M.O.H. UDUMAN AND ORS. versus M.O.H. ASLUM

Citation: [1990] SUPP. 2 S.C.R. 663 · Decided: 13-11-1990 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

M.O.H. UDUMAN AND ORS. 
v. 
M.O:H. ASLUM 
NOVEMBER 13, 1990 
[L.M. SHARMA AND K. RAMASWAMY, JJ.] 
Indian Partnership Act, 1932: Sections 39 and 40 and French 
Civil Code Article 1865-Duration of partnership provided for-Then 
not partnership at will-Rights of partners-What are-Contract of 
partnership to be read as a whole. 
The appellants/defendants 1-3 and the respondent/plaintiff are 
sons of the 4th appellant/defendant-their mother. Their father M.O. 
Hassan Knthus Marican started the proprietory concern M/s Hassan 
Tithils Marican doing import and export and other business in 
Pomlicherry on July 20, 1962, a partnership consisting of the appellants 
the respondent and the father Ex. Bl was constituted and was regis-
tered as per the provisions of the French Law and the business was 
carried on. By relinquishment deed Ex. B2 dated August 1, 1968 their 
father retired from the partnership. Thereafter the appellants and the 
respondent continued the business in terms of Ex. B2. 
A 
B 
c 
D 
Due to some misunderstanding ariSen in 1973, the respondent in 
E -
May 1978 laid the suit for dissolution of the partnership and for 
accounting etc. 
As per the respondent the partnership is at will and by issue of 
notice dissolving the partnership, it stood dissolved with effect from the 
date of the receipt of the notice by the appellants. Whereas the appel-
F 
!ants contended that under the French Law, the partnership is not at 
will, the contract operates as law and that in terms of contract Ex. Bl & 
Ex B2 the respondent has to relinquish his share in favour of the appel-
lants and take the value thereof without dissolving the firm. 
The Trial Court held that the partnership is not at will. So the suit 
G 
for dissolving the partnership was not maintainable and that for 
accounting etc. other remedies are left open. The suit was dismissed, 
and was affirmed on appeal by a learned single Judge. 
The Division Bench held that the partnership is at will and the 
respondent can seek its dissolution. It was further held that the rights of 
H 
663 
664 
SUPREME COURT REPORTS 
I 1990] Supp. 2 S.C.R. 
..... 
A 
the parties are governed by the Indian Partnership Act (9 of 1932) and 
the suit was maintainable. Accordingly the appeal was allowed and the 
suit was restored to file and the Trial Court directed to try the suit on 
merits expeditiously. Hence this appeal. 
Appeal Allowed, the Court, 
B 
HELD: The only question that needs decision is whether the part-
nership in question is a partnership at will. The trial court and the 
Learned Single Judge held in favour of the appellants but the Division 
r 
Bench held that the Indian Partnership Act would apply because the 
Pondicherry (Laws) Regulation 7 of 1963 was made in exercise of the 
c powers under Article 240 of the Indian Constitution extending the Part-
nership Act to Pondicherry /Union Territory on and from October 1, 
1963. Sec. 69 had come into force from July 1, 1964. Though Ex. Bl was 
made in accordance with the Civil Code of France 1804, the cause of 
action to lay the suit had arisen to the respondent in 1978 by which time 
the 'Act' was in operation. Thereafter rights and remedies of the parties 
D are to be regulated by the provisions of the Act. [ 667E-G] 
According to the appellants the provisions of the French Civil 
Code and the Code of Commerce touching partnership do have a bear-
,,. 
ing to cull out the intention of the parties manifested in the relevant 
clauses of the Partnership deed Ex. Bl and B2 which suggest that the 
E 
partnership in question is not at will but one in perpetuity. The respon-
dent contended that there is no express embargo in the French Law to 
treat a partnership at will. The contract is treated as law. Clause IV 
treats the partnership as at will. But the partnership at will cannot be 
put to an end if the notice of dissolution was not issued in good faith and 
at an opportune moment. [668A-B] 
f 
F 
Article 1865 of the French Civil Code postulates that a partner-
ship ends under 5 conditions ( 1) expiration of time of partnership, (2) 
termination of the business, (3) death of any partner, ( 4) insolvency of 
anyone of the partners, and ( 5) one or more partners have expressed a 
desire to cease being in partnership, Article 1869 provides that a part-
G 
nership can be dissolved at the will of the partners but does not apply to 
partnership where the duration has been iixed. Article 18 of the Code of 
Commerce provides that the c

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