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Issues involved:
1. Whether the suit is premature. 2. What is the "average rate of expense" mentioned in Clause 25 of the partnership instrument. 3. Have there been "extraordinary circumstances" within the meaning of that clause. Issue-wise detailed analysis: 1. Whether the suit is premature: The Court of Appeal's decision that the Nawab was not entitled to claim a dissolution when he filed his suit was based on the terms of the partnership agreement and Section 252 of the Indian Contract Act. However, it was acknowledged that the business of the partnership could only be carried on at a loss, as shown by the firm's balance sheets and profit and loss account. This condition is described in Section 254 (6) of the Indian Contract Act, 1872, which allows the Court to dissolve the partnership at the suit of a partner. The appellate Bench's view that Section 252 constituted a bar was rejected, as it was directed to something wholly different. The Nawab's claim for dissolution was based on his inherent right to invoke the Court's protection on equitable grounds, despite the partnership contract's terms. The original Court's discretion to decree dissolution was justified, given the dual position of the defendants and the common purpose that the quarries should be profitable to the partners. Therefore, there was no sufficient ground for disturbing the original decree pronouncing dissolution. 2. What is the "average rate of expense" mentioned in Clause 25 of the partnership instrument: Clause 25 was inserted to protect the Nawab by imposing a limit on expenditure by the controlling partners, measured by the rate of past expenditure. The agreed rate was 1/7 rupees per cubic foot for labour on granite for quarrying, dressing, and hauling to the station. This agreement was confirmed by a letter on 10th March 1908, and despite the Nawab's subsequent objection, the admission made in a letter dated 30th July 1913 confirmed the agreed rate. The letter of 10th March was explicit that the rate covered these three items only. The evidence, including Stuart's testimony, supported this, and there was no contradiction from Chukerbutty or anyone else. Thus, the appellate Bench's decision on this point was upheld. 3. Have there been "extraordinary circumstances" within the meaning of Clause 25: The burden of proving "extraordinary circumstances" was on the defendants. The only direct evidence was from Gay, who mentioned the preparation of culvert stones and the importation of labour as circumstances causing greater expenditure. However, the preparation of culvert stones was not considered extraordinary as it was within the contemplation of the parties. The importation of labour, due to an extension of quarrying operations, was a normal business development to suit the defendants' convenience as contractors, not as partners. Therefore, no "extraordinary circumstances" justifying an increase in the rate of expense were proven. Conclusion: The appeal was allowed, and the decree of the appellate Court was set aside, restoring the original Court's decree with modifications. The rate for Clause 25 was fixed at 1/7 rupees per cubic foot, covering only the expenses of labour on quarrying, dressing, and hauling the stones, excluding royalty and depreciation of plant or machinery. The declaration that the defendants were justified in adding ten percent for extraordinary circumstances was omitted. Each party was ordered to bear their own costs for the appeal and the appeal to the High Court.
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