Dissolution of Partnership firm

[Arun Aggarwal]

A Firm is registered under Indian Partnership Act consisting of two partners. If one of partners expire and out of four legal heirs of deceased partner , one legal heir with written consent of other three legal heirs , becomes partner of said firm from the date of death of deceased partner.

A) Will above be treated as dissolution of firm or continuation of firm ? Please support your reply with case laws

B) Can any debtor deny to pay debt on the ground that firm have been dissolved on death of one of partners?

AI Summary

Dissolution on death of partner: two-partner firm ends unless heirs form a new agreement promptly.
When a partnership has only two partners, the partnership is dissolved on the death of one partner; the partnership is contractual and not heritable, so legal representatives of the deceased are not obliged to continue the firm and a clause in the deed cannot unilaterally bind them. Continuation requires a fresh agreement or acceptance by successors; absent that, the firm is to be treated as dissolved despite any purported deed provision.