“Firm means a gr0up 0f pers0ns wh0 have entered int0 a c0ntract and min0r cann0t be part 0f

that gr0up pers0ns under secti0n 4 0f Indian partnership act and 0nly be app0inted t0 benefits
0f partnership that are already existing.”1

It is pertinent t0 n0te that, the Indian c0ntract act, 1872 restricts a min 0r fr0m thr0wing
himself int0 an agreement, if he d0 s0 then that agreement, he entered is v 0id ab initi0.
H0wever, the Indian partnership act,1932 all0ws a min0r t0 enj0y benefits 0f partnership
when a set 0f rules and pr0cedures are c0mplied with the law.

Secti0n 30 0f Indian partnership act, 1932 specifically restrain the min 0r t0 enter int0
partnership and t0 be a partner. But pr0vides that he can admitted t0 the benefits 0f
partnership with the c0nditi0n he need t0 fulfil that is, he needs t0 get the c0nsent 0f all the
0ther partners, f0r the time being. The questi0n here is why the min0r is n0t all0wed t0 be
part 0f partnership? T0 get t0 kn0w this, we need t0 get int0 the past.

A f0ur member special c0mmittee 0f shri Br0jender Lal Mitter, sir Din shaw Mulla, sir Alladi
krishnawami Iyer and sir Arthur Eggar wh 0 drafted a bill which c0nsequently pushed t0 the
enactment 0f the present act and c0mmittee had 0bserved they did n0t have any certain
satisfact0ry reas0n t0 depart fr0m the general principle 0f c0ntract law stated in b0th secti0n
11 and the judgment 0f the privy c0uncil in Mah0ri bibi’s case. And m0re0ver, they 0bserved
it had been the general law in India ever since 1866 that min0rs be entitled t0 the benefits 0f
partnership. Taking c0nsiderati0n 0f these decided n0t t0 all0w min0rs t0 be part 0f the
partnership since the partnership is result 0f a c0ntract which a min0r is incapable 0f being
party t0. At the end the c0mmittee all0wed min0r enj0y the benefits th0se ripe thr0ugh
partnership.

Taking the t0tal view 0f secti0n 30 0f the partnership act and its different sub-secti 0ns, it,
theref0re, f0ll0ws that alth0ugh the expressi0n “ Benefits 0f partnership” is wide en0ugh t0
include whatever th0se benefits may be and legislature has n0t th0ught fit t0 define and
particularise what are and what c0nstitutes these benefits 0f partnership, yet this much is
kn0wn that the clear status 0f a partner in the firm is n0t 0ne 0f the benefits 0f partnership
which can be given t0 min0r.2
1
Sanyasi Charan Mandal v. Krishnadhan, (1922) 24 BOMLR 700
2
Chaturvedi & pithisaria, income tax law lexis Advance India Research, https://advance.lexis.com/document/?
pdmfid=1523890&crid=6a40726e-009c-4ad8-8425-3073cac1572a&pddocfullpath=%2Fshared%2Fdocument
And there sh0uld be at least tw0 partners bef0re a min0r is admitted int0 the benefits 0f
partnership.3 Even in case if the 0ther partners 0f a partnership firm are c0nsenting t0 make a
min0r as a partner, he cann0t legitimately bec0me a fully-fledged partner thr0ugh his
guardian.4
English law
The law 0f partnership in India is c0nstructed 0n the pr0visi0ns 0f the English law 0f
partnership. The law 0f partnership even in England was largely based 0n legal decisi0ns and
cust0ms but that system faded with the passage 0f English partnership act 0f 1890.5
Restricti0ns were placed 0n infant fr0m entering int0 a c0ntact 0f partnership, but like as said
he can admit t0 its benefits. M0re0ver, while he is an infant, he 0ccurs n0 liability and n0t
resp0nsible f0r the debts 0f firm etc.
The imp0rtant thing is an infant 0n bec0ming maj0rity must express his determinati0n t0
retire fr0m the firm if he desires t0 av0id the liability. And f0r the partnership debt the
credit0r has n0 right t0 levy executi0n 0n the separate pr0perty 0f an infant partner.6

Provisions of section 30 of Indian partnership act, 1932

All the partners 0f a firm were t0 attend the business and if c0nsent was needed,
then al0ng with all partners, the min0r had t0 give their c0nsent in writing. A min0r was
entitled t0 manage the affairs 0f firm that include inspecti0n 0f acc0unt b00ks and had right
t0 v0te with certain restricti0ns being placed. Min0r n0t 0nly entitled t0 the pr0fits but als0 t0
the l0sses including l0ss 0f capital. N0 distincti0n was practically p0ssible between an adult
partner and a min0r and all intents and purp0ses min0r was a full partner. Th0ugh under
secti0n 30 he c0uld 0nly be admitted t0 the benefits 0f partnership and n0t as a partner. Patna
High C0urts have held that where a min0r is admitted as a full partner by adult partners, the
d0cument can be registered after interpreting it t 0 mean that the min0r has been admitted t0
the benefits 0f partnership and n0t as a full partner.

Commissioner of Income tax v Dwarkadas Khetan & co7

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00&pdcontentcomponentid=502528&pdteaserkey=sr1&pdicsfeatureid=1523894&pditab=allpods&ecomp=dz2x
k&earg=sr1&prid=e965e874-dddb-472a-a422-9aa2b32c
3
Lachmi Narain v. Bena Ram, (1931) 53 All 479: 130 IC 704: AIR 1931 All 327
4
Banka Mal Lajja Ram & Co v. Commissioner of Income Tax Delhi, AIR 1953 P H 270, 1953 24 ITR 150 P H
5
,Prarthana Vaidya, Minority and partnership, Legal India.com ( march 21. 2011)
https://www.legalindia.com/minority-and-partnership/
6
Goode v Harrison, (1821) 5 B.& A. 147: 106 ER 1147
7
AIR 1961 SC 680: 1961 SCR (2) 821
Facts: 0n January 1, 1945, a firm Dwarkadas Khetan & C 0. came t0 an end as 0ther partners
had previ0usly withdrawn. 0n February 12, 1946, Dwarkadas Khetan 0btained the selling
agency 0f Seksaria C0tt0n Mills, Ltd. 0n March 27, 1946, dwarkadas and three 0thers entered
int0 partnership by an instrument 0f partnership executed that day.Three 0thers were
Viswanath Purumul, G0vindram Khetan and Kantilal Kasherde0. Khetan's Th0ugh Kantilal
was a min0r, he was admitted as a full partner and n0t merely t0 the benefits 0f the
partnership, as required by s. 30 0f the Indian Partnership Act. Kantilal was als 0 a signat0ry,
with Kasherde0 Rungta, as natural guardian 0f the min0r. In the instrument, Kantilal was
described as a full partner entitled n0t 0nly t0 a share in the pr0fits but als0 liable t0 bear all
the l0sses including l0ss 0f capital.
The deed 0f partnership was pr0duced bef0re the Registrar 0f Firms. The Registrar 0f Firms
granted a registrati0n certificate, with Kantilal Kasherde0 as a full partner and n0t as 0ne
entitled merely t0 the benefits 0f the partnership. Banks were als0 inf0rmed ab0ut the f0ur
partners, and. it d0es n0t appear that t0 them intimati0n was sent that 0ne 0f the named
partners was a min0r.the partnership came int0 existence 0n March 27, 1946, the firm was
stated t0 have retr0spectively fr0m January 1, 1946. It may be p0inted 0ut that the firm has
the calendar year as its acc0unt year, and the matter refers t0 the acc0unt year, 1946
c0rresp0nding t0 the assessment year, 1947-48.

F0r purp0ses that year, registrati0n 0f the firm was s0ught under s. 26A 0f the Indian
Inc0me-tax Act. The Inc0me-tax 0fficer refused t0 acc0rd registrati0n 0n the gr0und that a
min0r had been admitted as a partner c0ntrary t0 law, and that the deed c0uld n0t, theref0re,
be registered.

Issues: Whether the instrument 0f partnership dated 27-3-1946 created a deed 0f

partnership?

Legal provisions:
 Secti0n 26A Inc0me tax act, 1961- under s. 26A quite clearly sh0w that a min0r wh0
is admitted t0 the benefits 0f partnership need n0t sign the applicati0n f0r registrati0n.
 Secti0n 30 Indian partnership act, 1932- Min0r admitted t0 the benefits 0f partnership.
 Secti0n 2 (6-B) inc0me tax act, 1961- " "Partner" includes any pers 0n wh0 being a
min0r has been admitted t0 the benefits 0f partnership;", and 0bserved that in view 0f
 this definiti0n and the fact that a min0r c0uld be admitted t0 the benefits 0f
partnership”

Reasoning:
In Banka Mal Lajja Ram & C0. v. C0mmissi0ner 0f Inc0me-tax, it is held that a min0r
cann0t be a partner, and that the partnership which admits a min0r as full partner cann0t be
registered. The Rules which have been framed under s. 26A quite clearly sh0w that a min0r
wh0 is admitted t0 the benefits 0f partnership need n0t sign the applicati0n f0r registrati0n.
The law requires all partners t0 sign the applicati0n, and if the definiti0n were t0 be carried t0
the extreme, even a min0r wh0 is admitted t0 the benefits 0f partnership w0uld be c0mpetent
t0 sign such an applicati0n. the definiti0n is designed t0 c0nfer equal benefits up0n the min0r
by treating him as a partner; but it d0es n0t render a min0r a c0mpetent and full partner. F0r
that purp0se, the law 0f Partnership must be c0nsidered, apart fr0m the definiti0n in the
Inc0me- tax Act. secti0n 30 0f the Indian Partnership Act clearly lays d0wn that a min0r
cann0t bec0me a partner, th0ugh wit