KARUMUTHU THIAGARAJAN CHETTIAR AND ANOTHER versus E. M. MUTHAPP A CHETTIAR

Citation: [1961] 3 S.C.R. 998 · Decided: 27-02-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Case Partly allowed

Judgment (excerpt)

joslu 
v. 
Shimpi 
Subba Ilao ] . 
I96I 
February :i7. 
998 
SUPREME COURT REPORTS 
[1961] 
The High Court sentenced the accused to undergo 
rigorous imprisonment for two months and also to 
pay a fine of Rs. 250/-. We agree with the High 
Court that the offence committed by the appellant is 
a serious one and that ordinarily the punishment 
should be deterrent. In mqst of the cases of this kind 
imprisonment would certainly be a suitable sentence. 
But in this case, there was a conflict of view even in 
the Bombay High Court as regards the question whe-
ther butter made from curd would be butter within 
the meaning of the rule. Indeed, it was brought to 
our notice that on April 16, 1960, the Central Govern-
ment made another rule amending rule {\-11.05 by 
inserting the word " curd " in the definition of butter 
and the amended definition reads, " butter means the 
product prepared exclusively from milk, cream or 
curd of cow or buffalo ......... " This must have been 
made to clarify the position in view of the conflicting 
decisions: In the circumstances, we think that a 
sentence of fine would meet the ends of justice in the 
present case. We, therefore, set aside ·the sentence of 
two months' rigorous imprisonment and a fine of 
Rs. 250/- and instead sentence the appellant to pay a 
fine of Rs. 500/·. 
With this modification, the appeal is dismissed. 
A.JYPeal di81nissed. 
KARUMUTHU THIAGARAJAN CHETTIAR 
AND ANOTHER 
v. 
E. M. MUTHAPP A CHETTIAR. 
(P. B. GAJENDRAGADKAR and K. N. WANcnoo, JJ.) 
Part1'ership-Duration not expressly provided-When can be 
implied~Terminatien of partnership by notice-Partnership Act, 
I9J2 (IX of 1932). ss. 7, IO, r3(g). 
The appellant and the respondent entered into a written 
partnership with respect to the managing agency business of two 
mills, the terms of which were, inter alia, that the management 
shall be carried on in rotation once in four years, the appellant to 
manage for the first four years and thereafter the respondent to 
manage for the next four years and in the same way thereafter, 
l 
) 
3 S.C.R. 
SUPREME COURT REPORTS 
It further provided that the partners and their heirs and those 
getting their rights shall carry on the management in rotation. 
Soon after disputes arose between the partners and the appellant 
gave notice to the respondent terminating the partnership treat-
ing it as a partnership at will, and the directors of the mills in 
1961 
Karuniutku 
Thiagarajan 
CheUiar 
their turn terminated the managing agency on the ground that > 
v. 
. 
the quarrels between the partners were detrimental to the good' futhappa Chell•••
management of the mills. Thereafter the respondent brought a 
suit against the appellant and the mills for dissolution of the 
partnership firm and damages alleging that dissolution of the 
partnership by the appellant by notice was fraudulent and con-
nived at by the mills. 
The trial court held that the partnership 
was at will and the termination of the managing agency was legal 
and disallowed damages. On appeal by the respondent the High 
Court held that the partnership was not a partnership at will and 
could not be dissolve~. by notice by the appellant. The termina-
tion of the managing agency was also held to be illegal. On 
appeal by the appellant with a certificate of the High Court: 
Held, that considering the provision that the management 
would be carried on in rotation between the partners in four 
yearly periods and that the heirs of the partners would also carry 
a·n the business in rotation the intention was obviously to have a 
partnership of some duration, though the duration was not 
expressly fixed in the agreement. The duration of a partnership 
may be expressly provided for in the contract but even when 
there is no express provision, courts have held that the partner-
ship will not be at will if the duration can be implied. 
Grawshay v. Manie, l Swans 495; 36 E.R. 479, followed. 
The contract in this case disclosed a partnership the deter-
mination of which was implied, namely, the termination of the 
managing agency and, therefore, under s. 7 of the Partnership 
Act it was not a partnership at will and was not legally terminable 
by the notice given by the appellant. 
In view of the strained atmosphere between the partners 
there was sufficient reason for the mill to terminate the managing 
agency and the resolution of the board of directors terminating 
the managing agency agreement confirmed by the general mee

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