INDEMNITY, GAURANTEE, BAILMENT AND PLEDGE

1. Adamson v. Jarvis
Section: 124-Contract of Indemnity

Facts: The plaintiff, an auctioneer, sold certain cattle on instruction if the defendant.
It subsequently turned out that the livestock did not belong to the defendant but to
another person who made the auctioneer liable and the auctioneer in his turn sued the
defendant for indemnity for the loss he had suffered by acting on the defendant’s
directions.

Held: The court laid down that the plaintiff having acted on the request of the
defendant was entitled to assume that, if, what he did, turned out to be wrongful, he
would be indemnified by the defendant.

2. Chiranji Lal v. Naraini

Section: 125- Rights of Indemnity Holder when sued
Facts: N/A
Ratio: The indemnity holder is entitled to recover all damages which he may be
compelled to pay in a suit in respect any matter to which the promise of indemnity
applies.

3. Bhawani Prasad v. Gopal Singh

Topic: Rights of indemnity-holder when sued.
Facts: ‘A’ wanted to take a lease from B. B declined, until guaranteed by C, father of
plaintiff. C in turn wanted a guarantee from D, father of defendant gave guarantee to
C. C then gave guarantee to B and B granted lease to A. D died. A failed to pay rent
due. B’s representatives brought action against C and recovered the amount of rent. C
also died. C’s representative (plaintiff) brought action against D’s representative
(defendant) for the amount of previous decree and costs incurred.
Principle: Indemnity-holder is entitled to recover all costs which he may be
compelled to pay in any suit in respect of any matter to which the promise of
indemnity applies.
4. Ramaswamy v. MuthuKrishnan
Topic: Rights of indemnity-holder when sued.
Principle: Indemnity-holder is entitled to recover all sums which he may have paid
under the terms of any compromise of any suit in respect of any matter to which the
promise of indemnity applies, if the compromise was not contrary to the orders of the
promisor.

5. M. S. Anirudhan v The Thomco'S Bank Ltd

Topic: Discharge of surety's liability by Alteration of terms of letter of guarantee by
principal debtor
Facts:
Supreme court heard the appeal-defendant guaranteed repayment of loan-guarantee
paper showed the loan to be Rs.25,000-bank refused to accept-principal reduced the
amount to Rs.20,000  without intimation to surety and gave it to the bank which was
then accepted by bank-principal failed to pay-bank sued surety
Legal Issue:

Whether the alteration had discharged him

Held:

By a majority (2:1) that the surety was not discharged.

NOTE:

While the general principle is that if the agreement of the surety is altered in a single
line, the surety in entitled to be discharged, but the law now accepts that where it is
self-evident that the alteration is unsubstantial or for the benefit of the surety, he
is not discharged from his liability.

6. Bombay Dyeing & Manufacturing Co. Ltd. v. State of Bombay

Topic: Discharge of Surety
Facts:
 B owes C a debt guaranteed by A. The dent becomes payable. C does not sue B for a
year after the debt has become payable.
Ratio:
Creditor’s forbearance to sue does not discharge the surety
Held:
A is not discharged from his surety-ship.

7. National Provincial Bank of England v. Brakenbury

Principle: Sec 144.Guarantee on contract that creditor shall not act on it until
co-surety joins.

Facts: The defendant signed a guarantee which on the face of it was intended to be a
joint and several guarantee of three persons with him .One of them did not sign. There
being no agreement between the bank and the co-guarantors to dispense with his
signature

Judgment: The defendant was held not liable.

8. Edward Owen Engineering Ltd. v. Barclays Bank Intl. Ltd

Principle: liability of the Guarantor

Facts: The Plaintiff was an English company supplier which entered into a contract
with a Libyan State entity buyer for the supply of greenhouses. The Plaintiff supplier
provided an on-demand performance bond as required under the contract for 10% of
the contract value. Payment by the buyer under the contract was in instalments and
were to be made by irrevocable confirmed letters of credit payable at Barclays Bank
International in England. The Libyan buyer instructed a Libyan bank to open an
irrevocable documentary credit in favor of the supplier. This was contrary to the
contract since it was not a confirmed letter of credit and payment was only to be made
when authorized by the buyer.

The Plaintiff was not satisfied with the letter of credit offered, and informed the buyer
that they rescinded the contract and the guarantee. The buyer then called for payment
under the on-demand bond and the plaintiff took steps to obtain an injunction to
restrain payment under the bond.
 Judgment: It was held that a bond payable "on-demand without proof or conditions"
imposes an obligation on the guarantor to pay irrespective of default by the
performing party, except in cases of fraud of which the guarantor had notice. It was
held that so long as the buyer makes an honest demand, the banks are bound to pay.

9. U.P Co-op Federation Ltd. v. Singh Consultants Engg. Ltd.

Principle: Liability under bank guarantee

Facts: The appellant, entered into a contract with the respondent for the supply and
installation of a vanaspati manufacturing plant at a place in the district of Nainital and
was asked to produce a bank guarantee which entitled the Appellant for encashment
on the failure of respondent to perform his obligation for which the appellant was
made the judge of and after alleging that the respondents had failed to complete the
required work, the appellant alleged that the respondent failed to perform his
obligation and invoked the guarantee.

Judgment/ratio: A bank guarantee is not and should not be concerned in any way
with the rights and wrongs of the underlying transactions between the parties

10. Bank of Bihar v. Damodardas Prasad

Principle: Conditional Precedent to Liability (Section 144)

Facts: The defendant guaranteed a bank’s loan. A default having taken place, the
defendant was sued. The trial court decreed that the bank shall enforce the guarantee
in question only after having exhausted its remedies against the principal debtor. The
patna high court confirmed this decision but it was overruled by the Supreme Court.

Judgment/ Ratio: Where the liability is otherwise unconditional, the court cannot of
its own introduce a condition on it.

11. Ultzen v. Nicolas

Topic: Bailment. Delivery of Goods.
Facts:
 The plaintiff went to a restaurant for dining. When he entered the room, the waiter
took his coat and hung it on a hook behind him. When the plaintiff arose to leave, the
coat was gone.
Plaintiff Claim:
He sued as a bailor of the coat.
Defendant Claim:
There wasn’t bailment and he merely provided a place for the plaintiff’s coat.
Legal Issue:
Was there delivery of goods and was the waiter a Bailee?
Judgment:
It was held that the waiter voluntarily took the responsibility of keeping the coat while
the customer was dining and was thus a Bailee. Therefore, he was liable to return it.

12. Kaliaperumal Pillai v. Visalakshmi

Topic: Bailment. Delivery of goods.
Facts:
A lady handed over to a goldsmith certain jewels for the purpose of being melted and
utilised for making new jewels. Every evening as soon as the goldsmith’s work for the
day was over, the lady used to receive half-made jewels from the goldsmith and put
them in a box in the goldsmith’s room and jeep the key in her possession. The jewels
were lost one night. The woman sued the goldsmith.
Legal Issue:
Was the goldsmith the Bailee of the jewels?
Judgment:
It was held that, in the night, the possession of the gold was not with the jeweler but
with the plaintiff because she locked the box and kept the keys with her. Hence, the
goldsmith was not a Bailee and could not be held liable.

13. Reed v. Dean

Topic: Duty of Bailor for reward under Sec. 150.
Facts:
i) Plaintiffs hired a motor launch from the defendant for a holiday on river
Thames.
 ii) Launch caught fire.
iii) Plaintiffs could not extinguish it because fire-fighting equipment – out of
order.
iv) Got injured and suffered loss.
Legal issue: Whether the non - gratuitous bailor is responsible for such damages
occurring due to a fact which he was unaware of?
Judgment: Implied undertaking that launch was as fit for the purpose for which it
was hired as reasonable care and skill could make it. Defendant liable.

14. Vithoba Laxman Kalar v. Maroti Ukandsa Kalar

Topic – Bailee’s right of lien under Sec. 170.
Facts –
i) Cattle given for grazing by bailor to bailee.
ii) Bailor didn’t pay for the grazing expenses.
iii) Bailee claimed right to retain the cattle till the bailor paid him.
Legal issue – whether bailee had right of lien under Sec. 170.
Judgment – Since this did not improve the condition of the cattle and merely
maintained its former condition, it was not a service involving the exercise of
labour or skill within the meaning of Sec. 170. So bailee was not entitled to right
of lien.

15. Lallan Prasad v. Rahmat Ali & Anr

Topic: Right to redeem of pawner

Facts: The appellant advanced Rs. 20,000 to the first respondent against a promissory
note and a 'receipt. The respondent executed an agreement whereby he agreed to
pledge certain goods as security for the debt. Promised to deliver them to the
appellant, and to keep them in the appellant's custody. The appellant filed a suit on the
promissory note claiming that the respondent failed to deliver the goods, that the
agreement therefore did not result into a pledge, and that consequently, he was
entitled to recover the amount advanced by him. It was found on the evidence. That
the goods were delivered to the appellant, and that he was it pledgee thereof.

Legal Issue: Whether the appellant was entitled to a decree in view of his denial of
the pledge and his failure to offer to redeliver the goods
 Judgment: The appellant would not be entitled to a decree on the promissory note
and also retain the goods found to have been delivered to him and to be in his
Custody.  As long as the sale of pledged goods does not take place, the pawner is
entitled to redeem the goods on payment of the debit. Therefore, the right to sue on
the debt assumes that be is in a position to redeliver the goods on payment of the debt,
and if by denying the pledge or otherwise, he has put himself in a position whereby he
is not able to redeliver the goods, he cannot obtain a decree.

16. Prabhat Bank Ltd. And Anr. v. Babu Ram

Topic: Reasonable Notice before sale of pledged goods

Facts: Pawnee had a bank account with Prabhat bank. Pawnee allowed to overdraw
on his account upto a given limit. In this regard, certain securities deposited by
Pawner with the bank. Agreement allowed the bank to sell the securities without
notice if the Pawner failed to pay the overdrawn money on demand. Pawnee failed to
pay the money. Bank sent a reminder. Pawnee asked for more time. The bank without
notice sold the securities.

Legal Issue: Whether a reasonable notice is required of the intention of sale of

pledged goods?

Contention: of bank: Intention of sale can be inferred from pawner’s request for time.

Judgment: What is contemplated by Section 176 is not merely a notice but a

'reasonable' notice, meaning thereby a notice of intended sale of the security by the
creditor within a certain date so as to afford an opportunity to the debtor to pay up the
amount within the time mentioned in the notice.

17. Gajanan Moreshwar v. Moreshwar Madan

Facts:

Plaintiff (P) got a plot of land on lease from municipal corp. of Mumbai. P allowed
Defendant (D) to erect building on that land. D, in this course, incurred debt
of Rs.5ooo from building material supplier (K), twice. On both the occasion, P
mortgaged part of the land to K. P, on D’s request transferred the land to D, on the
 consideration that he (P) would be discharged of all the liabilities arising out of that
land. D failed to adhere to his consideration. P filed a suit for discharge of liabilities
on him, alleging D to be indemnifier.

Legal Issue: When does the liability of indemnifier commence? Should the indemnity
holder be payable only after he has suffered actual loss by paying off the claim?
Maxim of English law: “you must be damnified before you can claim to be
indemnified”.

Judgment: Process of transformation in law observed by J. Chagla of Bombay High

Court as he held in relation to the case: “... if his(indemnity holder) liability had
become absolute then he was entitled either to get the indemnifier to pay off the claim
or to pay into court sufficient money which would constitute a fund for paying off the
claim whenever it was made.” Thus, an indemnity-holder can compel the indemnifier
to indemnify even before the indemnity holder has actually suffered the loss.

AGENCY
1. Loon Karan Sohan Lal v. John & Co.
This case explains the test of determining the existence of agency relationship.
Facts: Assam government placed its quota of a commodity at the hands of a dealer for resale
to consumers. Held not to be an agent of the government even if he was described to be an
agent in the agreement.
Legal Point: Agency depends on true nature of the relationship. The fact that parties have
called their relationship an agency is not conclusive, instead the true nature of the
relationship and the functions and responsibilities of the alleged agent are to be examined.

2. Beswick v. Beswick
Facts: Agreement between B and defendant to transfer B’s business to the defendant. B was
to be employed for his life and after his death the defendant was to pay to his widow some
money per week from the business. After B’s death, defendant paid B’s widow only once.
The widow brought an action to recover sums and for specific performance.
Held: She was entitled to enforce the agreement. A third party can bring action against the
owner (Principal).

3. Ireland v. Livingston
Topic: Duty to follow instructions
Facts:
Livingston asked Ireland to ship 500 tons of sugar and stated that he would not mind if this
amount was more or less or around 450 tones. As the shipment was to come from Mauritius
and there was uncertainty as to the how much sugar would be available, Ireland was able to
supply only 400 tones and sent it to Livingston who refused to accept it.
Held:
The House of Lords said that Livingston was bound to accept it, as the wordings was
ambiguous. It held that when a principal had given instructions of ambiguous nature which
were capable of more than one meaning, he cannot argue as against the agent in the other
sense as against the sense in which he read the instructions.

4. Sims and co v. Midland Ryl Co.

Topic: Marine Adventure (Agencies of necessity)
Facts:
A quantity of butter was consigned with the defendant railway company. It was delayed
during transit due to a strike. The goods being perishable, the company sold them.
Held:
The sale was binding on the owner. The company’s action was justified by the necessities of
the case and it was not practicable to get instructions from the owner.

5. Debenham v. Melon
Facts: the defendant was the manager of a hotel, where his wife acted as the manageress.
They lived together in the same hotel, but had no domestic establishment of their own. The
wife incurred with a tradesman a debt for clothes, payment for which was demanded from the
husband.
Judgement: He was held not liable.
The mere fact of cohabitation is not sufficient to give a wife an implied authority to pledge
her husband's credit for necessaries, and it is not necessary for the husband to prove that a
tradesman supplying his wife with goods knew that he had prohibited her from pledging his
credit.

6. K. Kasulu v. Commission, Endowment Dept.

Principle:
A husband has no original, inherent or implied power to act as an agent of his wife. His
authority can arise from an appointment as agent, expressly or impliedly or by ratification by
his wife of acts done by him on her behalf.
Judgement:
Wife was held not liable on a contract made by her husband in her name and without her
authority when she disaffirmed the contract within reasonable time after getting to know it

7. Girdhari Lal v. W. Crawford- Allahabad HC

Topic: Husband and Wife, Agent by Cohabitation conditions
Section: 186 and 187
Held: Husband not liable if he makes reasonable allowance to wife for her needs- Husband
not liable even if fact of allowance is not known to seller. It was held that the liability of a
husband for his wife's debts depends on the principle of agency, and he can only be liable
when it is shown that he has expressly or impliedly sanctioned what his wife has done. 
Expressly warned Tradesman not to supply goods on credit
Wife was already supplied with sufficiency of articles in question
Wife was supplied with sufficient means for the purpose of buying the articles without
pledging the husband’s credit

8. Seymore v. Kingscote
Topic: Husband and Wife, Agent by Cohabitation conditions
Section: 186 and 187
Held: Wife can run her husband into debt only for necessaries-
“Wife can’t embark upon the purchase of things beyond the station in which they live”
 9. Lilley v. Doubleday
Topic: Sec. 211; Agent’s duty to follow the Principal’s Instructions
Facts:
An agent was instructed to warehouse his principal’s goods at a particular place. He placed a
part of them at a different warehouse which was equally safe. However the goods were
destroyed without any negligence on the part of the agent.
Held:
The Agent was held liable for the loss. Any disobedience of or departure from the
instructions of the principal makes agent absolutely liable for the loss.

10. Firm Pannalal Janki Das v. Mohanlal

Topic: Sec. 212; Agent’s Duty of Due Care and Diligence
Facts:
A commission agent purchased goods for his principal and stored them in a warehouse
pending dispatch. The agent was under instruction to dispatch them. He charged the premium
for the insurance but failed to insure them. There was an explosion in the Bombay Harbour
and the goods were lost. Under the Bombay Explosion (Compensation) Ordinance, the
government decided to compensate half the losses in case of uninsured goods. The agent
argued that he had the right to be compensated for the remaining half of the losses incurred
by him.
Held:
It was held that the loss to the defendants arose directly from the neglect or breach of duty of
the plaintiffs to insure the goods as they had been instructed and agreed to do. Thus agent was
held liable for neglect and misconduct.

11. Ahammed v. Mammad Kunshi

Principle: Principal not bound when excess of agent’s authority is not separable.
Held: Where agent was authorised to sell half right over a property and he contracted to sell
all the rights, the principal was held to be bound to the extent of half rights, they being
separable from the rest.

12. De Bushe v. Alt

Principle: Duty of an agent to not mix his business with that of his principal and act in good
faith. He should avoid conflict of interest.
Facts: The plaintiff consigned a ship to a company in company in China for sale at 90,000
pounds payable in cash. With the consent of the plaintiff the company appointed the
defendant, a Japanese agent, to sell the ship. The defendant attempted to sell the ship, but
having failed to find a customer, bought the ship himself and without disclosing this, remitted
the above sum through the company to the plaintiff. Soon thereafter a war broke out and
ships were again in great demand. A Japanese prince bought it from the defendant at 1,60,000
pounds. The plaintiff sued the defendant to recover the promise made on resale.
Held: He was held bound to account for the profit.

13. Lloyd v. Grace Smith and Co.

Topic: Section 238; Effect, on agreement, of misrepresentation or fraud by agent
Facts: Grace Smith & Co. were a firm of solicitors. Mrs. Lloyd, a widow dissatisfied with the
income of her two cottages, consulted the firm’s clerk who was in charge of conveyancing
business as how to improve the income. He advised her to dispose of the cottages. He asked
her to bring the title deeds and obtained her signature on two papers and converted those into
sale deed to himself. He subsequently disposed of the property and misappropriated the
proceeds.
Legal Issue: Whether a principal would be liable if tort is committed by the agent for his
personal benefit? In Barwick v English Joint Stock Bank, it was declared Principal wouldn’t
be liable for torts committed by agents for personal benefit.
Judgment: Ruled that Barwick case was not an authority and the only condition of
principal’s liability is that the act in question must be within course of agency business. Firm
was held responsible for the fraud committed by their representative in the course of his
employment.

14. National Bank of Lahore v. Sohan Lal

Topic: Section 238; Effect, on agreement, of misrepresentation or fraud by agent
Facts: (Court was to dispose of cases of 3 plaintiffs regarding the same matter). The plaintiffs
had hired lockers from the defendant bank in which they stored there valuable and jewellery.
These valuables were ultimately found missing. The plaintiffs alleged that the levers pf
plaintiff side of lock were filed of in such a manner that they could be opened by any key.
Bank said that it did not allow its employee to rent defective locks or fraudulently take
valuables out of the locker.
Legal Issue: Whether relationship between locker holder and bank was that of landlord and
tenant or bailor and bailee? Whether tort committed by an agent for personal benefit would
make the principal liable.
Judgement: Relationship between locker-holder and bank is that of bailor and bailee and not
of landlord and tenant. Held that bank should be considered liable if an employee
fraudulently tampers with a locker.

15. M. N. Shankar v. Maharashtra Board of Secondary & Higher Secondary

Education
Topic:
Vicarious Liability of Principal, implied agency
Facts:
30 students were barred from entering the exam due to lack of hall ticket. This was found to
be due to the misappropriation of the money, paid for hall tickets, by a clerk. The question
was whether the board could be held liable?
Legal Issue:
Was the clerk an agent of the Board?
Judgment:
The court held that the clerk was an implied agent of the Board and so the Board would be
held liable for his acts and were ordered to give the 30 students entry to the exam.

16. State Bank of India v. Shyama Devi

Topic:
Capacity of Agent
Facts:
Shyama Devi gave a cheque to her friend A, who was a bank employee to deposit the cheque.
Shyama Devi received no receipt of the cheque and a fake entry was made in her passbook by
A. A took this opportunity to misappropriate the money. She sued the Bank.
Legal Issue:
Can the bank be held liable for the acts of A? Was A acting in capacity of employee/ agent of
the bank or was he acting in the capacity of a friend?
Judgment:
The Apex Court held that A was acting in the capacity of a friend when he did the acts of
receiving the cheques from Shyama Devi. Therefore the Bank in this case was not a principal
and could not be held liable for the misappropriation. Only A could be held liable.

17. Chairman, L.I.C v. Rajiv Kumar Bhaskar

Facts: Salary Savings Scheme floated by the L.I.C provided for a tripartite agreement under
which, the employer accepted the sole responsibility to collect premium from its employees
and remit the same to the corporation. No individual premium notice was required to be sent
to the employee and the employees were not made aware of communication between the
L.I.C and the employer. Default on part of the employer to pay the premium to LIC.
Judgment: LIC held liable under an implied form of agency in view of Section 186 of
ICA,1872. The court held that the employer was acting on behalf of the Corporation, and a
contract of agency might be inferred. So ruled, the Court held, for failure on the part of the
employer to payment of premium, the L.I.C liable.

18. Delhi Electric Supply Undertaking (DESU) v. Basanti Devi

Facts: Under an agreement between DESU and the L.I.C, DESU was to deduct insurance
premium every month from salary of its employees under Salary Savings Scheme of the L.I.C
and the same was to be transmitted to the L.I.C. Employer had ostensible authority from
L.I.C. to collect premium from its employees on behalf of L.I.C. Further, the employer failed
to remit the premium deducted from the salary of the employee to the L.I.C., on the death of
the employee to the widow of the employee.
Judgment: It was finally held that the employer was an agent of L.I.C. for collecting
premium from its employees under Section 182 of ICA, 1872. LIC was discharged from its
liability by the State and National Commission when the case was initially tried under
Consumer Protection Act. On appeal to SC, L.I.C. was held liable for payment of the
insurance claim.

PARTNERSHIP ACT

1. Cox v. Hickman

Concept of Agency and Mutual Agency- basis of Section 6-presence of  only some essentials
of partnership does not necessarily result in partnership- Money lender sharing profits of a
business of which he is not a partner

Facts: Smith and Son carried on business of iron merchants. They got into financial
difficulties as a consequence of which they executed a deed of arrangement with the
creditors. According to the agreement 5 representatives of the creditors were appointed as5
trustess. They included Cox and Wheatcroft. The business of Smith and Son was to be
managed by 5 trustees. The net income of the business was to be distributed by these trustees
amongst the general creditors of Smith and Son. After all the creditors had been paid off the
business was to be returned to Smith and Son. While the business was being managed by the
trustees, the plaintiff, Hickman, supplied goods to the firm. One of the trustees accepted bills
of exchange drawn by Hickman undertaking to pay the price of those goods. Hickman sued
Cox and Wheatcroft to recover the price of goods supplied by him.
Held: Although the creditors were sharing the profits and the business was being managed by
the trustees, still the relationship between Smith and Son on the one hand and the creditors
(including the trustees) on the other was that of debtor and creditor and not that of partners
and therefore, Cox and Wheatcroft could not be made liable.

2. v. Salomon- Creditors of an insolvent company could not sue the company's

shareholders to pay up outstanding debts

3.  Byrne v. Reid- Incoming and Outgoing Partners (Minors)

A,B,C and D- 4 partners- authorised A, in the partnership deed to admit his son, S, into
partnership when he attained age of 21-A nominated him partner in accordance with the deed
and S accepted it-other partners refused to recognise him-

Held: Son accepting nomination had become a partner- no partnership merely by nomination,
option to become a partner or not- becomes partner after he agrees to nomination, expressly
or impliedly

4.  Mohiri Bibi v. Dharmodas Ghosh

Facts: A minor executed a mortgage of Rs. 20,000 and received Rs. 8,000 as advance. The
mortgagee filed a suit for recovery of mortgage money and for sale of property in case of
default.

Judgement: The Privy Council held that an agreement involving a minor was void ab
initio and so there could be no recovery of money by the mortgagee.

5. Prithvisingh Devising v. Hasan alli Vazirkhan

Facts:
The plaintiffs were partners in a firm, which was not registered. They had some
dealings with the defendants and in due course had to file suit for recovery of property
and for recovery of past rents. On date of filing of suit, the firm was not registered.
They subsequently registered it.
Legal Issue:
What is the effect of subsequent registration on an existing suit?
Held:
The High Court of Bombay upheld the verdict of the Trial Court and said that since a
suit by a non-registered firm is barred by Sec. 69(2), subsequent registration cannot
cure the defect. There must a fresh suit.

6. Malhotra & Co. v. Ramesh Mistri

Facts:
The plaintiffs appealed against the order of a trial court which prevented them from
filing a fresh suit after registration of their partnership firm.
Legal Issue:
 Can a firm, which wrongly filed a suit before their registration file a fresh suit after
registration?
Held:
The High Court of Punjab and Haryana held that a firm has the right to file a fresh suit
after registration.

7. Sri Lakha Granites vs. Eklavya Singh & Anr. AIR 2011 Rajasthan 49

Ratio of the Case

Remedy for cancellation of partnership deed is available under the general law before the
Civil Court of Competent Jurisdiction and the Registrar has no jurisdiction whatsoever to
entertain any appeal or application for declaring the reconstitution of partnership deeds as
null and void and cancel the entries made on the basis of such partnership deeds. The remedy
is to approach civil court under sec. 31 of Specific Relief Act

8. Abbot v. Crumb- Dissolution of Firm/ Destroy mutual confidence-Dissolution just

and equitable

Adultery be one partner with another partner's wife was held to be a good ground for the
dissolution of the firm by the court.

9. Harrison v. Tenant-
PRINCIPLE:Dissolution of the firm/ Persistent breach of partnership agreement
FACTS:One of the partners in a firm of solicitors ignored the other two partners and declined
to settle their disputes by mutual consultation. It was held that the conduct of one of the
partners being destructive of mutual confidence, which could not be restored, was a valid
ground for dissolution of the firm

10. SNOW vs MILLFORD

PRINCIPLE:When a partner, other than the partner suing, is guilty of conduct which is likely
to affect prejudicially the business of the firm the court may order dissolution.
FACTS:A partner of a firm of bankers committed adultery with several women in the city
where the business was carried on and his wife had left him. The other partners applied for
dissolution on this ground. The adultery of a partner was conduct insufficient to warrant
expelling that partner or dissolving the partnership.
11. Essel vs. Hayward
Facts:
A partner of a firm was convicted for an offence under moral turpitude, the English Court had
passed the order for the dissolution of the firm.
Note:
The act of misappropiation of the money of a client by solicitor, an act of adultery by a
doctor, have also been found by the English Courts to fall under the category of such acts,
justifying dissolution of the firm concerned.

12. Case: Cheesman vs. Price(1865)

Principle Involved:
Wilful or persistent breach
One partner willfully or persistently commits a breach of the partnership agreement or
otherwise conducts himself in matters relating to the partnership business that it is not
reasonably practicable for the other partner or partners to carry on business in partnership
with him, then they (the other partners) may apply to the court for a
dissolution.
Facts:
In this case, the offending partner had failed to enter small sums of money received from
customers into the accounts as he was required to do under the agreement. This had happened
17 times. The court held that there was persistent breach and ordered a dissolution.