K.N.WANCHOO - (1.)THIS is an appeal on a certificate granted by the Madras High Court. The brief facts necessary for present purposes are these : The present suit was brought by Multhappa Chettiar (hereinafter referred to as the respondent) against K. Thaiagarajan Chettiar (hereinafter called the appellant) and the Saroj Mills Ltd. In 1939 these two persons thought of doing business jointly by securing managing agencies of some mills. In that connection they carried on negotiations with two mills, namely, Rajendra Mills Limited, Salem and the Saroja Mills Limited, Coimbatore (hereinafter called the Mills). The managing agency of the Mills was with the Cotton Corporation Limited. On 4/10/1939, the said Corporation transferred and assigned its rights to the appellant and the respondent under the name of Muthappa and Co. On 15/11/1939, the Mills at an extraordinary general meeting of the shareholders accepted Muthappa and Co. as the managing agents and made the necessary changes in the Articles of Association. Later the appellant and the respondent obtained the managing agency of the Rajendra Mills Ltd., Salem. The managing agents of this mill were Salem Balasubramanian and Co. Ltd. Muthappa and Co. purchased all the shares of the Salem Balasubramaniam and Co. and thereafter carried on the business of the managing agency of this mill in the name of Salem Balasubramaniam and Co. Ltd. In November 1940 the appellant and the respondent entered into a written partnership agreement with respect to the managing agency business of the two mills. We shall consider the terms of this agreement later and all that we need say at this stage is that turns were fixed for the appellant and the respondent to look after the actual management of the two mills and the appellant's turn was the first and he therefore came into actual control of the two mills. Soon after however disputes arose between the appellant and the respondent with respect to the managing agency of the Rajendra Mills Ltd. , which resulted in various suits being filed between the partners, to which we shall refer later. Eventually on 4/03/1943, the appellant gave notice to the respondent terminating the partnership, considering it as a partnership at will. THIS was followed by the directors of the Mills terminating the managing agency of Muthappa and Co. on the ground that that company had ceased to exist and also on the ground that quarrels between the partners of the firm were not conducive to good management of the mills. THIS was notified to the respondent on 22/03/1943. THIS action of the directors was approved in a meeting of the shareholders of the Mills on 29/09/1943, and necessary modifications were again made in the Articles of Association. In between on 17/04/1943, the respondent had filed a suit for a declaration that Muthappa and Co. continued to be the managing agents of the Mills and for obtaining possession of the office of managing agents for himself or along with the appellants and also for a permanent injunction restraining the Mills from appointing any other managing agents. THIS suit was dismissed by the trial court on the ground that it was not maintainable under S. 69 of the Indian Partnership Act. No. 9 of 1932 (hereinafter called the Act), though the trial court gave findings on other issues also. The respondent went up in appeal to the Madras High Court against the decree in that suit. THIS appeal was dismissed on 8/07/1948, as the High Court held that the finding of the subordinate judge that the suit was not maintainable under S. 69 of the Act was correctness or otherwise of the other findings recorded by the subordinate judge.
(2.)WHILE this appeal was pending the respondent brought the present suit on 28/02/1946. In this suit he prayed for dissolving the firm Muthappa and Co., for accounts and for damages against the appellant and the Mills. The main contention of the respondent in the suit was that the alleged dissolution of partnership by the appellant and the removal of Muthappa and Co., from the managing agency of the Mills were part of a scheme of fraud conceived by the appellant which was actively connived at by the Mills in order to defeat and defraud the respondent of his legitimate dues and his right to continue and act as the managing agent of the Mills. The damages claimed were estimated at the figure of five lacs of rupees to be recovered from both the appellant and the Mills or from either of them. In the alternative the respondent claimed that even if Muthappa and Co. had been removed validly from the managing agency on 29/09/1943, he was entitled to an account from the appellant from 15/11/1939, to 29/09/1943. The suit was resisted by both the appellant and the Mills and their case was that the partnership was one at will and therefore was validly terminated by the appellant by notice. It was further contended that in any case the Mills were within their rights in terminating the managing agency of Muthappa and Co., as that firm had ceased to exist and there were interminable disputes between the partners. Fraud and collusion were denied and it was alleged that it was the respondent's conduct which compelled the appellant to give notice of termination of partnership and the Mills to terminate the managing agency. The Mills took a further plea, namely, that so far as they were concerned, the suit was barred under S. 69 of the Act.
The trial court held that the firm of Muthappa and Co. was a partnership at will and therefore was legally dissolved by the appellant by giving notice dated 4/03/1943. If further held that no case of fraud had been proved and that the termination of the managing agency was legal. As to the Mills the trial court held that the suit against them was barred under S. 69 of the Act. In consequence the suit against the Mills was dismissed in toto and the prayer for damages was also rejected. The trial court however directed the appellant to account for the profits earned from the inception of the partnership business till 4/03/1943, when the partnership was terminated by the appellant by notice.

Thereupon the respondent went up in appeal to the High Court. The High Court held that the suit against the Mills was barred under S. 69 of the Act, though it was made clear that if there were assets of the partnership firm in possession of the Mills the respondent would be entitled to recover them. The High Court however ordered the Mills to bear their own costs in both the courts on the ground that the Mills were guilty of fraud. As to the case against the appellant, the High Court held that the partnership was not a partnership at will and therefore it could not be dissolved by notice by the appellant. It further held that the appellant fraudulently and in collusion with the Mills purported to dissolve the partnership by issuing an illegal notice and to have the managing agency terminated by the Mills, and in consequence the termination of the managing agency was illegal. On the view therefore that the partnership as well as the managing agency continued and on a review of the circumstances, the High Court held that this was a fit case for dissolving the partnership and fixed 10/03/1949, which was the date of the decree of the trial court as the date from which the partnership would be dissolved. Consequently it modified the decree of the trial court and passed a preliminary decree for accounts against the appellant in respect of the firm Muthappa and Co. from 15/11/1939, to 10/03/1949, and added that the respondent could also recover any amount found due to him on taking accounts against the partnership assets, if any, in the hands of the Mills. The appellant then applied for a certificate to appeal to this Court which was granted; and that is how the matter has come up before us.

(3.)THE first question therefore that arises for our determination is whether the partnership in this case is a partnership at will and it is necessary to refer to the terms of the partnership agreement to determine this question. After reciting that the management of the Mills was being carried on in the name and style of Muthappa and Company and of the Rajendra Mills Limited in the name and style of Salem Balasubramaniam and Co. Ltd., the partnership agreement goes on to say that the partners shall get in equal shares, the salary, commission, profit, etc., that may be realised from the aforesaid managing agencies. It provides for carrying on the management in rotation once in four years, the appellant to manage for the first four years and thereafter the respondent to manage for the next four years and in the same way thereafter. It further provides that the partners and their heirs and those getting their rights shall carry on the management in rotation. THE accounts were to be made once in every year after the closing of the yearly accounts of the two mills. THEre were then provisions as to borrowing with which we are not concerned. THE agreement further provides that in case either partner thinks of relinquishing his right of management under the agreement it shall be surrendered to the other partner only but shall not be transferred or sold to any other person whatever. Finally it is provided that the two partners shall carry on the affairs of the firm by rotation once in four years and the income realised thereby shall be divided year after years and the partners and their heirs shall get the same in equal shares and thus carry on the partnership management.
The contention on behalf of the appellant is that as this partnership does not fall under S. 8 of the Act and is not within the two exceptions under S. 7, it is a partnership at will. S. 7 provides that where no provision is made by contract between the partners for the duration of the partnership, or for the determination of the partnership, the partnership is partnership at will. S. 8 provides that a person may become a partner with another person in particular adventures or undertakings. S. 43 provides that where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. On the other hand if the partnership is not at will, S. 42 applies and is in these terms :-

"Subject to contract between the partners a firm is dissolved-

(a) if constituted for a fixed term, by the expiry of that terms;

(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;

(c) by the death of a partner; and

(d) by the adjudication of a partner as an insolvent."

Section 44 provides for dissolution by the court. The High Court was of the view that looking to the terms of the partnership it could not be held to be a partnership at will and that under S. 7 it will be a case of a partnership the duration of which as well as the determination of which were fixed. The High Court was further of the view that S. 8 of the Act would also apply to the partnership in question as the evidence showed that the partners had entered into partnership in order to carry on the business of managing agency of the two mills and such business was an undertaking. As we read the terms of the agreement it seems to us clear that the intention could not be to create a partnership at will. The partners contemplated that the management would be carried on in rotation between them in four yearly periods. It was also contemplated that the heirs of the partners would also carry on the management in rotation. Considering this provision as well as the nature of the business of partnership it could not be contemplated that the partnership could be brought to an end by notice by either partner. The intention obviously was to have a partnership of some duration though the duration was not expressly fixed in the agreement. Now S. 7 contemplates two exceptions to a partnership at will. The first exception is where there is a provision in the contract for the duration of partnership; the second exception is where there is provision for the determination of the partnership. In either of these cases the partnership is not at will. The duration of a partnership may be expressly provided for in the contract; but even where that is no express provision, courts have held that the partnership will not be at will if the duration can be implied., where it is said that where there is no express agreement of continue a partnership for a definite period there may be an implied agreement to do so. In Crawshav v. Maule, (1818) 1 Swans 495 : 36 ER 479 the same principle was laid down in these words :-

"The general rules of partnership are well-settled. Where no term is expressly limited for its duration, and there is nothing in the contract to fix it, the partnership may be terminated at a moment's notice by either party... .Without doubt, in the absence of express, there may be an implied, contract, as to the duration of a partnership."

The same principle in our opinion applies to a case of determination. The contract may expressly contain that the partnership will determined in certain circumstances; but even if there is no such express term, an implied term as to when the partnership will determine may be found in the contract. What we have therefore to see is whether in the present case it is possible to infer from the contract of partnership whether there was an implied term as to its duration or at any rate an implied term as to when it will determine. It is clear from the terms of the contract of partnership that it was entered into for the purpose of carrying on managing agency business. Further the term relating to turns of the two partners in the actual management and further term that these turns will go on even in the case of their heirs in our opinion clearly suggest that the duration of the partnership would be the same as the duration of the managing agency. We cannot agree that this means that the partnership would become permanent. In any case even if there is some doubt that the terms do imply a determination of the partnership when the managing agency agreement comes to an end. It is clear that the partnership was for the sole business of carrying on the managing agency and therefore by necessary implication it must follow that the partnership would determine when the managing agency determines. Therefore on the terms of the contract in this case, even if there is some doubt whether any duration is implied, there can be no doubt that this contract implies that the partnership will determine when the managing agency terminates. In this view the partnership will not be a partnership at will as S. 7 of the Act makes it clear that a partnership in which there is a term as to its determination is not a partnership at will. Our attention was drawn in this connection to a term in the contract which lays down that either partner may withdraw from the partnership by relinquishing his right of management to the other partner. That however does not make the partnership a partnership at will, for the essence of a partnership at will is that it is open to either partner to dissolve the partnership by giving notice. Relinquishment of one partner's interest in favour of the other, which is provided in this contract, is a very different matter. It is true that in this particular case there were only two partners and the partnership will come to an end as soon as one partner relinquishes his right in favour of the other. That however is a fortuitous circumstance; for, if (for example) there had been four partners in this case and one of them relinquished his right in favour of the other partners, the partnership would not come to an end. That clearly shows that a term as to relinquishment of a partner's interest in favour of an other would not make the partnership one at will. We may in this connection refer to Abbott v. Abbott, 1936-3 All ER 823. That was a case where there were more than two partners and it was provided that the retirement of a partner would not terminate the partnership and there was an option for the purchase of the retiring partner's share by other partners. It was held that in the circumstances the partnership was not at will and it was pointed out that only when all the partners except one retired that the partnership would come to an end because there could not be a partnership with only one partner. We are, therefore, in agreement with the High Court that the contract in this case disclosed a partnership the determination of which is implied, namely, the termination of the managing agency and, therefore, under S. 7 of the Act it is not a partnership at will. In the circumstances it is unnecessary to consider whether the case will also come under S. 8 of the Act.