Legal Question in Banking Law in India

Partnership firm has been converted to proprietorship.

In above context, the bank has kept continued the partnership account for the period of 06 months after the date of one the two partners of the firm and on the same very date they have closed the partnership account on the request of the surviving partner and opened another account under the sole proprietorship of the surviving partner without any consent of legal heir. The legal heir filed a criminal case of conspiracy against the bankers and the surviving partner for conversion. Kindly advise in this matter and send the decision of any leading case in this regard.


Asked on 9/21/07, 7:04 am

3 Answers from Attorneys
J. Radhakrishnan independent Practice

Re: Partnership firm has been converted to proprietorship.

a firm gets dissolved on the death of one of the two partners. The surviving partner has every authority to deal with the partnership assets on dissolution. The legal heirs cannot complain of conversion against the partner or bankers. Go through the partnership Act. Consult lawyer personally for the case and don't throw it at this forum for specific advice.

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Answered on 9/21/07, 7:20 am
Homi Maratha N.N. Maratha & Co.-Advocates

Re: Partnership firm has been converted to proprietorship.

I recommend you to go through The Partnership Act as when a firm gets dissolved on death of one partner out of two the exisiting partner has right to deal with the partnership assets.

Contact a lawyer immediately as this case needs a extensive examination of the papers and facts.

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Answered on 9/21/07, 8:12 am

Re: Partnership firm has been converted to proprietorship.

Legal heirs of deceased partner have no say in partnership mater. After death of one partner the partnership dissolves and the firm becomes proprietorship firm,so, bank had rightly opened the new account in the name of propritorship firm. No conspiracy case is made out.Thereis no wrongfull act on part of bank or surviving partner.

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Answered on 9/21/07, 2:34 pm


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