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narainreddy (Lawyer)     01 August 2007

Partnership Act

Can a partner be expelled by the other partners. Please specify.


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 5 Replies

raomohan

raomohan (n/a)     21 August 2007

Why not?

If the partner is being expelled for a valid reason. But its better the partnership deed have such a clause inserted.

Where a partner acts or does something which is against the interests of the partnership, i think the other partners will only be right in expelling him!
mmn

mmn (n/a)     23 August 2007

[font=""times new roman""]Section 33(1) of the Indian Partnership Act, 1932, prohibits expulsion of a partner which reads thus :
""A partner may not be expelled from a firm by any majority of the partners, save in the exercise in good faith of powers conferred by contract between the partners.""[/font]

 

Adv. Murtaza M. Najmi, Mumbai.
raomohan

raomohan (n/a)     23 August 2007

The section 33(1) of the Partnership Act uses the words ""may not"" and not ""shall not"". But the same section also provides for expulsion if done in good faith by the majority of the partners.

This sort of a saving clause is required to save the minority partner(s) against oppression and mismanagement.

Any comments?


Prakash Yedhula

Prakash Yedhula (Lawyer)     25 August 2007

What Raomohan says is correct. The expulsion cluase is a contract to be agreed upon by the partners in the deed. Unless there is an express clause in the partnership for expulsion of a parter, a partner cannot be expelled and such expulsion is bad. That is why the words "" [font=""Times New Roman""]save in the exercise in good faith of powers conferred by contract between the partners"" are used in [/font]Section 33 (i).
DR.P.L.NAWALKHA

DR.P.L.NAWALKHA (COUNSELLING CANCER)     10 March 2009

I  LETTED OUT MY PREMISES TO A PARTNERSHIP FIRM WITH PARTNERS AS TENANTS.FOR EVICTION I LOST THE CASE. THE CASE WAS CONTESTED BY TWO PARTNERS.THROUGH SETTLEMENT I GOT POSSESSION OF PREMISES.SETTLEMENT WAS SIGNED BY FOUR OUT OF FIVE PARTNERS. AFTER HAVING TAKEN POSSESSION,ONE 'SLEEPING' PARTNER FILED REVIEW APPLICATION,MAKING FOUR OTHER PARTNERS AND OWNER AS PARTY. MAY I KNOW LATEST APEX COURT RULING RELAXING NECESSITY OF ALL FIVE PARTNERS TOBE SIGNATUREE TO NEGOTIATION .


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