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amit (Risk mitigator)     14 September 2009

Can Partner sue after firm’s dissolution

hi,
As i understand, partnership at will dissolves after death of one of the partners..can the remaining partner sue the dead partner's heirs in capacity of the partnership firm? answers appreciated. tnx



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 3 Replies

A V Vishal (Advocate)     14 September 2009

You have not stated how many partners are there in the firm, Moreover, the query is silent on the facts of the case.

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amit (Risk mitigator)     14 September 2009

tnx for reply..

there were 3 partners. Now after death of the principal partner, can one of the remaining partners sue the dead partner's heirs for missappropiation? he has filed a criminal case using the name of the partnership firm. am guessing in case the partnership dissolves after death of a partner, then his filing this case under company's name is good eneough reason to get it dismissed?? fyi partnership is at will..

A V Vishal (Advocate)     15 September 2009

Under the Indian Partnership Act, 1932: S.10 Every partner shall indemnify the firm for any loss caused to it by his fraud in the conduct of the business of the firm.

Further, the Act also provides that a Partnership firm may be dissolved under the following circumstances namely (a) as a result of any agreement between all the partners (b) by adjudication of all the partners or all partners but one as insolvent, or (c) by the happening of an event which makes it unlawful for the business of the firm to be carried on in Partnership or (d) subject to agreement between the parties, on the happening of any of the following events such as (i) efflux of time, (ii) completion of the adventure, (iii) death of a partner, and (iv) insolvency of a partner. In these last four cases the Partnership agreement may provide events. Even if the deed provides that the Partnership will not be dissolved on the death or insolvency of a partner, it does not mean that on the death or insolvency of a partner he ceases to have interest in the Partnership property. In such cases his interest in the Partnership property will survive to his heirs in case of his death and to his assignees in case of insolvency. In the absence of a term in the deed of Partnership to that effect, it cannot be that, the Partnership shall continue, and notwithstanding the death of a partner it will operate to extinguish his proprietary rights in the assets of the Firm.

Hence you can proceed against the heirs of the deceased partner.


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