The Court may order a partnership firm to be dissolved in which of th…

The correct answer is Option (3) → When a partner becomes insane

The court orders dissolution only at the suit of a partner, on grounds such as a partner’s insanity, permanent incapacity, misconduct, persistent breach of the agreement, or losses. The other events dissolve the firm without going to court.

Option (1) When the business of the firm becomes illegal — Incorrect. This is compulsory dissolution: the firm is dissolved by law itself, with no court order needed.

Option (2) On the death of a partner — Incorrect. Death of a partner is one of the contingencies on which the firm is dissolved, subject to the contract between the partners.

Option (4) On the expiry of the term of the partnership — Incorrect. A firm formed for a fixed term is dissolved on the expiry of that term, again a contingency, not a court order.