A firm may not be dissolved by court in the following condition :

The correct answer is Option (4) → When all the partner give their consent for dissolution.

When all the partners agree to close the firm, it is a dissolution by agreement. No court order is needed for it. The court dissolves a firm only on a suit filed by a partner, and only on the grounds laid down in the Partnership Act.

Option (1) When a partner becomes permanently incapable of performing his duties as a partner. — A ground for dissolution by the court. A partner who can never do his work again cannot share in running the firm, so the court may close it.

Option (2) When a partner is guilty of misconduct which is likely to adversely affect the business of the firm. — A ground for dissolution by the court. Such conduct harms the business, so the other partners may ask the court to dissolve the firm.

Option (3) When a partner persistently commits breach of partnership agreement. — A ground for dissolution by the court. When one partner keeps breaking the agreed terms, the court may end the partnership.

Option (4) When all the partner give their consent for dissolution. — Correct. The partners themselves end the firm by mutual consent, without the intervention of the court.