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Section 252: Sections 239 to 266 [Repealed by the Indian Partnership Act, 1932]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 1872
Section 75 All 266 Sections of Indian Contract Act Section 77

Legal Commentary & Landmark Judgments: Section 252

Section 252 historically recognized the contractual autonomy of partners to vary, modify, or annul the terms of their partnership agreement by mutual consent, whether expressed or implied by a long course of dealing, now reenacted as Section 11 of the Indian Partnership Act, 1932.

  • Primacy of Contractual Autonomy: The rights, duties, and profit-sharing ratios of partners are fundamentally creatures of contract and can be altered at any time by the unanimous agreement of the partners.
  • Variation by Established Course of Dealing: Mutual consent to alter partnership covenants does not require a formal written addendum; it may be inferred from financial statements, ledger entries, or established commercial practice.
  • Modern Reenactment in Section 11 IPA 1932: Repealed by Act 9 of 1932 and reenacted as Section 11(1) of the Indian Partnership Act, 1932, preserving the flexibility of internal firm governance.
Key Landmark Precedents:
  • Const v. Harris (1824) Turn & R 496: Lord Eldon established that partnership articles, however solemnly agreed upon, may be varied by the continuous mutual consent of all partners demonstrated through long practice.
  • England v. Curling (1844) 8 Beav 129: Affirmed in Indian law: equity will enforce an unexecuted or modified partnership agreement where the partners have acted upon its altered terms over a substantial period.
  • CIT v. Bagyalakshmi & Co. AIR 1965 SC 1708: The Supreme Court recognized that partners have complete autonomy to rearrange their mutual rights, capital ratios, and shares by agreement without altering the external identity of the firm.
Courtroom Practice & Strategic Litigation Guidance:

In partnership disputes where a partner claims a higher profit share or interest on capital contrary to the original deed, file certified tax returns, annual balance sheets, and distribution ledgers to prove that the partners mutually varied the deed by course of dealing under Section 11(1) of IPA 1932.

Section 75 All 266 Sections of Indian Contract Act Section 77