Partnership deed disputes belong in civil court; death of one of two partners dissolves the firm and affects licence renewal.

Customs authorities were held to be an improper forum for deciding the genuineness of competing partnership deeds, because that dispute was a civil matter concerning contractual rights and had to be pursued before the civil court. Where a partnership firm consisted of only two partners, the death of one partner dissolved the firm by operation of Section 42 of the Partnership Act, notwithstanding any contrary agreement. On that basis, renewal of a customs house agent licence in the name of the dissolved firm was not sustainable, and a fresh application by the surviving or proposed partners was the proper course. The impugned order was set aside and the matter remanded.

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Issues: (i) whether the Customs authorities and the Tribunal could determine the validity and genuineness of the competing partnership deeds; (ii) whether the death of one of the two partners dissolved the firm and affected renewal of the customs house agent licence.

Issue (i): Whether the Customs authorities and the Tribunal could determine the validity and genuineness of the competing partnership deeds.

Analysis: The dispute regarding tampering of the partnership deed was held to be a civil dispute concerning contractual rights between the parties. It was held that Customs authorities were not the proper forum to adjudicate the genuineness or correctness of such a document, and that the remedy lay before the civil court.

Conclusion: The issue was answered against deciding the dispute on merits in departmental proceedings, and the question of genuineness was left to be decided in appropriate civil proceedings.

Issue (ii): Whether the death of one of the two partners dissolved the firm and affected renewal of the customs house agent licence.

Analysis: The firm consisted of only two partners. Applying Section 42 of the Partnership Act, the death of one partner was held to dissolve the firm notwithstanding any agreement to the contrary. On that footing, renewal of the existing customs house agent licence in the name of the dissolved firm could not arise, and a fresh application by the surviving or proposed partners was the proper course.

Conclusion: The firm stood dissolved on the death of the partner, and renewal of the licence in the firm's name was not sustainable.

Final Conclusion: The impugned order was set aside and the matter was sent back for reconsideration in light of the legal position on dissolution of the firm and the consequence for licence renewal.

Ratio Decidendi: Where a partnership firm consists of only two partners, the death of one partner dissolves the firm by operation of law, and questions about the genuineness of rival partnership deeds are not to be conclusively adjudicated by Customs authorities in licensing proceedings.

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