Examine the rights of the partners in the Contract of Partnership.

Right to Take Part in Management: Section 12

Section 12(a) gives every partner, subject to contract between the partners, the right to take part in the conduct of the business. This right cannot be taken away except by express agreement, though partnership deeds commonly designate certain partners as sleeping or dormant, excusing them from active management while paying a salary to the managing partner instead. Section 12(d) further grants every partner the right to inspect and copy the books of the firm, ensuring transparency in how the common business is being run.

Right to be Consulted: Section 12(c)

Section 12(c) provides that any difference on ordinary matters connected with the business may be decided by a majority of partners, but every partner retains the right to express his opinion before the matter is decided, and no change may be made in the nature of the business without the consent of all partners. The Supreme Court has clarified that the majority's power under this clause comes into play only once a genuine difference arises while a partner is exercising his right under clause (a); it cannot be used to bind the minority on matters of fundamental or vital importance to the firm.

Right to Share Profits and Losses

Partners have a right to share in the profits of the business, in whatever proportion has been agreed, and, correspondingly, are liable to contribute to losses. Where the deed is silent, the law presumes equal sharing of both profits and losses, but partners are free to depart from this by agreement — they may share profits unequally while sharing losses equally, may fix a salaried partner's return irrespective of the fluctuating fortunes of the firm, or may agree that one or more partners shall not bear losses at all. This flexibility was recognised in Raghunandan Nanu v. Hormasjee Benzoojee, where a partner who was entitled only to a fixed monthly sum in lieu of a share of profits, and who bore no responsibility for losses, was nonetheless held to be a genuine "salaried partner," since partners may agree to share profits in any manner they choose.

Right to Indemnity and Reimbursement

Every partner has the right to be indemnified by the firm for payments made and liabilities incurred by him in the ordinary and proper conduct of the business, or in an emergency, for the purpose of protecting the firm from loss, provided the act done would have been done by a person of ordinary prudence in his own case under similar circumstances. This right flows directly from the agency relationship between the firm and its partners recognised under Section 18, since an agent who incurs expenses on behalf of his principal in the course of the agency is ordinarily entitled to reimbursement.

Right to Use Property Exclusively for the Firm's Business: Section 15

Section 15 provides that, subject to contract, the property of the firm shall be held and used by the partners exclusively for the purposes of the business. Correspondingly, every partner has the right to insist that firm property be applied only to firm purposes and not diverted to any partner's private use; a mortgage of partnership property executed by a partner for his own personal benefit has accordingly been held invalid. If a partner nonetheless uses firm property for himself, the other partners have the right to call him to account for any profit made, since a contract of partnership is uberrimae fidei.

Right to Restrain Personal Profits and Competing Business: Section 16

Section 16 secures to every partner the right to share in any profit that a co-partner derives from a transaction of the firm, or from use of its property, business connection, or firm name, and equally the right to an account of profits made by a co-partner who carries on a competing business of the same nature. The Act's own illustration makes this concrete: where C, without the knowledge of A and B, secures for himself the lease of the premises in which the firm's business is carried on, A and B have the right to participate, if they wish, in the benefit of that lease. Likewise, where a London merchant secretly pays commission to partner C for directing consignments his way, A and B have the right to call C to account for that secret payment.

Right to Continuity of Terms on Change in Constitution: Section 17

Section 17(a) protects a partner's rights on reconstitution of the firm, providing that where a change occurs in the firm's constitution — as when a new partner is introduced following death or retirement — the mutual rights and duties of partners remain, so far as possible, the same as they were immediately before the change. This was applied where a deceased partner's son stepped into his place and continued the business with the surviving partner; the son was held entitled to the same share his father had enjoyed, without any need for a fresh agreement. Section 17(b) preserves this continuity, consistent with a partnership at will, where a firm formed for a fixed term continues business beyond that term, and Section 17(c) extends the same protection where a firm formed for particular undertakings goes on to further undertakings.

Right to Restrict a Co-Partner's Competing Business: Section 11(2)

Partners also have the right, by express agreement, to restrain a co-partner from carrying on any business other than that of the firm while he remains a partner, and Section 11(2) validates such a covenant notwithstanding Section 27 of the Indian Contract Act, 1872, which would otherwise render agreements in restraint of trade void. This is a rare and deliberate legislative departure from the general contract law rule, justified by the personal and fiduciary character of the partnership relationship.

Illustration

Suppose A, B and C are partners in a stationery trading firm, sharing profits equally under the partnership deed, which is silent as to losses. C, using his position as a partner, secretly earns a commission from a supplier for directing the firm's bulk orders to that supplier. A and B, exercising their right under Section 16(a), can compel C to account for and pay over that secret commission to the firm. If C also opens a stationery shop of his own nearby while remaining a partner, A and B can invoke Section 16(b) to claim the profits of that competing venture, and if the partnership deed contains a clause restraining C from carrying on any other business at all, A and B can additionally enforce that restrictive covenant under Section 11(2), notwithstanding the general rule against restraint of trade. Meanwhile, if A dies and his son steps into the partnership by agreement with B and C, Section 17(a) ensures that the son inherits the same rights and share that A previously held, without requiring any renegotiation of terms.

Concluding Observations

Taken together, these provisions show that a partner's rights in the contract of partnership are not confined to a simple entitlement to profit, but extend to active participation in management, transparency through inspection of accounts, protection of firm property from private misuse, restitution of secret or improperly obtained profits, continuity of terms through changes in the firm's personnel, and even the ability to contractually restrain a co-partner's outside business activities. Because most of these rights are default rules operating "subject to contract between the partners," the partnership deed remains the primary instrument through which partners define and adjust their mutual entitlements, always within the outer limits set by the Act's mandatory provisions safeguarding good faith and honesty among partners.