Exclusive management does not invalidate partnership where profit sharing and mutual agency remain established under the deed.

A partnership deed remains valid in law where it shows agreement to share profits and mutual agency, even if one partner is given exclusive management and the others are left dormant. A contractual clause allowing one partner to exclude the others does not by itself destroy the partnership; at most, any expulsion contrary to the Partnership Act may be ineffective without negating the firm's existence. On that basis, the firm satisfied the statutory test for partnership and was registrable under section 26A of the Income-tax Act, 1922.

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Issues: Whether the firm, on the terms of the partnership deed, constituted a valid partnership in law and was therefore registrable under section 26A of the Indian Income-tax Act, 1922.

Analysis: The statutory test under section 4 of the Indian Partnership Act, 1932 requires agreement to share profits and carrying on of business by all or any of them acting for all, that is, the principle of agency. The deed provided for equal division of profits and permitted one partner to manage the business at his sole discretion, which was consistent with an arrangement where one partner manages and the others remain dormant. The clause empowering one partner to exclude the others did not destroy the partnership; at most, an expulsion made contrary to section 33(1) of the Indian Partnership Act, 1932 could be ineffective, but that would not negate the existence of the partnership itself.

Conclusion: The firm was a valid partnership in law and was registrable under section 26A.

Ratio Decidendi: A partnership is not invalid merely because one partner is given exclusive management or a contractual right to exclude others, so long as the deed still discloses an agreement to share profits and the mutual agency essential to a partnership.

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