Question

X, a resident in India and Y, a resident In Pakistan are partners.,The firm iscarrying on the business of importing and exporting Commodity I and Commodity II. State whether the firm is. dissolved in each of the following, alternative cases:
Case (a): If a war breaks out between India and Pakistan.
Case (b): If a law is passed by which imports and exports of Commodity I are prohibited;
Case (C): If a law is passed by which import and export of Commodities I and II are prohibited.

Answer 1

Solution: Section to which the glven problem relates: Section 41
Decision and Reason:
Case (a) The firm is compulsorily dissolved. On the outbreak of war, it becomes unlawful for the firms business to be carried on.
Case (b): The firm is not computsorily dissolved because the illegality of the business shall not necessitate the dissolution of the firm in respect of- lawful business (i.e., Commodity II).
Case (c): The firm is compulsorily dissolved because on passing of law, prohibiting the import. and export of Commodities I and II, it becomes unlawful for the firms business to be carried on.