position of principals and agents, they are
partner.
 RELATION S OF PARTNERS
TO ONE ANOTHER
• Mutual Relations
Section 11 states: Subject to the provisions of this
Act, the mutual rights and duties of the partners of
affirm may be determined by contract between the
partners, and such contract may be expressed or
may be implied by a course of dealing.
Such contract may be varied by consent of all the
partners, and such consent may be expressed or
may be implied by a course of dealing.
 
 The duties of partners which
emerge from the provisions of
the Partnership Act, can be
briefly enumerated thus:
1.        Duty of Absolute Good Faith (Section 9)
2.        Duty Not to Compete (Section 16 b)
3.        Duty of Due Diligence (Section 12.b and
13.b)
4.        Duty to Indemnity for Fraud (Section 10)
5.        Duty to Render True Accounts (Section 9)
6.        Proper Use of Property (Section 15 and
Section 16. a)
7.        Duty to Accounts for Personal Profits
(Section 16)
 The statutory rights of partners
can be enumerated as under:
1.        Right to take part in business [Section 12. a]
2.        Majority Rights [Section 12. d]
3.        Access to Books [Section 13, e]
4.        Right to Profits [Section 13. (e)]
5.        Right to profits (Section 13(b)
6.        Right to interest on capital [Section 13(c) and
(d)]
7.        Right to remuneration [Section 13(a)]
 
 
 DUTIES OF PARTNERS

1.       Duty of good faith [Section 9]

General duties of partners. – Partners
are bound to carry on the business of
the firm to the greatest advantage, to be
just faithful to each other, and to render
true accounts and full information of all
things affection, the firm to any partner
or his legal representative.
 Duty not to compete [Section
16.(b)]
Section 16(b) make it the duty of partners not to carry
on any business similar to or in competition with the
business of the firm and, if a partner does this, he is
bound to pay to the firm all profits made by him in that
business.
 
(a)     If a partner carries on any business of the same nature
as and competing with that of the firm, he shall account
for and pay to the firm all profits made by him in that
business.
 
• The principle is well established by the authorities
that a partner is not to derive any exclusive
advantage by engaging in transactions in rivalry
with the firm. Thus, where a firm is constituted to
supply goods of a certain kind, a partner cannot
carry on a personal business of supplying the same
stuff. It is also well established that “a partner is not
allowed in transacting the partnership affairs to
carry to carry on for his own sole benefit any
separate trade or business which, were it not for his
connection with the partnership, he would not have
been in a position to carry on”. Pulin v Mahendra is
an illustration of the application of these principles.
 Due diligence [Section 12(b)
and 13(f)]
 
Section 12(b) declares that—
 
Every partner is bound to attend
diligently to his duties in the
conduct of the business.
 Duty to indemnify for fraud
[Section 10]
 
Duty to indemnify for loss caused by
fraud.—Every partner shall indemnify
the firm for any loss caused to it by his
fraud in the conduct of the business of
the firm.
    Duty to render true accounts
[Section 9]
•     Partners are bound  to each other by the
principle of utmost good with faith. This entails a
duty of the partners towards each other to make a
full and frank disclosure of facts affecting the
affairs of the firm. In partial recognition of this
principle Section 9 makes it a duty of the partners
to render true accounts to every other partner. 
Partners are bound… to render true
account and full information of all
things affecting the firms to any
partner or his legal representative.
Proper use of property [Section
15]
 
This duty is emphasized by Section 15, which is
as follows:
 
15. Application of the property of the firm. –
Subject to contract between the partners, the
property of the firm shall be held and used by
the partners exclusively for the purposes of
the business.
 
        Duty to account for
personal profits [Section 16]

16. (a) Personal profit earned by partners. –

Subject to contract between the partners if a
partner derives any profit for him from any
transaction of the firm, or from the use of the
property or business connection of the firm or
the firm name, he shall account for the profit
and pay it to the firm;
 
(b) if a partner carries on any business
of the same nature as and competing
with that of the firm, he shall account
for and pay to the firm all profit made
by him in that business.
 
 RIGHTS OF PARTNERS

1. Right to take part in business [Section

12(a)] 
Every partner has a right to take part in
the conduct of the business of the firm.
 
 2.       Majority rights [Section
13(c)]
 
When every partner has the right to be consulted
in the formulation of business policy, differences
of opinion among the partners may arise. How
such differences are to be resolved? Section 12(c)
provides the answer.
 
12(c). any difference arising as to ordinary
matters connected with the business may
be decided by a majority of the partners,
and every partner shall have the right to
express his opinion before the matter is
decided, but no change may be made in
the nature of the business without the
consent of all the partners;
 
Access to books [Section 12(d)]

•        
Every partner has a right to have access to
and inspect and copy any of the books of
the firm.
 Right to indemnity [Section
13(e)]
 
      The right to recover indemnity from the firm is
provided in Section 13(e) of the Act in the
following words:
The firm to recover indemnity a
partner in respect of payments made
and liabilities incurred by him—
 
 
 a.   in the ordinary and proper conduct
of the business, and
b.     in doing such act, in an
emergency, for the purpose of
protecting the firm from loss, as
would have been done by a person of
ordinary prudence, in his own case,
under similar circumstances.
 
       Right to profits [Section
13(b)]
• Unless otherwise agreed, partners are
entitled to share equally in the profits
earned by the firm. Similarly, they are
bound to contribute equally in the losses
sustained in the course of the business of
the firm. This would be so even where there
is disproportionate capital contribution or
some of the partners render extraordinary
services. 
        Right to interest [Section
13(c) and (d)]
If a partner has advanced, for the purposes of the firm business,
a sum of money beyond the capital he has agreed to
subscribe, he is entitled to interest on the advance at the rate
of 6 per cent per annum.
 
13(d) a partner making, for the purposes of
the business, any payment or advance
beyond the amount of capital he has agreed
to subscribe, is entitled to interest thereon
at the rate of six per cent per annum.
•  
Unless otherwise agreed, partners are not entitled to
any interest on their contributions to the capital.
Even where a partner is given the right to receive
interest on his subscribed capital, such interest
shall be payable only out of profits. Section 13(c)
so provides in the following words:
 
13(c) where a partner is entitled
to interest on the capital
subscribed by him, such interest
shall be payable only out of
profits;
 
So far as interest on capital contribution is concerned,
it ceases to run from the date of dissolution.
Right to remuneration [Section
13(a)]
•        
Unless otherwise agreed, partners are not entitled to
receive salary or remuneration for taking part in
the conduct of the business. Section 13(a) so
provides:
 
A partner is not receiving remuneration for
taking part in the conduct of the business.
 
 Relations of Partners to Third
Parties
LIABILITY OF PARTNERS FOR ACTS OF FIRM
Every partner is declared by Section 25 to be liable,
with all his co-partners and also severally, for all the
acts of the firm done while he is a partner. The
declaration is as follows:
 
25.    Liability of a partner for acts of the firm. –
Every partner is liable, jointly with all the other
parties and also severally, for all acts of the firm
done while he is a partner.
 DOCTRINE OF IMPLIED
AUTHORITY
The liability that the partners incur is for the acts of the
firm. What is meant by an “act of the firm?” As the
firm is incapable of acting by itself, it is some act of
a partner, which is going to be regarded as the act of
the firm. The question then is what acts of a partner
are the acts of the firm? The answer is to be found in
the provisions of Sections 18 and 19. Section 18
declares every partner to be an agent of the firm for
the purposes of the business of the firm.
 
18. Partner to be agent of the firm. – Subject to the
provisions of this Act, a partner is the agent of the
firm for the purposes of the business of the firm.
 
Every partner embraces the character both of principal
and agent. But a partner is an agent for what
purposes? Only for the business of the firm. And,
hence, the principle as stated by James LJ in Baird’s
case:
As between the partners and the
outside world (whatever may be
their private relations between
themselves) every partner is the
unlimited agent of every other in
everything connected with the
partnership business…
• 
Thus, the act of a partner done by him as an
agent in the usual course of business is an
act of the firm. This is precisely what is
described to be the implied authority of a
partner.
 
 Scope of implied authority
[Section 19]
The scope of implied authority is determined in
accordance with the provisions of Section 19, which is as
follows:
 
19. Implied authority of the partner as agent of the firm.
– (1) Subject to the provisions of Section 22, the act of
a partner, which is done to carry on, in the usual way,
business of the kind carried on by the firm, binds the
firm.
•  
•
 Restrictions on implied authority
[Section 19 and 20 
When a partner is prohibited from doing an act
which would otherwise be within the scope of his
implied authority of a partner does not empower
him to do without consulting the other parties. The
section says that in the absence of any usage or
custom of trade to the country, the implied
authority of a partner does not empower him to –
 
   
(a) submit a dispute relating to the business of the
firm to arbitration,
(b)     open a banking account on behalf of the firm
in his own name,
(c)     compromise or relinquish any claim or portion
of claim by the firm,
(d)     withdraw a suit or proceeding field on behalf
of the firm,
(e)     admit any liability in a suit or proceeding
against the firm,
(f)      acquire immovable property on behalf of the
firm,
(g)     transfer immovable property on behalf of the
firm,
(h)     enter into partnership on behalf of the firm.
 
 LIABILITY FOR TORTS
AND OTHER WRONGS
[SECTION 26]
The firm is liable for the wrongful acts of a
partner occurring in the ordinary course of
the business of the firm. The principal is
enunciated in Section 26 of the Partnership
Act:
Liability of the firm for wrongful acts
of partners. – Where, by the wrongful
act or omission of a partner acting in
the ordinary course of the business
of a firm, or with the authority of his
partners, loss or injury is caused to
any third party, or any penalty is
incurred, the firm is liable therefore
to the same extent as the partner. 
 LIABLITY FOR
MISAPPRORIATION
[ SECTION 27]
Liability of firm for misapplication by
partners. – where
(1)   a partner acting within his
apparent authority receives money
or property from a third party and
misapplies it, or
 
(2)   a firm in the course of its business
receives money or property from a
third party, and the money or
property is misapplied by any of the
partners while it is in the custody of
the firm,
the firm is liable to make good the
loss.
 LIABLITY FOR
MISAPPRORIATION
[ SECTION 27]
• In the course of the business of the firm,
money or property belonging to third
parties, is likely to be received by the firm
or its partners. If a partner misappropriates
the same, the question at once arise whether
the firm is liable. Section 27 provides the
answer. It lays down two rules –
• Liability of firm for misapplication by partners. –
where
– a partner acting within his apparent authority receives
money or property from a third party and misapplies it,
or
– a firm in the course of its business receives money or
property from a third party, and the money or property
is misapplied by any of the partners while it is in the
custody of the firm,
• the firm is liable to make good the loss.
Holding out. – (1) Anyone who by words spoken or
written or by conduct represents himself, or
knowingly permits himself to be represented, to
be a partner in a firm, is liable as a partner in the
firm to anyone who has on the faith of any such
representation given credit to the firm whether
the person representing himself or represented to
be a partner does or does not know that the
representation has reached the person so giving
credit.
(
2) Where after a partner death the business is
continued in the old firm name, the
continued use of that name or of the
deceased partner’s name as a part thereof
shall not of itself make his legal
representative or his estate liable for any act
of the firm done after his death.
The conditions of this liability are as follows:
Representation
The person sought to be charged with liability for holding out
must have represented he to be a partner in the firm.
Representation may be made either by words, written or
spoken, or by conduct. An express representation takes
place when a person allows his name to be used in the
affairs of the firm, for example, in the name, title or
signboard of the firm. In Bevan v The National Bank Ltd.:

One M W was the manager of one B’s business was

carried on under the name M W & Co.
Knowledge of Representation
The person seeking to hold another liable by holding out
or estoppels must show that he had knowledge of the
representation and acted on it. If must be proved:
…that the defendant had held himself out to be a partner
not ‘to the world’ – for that is a loose expression, -- but
to the plaintiff himself, or under such circumstances or
publicity as satisfy a jury that the plaintiff knew of it and
believed him to be a partner. He would be liable to the
plaintiff is all transactions in which he engaged and gave
credit to the different (or the firm) upon the faith of his
being such partner.
 TRANSFEREE OF PARTNER’S
INTEREST [SECTION 29]
Rights of transferee of a partner’s interest. –
– a transfer by a partner of his interest in the firm, either absolute or
by mortgage, or by the creation by him of a charge on such interest,
does not entitle the transferee, during the continuance of the firms,
to interfere in the conduct of the business, or to require accounts,
or to inspect the books of the firm, but entitles the transferee only to
receive the share of profits of the transferring partner, and the
transferee shall accept the account of profits agreed to by the
partners.
– If the firm is dissolved or if the transferring partner ceased to be a
partner, the transferee is entitled against the remaining partners to
receive the share of the firm to which the transferring partner is
entitled, and, for the purpose of ascertaining that share, to an
account as from the date of the dissolution.
The section. However, give the transferee at least two rights:
• His first right is that during the continuance of the firm he
is entitled to receive the share of profits of the transferring
partner. But he has to accept the account of profits as given
by the partners. He cannot inspect the accounts.
• His second right is that on the dissolution of the firm or
when the transferring partner ceases to be a partner, he is
entailed to receive the transferring partner’s share in the
assets of the firm. And, for the purpose of ascertaining that
share, he is entitled of an account as from the date of the
dissolution.
 MINOR AS PARTNER
[SECTION 30]
Minors admitted to the benefits of partnership. –
– A person who is a minor according to the law to which he is subject
may not be a partner in a firm, but with the consent of all the partners
for the time being, he may be admitted to the benefits of partnership.
– Such minor has a right to such share of the property and of the profits
of the firm as may be agreed upon, and he may have access to and
inspect and copy any of the accounts of the firm.
– Such minor’s share is liable for the acts of the firm, but the minor is
not personally liable for any such act.
– Such minor may not sue the partners for an account or payment of his
share of the property or profits of the firm, save when severing his
connection with the firm, and in such case the amount of his share
shall be determined by a valuation made as far as possible in
accordance with the rules contained in Section 48:
– Provided that all the partners acting together or any partner
entitled to dissolve the firm upon notice to other partners may elect
in such suit to dissolve the firm, and thereupon the Court shall
proceed with the suit as one for dissolution and for settling
accounts between the partners, and the amount of the share of the
minor shall be determined along with the shares of the partners.
– At any time within six months of his attaining majority, or of his
obtaining knowledge that he had been admitted to the partnership,
whichever date is later, such person may give public notice that he
has elected to become or that he has elected not to become a
partner in the firm, and such notice shall determine his position as
regards the firm:
– Provided that if he fails to give such notice, he shall become a
partner in the firm on the expiry of the said six months.
– Where any person has been admitted as a minor to the benefits of
partnership in a firm, the burden of proving the fact that such
person had no knowledge of such admission until a particular date
after the expiry of six months of his attaining majority shall lie on
the persons asserting that fact.
– When such person becomes a partner –
• His right and liabilities as a minor continue up to the date on which
be becomes a partner, but he also becomes personally liable to third
parties for all acts of the firm done since he was admitted to the
benefits of partnership, and
• His share in the property and profits of the firm shall be the share to
which he was entitled as a minor.
– Where such person elects not to become a partner –
(a) his rights and liabilities as a minor continue to be
those of a minor under this section up to the date
on which he gives public notice.
(b) his share shall not be liable for any acts of the
firm done after the date of the notice, and
(c) he shall be entitled to sue the partners for his
share of the property and profits in accordance
with sub-section (4)
– Nothing in sub-section (7) and (8) shall affect the
provisions of Section 28.
 DISSOLUTION

When a firm is put an end as between all the

partners that is called dissolution. Section
39 declares:
39. Dissolution of a firm. – The dissolution of
partnership among all the partners of a firm
is called “dissolution of the firm”.
 MODES OF DISSOLUTION

A firm may be dissolved in any of the

following ways:

• By consent [Section 40]

• By agreement [Section 40]
• Compulsory dissolution [Section 41]
• Contingent dissolution [Section 42]
• By notice [Section 43]
• Dissolution by court [Section 44]
 By consent and agreement
[Section 40]
• A firm may be dissolved in accordance with a contract
among the partners. The contract providing for
dissolution may be contained in the partnership deed
itself or in a separate agreement.
• Both the above kinds of dissolution, namely, by consent
and by agreement, are provided in the same section. But
they are different. Partners can consent to dissolution
regardless of what their previous agreements are. But in
dissolution by contract they have to follow their
subsisting agreement, whether all the partners give their
consent or not.
 Reconstitution after dissolution

• Dissolution is, in the opinion of the Supreme Court.

Something different from a continuation of the firm after
reconstituting it. It will be a question of fact in each case
whether the intention that is dissolve or to continue. Where
the partnership was for a fixed period, after the expiry of
which it was stated to have been dissolved by mutual
consent of the partners and some of the partners continued
the business in the name and style of the firm, it was held
on facts that the assesses firm was entitled to relief under
Section 25(4) of the Income Tax Act, 1922.
 Compulsory dissolution [Section
41]
41. Compulsory dissolution. – A firm is dissolved ---
– by the adjudication of all partners or of all the partners but
one as insolvent, or
– by the happening of any event which makes it unlawful for
the business of the firm to be carried on or for the partners
to carry it on in partnership:
• Provided that, where more than one separate
adventure or undertaking is carried on by the firm,
the illegality of one of itself cause the dissolution of
the firm in respect of its lawful adventure and
undertakings.
• The two events mentioned in the section, namely,
the insolvency of all, or all but one, partners, or
illegality of business, are known as grounds of
compulsory dissolution because they operate to
bring about such necessary dissolution that there
can be no agreement to the contrary. No amount of
clauses in the partnership agreement can prevent
the operation of the clause of Section 41. The two
clauses of dissolution of compulsory nature
mentioned in the section are as follows:
• Insolvency. – Where all the partners of the firm have been adjudicated as insolvents, the
partnership inevitably ends. This is so because partnership is contract and insolvents, till they are
not discharge, cannot contract either among themselves or with those dealing with the firm. The
same result follows where only one partner remains solvent and all others have been adjudicated
as insolvents. A single person cannot make a partnership and, therefore, the matter is over.
• Illegality of business. – Where the business of a firm is illegal from the very beginning, the
agreement of partnership by itself is unlawful under Section 23 of the Contract Act. Such a case
does not fall within the scope of Section 41. The section applies when the business is lawful in
the beginning but subsequently, on account of some change in law or outbreak of hostilities, the
business becomes unlawful. Section 56 the Contract Act says that when the performance of a
contract becomes unlawful, the contract becomes void. Section 41(b) of the Partnership Act says
that when the business of a firm becomes unlawful, the firm is, by force of law, dissolved. The
clause contemplates two kinds of possibility. Either the business itself becomes unlawful, e.g.,
on the introduction of prohibition, wine business becomes unlawful, or the business remaining
lawful, but carrying it on in partnership becomes unlawful, or the business remaining lawful, as,
for example, where there is no prohibition, there may still be prohibition on partnership running
liquor licenses. In such cases the business is lawful, but it is lawful allowed only to individuals
and not to organization though the business itself is lawful. In either case, the effect upon the
firm is the same, that is, the firm stands dissolved by a compulsory provision of law.
Contingent dissolution [Section 42]

42. Dissolution on the happening of certain

contingencies. – Subject to contract between
the partners a firm is dissolved –
– if constituted for a fixed term, by the expiry of the
term;
– if constituted to carry out one or more adventures
or undertaking, by the completion thereof;
– by the death of a partner; and
– by the adjudication of a partner as an insolvent.
 By notice [Section 43]

43. Dissolution by notice of partnership at

will. –
• Where the partnership is at will, any partner
giving notice in writing to all the other partners
of his intention to dissolve the firm may
dissolve the firm.
• The firm is dissolved as from the date
mentioned in the notice as the date of
dissolution or, if no date is so mentioned, as the
date of the communication of the notice.
 Dissolution by court [Section 44]

44. Dissolution by the Court. – at the suit of

a partner, the Court may dissolve a
firm on any of the following grounds,
namely:
• Insanity. -- When one of the partners had become a person of unsound
mind, any partner, including the insane, may apply for dissolution.
Insanity renders the partner incapable of performing his duties as a
partner and is, therefore, a good ground for putting an end to the firm.
Dissolution may be necessary both to product the interest of the insane
and of the other partners.
• Permanent incapacity. —Where any partner, other than the partner
suing, has become permanently incapable of performing his duties as a
partner, any partner may apply for dissolution. The incapacity may be
due to illness, mental or physical, but it should be of a permanent
nature. In Whitwell v Arthur, a partner suffered from an attack of
paralysis and that would have been a good ground for dissolution but
for the fact that the medical evidence showed that the attack was only
temporary and he was already improving.
• Misconduct. – When a partner, other than the partner suing, is guilty
of conduct which is likely to affect prejudicially the business of the
firm the court may order dissolution. It is not necessary that the
misconduct should be connected with the business of the firm. Its only
connection with the firm need be that it will damage the business
prospects of the firm. Thus, conviction for traveling without ticket, or
for breach of trust is sufficient, but misconduct in personal life may
not be so. In Snow v Milford:
A partner of a firm of bankers committed adultery with several women
in the city where the business was carried on and his wife had left him.
The other partners applied for dissolution on this ground.
• Persistent breach of agreement. – When a partner, other
than the partner suing, persistently commits breach of
agreements relating to the management of the firm or
otherwise so conducts himself in matters relating to the
business that it is not reasonably practicable for the other
partners to carry on the business in partnership with him.
Any conduct which is destructive of mutual confidence
between the partners is sufficient. “Keeping erroneous
accounts and not entering receipts, refusal to meet on
matters of business, continued quarrelling, and such a
state of animosity a precludes all reasonable hope of
reconciliation and friendly cooperation, have been held
sufficient to justify a dissolution.
• Transfer of interest. – When a partner,
other than the partner suing, has transferred
the whole of his interest in the firm to a
third party, or has allowed his interest to be
charged, or has allowed it to be sold in, the
recovery of arrears of land revenue, or of
any dues recoverable as arrears of land
revenue, the court may order dissolution.
• Perpetual Losses. – When the business of the firm
cannot be carried on save at a loss the court may
dissolve it. The whole object of a partnership is to
make profits and if that object cannot be attained,
it is needless for the firm to continue. Thus, where
the whole of the capital contributed by the partners
has already been spent and there were no business
unless they contributed further capital, which they
refused to do, the court granted dissolution.
• Just and equitable. – When on any other ground the court thinks it
just and equitable that the firm should be dissolved. The expression,
“just and equitable” gives the court a very wide discretionary power,
which is not to be fettered by any rules, to order dissolution whenever
in the circumstances it seems to be desirable. Where the terms of
partnership deed provided to a partner the facilitate of with drawing
from the firm by transferring his interest to others, the court said that
this would keep the right to seek dissolution in abeyance unless a
crisis is created by others by refusing to pay him out. The court
equally concerns itself with the interest of the other partners. The court
equally concerns itself with the interest of the other partners. The court
has to take into account all the facts and circumstances and mould
relief according to the exigencies of the case. Where dissolution was
prayed for, the court provided the relief of retirement.