Back
2022 Supreme(Online)(Ker) 74912
IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.B.SURESH KUMAR, C.S. SUDHA, JJ
MEENU KORAH – Appellant
Versus
RAJU KORAH ABRAHAM – Respondent
RFA NO. 406 OF 2012|RFA NO. 761 OF 2013
For the Appellants/Petitioners: SRI.MATHEW JOHN, SRI.DOMSON J.VATTAKKUZHY, SRI.REJI GEORGE, SRI.JAGAN ABRAHAM M.GEORGE
For the Respondents: JAGAN ABRAHAM M.GEORGE, M.GEORGE, SRI.P.JAYABAL MENON, SRI.THOMAS T.VARGHESE, DOMSON J VATTAKUZHY
The partnerships defined as 'at will' cannot be dissolved at the will of a partner where implied conditions exist for continuity.
Headnote:(A) Partnership Act, 1932 - Section 7 - Partnership deeds - Nature of partnership - Dispute over whether partnerships are 'at will' or not - Appellant’s claim for dissolution disputed; court finds implied terms constraining termination - Decrees granted for account rendition work instead of dissolution. (Paras 1-13)
(B) Prior agreement - Admissions made by defendants recognized - Intention revealed from deed construction considered in light of Sections 7 and 43 of the Partnership Act. (Paras 4-10)
Facts of the case:
Appeals against decrees of dissolution of partnerships based on partnership deeds declaring them 'at will'; plaintiff argued non-compliance with accounting obligations.
Findings of Court:
Partnerships found not 'at will' despite clause stating so - plaintiffs entitled to seek account rendering and valuation of partnership assets.
Issues: Determining partnership nature from deed clauses, rights for dissolution, implications of partner’s retirement.
Ratio Decidendi: Court ruled partnerships were not 'at will' due to conflicting clauses that implied continuity, against the plain reading of a single clause.
Result: Appeals allowed; account rendition ordered.
| Table of Content |
|---|
| 1. partnerships' nature and relevant legal standing. (Para 1 , 2) |
| 2. arguments regarding the validity of dissolution and conditions of partnerships. (Para 3 , 4 , 5 , 11) |
| 3. legal interpretations on the implications of 'at will' partnerships. (Para 6 , 7 , 8 , 9) |
| 4. outcome of the appeals and subsequent court orders. (Para 10 , 12 , 13) |
JUDGMENT
C.S.Sudha, J.
These appeals are against the judgment and decree in O.S.No.55/2009 dated 20.10.2011 and O.S.No.131/2009 dated 18.10.2012 on the file of the Sub Court, Kottayam. The appellant in RFA No.406/2012 is the plaintiff and the respondents are the defendants in O.S.No.55/2009. The appellants in RFA No.761/2013 are defendants 6 to 12 and the respondents are the plaintiff and defendants 1 to 5 and 13 in O.S.No.131/2009. Parties in these appeals will be referred to as described before the court below. Parties in both the suits are the same. The suits deal with two different partnership firms. However, the terms contained in both the partnership deeds are admittedly the same. As the parties and the terms of the deeds are the same, the appeals are being disposed of together. Both the aforesaid suits were filed by the plaintiff for dissolution of partnership and rendition of accounts. O.S.No.55/2009 was for dissolution of partnership by name ‘Anupama Theatres’ and O.S.No.131/2009 was for dissolution of the partnership by name ‘Apsara Theatres’. According to the plaintiff, the partnership business is to be conducted by the Managing Partners who have a duty to keep proper accounts and convince the other partners of the details of the accounts. They are liable to prepare the balance-sheet and share the profits with the partners in accordance with their share. This is not being done. Hence the plaintiff is not interested in proceeding with the partnership business. So, she sent Ext.A2 notice for dissolution of the partnership firms and thereafter filed the aforesaid two suits. The defendants disputed the claim of the plaintiff and contented that if the latter is desirous of retiring from the firms, she is free to do so. In such eventuality, the plaintiff can be given her share of profits. But she cannot insist for a dissolution of partnerships as the retirement of a partner would not result in dissolution of the same.
2. In O.S.No.55/2009, the learned Principal Sub Judge, Kottayam, finding that Ext.A1 partnership deed dated 10/07/2003 relating to Anupama Theatres is not one 'AT WILL’, dismissed the suit. However, the learned Additional Sub Judge in O.S.No.131/2009 finding that Ext.A1 partnership deed dated 10/07/2003 relating to Apsara Theaters is a partnership 'AT WILL’, decreed the suit. The court below in O.S.No.55/2009 referring to the various clauses in Ext.A1 with specific reference to clause16(b), which deals with retirement of a partner, held the partnership to be one 'AT WILL’. The learned Additional Sub Judge in O.S.No.131/2009 on the other hand held that there is neither an express or implied provision relating to duration or determination of the partnership in the deed and that the clause relating to retirement of a partner cannot be equated with ‘determination’ within the meaning of Section 7 of the Partnership Act , 1932 and hence finding that it is a partnership 'AT WILL’, proceeded to decree the suit.
3. Heard Sri.Mathew John, the learned counsel for the appellant in R.F.A.No.406/2012 and for respondents 1 to 7 in R.F.A.No.761/2013 ; Sri.Reji George, the learned counsel for the appellants in R.F.A.No.761/2013 and also for respondents 7 to 10 in R.F.A.No.406/2012 and Sri.Jagan Abraham M.George, the learned counsel for additional eighth respondent in R.F.A.No.761/2013 and for additional15th respondent in R.F.A.No.406/2012.
4. The only point to be decided is - whether the partnership firms referred to in Ext.A1 deeds are partnerships 'AT WILL’? The learned counsel for defendants 6 to 12 (Appellants in R.F.A. No.761/2013) submitted that though the deeds say that the pa
