Rights of outgoing partner to carry on competing business
Commencement. 1932-10-01 (except section 69) 1933-10-01
Section 36 of the Indian Partnership Act, 1932 deals with rights of outgoing partner to carry on competing business. An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not-- (a) use the firm name, (b) represent himself as carrying on the business of the firm, or (c) solicit the custom of persons who were d The Act was enacted on 08 Apr 1932.
(1) An outgoing partner may carry on a business competing with that of the firm and he may advertise such business, but, subject to contract to the contrary, he may not--
(a) use the firm name,
(b) represent himself as carrying on the business of the firm, or
(c) solicit the custom of persons who were dealing with the firm before he ceased to be a partner.
(2) A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period or within specified local limits; and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable.
Section 36, The Indian Partnership Act, 1932 (Act 9 of 1932).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Sharad Vasant Kotak vs Ramniklal Mohanlal Chawda
Court's Decision & Legal Precedent
When a registered partnership firm undergoes reconstitution due to the death of a partner and the induction of a replacement partner, the reconstitution does not dissolve the original registered firm and does not require fresh registration. The original registration continues to be valid. A suit for dissolution and accounts of the firm can be maintained if (1) the firm was originally registered, and (2) the person suing is shown in the Register of Firms as a partner in that registered firm. Non-compliance with the requirement to notify the Registrar of changes in firm constitution (Sections 61, 62, 63) attracts penalties under Section 69A but does not invalidate the registration or bar the maintainability of suits under Section 69(2A). For purposes of Section 69(2A), the partnership firm means the firm as found in the Certificate of Registration, and partners are those found in the Register of Firms.
On this section: Dissolution of a firm - Defined as dissolution of partnership between all partners; distinguished from reconstitution
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 36
What have the courts held on Section 36 of the Indian Partnership Act?
Sharad Vasant Kotak vs Ramniklal Mohanlal Chawda (17 Dec 1997) is the leading judgment on this section among those set out below: Dissolution of a firm - Defined as dissolution of partnership between all partners; distinguished from reconstitution.
How do I find court cases under Section 36 of the Indian Partnership Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Partnership Act 36, section 36 Partnership Act, section 36 of the Indian Partnership Act. People searching for it also type indian partnership act 1932 section 36. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Sharad Vasant Kotak vs Ramniklal Mohanlal Chawda (17 Dec 1997).
When was Section 36 of the Indian Partnership Act enacted?
Section 36 of the Indian Partnership Act, cited as Partnership Act 36, was enacted on 08 Apr 1932 as Act 9 of 1932. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.