Partnership not illegal where a company acted through a representative, and dissolution followed breakdown of relations and losses.

A partnership was not invalid merely because one participant acted for a company: the company was a separate legal person, and the statutory bar on an unregistered association or partnership exceeding the prescribed number of persons did not apply on these facts. The deed showed only three individuals as parties, with one signing in a representative capacity. Independently, persistent losses and a serious breakdown in relations between the partners satisfied the grounds for dissolution under the Partnership Act, so dissolution and accounts were properly ordered.

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Issues: Whether the suit partnership was illegal for contravention of the limit on the number of persons under the Companies Act, and whether the partnership was otherwise liable to be dissolved.

Analysis: The partnership deed showed that only three individuals were parties to the arrangement, one of them signing in a representative capacity as managing agent, while the company itself was not the contracting partner in the sense of a body of shareholders. A registered company is a distinct legal person with perpetual succession, separate from its shareholders, and the statutory bar against an unregistered association or partnership of more than 20 persons was therefore not attracted on the facts. Independently, the firm had been running at a loss and the relations between the partners had broken down so seriously that the grounds for dissolution under section 44 of the Indian Partnership Act were made out.

Conclusion: The partnership was not illegal on the ground urged, and the decree for dissolution and accounts was sustainable. The appeal failed.

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