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Partnership does not survive after the death of a partner: Supreme court of India

The partnership dissolves in the eyes of law in case of an unfortunate event of the death of a partner. This is also given in section 42 (c) of the partnership act. Therefore, with the death of both partners and not having any clause permitting continuation of the partnership by the legal heirs, the partnership ceases to exist. This was held by the two-judge bench comprising of Hon’ble Justice Hemant Gupta and Hon’ble Justice A. S. Bopanna in the case of Davesh Nagalya (D) And Ors. Vs. Pradeep Kumar (D) Thr Lrs. And Ors. [CIVIL APPEAL NO. 3477 OF 2010] before the Hon’ble Supreme Court of India at New Delhi.

The brief facts of the case are, an application was filed by Pradeep Kumar in July 1982 before the Court of Rent Control and Eviction Officer, Dehradun, the District Magistrate, in terms of the Act. In such application, Pradeep Kumar, the successor-in-interest of tenant Tika Ram averred that Subhash Chand was a divorcee and had no children and was willing to devote full time in the said proposed business of sale of milk, curd, ghee and butter. The application was however opposed by the landlord. It was inter alia averred that after death of Tika Ram, he had left behind 8 legal heirs who were joint tenants in the disputed property. It was stated that Subhash Chand was a sub-tenant and that he was involved in demolition, changing the structure and making furniture for last two months. Shri Pradeep Kumar has put such person in possession of the property. It is also averred that Subhash Chand has been doing the business of milk products in Dehradun and that the application has been filed in order to only cover the sub-tenancy. It was argued that Pradeep Kumar had put such person in possession of the shop who was not a member of their family and thus property would be deemed to be vacant under Section 12(2) of the Act. However, the District Magistrate permitted Subhash Chand to be inducted as a partner on 15.11.1982. It was thereafter, on 19.11.1982, a written partnership deed was signed between Pradeep Kumar and Subhash Chand, a copy of which is annexed herewith as P-4. Clause 6 of the said Partnership Deed states that all provisions of the Partnership Act would be applicable. The challenge in the present appeal is to an order passed by the High Court of Uttarakhand wherein the factum of death of Pradeep Kumar, the successor-in-interest of Tika Ram – the tenant, was not considered.

The counsel for the appellant submitted that, subsequent events consequent to the order passed by the District Magistrate had to be taken into consideration. The High Court however failed to take into consideration death of one of the partners leading to deemed vacation of the premises. The counsel for the appellant relied on the judgement in the case of Harish Tandon v. Addl. District Magistrate, Allahabad, U.P and Others [(1995) 1 SCC 537] wherein it was held that, “When sub-section (2) of Section 12 provides that whenever a tenant carrying on business in a building admits a person, who is not a member of his family, as a partner, the tenant shall be deemed to have ceased to occupy the building, full effect has to be given to the mandate of the Legislature. There is no escape from the conclusion that such tenant has ceased to occupy the building. No discretion is left to the court to enquire or investigate as to what was the object of such tenant while inducting a person as partner who was not the member of his family. It can be said that the aforesaid statutory provision requires the court to come to the conclusion that by the contravention made by the tenant, such tenant has ceased to occupy the building. The framers of the Act have not stopped only at the stage of Section 12(2) but have further provided in Section 25, Explanation (i) another legal fiction saying that where the tenant ceases to occupy the building within the meaning of sub-section (2) of Section 12 “he shall be deemed to have sub-let that building or part”. In view of the three deeming clauses introduced in sub-section (2) of Section 12, sub-section (4) of Section 12 and Explanation (i) to Section 25, no scope has been left for the courts to examine and consider the facts and circumstances of any particular case, as to what was the object of admitting a person who is not the member of the family, as partner and as to whether, in fact, the premises or part thereof have been sub-let to such person. the framers of the Act have clearly expressed their intention in Sections 12, 20 and 25 while protecting the tenant from eviction except on the grounds mentioned in Section 20, that after the death of the original tenant his heirs will be deemed to be holding the premises as joint tenants and for any breach committed by any of such joint tenants, all the heirs of the original tenant have to suffer. They cannot take a plea that unless the grounds for eviction mentioned in sub-section (2) of Section 20 are established individually against each one of them, they cannot be evicted from the premises in question.”

The learned judge heard the submissions of both the parties and was convinced wit the submission by the appellants. The petition was allowed and the tenancy ceased to exist by holding, “We find that the order of permitting Subhash Chand as partner with Pradeep Kumar has come to an end by efflux of time and operation of law. In terms of Section 42(c) of the Partnership Act, partnership stands dissolved by death of a partner. One of the partners i.e., Pradeep Kumar died on 21.05.2004. Therefore, with the death of both partners and not having any clause permitting continuation of the partnership by the legal heirs, the non-residential tenanted premises is deemed to be vacant in law as the tenant is deemed to have ceased to occupy the building. In view thereof, the order passed by the High Court in Review Application dated 23.04.2008 is set aside.”

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