Topic
The Indian Partnership Act, 1932 governs the formation, rights, and dissolution of partnerships in India, including obligations of partners and enforceability of agreements.
A cheque dishonoured due to an account block after a partner's death lacks the 'insufficiency of funds' needed under Section 138 NI Act, so the Karnataka HC quashed proceedings, meaning blocks attract no criminal liability for partners and firms.
The Bombay High Court has ruled that when a partnership is 'at will', the original liquor license holder may remove a partner from the license by serving notice under Section 43 of the Partnership Act, without needing to first resolve the dispute in civil court. This clarifies that excise authorities must recognize such dissolution for license purposes, empowering licensees to restructure partnerships administratively - a critical precedent for family-run liquor businesses in Maharashtra.
Madhya Pradesh High Court rules that an arbitration clause in a mere agreement to form a partnership is non-arbitrable under Section 11(6) of the Arbitration Act, as no enforceable partnership exists. The decision underscores that arbitrability hinges on the actual formation of a partnership, not just a preliminary agreement.
Madras HC rules that an unregistered partnership firm can recover payment for goods supplied under Section 70 of the Contract Act, overriding the bar under Section 69(2) of the Partnership Act. The court dismissed the MSMED Act interest claim due to the absence of a formal contract, reinforcing the principle of quantum meruit for non-contractual supplies.
Karnataka HC rules that an arbitration clause in a partnership deed only covers disputes arising after the deed’s effective date. Claims under a novated settlement deed lacking an arbitration clause fall outside the arbitrator’s jurisdiction, reinforcing the need for explicit dispute resolution terms in post-novation agreements.
Bombay High Court holds that dismissal of SLP without adjudication on merits does not create fresh cause of action; limitation continues to run from original breach.
Delhi High Court holds that Registrar of Firms lacks power to cancel partnership registration under IPA; only rectification of mistakes permitted under Section 64.
Bombay High Court holds that once a suit is dismissed under Order VII Rule 11 CPC, no stay can be granted on appeal as the proceedings stand concluded.