IN THE HIGH COURT OF MADRAS
R. Subramanian, J.
K. Selvakumar and Ors. - Appellant
Versus
G. Suthakar and Ors. - Respondent
O. Appl. Nos. 551, 552, 591 and 592 of 2019
Decided On : 28-08-2019
Arbitration and Conciliation Act - Section 9 - Income Tax 1961 - Section 40(b) - Limited Liability Partnership Agreement - Interim measure - Termination & Dissolution - Arbitration Proceedings - Partnership Deed was entered into between first applicant in OAs and sole respondent therein constituting a partnership business with an object of setting up a chain of restaurants and eating houses - As per said partnership agreement, capital amount was agreed to be provided by first applicant in OAs. Sole respondent was designated as a working partner and it was agreed between partners that future capital requirements shall be brought in by party of first part therein, namely, first applicant in OAs - Other finances required for partnership firm from time to time is agreed to be contributed by parties in equal proportion or in manner as may be mutually agreed upon by partners - Held, Under agreement between parties, to applicant in OA to restrain other partners from using name, logo, trademark of restaurant and combination of recipe and also to restrain LLP as well as other partners for opening any additional branch without his written permission. Court do not think such a contract is invalid or precluded under law - Once it is agreed between parties that Trade Mark or Logo should be used by LLP subject to certain restrictions, same will prevail - At same time, the applicant in Application cannot prevent the respondents therein from continuing business which is now being carried on in name of the LLP, subject of course to respondents in Application maintaining true and proper accounts for business that are being carried on Applications are disposed of
ORDER :
R. Subramanian, J.
1. These applications stem out of a partnership agreement dated 14.10.2017 and a Limited Liability Partnership Agreement (LLP Agreement) dated 28.09.2018 entered into between the first applicant in OA Nos. 551 and 552 of 2019 and the respondent therein. By a supplementary LLP Agreement dated 12.10.2018, the applicants 2, 3 and 4 in OA No. 552 of 2019 were added as partners in the Limited Liability Partnership Firm. While OA Nos. 551 and 552 of 2019 had been filed by the applicants seeking aforesaid relief of injunction, OA Nos. 591 and 592 of 2019 have been filed by the respondent in OA Nos. 551 and 552 of 2019 seeking injunction. All these applications have been filed under Section 9 of the Arbitration and Conciliation Act.
2. The brief facts that led to the dispute are as follows:
On 14.10.2017, a Partnership Deed was entered into between the first applicant in OA Nos. 551 and 552 of 2019 and the sole respondent therein constituting a partnership business in the name of "New Pattukottai Kamachi Mess" with an object of setting up a chain of restaurants and eating houses. The Principal place of business is at New No. 4, Dr. Singaravelu Street, T. Nagar, Chennai 600 017. As per the said partnership agreement, the capital of Rs. 20,00,000/- was agreed to be provided by the first applicant in OA Nos. 551 and 552 of 2019. The sole respondent was designated as a working partner and it was agreed between the partners that future capital requirements shall be brought in by the party of the first part therein, namely, the first applicant in OA Nos. 551 and 552 of 2019. The other finances required for the partnership firm from time to time is agreed to be contributed by the parties in equal proportion or in the manner as may be mutually agreed upon by the partners. It was also provided that partners will be entitled to interest at the rate of 12% per annum or at such rates, as may be prescribed under Section 40(b) of the Income Tax 1961.
3. The respondent was required to be in-charge of the recipe and cooking at the restaurants. The said deed also provided for a minimum of 3 months' notice by a partner who desires to retire from the Partnership firm. The Partnership was at Will. The good will of the retiring or deceased partner or partners shall be decided by mutual consent of other partner's the Deed also contained an Arbitration Clause.
4. Subsequently on 28.09.2018, the first applicant in OA Nos. 551 and 552 of 2019 and the respondent therein, entered into a Limited Liability Partnership Agreement. The object of the agreement is to set up restaurant in the name of "New Pattukottai Kamatchi Mess - Nunpahal Unvavagam LLP". The capital of the LLP was fixed at Rs. 30,00,000/-. The party of the first partner namely, the first applicant in OA Nos. 551 and 552 of 2019 contributed a sum of Rs. 29,99,000/- towards capital and the party of the second part, namely, the respondent in the said applications had contributed Rs. 1,000/-. Inasmuch as, the party of the second part, namely, the respondent in OA Nos. 551 and 552 of 2019 was having cooking skills, long experience and had developed recipe and other support services in running of Noon time restaurant, it was agreed between the parties that the Name, Logo, Trademark of the Restaurant, Combination of recipe were not to be used by other partners and any additional branch was agreed to be opened only with the written consent of the party of the second part, namely, the respondent in OA Nos. 551 and 552 of 2019. The profit and loss were to be shared as follows:
The first partner namely, the first applicant in OA Nos. 551 and 552 of 2019 is entitled to 70% of the profit and the second partner, namely, the respondent in OA Nos. 551 and 552 of 2019 is entitled to 30% of the profit. The LLP also was at liberty to take new partners. The duration of LLP was agreed to be for a
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