Question

Under which of the following cases, the Court can order the dissolution of a partnership firm?
(A) When a partner persistently commits breach of partnership agreement.
(B) When a partner has transferred the whole of his interest in the firm to a third party.
(C) By the death of a partner.
(D) When the business of the firm cannot be carried on except at a loss.
Choose the correct answer from the options given below:

• A. (A), (B) and (C) only
• B. (A), (B) and (D) only
• C. (A), (B), (C) and (D)
• D. (A), (C) and (D) only

Hint:

Death of a partner dissolves the firm automatically, so it is not a court ground under Section 44.

Answer 1

The Correct Option is B

Step 1: Separate the two routes of dissolution
A firm may end by the law itself or by an order of a court. Events which end the firm automatically, such as death of a partner, do not need the court. The court is needed only for the specific grounds listed in Section 44.

Step 2: Sort the four statements
(A) Persistent breach of agreement: a court ground.
(B) Transfer of whole interest to an outsider: a court ground.
(C) Death of a partner: automatic dissolution under Section 42, not a court ground.
(D) Business only at a loss: a court ground.

Step 3: Pick the option
The list with A, B and D and without C is option 2. Options 1, 3 and 4 all include (C), so they are wrong.

Final Answer:
Option 2 is correct. \[ \boxed{\text{Option 2}} \]