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2023 Supreme(Kar) 238
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
Nagalinga, S/o. Sharanabasappa, M. - Petitioner
Versus
The Excise Commissioner In Karnataka and Ors. – Respondents
Writ Petition No.23306 Of 2021 (Excise)
Decided On : 08-02-2023
For the Petitioner: Sri. C.H. Jadhav, Senior Counsel for Sri. Shashidhar G.
For the Respondent: Sri. Pramod R., Smt. Jyothi Bhat.
Point of Law: Suit for dissolution of a firm cannot seek for renewal of a licence and continuance of business while suit filed by him for dissolution of partnership is pending.
Headnote:
Indian Partnership Act, 1932 - Section 44 (c) – Code of Civil Procedure, 1908 - Order 39 Rules 1 and 2 - Suit for dissolution of a firm - Renewal of licence - Issue direction quashing impugned Judgment and Order – Whether once a suit for dissolution of a firm has been filed, can any of partners continue business of firm - State cannot seek to try and protect its own interest of revenue when two of partners are involved in litigation - Para 13.
Finding of the Court:
Plaintiff in a suit for dissolution of a firm, in Court considered opinion, cannot seek for renewal of a licence and continuance of business while suit filed by him for dissolution of partnership is pending - Hence, this particular fact ought to have been taken into consideration by respondent No.1 as also KAT which has not been done - Respondent No.1 has infact passed an order approving renewal of licence on ground that State Exchequer would suffer which cannot be a ground for renewal of licence of a private party - State cannot seek to try and protect its own interest of revenue when two of partners are involved in litigation - Observation made by Excise Commissioner is completely untenable - There is due compliance inasmuch as one of partners has made an application for extension and same has been rightly considered – Court is of considered opinion that when a suit for dissolution filed by very same applicant is pending, no application could be filed by such a partner for renewal.
Result: Petition allowed.
ORDER :
1. The petitioner is before this Court seeking for the following reliefs:
a. Issue a Writ of Certiorari order any other appropriate writ order or direction quashing the impugned Judgment and Order dated 08.12.2021 as per Annexure-Q passed by the Karnataka Appellate Tribunal at Bengaluru in so far as it relates to Appeal No.337/2021.
b. Issue any other appropriate writ order or direction s the Hon’ble Court deemed fit to be granted under the facts and circumstance of the case to meet the ends of justice.
2. The petitioner and the respondent are stated to be the partners in the firm M/s.Marthanda Enterprises, which is constituted under the Partnership Deed dated 15.12.2010. The said M/s.Marthanda Enterprises runs the business of M/s.Marthanda Wines under Form CL-2 which is transferred in the name of M/s.Marthanda Enterprises from the earlier licensee.
3. There being certain disputes between the partners, as regards the continuance of the business, each of the partners made several allegations against the other. The petitioner alleges that respondent No.3 could not carry on the business of the partnership firm, and similar allegations have been made by respondent No.3 against the petitioner. There are various proceedings which took place between the parties.
4. What is under challenge in the present matter is the order dated 08.12.2021 passed by the Karnataka Appellate Tribunal (KAT) in Appeal No.337/2021. By virtue of the said order, the Appellate Tribunal dismissed the appeal filed by the petitioner challenging the renewal of the licence on an application made by respondent No.3 and confirmed the order of respondent No.1-Excise Commissioner renewing the licence. It is aggrieved by the same that the petitioner is before this Court seeking for the aforesaid reliefs.
5. Sri.C.H.Jadhav, learned Senior Counsel for the petitioner would submit that:
5.1. Respondent No.3 has no right to continue the business without involving the petitioner. Both of them being partners in the firm, respondent No.3 is acting contrary to the interest of the petitioner and partnership firm.
5.2. When there is a dispute between the partners neither respondent No.1 could have renewed the licence nor could KAT confirm the said order.
5.3. In this regard, he relies upon the decision of the Co-ordinate Bench of this Court in W.P.No.14282/2021 dated 11.03.2022 more particular Para 11 thereof, which is reproduced hereunder for easy reference:
11. As rightly submitted by learned High Court Government Pleader, the applications seeking transfer of licence filed by the parties is required to be kept in abeyance and parties have to adjudicate their claim in a competent Civil Court and get resolved the dispute and then approach respondent Nos.1 and 2 for further opinion on their applications. However, in the meantime, if the contesting parties seeking transfer of licence in their favour come to an understanding that, due to their dispute, the business shall not be stalled, in such an event, they are at liberty to approach respondent Nos.1 and 2 with a via-media interim solution, in a process known to law, for the continuation of the licence, however, without affecting the desire, if any, of the alleged testator in the alleged Will about continuation of the licence and bequeathing the property, particularly the business involving the licence under question.
5.4. Respondent No.3 has also involved himself in fraudulent activities, has fabricated the signature of the petitioner, made use of the photograph of the petitioner downloaded from the Facebook page of the petitioner, and while the matter was pending, was successful in obtaining renewal of Form CL-2 on 02.08.2021 which is issued at 18.20 hours when an order had been passed in W.P.No.13793/2021 whereunder this Court had directed the Appellate Tribunal to pass orders on the interlocutory application within a period of 10 days. Instead of awaiting the decision of the KAT, the respondent No.3 has gone ahead and sec
