Removal of a partner

pushpakrishna (Querist) 11 April 2017 This query is : Resolved
Dear experts
We are having a construction business under the partnership business registered under the Indian partnership act having 6 partners and business is going very smoothly but one of the partners of the firm has creating problems causing loss to the firm and the reputation in the society. Hence we want to remove from the firm other wise firm's reputation will effect to the firm. Hence we request you that kindly give the suitable advice on this.
Thank you experts in advance.

Follow Query

Report Abuse

Adv. Yogen Kakade (Expert) 12 April 2017
There might be a clause mentioned the partnership deed of your firm about the expulsion of a partner. Take it as a ground and issue a legal notice to your partner and proceed with the process of settlement of accounts with him.

BAALASUBRAMANNYAMM (Expert) 12 April 2017
Agreed with Yogen Sir. Better to remove him from the Partnership Firm, after settling his account.

M V Gupta (Expert) 12 April 2017
Section 33 of the Indian Partnership Act, 1932 provides that a partner may not be expelled from the Firm by any majority of the partners, unless the partnership agreement contains a power to that effect. In case the agreement does not have any provision for expulsion, then the courts have held that the remedy is only to apply for dissolution of the firm under Section 44 (d) of the Act. See Calcutta HC judgement in Sanitram Mullick Vs Hiranmoy Bagchi. (1991)2 CALLT 399. Also in Indian kanoon.org.

Guest (Expert) 13 April 2017
Quite an unbelievable story. Can you state the ways in which a single partner is causing loss to the firm, while 5 other partners are acting merely as a silent spectators?

Rajendra K Goyal (Expert) 13 April 2017
Agree with the expert M V Gupta.

Guest (Expert) 13 April 2017
Sorry to differ with the views of Shri MV Gupta, but I reserve my reply till the author clarifies my point, as asked in my query above, as I am of the view that the author's query is merely an academic query, not a real problem.

Besides, the author is also required to state about the terms of the partnership deed, which he has not stated so far.

pushpakrishna (Querist) 14 April 2017
Dear experts
Ps.dhingra sir
The quiry is not an academic quiry as the partner is interested to defame the firm In the society as he did not offered partnership in another firm promoted by them
That there is no clause regarding removal of a partner from partnership business who is creating unnecessarily problems in the partnership deed
Partnership business is at will
The partner who is creating unnecessarily problems having share27% and where as partners wants to remove is having share 73%
Kindly let us know the details of the same and advice as some Times authors in this forum also need some needful advices from the experts like yours
Thanq in advance experts.

rajeev sharma (Expert) 15 April 2017
Mr Pushpkrishna pl dont take us other wise generally the quarries posted here do not give complete details of the matter at first instance and hope to avail an expert advice. This simply frustrates us and we got a feeling that the person posting a quarry is just testing our knowledge.
Any way now you have posted sufficient facts .
Dear just understand one thing the constitution of the partnership firm i sits Partnership agreement and it has to act according to that only. Your partnership deed has no provision of removal of partner so you may not remove him.
I presume that your firm too is partnership at will. If it is so one or more partners may give notice to other partners to dissolve the partnership and the firm shall be stand dissolved from the date of notice of dissolution. Also publish a public notice that the firm stand dissolved.
You may go for dissolution of partnership by filing a suit U/S 44 of Partnership Act on the ground of misconduct of one partner. But that will give the opposing partner an opportunity to contest the suit and the procedure of court will take time.
Dissolution of a continuing business is not easy and may not be done abruptly because all the partners are jointly and severely liable for the liabilities of the firm. a consented dissolution is always better because that gives you ample time to settle the accounts of creditor and debtors

Guest (Expert) 15 April 2017
Mr. Pushpakrishna,

You have not replied my query, which I repeat here also.

"Can you state the ways in which a single partner is causing loss to the firm, while 5 other partners are acting merely as a silent spectators?"

You have replied, "the partner is interested to defame the firm In the society as he did not offered partnership in another firm promoted by them."

I hope, you can well understand, defaming a firm cannot be caused as that cannot be termed as a loss to the firm, may that be affecting the reputation.

Anyway, Shri Rajeev Sharma has rightly advised you. You have already stated the partnership is at will with no clause of expulsion.

pushpakrishna (Querist) 16 April 2017
Dear experts
Thank you very much for your kind response and timely advice.
Please note that the authors posting the quirys in this forum purely because to have a moral motivation and support but not for testing the experts.
If any inconvenience caused in my quiry to any body kindly execuse and my quiries always to have a moral confidence which please note.
Any how once again Thanq very much my dear experts and hope infuter also i expect more support from your esteemed office to learn more and gain the knowledge.

krishna mohan (Expert) 18 April 2017
Well advised by experts especially Mr.Gupta and Mr.Sharma. I would like to add that if you have a practice of convening meeting to discuss critical issues like the board meeting of pvt. ltd. companies, you may do so with a specific agenda to have commitment of the partner not to cause any loss or any activity that is against the interest of the company. When that fails remaining partners with appropriate evidence and legal advise can settle the account of the erring partner by ADR methods like mediation, conciliation or arbitration to settle the issue amicably with force of law.

Guest (Expert) 18 April 2017
Moral motivation and support has no relevance, in any fake problem having no background.

M V Gupta (Expert) 18 April 2017
Dear Mr. Pushpa Krishna,As u have stated that your partnership is at will, you need not approach court under Section 44(d) as mentioned in my earlier posting. U can dissolve ur firm by following the procedure indicated by Shri Rajiv Sharma supra and reconstitute the firm without including the trouble making partner.