M/S LMP & Associates, a partnership firm engaged in carpet manufacturing and exporting, was initially managed by senior partners L, M, and P. On 25th August, 2022, the firm admitted Mr.G, an expert in carpet manufacturing, as a partner. However, on 10th January, 2024, Mr. G was accused of unauthorized activities and subsequently expelled from the partnership with the unanimous approval of the remaining partners. With reference to the provisions of the Indian Partnership Act, 1932, answer each of the following: (l) Examine whether action by the partners was justified or not? (2) What are the factors which should be kept in mind prior to expelling a partner from the firm by other partners?

(1) Expulsion of a Partner (Section 33 of the Indian Partnership Act, 1932): A partner may not be expelled from a firm by a majority of partners except in exercise, in good faith, of powers conferred by contract between the partners. The test of good faith as required under Section 33(1) includes three things: • The expulsion must be in the interest of the partnership. • The partner to be expelled is served with a notice. • He is given an opportunity of being heard. If a partner is otherwise expelled, the expulsion is null and void. Action by the partners of M/s LMP & Associates, a partnership firm to expel Mr. G from the partnership was justified as he was expelled by unanimous approval of the partners exercised in good faith to protect the interest of the partnership against the unauthorized activities charged against Mr. G. Provided, a proper notice and opportunity of being heard has been given to Mr. G. (2) Factors to be kept in mind before expelling a Partner The following are the factors to be kept in mind prior to the expelling of a partner from the firm by other partners: (a) the power of expulsion must have existed in a contract between the partners; (b) the power has been exercised by a majority of the partners; and (c) it has been exercised in good faith.