As per section 11 of Indian Partnership Act, 1932, the mutual rights and duties of the partners of a firm can
be determined by contract between the partners. Such contract may be express or
may be implied by a course of dealing.
The aforesaid provision is however
subject to the other provisions of Indian Partnership Act, 1932
Such contract may also provide that a
partner shall not carry on any business other than that of the firm while he is
a partner and same shall not be considered as an agreement in restraint of
trade.
An agreement in restraint of trade is
void as per section 27 of the Indian Contract Act, 1872. However an agreement
between the partners that while one is partner of the firm, he shall not carry
on any business other than that of the firm, shall not be a void agreement by
virtue of section 11 of Indian Partnership Act, 1932.
See section 11 of the Indian Partnership Act, 1932 on lawzonline.com