K.Ramaswamy, J. - (1.) Special leave is granted.
(2.) The appeal arises against the judgment and decree of the Division' Bench of the Madras High Court dated November 17, 1988 made in L.P.A. No. 113 of 1986 (reported in (1 989) 103 Mad LW 1) reversing the judgment and decree of the learned single Judge and of the First Addl. Subordinate Judge, Pondicherry in O. S. No. 206 of 1978. The facts are that the appellants/ defendants 1 to 3 and the respondent/plaintiff are sons of the 4th appellant/defendant - their mother. Their father ' M. 0. Hassan Kuthus Marican, started the proprietary concern M/ s. M. 0. Hassan Tithus Marican doing import. and export and other business in Pondicherry. On July 20, 1962, a partnership consisting of the appellants, the respondent and the father, Ex. B 1 (a translation copy in English in Ex. B 1 / a) was constituted and was registered as per the provisions of the French Law and the business was carried on. By relinquishment deed, Ex. B2 dated August 1, 1968 their father had retired from the partnership. Thereafter the appellants and the respondent continued the business in terms of Ex. B2. When misunderstanding between the parties had arisen, as pleaded by the respondent, in 1973 and in May, 1978, the respondent laid the suit for dissolution of the partnership and for accounting etc. It is the respondent's case (supra) that the partnership is at will and by issue of notice dissolving the partnership, it stood dissolved with effect from the date of the receipt of the notice by the appellants. He sought to have his share in the partnership ascertained and decree granted accordingly. The appellants contended that under the French Law the partnership is not at will. The contract operates as Law. In terms of the contract Exs. B I and B2, the respondent has to relinquish his share in favour of the appellants and to take the value thereof without dissolving the firm. One of the issues raised was the maintainability of the suit which was tried as a preliminary issue. Only partnership deeds Exs. B I and B2 were marked and arguments were addressed on the issue. The Trial Court held that the partneship is not at will. The suit for dissolution of the partnership was not maintainable. The relief of accounting and other remedies were left open. Accordingly the suit was dismissed, which was affirmed, on appeal, by a learned single Judge. The Division Bench held that the partnership is at will and the respondent can seek its dissolution. It was further held that the rights of the parties are governed by the Partnership Act 9 of 1932 (for short 'the Act). The suit was maintainable. Accordingly the appeal was allowed; the suit was restored to file and the Trial Court was directed to try the suit on merits expeditiously.
(3.) At this stage we are not concerned with the merits of the rival contentions of the alleged mismanagement of the partnership or for attempt of converting the partnership firm into a Private Limited Company. The only question that needs decision is whether the partnership in question is a partnership at will Considerable debate was made across the bar contending that it is the French Law and not 'the Act'that would govern the facts of the case. The Trial Court and the Learned single Judge held in favour of the appellants but the Division Bench held that the Act would apply to the facts of the case. Admittedly the Pondicherry (Laws) Regulation 7 of 1963 was made in exercise of the powers under Art. 240 of the Constitution extending the Act to Pondicherry/ Union Territory on and from October 1, 1963. Section 69 had come into force from July 1, 1964. Though Ex. B 1 was made in accordance with the Civil Code of France, 1804, the cause of action to lay the suit had arisen to the respondent in 1978 by which time the Act was in operation. Therefore, the rights and remedies of the parties are regulated by the provisions of the Act.;