soyal
in Intellectual Property Law
Asked August 25, 2013

can a partner sue another partner in an company?

  • 1 Answer
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Can a partner sue another partner in an company? can a partner institute a criminal case against another partner of the company? cite some cases also please be quick ,it'd of a great help if i can get yhe answer within a day.

Answer 1

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Vedang

Generally a partner can sue his co-partner for dissolution of a partnership firm and for settlement of general account of partnership. For dissolution of the firm, he may sue his co-partner on the following grounds provided under section 44 of the Indian Partnership Act, 1932.

·         A partner becomes insane;

·         A partner becomes permanently incapable of performing his duties as a partner;

·         A partner deliberately and consistently commits breach of agreements relating to the management of the firm;

·         A partner’s conduct is likely to adversely affect the business of the firm;

·         The partner transfers whole of his interest in the firm to a third party;

Under section 44 (c) the Court will pass decree of dissolution if it is satisfied that the conduct of partner in question is calculated to prejudice the carrying on of the partnership business. The suit may be brought by any one or more of the innocent partners. But it is not necessary that the conduct which is made the ground of dissolution should be connected with partnership business.

But apart from this general rule, a suit for contribution by a partner against his co-partner is also allowed. In Guda Kulita v. Joyram Das Justice Banerjee pointed out that a suit for contribution by a partner against some of, his co-partners, on account of money paid by him for the satisfaction of a debt contracted by him jointly with the said co-partners, is maintainable in cases where the liability satisfied by the plaintiffs is not a joint liability of the entire partnership. A suit for contribution is also maintainable in cases where the partners expressly promised to contribute their share of the debt after a decree had been passed upon the bond. The rule is similarly stated by Mr. Justice Muttusami Ayyar in the case of Sabbarayudu v. Adinarayudu.

In Beecham v. Smith it was held that if one partner gave to his co-partner a note which bound only the partner who gave it and not the firm, he might be sued by his co-partner thereon. In Sedgwick v. Daniell it was held that if some of a number of partners gave their promissory note for better securing the payment of a debt owing by them and their co-partners and one of the makers of the note was compelled to pay the whole amount of it, he was entitled to sue each of the other makers of the note for his proportion of the sum so paid.

 

A criminal case can be brought against any person in India who has broken the law. As far as criminal breach of trust related to a partnership firm business is concerned, in S.A.Q. Hashmi v. The State and anr. Calcutta High Court held that ordinarily a partner cannot institute a criminal proceeding for criminal breach of trust of partnership property against another partner unless it can be shown that by a special contract the accused was entrusted with the dominion over the property and in breach of such entrustment he has misappropriated the money.

Agree Comment 0 Agrees almost 4 years ago

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