Discuss the Legal Provision Regarding Expulsion of a Partner.
A partner cannot be ordinarily expelled from the firm by any majority of the partners. But, if need arises, expulsion may be done while satisfying the following requirements : The power of expulsion must be available to the partners by an express contract between them.
- The power to expel should be exercised by majority of partners.
- It should be exercised in absolute good faith in the interest of the firm
- The accused partner should be given a chance to defend himself.
If any of the above conditions is not satisfied, the expulsion of the partner will be considered as improper. A partner who is not properly expelled is entitled to be reinstated in his position. Example. In Carmichael vs. Evans, C was a partner in a firm of drapers.
He was convicted of traveling without ticket. The partnership agreement authorized expulsion when a partner was guilty of flagrant breach of duty. C was given the notice of expulsion on the above ground. Held the expulsion was justified. So far as his liability for acts done before or after his expulsion are concerned, the expelled partner is in the same position as that of a retiring partner (Section 33).