Renewed lease after partnership dissolution is not automatically partnership property where no fiduciary advantage or trust basis is proved.

A renewal of a lease used for partnership business does not automatically become partnership property. The equitable presumption that one partner's renewal enures to the benefit of all is only a rebuttable presumption of fact, and it was displaced here because the partnership was limited to the original lease term, no term provided for continuation or renewal for all partners, no partnership funds or goodwill were used, no clandestine conduct was shown, and the renewed lease and later permanent licence were obtained after dissolution. On those facts, the renewed lease was not held on constructive trust for the former partners and could not be treated as an asset of the dissolved partnership.

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Issues: Whether the renewal of the lease taken in the names of the continuing partners after the dissolution of the partnership had to be treated as an asset of the dissolved partnership under the law of constructive trust.

Analysis: The partnership was deliberately fixed to run only for the period of the original lease and licence, and there was no provision, express or implied, for continuation of the business or for renewal of the lease for the benefit of all partners. No partnership funds or goodwill were used to obtain the renewed lease, no clandestine conduct was proved, and the renewed lease as well as the later permanent licence were granted after the partnership had already come to an end. On these facts, the case did not fall within Section 88 of the Indian Trusts Act, 1882, and the equitable presumption that a renewal by one partner enures to the benefit of all was rebutted. Section 90 of the Indian Trusts Act, 1882 had no application.

Conclusion: The renewed lease was not an asset of the dissolved partnership, and the claim to treat it as such failed.

Ratio Decidendi: A renewal of a lease formerly used for partnership business does not automatically belong to all partners; it is only a rebuttable presumption of fact, and where the partnership was fixed to expire with the original lease, no partnership assets or fiduciary advantage were used, and the renewal was obtained after dissolution, the renewed lease is not held on constructive trust for the former partners.

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