Rights where partnership rescinds to fraud- (Sec 52-53)


Chapter VI of the Indian partnership act 1932, discussed the dissolution of a firm deals with section (39 to 55). If the partner is tempted to persuade the firm by fraud  via other partner, he has the right to set a conclusion to the partnership agreement when such fraud or falsification was created. The partner is permitted to the subsequent rights moreover the other rights. Where a contract partnership is withdrawn or else rescinded on the circumstances of the fraud or falsification of any of the parties to that place. The party permitted to rescind is, not including intolerance or discrimination to any right. As soon as the partnership taking place from the contract is rescinded due in the direction of fraud and misrepresentation or falsification after that the party who has rescinded the contract will be legally responsible.

According to Section 52 of the Transfer of Property Act 1932, where a contract forming  partnership is rescinded on the circumstances of fraud or misrepresentation or falsification of any of the parties to that, the party at liberty to rescind is, devoid of narrow-mindedness to any further right, sanction –

Section 52:- Rights where partnership rescinds to fraud.

  • In this act a right of lien or maintenance of the remaining of the assets of the firm left after having paid the debts of the firm, for any sum paid by him with a view to purchase a share in the firm and for any capital contributed by him.
  • Also in this act, to rank as a creditor of the firm as to any payment made by him towards the debts of the firm as well as
  • In the direction of be indemnified by the partner or partners guilty of fraud or misrepresentation or falsification in opposition to all the debts of the firm.

So, this section required:-

  • The right to lien.
  • To treated as creditor
  • The Right to be indemnified by the partner guilty of fraud or falsification.

Meaning of right to lien- Lien is the right and responsibilities of a person to keep hold of supplies as well as securities in his ownership or possessions that fit in to a different until definite authorized debts due to the individual retaining the supplies are contented. Lien does not give your support to supremacy of sale however simply to hold the property. This contrasting as of other forms of charges as it does not occurs from an implied or express agreement, While, it happens from the connections among the parties. 

Section 53:- Right to Restrain the Use of the Firm Name or firm Property.

In the familiarity and understandings of dissolution of a firm, a partner holds the right to restraint other partner to hold comparable commerce in the given name of the firm.

By means of the property of firm for his personal benefit be able to be restrained through a partner. It is supposed to as well note that a partner can be consequently restrained awaiting the relationships or affairs of the firm are entirely wound up. On the other hand, if he has acquired the benevolence or kindness of the firm at that time a partner cannot be restrained from using the firm name for his personal profit.

subsequent to a firm is dissolved, each partner or his representative may well, in the nonexistence of a contract among the partners to the opposing, restrain any other partner or his representative from carrying on a comparable business in the firm name or starting using any of the property of the firm for his personal profit, until the relationships or affairs of the firm have been entirely wound up; 

Propose that if any partner or his representative has carried the goodwill of the firm, nothing in this section according to this act shall have an effect on his right to use the firm name.

According to this Section 53 of the act lays down the right of a partner to contain or restrain any further partner or his representative commencing running taking place a comparable commerce other than anywhere any partner has acquired the benevolence or goodwill of the firm this limitation shall not be appropriate. It is to be there well-known with the purpose of the section 50 provisions has been geared up on the subject of own profits earned by means of or through a partner later than dissolution of the partnership firm.

In the leading case of pushpa singh and ors vs. ravi prakash singh held that section 53 of partnership act, 1932 all for restraints organize being prepared on respondent as of by means of any property of the firm for his own do good to in anticipation of dealings, relationship or affairs of the firm have been entirely wound up on respondent not having had purchased goodwill of the partnership firm.

In the other case,  Ishwarchand jain vs. sushil kumar jain presented that according to section 53 of the Indian partnership act, a partner is at liberty to implore or plead on behalf of an restriction as well as the court is appreciative to allowance such injunction or restriction. In the remarkable, it is proposed that proviso the defendants are permitted to carry on with the business in that case they are to be expected to generate enumerable troubles in opposition to the interest of the plaintiff in the after everything else. It was held that proviso the high court is of the view that the injunction as decided by the trial of the court could not be established at that time the suitable orders protecting the interest of the plaintiff be approved.


Section 53 of this act applies to a issue where firm is dissolved as well as in such a case each partner or his representative may well, in the absence of a contract among the partners to the differing, may restrain every partners from doing exacting or particular belongings.


Partnership is an extremely widespread category of business in which the customary in the country. It has numerous of advantages for the company or business for their profit also. This Act is a completed Act about the all feature interrelated to the partnership. Like section 52 and 53, also plays a vital role in this act. 






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