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Section 257: Sections 239 to 266 [Repealed by the Indian Partnership Act, 1932]

Indian Contract Act • Official Statutory Text & Practice Guide

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

Legal Commentary & Landmark Judgments: Section 257

Section 257 historically codified the supreme fiduciary duty of partners to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information, now reenacted as Section 9 of the Indian Partnership Act, 1932.

  • Doctrine of Uberrima Fides (Utmost Good Faith): Partnership is fundamentally an uberrimae fidei relationship; every partner owes an unyielding, non-derogable duty of absolute fidelity, loyalty, and transparency to all co-partners.
  • Tripartite Statutory Obligation: Mandates that partners must (a) conduct the enterprise for the greatest common advantage, (b) be strictly just and faithful in all dealings, and (c) render true accounts and full disclosure of all matters affecting the firm.
  • Modern Reenactment in Section 9 IPA 1932: Repealed by Act 9 of 1932 and reenacted verbatim as Section 9 of the Indian Partnership Act, 1932, serving as the core moral and legal anchor of partnership law.
Key Landmark Precedents:
  • Blisset v. Daniel (1853) 10 Hare 493: Landmark English authority applied in India holding that even an express power in a partnership deed to expel a partner cannot be exercised maliciously or without good faith; the duty under Section 257 / Section 9 IPA overrides arbitrary contract terms.
  • Addanki Narayanappa v. Bhaskara Krishtappa AIR 1966 SC 1300: The Supreme Court emphasized that the mutual relationship of partners is based on mutual confidence and uberrima fides, requiring complete accounting of all firm properties.
  • Clemens v. Clemens Bros Ltd. [1976] 2 All ER 268: Reaffirmed the principle that majority powers in commercial partnerships and quasi-partnerships are fettered by equitable obligations of good faith.
Courtroom Practice & Strategic Litigation Guidance:

In any suit for oppression, secret dealings, or exclusion from partnership management, anchor the cause of action in the mandatory fiduciary standard of Section 9 of IPA 1932. Emphasize that partners cannot contract out of this duty of good faith or waive accountability in the partnership deed.

Section 75 All 266 Sections of Indian Contract Act Section 77