The Court may order a partnership firm to be dissolved in which of the following case?

When a partner becomes insane

The correct answer is option 3- When a partner becomes insane.

Under the Indian Partnership Act, the Court may order the dissolution of a partnership firm if a partner becomes of unsound mind (insane). This is one of the grounds for dissolution by the court.

NCERT: Dissolution by Court: At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:
(a) when a partner becomes insane;
(b) when a partner becomes permanently incapable of performing his duties as a partner;
(c) when a partner is guilty of misconduct which is likely to adversely affect the business of the firm;
(d) when a partner persistently commits breach of partnership agreement;
(e) when a partner has transferred the whole of his interest in the firm to a third party;
(f) when the business of the firm cannot be carried on except at a loss; or
(g) when, on any ground, the court regards dissolution to be just and equitable. 

OTHER OPTIONS

• When the business of the firm becomes illegal- Compulsory Dissolution.
• On the death of a partner- On the happening of certain contingencies.
• On the expiry of the term of the partnership- On the happening of certain contingencies.