Question

X, Y and Z are partners in a firm. State whether the court may pass an order for dissolution of a firm in each of the following alternative cases:
Case (a): If X (an active partner) becomes insane and the suit is filed by the X s next friend who is not a partner.
Case (b): If X (a dormant partner) becomes insane and the suit is filed by Y.
Case (c): If X had an attack of paralysis and the suit is filed by Y. According to doctors, paralysis Was of a termporary nature and the patients condition was improving.
Case (d): If X has adulterous relations with Y s wife.
Case (e): If X was convicted of travelling on a railway without a ticket and with intent.to defraud.
Case (f): If X has adulterous relations with W s wife.
Case (g): It X has adulterous relation with Ws wife who is a regular patient of medical firm of X, Y and Z
Case (h): If X omitted to enter a particular receipt of money in the books of accounts.
Case (i): If X continuously omits to enter receipts of money in the books of accounts.
Case (j): If X transferred the whole of his interest in a firm to a third party.
Case (k): X, Y and Z enter into a partnership agreement for 20 years. The business resulted in a loss each year. X and Y decide to dissolve the firm .as the business cannot be carried on except at a loss. Z objects. X filed a suit.
Case (l): X, Y and Z are partners in a firm and are not on speaking terms with each other.

Answer 1

Solution: Section to which the given problem relates: Section 44,
Decision and Reason:
Case (a): The court may pass an order for dissolution when a partner has become of unsound mind. The suit can be filed by the next friend. of such prtner any other partner.
Case (b) The court may not pass an order for dissolution because such a partner does not take an active part in the conduct of firms business
Case (c): The court will not pass an order for dissolution because incapacity of a partner was of a temporary nature. [Whitwell Arthur]
Case (d): The court will pass an order for dissolution because Xs condudt is likely to affect prejudicially the carrying on of the business because this destroys. the mutual confidence between X and Y. [Abbot v. Crump]
Case (e): The court will pass an order for dissolution, because X s.conviction. was for dishonesty which is likely to affect.prejudicially. the.carrying on of the business. [Carmichael v. Evans]
Case (f) The court, may. not pass an order for dissolution as Xs conduct does not affect prejudicially the carrying on of the business. [Snow v. Milform]
Case (g): The court will pass an order for dissolution since X s conduct, is likely to affect prejudicially the carrying on of medical profession. now v. Milform]
Case (h): The court may not pass an: order for dissolution since there is no persistent breach.
Case (i): The court will pass an order for dissolution since there was persistent breach.
Case (j): The court will pass an order for dissolution since X has transferred the whole of his interest in a firm to a third party.
Case (k) The court will pass an order for dissolution because the business has been running at loss and it cannot be carried on except at a loss.
Case (l): The court will pass an order for dissolution because absence of speaking terms is sufficient ground to justify dissolution.