Expulsion of a partner
Section 33 provides that “a partner may not be expelled from a firm by any majority of the partners, save in the exercise in good faith of powers conferred by contract between the partners”.
Thus, two conditions are required for expulsion of a partner:
i) The power to expel has been conferred by contract between the partners.
ii) Such a power has been exercised in good faith.
If the power to expel has been exercised bonafide the same cannot be challenged in Court of law.
i) Russell v. Russell
ii) Blisset v. Daniel – Power to expel exercised mala fide void i.e. expulsion was not to protect any commercial interest but was due to the opposition of the expelled partner for the appointment of co-partner’s son as co-manager with his father.
Expulsion of a partner who has been held guilty of an offence (travelling without ticket) has been considered to be justified (Carmichael v. Evans) – (power to expel existed when partner was addicted to scandalous conduct or was guilty or any breach of duties).
Liability of an expelled partner
It is same as that of retired partner.
i) Before expulsion, he continues to be liable for the acts of the firm done, unless he is discharged from liability by following the procedure mentioned in Section 32(2) i.e. by novation.
ii) After expulsion, he can be made liable toward third parties for the act of firm done unless a public notice of expulsion is been given.