Partnership Does Not Dissolve On Partner’s Death If There Are More Than Two Partners : Supreme Court

The Supreme Court dismissed Indian Oil Corporation Limited’s (IOCL) plea challenging a Calcutta High Court order directing it to continue kerosene supplies to a dealership firm until reconstitution or formal termination.

A bench held that under Section 42 of the Partnership Act, 1932, a partnership does not dissolve upon a partner’s death if there are more than two partners and the deed permits continuity.

Since the firm had three partners and the deed permitted continuity, the partnership remained valid. The Court upheld the High Court’s mandamus and cautioned IOCL against arbitrary disruption of supply.