If there is mismanagement in firm and defalcation of fund you can instruct the bank to freeze the account.

Then you can file civil suit to remove the said partner or to dissolve the firm and to distribute the funds.

Request bank to freeze accounts of firm

on account of disputes between partners 

2) you can also issue notice for dissolution of firm 

According to section 43 of the Indian Partnership Act, 1932:

1. “Where the partnership is at will the firm may be dissolved by any partner

giving notice to all the other partners of his intention to dissolve the firm.”

2. “The firm is dissolved as form the date mentioned in the notice as the date of

dissolution or, if no date is so mentioned, as from the date of communication of the

notice.”

3)The Supreme Court observed that under section 43(2), notice must contain the date from

which the firm will be dissolved

4)if no notice is issued section 43 of partnership act then partner can also move court seeking dissolution of firm and for taking of accounts under order 20 Rule 15 of CPC

1.  By citing proper justifications (eg. fraud, misappropriation, cheating, lack of transparency  etc....)  a Legal Notice may be issued to all partners and the Bankers, for stopping operations of the Banking transactions.

You need to Approach civil with praying injunction for the same after serving him legal notice

Dear Client,

Most of right and duties are mention in Partnership deed, that which partner will operate what part. Who will deal with banking and who will sign cheques etc. If deed is silent on this aspect than you partners must have given consent letter to bank authorizing Mr. X Y partner to do this job.

IF not than , you can file injunction suit to bar , partner to operate bank account.

Give a letter to the bank for stopping the bank transaction as there is dispute in the partnership firm.

Further the partner can file a suit before the civil court and can seek stay on operation of partnership firm .

The partner can seek dissolution of firm.

the partners handling the bank account need to have a proper resolution of the firm signed by all partners before they do any banking transaction

if the transactions are made without such a resolution, then it would be in breach of partnership

you will have to write to the bank that no transaction sought to be made by the partners having signing authority, should be allowed by the bank, unless the transaction request is also accompanied by a valid resolution of the firm signed by all partners

rest of the partners can approach the bank and instruct them stop further transactions. you may also give a public notice and issue legal notice to the said partner and point out everything and can cancel his authority by majority. 

Dear Sir,

The following information may kindly be read:

Relation of Partners with One Another

All partners are free to form their own terms and conditions with respect to functioning in their partnership deed. The Indian Partnership Act, 1932 has also prescribed provisions to govern their relationship inter se (amongst them), and these provisions are applicable if no such deed exists. Let us take a look at the duties and the rights of partners.

Right to Determine Relationship

Partners can determine their mutual rights and duties by a contract called partnership deed, which determines aspects of general administration, such as which partner will do what work, what will be their share in profits, etc. It may be varied by express or implied consent of all the partners.

Such deed can be expressly made or implied by a course of dealing. For example, if one partner checks accounts of the firm daily and others do not object, his conduct will be presumed to be a right of all partners in the absence of a written partnership deed between them. So they can themselves determine the rights of partners.

Agreement in Restraint of Trade is Valid

Section 27 of the Indian Contracts Act, 1872 declares contracts in restraint of trade as void. All agreements restraining exercise of a lawful profession, trade or business are invalid.

Section 11 of Partnership Act, however, states that partners can validly levy such a restraint on each other, but such restraint must be provided for under the partnership deed. Partners can use this agreement to prohibit each other from carrying on any business other than that of the firm.

Rights of Partners Inter Se

Partners can exercise the following rights under the Act unless the partnership deed states otherwise:

1. Right to participate in business: Each partner has an equal right to take part in the conduct of their business. Partners can curtail this right to allow only some of them to contribute to the functioning of the business if the partnership deed states so.
2. Right to express opinions: Another one of the rights of partners is their right to freely express their opinion. Partners, by a majority, can determine differences with respect to ordinary matters connected with the business. Each partner can express his opinion to decide such matters.
3. Right to access books and accounts: Each partner can inspect and copy books of accounts of the business. This right is applicable equally to active and dormant partners.
4. Right to share profits: Partners generally describe in their deed the proportion in which they will share profits of the firm. However, they have to share all the profits of the firm equally if they have not agreed on a fixed profit sharing ratio.
5. Right to be indemnified: Partners can make some payments and incur liabilities through their decisions in the course of their business. They can claim indemnity from each other for these decisions. Such decisions must be taken in situations of emergency and should be of such nature that an ordinarily prudent person would resort to under similar conditions.
6. Right to interest on capital and advances: Partners generally do not get an interest on the capital they contribute. In case they decide to take an interest, such payment must be made only out of profits. They can, however, receive interest of 6% p.a. for other advances made subsequently towards the business.

Duties of Partners inter se

Now that we have seen the rights of partners let us see the duties the Act has prescribed,

1. General duties: Every partner has the following general duties like carrying on the business to the greatest common good, duty to be just and faithful towards each other, rendering true accounts, and providing full information of all things affecting the firm. etc
2. Duty to indemnify for fraud: Every partner has to indemnify the firm for losses caused to it by his fraud in the conduct of business. The Act has adopted this principle because the firm is liable for wrongful acts of partners. Any partner who commits fraud must indemnify other partners for his actions.
3. Duty to act diligently: Every partner must attend to his duties towards the firm as diligently as possible because his not functioning diligently affects other partners as well. He is liable to indemnify others if his willful neglect causes losses to the firm.
4. Duty to use the firm’s property properly: Partners can use the firm’s property exclusively for its business, and not for any personal purpose, because they all own it collectively. Hence, they must be careful while using these properties.
5. Duty to not earn personal profits or to compete: Each partner must function according to commonly shared goals. They should not make any personal profit and must not engage in any competing business venture. They should hand over personal profits made to their firm.

Effect on Rights and Duties after a change in Firm

The nature of the existing relationship between partners will be affected whenever there is a change in the firm’s constitution. Such changes occur in the following situations:

1. Change in constitution of the firm due to incoming or outgoing or partner(s);
2. Expiry of the pre-determined term of the firm; and
3. Carrying out of additional business undertakings than originally agreed upon.

Mutual rights and duties of the partners will continue to be the same as they existed prior to such changes, but partners can change this by making a fresh partnership deed.

Solved Examples for You

Question: Aman and Priya started a partnership firm for which they contributed capital of Rs. 1 lakh and Rs. 50,000 each. Aman wants interest on his capital as he has contributed more. Can he ask for such interest?

Answer: Interest is payable on capital only if the deed states so. Aman cannot claim an interest in the absence of a deed.

Question: A dispute arose between Aman and Priya with respect to sharing of profits. Aman demands equal profits, but Priya wants more as she works longer hours than him. Who is correct?

Answer: Profits must be shared in accordance with the ratio agreed upon by them in their deed. They can change this ratio with mutual acceptance. However, they are both entitled to equal share if no such deed exists.

Inform the Bank of existence of a dispute and move a request with them for ceasing the operation of the Bank Account of this partnership Firm. 

Hi,

You may stop doing things, if the things are not going as per law or rule and finally the interest of the stakeholders are affected. Be sure that nothing happens wrong on your part and you are not blamed for any wrong later on. 

If there is a dispute you can approach to the bank and giving writing that the transactions on the account of the phone should be kept on hold till the matter is resolved now there is the dispute in the organisation and accounts should not be operated and request the bank to hold the transaction in the account

When business partners are disputing, their quarrels tend to disrupt the daily goings-on of their organization. If they are not careful about keeping their disputes between themselves, it can result in the failure of their organization. Conflicts between partners aren't restricted to businesses that aren't doing well; partners of even the most successful businesses tend to bicker every now and then.

Proper planning, written agreements, and mutual understanding are the only way to avoid any sort of disputes. However, if a dispute does arise, it's best to see a business attorney before matters get worse.