I am facing a problem which deals with Indian Partnership Act. I am hoping if you could help me finding a solution. It goes like this:
If there are two partners in a firm where the partnership is at will and one of those partners *suggested* the other partner to induct his wife in his place. And then due to change in management, business suffered huge losses. And then the bank in which the partners had opened a joint account in the name of their firm filed a case against their firm for interest dues.
What is your say about the existence of firm? I am not clear as to whether the other partner gave consent for the replacement or not. I have read that partner can be replaced only with the consent of other partners. Now if such a replacement is done without consent, would that make it unlawful to carry on the business according to section 41(b) and thus leading to compulsory dissolution or would it make the action invalid and partnership will continue? On the other hand and more importantly, What would be the status of the partenrship and the existence of the firm if the replacement was done with the consent of the other partner?
Please help, it's a part of a class assignment i got assigned yesterday and submission is on coming monday.