Lawstreet Journal

When One of the Two Partners Retire, Retirement Amounts to Dissolution of the Firm: SC [READ ORDER]

Lawstreet Journal 29 May 2020 10:40pm

Image courtesy: Lawstreet Journal Judiciary When One of the Two Partners Retire, Retirement Amounts to Dissolution of the Firm: SC [READ ORDER]

A full Bench of the Supreme Court headed by Justice N. V. Ramana and also comprising Justices Sanjiv Khanna and Krishna Murari had in the matter of Guru Nanak Industries, Faridabad and Ors. V. Amar Singh (Dead) Through LRs has held that the retirement of one of the partners in a partnership firm amounts to an automatic dissolution of the partnership firm. Judgment to this effect was delivered on May 26, 2020.  


Background of the case: 

Four persons, including two brothers, Swaran Singh and Amar Singh, both of whom had died and were represented by their legal representatives, had constituted a partnership firm – Guru Nanak Industries, on May 02, 1978. On May 06, 1981, a fresh partnership deed was executed between Swaran Singh and Amar Singh as the other two partners had resigned. The partnership

firm was primarily in the business of manufacture and sale of print machinery for the paper, polythene, etc. Initially, profits and losses were to be divided in the ratio of 69:31 between Swaran Singh and Amar Singh. However, with effect from April 01, 1983, profit and loss sharing ratio was altered between Swaran Singh and Amar Singh to 60:40 respectively.

On March 29, 1989, Guru Nanak Industries and Swaran Singh had filed a civil suit against Amar Singh claiming that the latter had retired from a partnership with effect from August 24, 1988, and had voluntarily accepted payment of his share capital of Rs. 89,277.11 In addition to that, he had been an advanced loan from the funds… Continue Reading...

Tagged: Supreme Court of India  
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