Mr. Ram and Mr. Rakesh are working as teachers in Ishwarchand Vidhyasagar Higher Secondary School and also are very good friends. They jointly…
CA Foundation · Business Laws · RTP · September 2026
Mr. Ram and Mr. Rakesh are working as teachers in Ishwarchand Vidhyasagar Higher Secondary School and also are very good friends. They jointly purchased a flat which was given on rent to Mr. John. It was decided between landlords and tenant that the rent would be ₹ 10,000 per month inclusive of electricity bill. It means electricity bill will be paid by landlords. The landlords, by mistake, did not pay the electricity bill for the month of March 2023. Due to this, the electricity department cut the connection. Mr. John has to pay the electricity bill of ₹ 2800 and ₹200 as penalty to resume the electricity connection. Mr. John claimed ₹3000 from Mr. Ram but Mr. Ram replied that he is liable only for ₹1500. Mr. John said that Mr. Ram and Mr. Rakesh are partners therefore he can claim the full amount from any of the partners. Explain, whether under the provision of Indian Partnership Act, 1932, Mr. Ram is liable to pay whole amount of ₹3000 to Mr. John?
Suggested Answer and Working Notes:
According to Section 4 of the Indian Partnership Act, 1932, "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Therefore, for determining the existence of partnership, it must be proved that: 1. There must be an agreement between all the persons concerned; 2. The agreement must be to carry on some business; 3. The agreement must be to share the profits of a business and 4. The business was carried on by all or any of them acting for all. On the basis of above provisions and facts provided in the question, Mr. Ram and Mr. Rakesh cannot be said under partnership as they are teachers in a school and just purchased a flat jointly. By merely giving the flat on rent, they are not doing business. They are just earning the income from the property under their co-ownership. Hence, there is no partnership between them. Therefore, Mr. Ram is liable to pay his share only i.e. ₹ 1500. Mr. John has to claim the rest of ₹1500 from Mr. Rakesh.
Topics: The Indian Partnership Act, 1932
Related Questions in this Topic
- A, B and C are partners in an unregistered partnership firm named M/s ABC & Associates. Is the suit maintainable in the ...
- Ram and Sarthak are partners in a partnership firm styled as RS & Co. (the firm). Gopal, a renowned businessman, is thei...
- With reference to the provisions of Indian Partnership Act, 1932 explain the various effects of insolvency of a partner.
- "Partner indeed virtually embraces the character of both a principal and an agent". Describe the said statement keeping ...
- (i) Mr. Ram and Mr. Raheem are working as teachers in Ishwarchand Vidhyasagar Higher Secondary School and also are very ...