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2025 Supreme(Kar) 1316

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANU SIVARAMAN, K. MANMADHA RAO, JJ.
 
M/S. Cheers Garden Paradise Bar And Restaurant, Rep. By Its Managing Partners Mr. G.R. Channakeshava, S/o. Sri. Rangegowda and Ors. – Appellants
Versus
Sri. D. Jayanna, S/o. Late Kenchegowda Major and Anr. – Respondents
Commercial Appeal No.272 of 2022
Decided On : 04-09-2025

Advocates Appeared:
For the Appellants :Sri. M.C. Jayakirthi, Advocate
For the Respondents:Sri. Vighneshwar S. Shastri, Senior Counsel A/W. Ms. Sadhana, Advocate.

The partnership deed from 2007 was declared void, maintaining the existence of the original partnership from 2002.

Headnote:(A) Partnership Act, 1932 - Sections relating to partnership dissolution and agreements - Claim for dissolution and accounts by a partner - Court holds that the partnership deed dated 26.11.2007 is void abinitio; partnership dated 21.02.2002 continues. (Paras 4, 6, 10)

(B) Limitation Act, 1963 - Article 59 - Court finds the suit is not barred by limitation, determining that cause of action for the dissolution was ongoing. (Paras 7-12)

Facts of the case:
Respondent claimed the partnership deed from 2007 was void, sought declarations on dissolution and accounts since the original partnership from 2002 was allegedly still in force. The trial Court decreed the suit, validating the original partnership.

Findings of Court:
The partnership dated 26.11.2007 was ruled void, and the original partnership remained active. The court permitted the plaintiff to claim accounts and prohibited future business under the disputed name.

Issues: Whether the 2007 deed is void; whether the original partnership remained.

Ratio Decidendi: The trial Court's failure to prove the either dissolution of the partnership or the validity of the 2007 deed sustains the original partnership's existence.

Result: Appeal dismissed with costs.

Table of Content
1. jurisdiction and appeal context. (Para 1 , 2)
2. reliefs sought in the original suit. (Para 3 , 4)
3. background and procedural history of the case. (Para 5 , 6)
4. arguments regarding limitations and partnerships. (Para 7 , 9)
5. court analysis of the evidence and findings. (Para 8 , 10)
6. validity of the partnership and dissolution. (Para 11 , 12 , 13)
7. final dismissal of appeal. (Para 14)

JUDGMENT :

ANU SIVARAMAN, J.

This Commercial Appeal is filed challenging the judgment and decree dated 09.11.2021 passed by the Commercial Court and II Additional District and Sessions Judge, Mysuru ('Commercial Court' for short) in Commercial O.S.No.103/2020.

2. We have heard Shri. M.C. Jayakirthi, learned counsel appearing for the appellants and Shri. Vighneshwar S. Shastri, learned Senior Counsel as instructed by Ms. Sadhana, learned counsel appearing for respondent No.1.

3. The suit was filed by respondent No.1 seeking the following reliefs:-

"a) Declare that the alleged registered partnership deed dated 26.11.2007 created between the 2nd and 4th defendant is not binding on the above plaintiff as it is void abinitio in nature.

b) Pray for dissolution of first defendant partnership firm which is running under name and style as "CHEERS GARDEN PARADISE BAR AND RESTAURANT" coming into existence as per the partnership deed dated 21.02.2002.

c) Pray for accounts of the firm from the date of commencement of the business till the date of dissolution.

d) And consequential relief of mandatory injunction directing the 1st and 2nd defendant to settle all the capital investments, interests, good wills, profits, etc., as per the partnership deed dated 21.02.2002 till the date of realization.

e) And also pray for consequential relief of permanent injunction restraining the defendant No.1 to 4, their agents, relatives, children, employees, etc., to run the partnership firm in the name and style of "CHEERS GARDEN PARADISE BAR AND RESTAURANT" in future permanently anywhere in India.

f) With cost and such other relief's as this Hon'ble Court deems think fit under the circumstances of this case, in the interest of justice and equity."

4. By the judgment under appeal, the trial Court held as follows:-

"The suit of the Plaintiff is decreed with costs as under:

It is declared that the alleged partnership deed dated 26.11.2007 is not binding on the Plaintiff.

The partnership firm which is running under the name and style 'Cheers Garden Paradise Bar and Restaurant' coming into existence as per partnership deed dated 21.02.2002 is dissolved on the date of presentation of the plaint dated 29.06.2011.

The three partners of the firm i.e., Defendant No.2 G.R. Chennakeshava and Defendant No.3 Mr.K.N. Yashavantha Kumar are having 33.33% share each in the profit and loss of the firm and the plaintiff is having 33.34% share in the profit and loss of the firm as per partnership deed.

The defendant No.2 is directed to furnish the accounts of the firm within four months. In case of failure to furnish the account by the Defendant No.2, the Plaintiff is entitled to take appropriate steps for relief of rendition of accounts and distribution of shares as declared above in the firm as provided under law through process of the Court.

The Defendants No.1 to 4 are permanently restrained from running partnership firm in the name and style of "Cheers Garden Paradise Bar and Restaurant" in future.

The suit against Defendants No.5 to 7 is dismissed.

Draw preliminary decree accordingly.

File be consigned to the record room."

5. The learned counsel appearing for the appellants submits that the judgment and decree were passed without considering the relevant aspects of the matter and are liable to be set aside. It is submitted that the appellants and respondents No.1 and 2 had entered into a partnership to run the business of Bar and Restaurant under the name and style of 'M/s. Cheers Garden Paradise Bar and Restaurant'. Each of the partners had contributed a sum of Rs.3,00,000/- as Capital f

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