Disposed

Mac- Precitec India v. Smt Rekha S

Karnataka HC13 Nov 2024WP/29557/2024

Case brief

AI extract

What is this about?

A writ petition challenged an arbitral tribunal order concerning a goodwill claim against a firm continuing after a partner's death. Counsel cited the Apex Court decision on partnership goodwill; the petition was withdrawn with liberty to seek treatment of arbitrability as a preliminary issue before the arbitrator, all contentions kept open.

What did the court decide?

Leave granted to withdraw the writ petition, with liberty to move the arbitrator to treat arbitrability of the goodwill dispute as a preliminary issue; all contentions kept open.

Mac- Precitec India Vs Smt Rekha S — Arbitration | Karnataka HC (2024)

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1 - NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF NOVEMBER, 2024 PRESENT

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THE HON'BLE MR JUSTICE KRISHNA S DIXIT AND

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THE HON'BLE MR JUSTICE C M JOSHI WRIT PETITION NO. 29557 OF 2024 (GM-RES)

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BETWEEN:

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MAC- PRECITEC INDIA A REGISTERED PARTNERSHIP FIRM, NOW HAS BEEN INCORPORATED AS MAC-PRECITEC INDIA PVT LTD., SITUATED AT NO.B-291(A), 7^TH MAIN, PEENYA 2^ND STAGE, PEENYA INDUSTRIAL AREA, BENGALURU-560 058. REPRESENTED BY ITS DIRECTORS I E PETITIONER NO 2 TO 5.

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Digitally signed by SHARADA VANI B Location: HIGH COURT OF KARNATAKA

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HS SHIVAKUMAR S/O SUBBAIAH, AGED ABOUT 57 YEARS, RESIDING AT NO E454, 8^TH BLOCK, VISHWESHWARAIAH LAYOUT, NEAR KEMPEGOWDA CIRCLE, MUDDAIAHANAPALYA, VISWANEEDAM, BANGALORE 560 091.

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GEETHA C GOWRISHANKAR W/O GOWRISHANKAR, AGED ABOUT 46 YEARS, RESIDING AT NO 18, GANGAMMA GARDEN, MALGALA MAIN ROAD, NAGARABHAVI 2^ND STAGE, VISHWANDEEDAM POST, BANGALORE 560 091.

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2 - NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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ROHINI G KULKARNI W/O. GURURAJ, AGED ABOUT 45 YEARS, RESIDING AT No. 3, 1^ST FLOOR, PRAJWAL MINI APARTMENT,

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6^TH CROSS NEAR VASKHAVANOOR EXTENSION, NAGASANDRA, BANGALORE - 560 073.

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SUDHIR B NAGALEEKAR S/O BASAVARAJABASAPPA, AGED ABOUT 48 YEARS, RESIDING AT NO.40, AVYUKTHA, 3^RD MAIN KAHADHI LAYOUT, KATHRIGUPPE MAIN ROAD, NEAR GANESH TEMPLE, VIVEKANANDA NAGAR, BANASHANKARI 3^RD STAGE, BANGALORE 560 085.

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RAMACHANDRA N S/O NARAYANAPPA NAGARAJU, AGED ABOUT 44 YEARS, RESIDING AT NO.79, 12^TH CROSS, CONCILATION BOVIPALYA, MAHALAKSHMIPURAM, BANGALORE 560 086.

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…PETITIONERS

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(BY SRI. S M CHANDRASHEKARAIAH.,SENIOR COUNSEL FOR SRI. CHANDRASHEKAR H B., ADVOCATE)

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AND:

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SMT REKHA S W/O. LATE SRI. LAKSHMIPATHI, AGED ABOUT 42 YEARS,

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VEDANTH L., S/O. LATE SRI. LAKSHMIPATHI, AGED ABOUT 3 YEARS,

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VEDITH L., S/O. LATE SRI. LAKSHMIPATHI, AGED ABOUT 3 YEARS,

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RESPONDENT NO.2 & 3 ARE MINORS AND REPRESENTED BY THEIR NATURAL GUARDIAN

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3 - NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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SMT. REKHA S C/O. SMT. SHANTHAMMA, RESIDING AT NO.33, ANJANEYA TEMPLE STREET, 6^TH BLOCK, JAYANAGARA, BENGALURU-560 070. SHRI JUSTICE H G RAMESH, FORMER JUDGE & ACTING CHIEF JUSTICE, HIGH COURT OF KARNATAKA, SOLE ARBITRATOR, ARBITRATION & CONCILIATION CENTREBENGALURU (DOMESTIC & INTERNATIONAL) 3^RD FLOOR, EAST WING, KHANIJA BHAVANA, RACE COURSE ROAD, BENGALURU – 560 001.

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…RESPONDENTS

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(BY SRI. RAKESH B BHATT.,ADVOCATE FOR R1)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION AND A) SET-ASIDE THE ORDER DATED 03.10.2024 PASSED IN A. C. 649/2023 PENDING BEFORE THE HONBLE ARBITRAL TRIBUNAL COMPRISING OF Ld. SOLE ARBITRATOR Sri. HONBLE H. G. RAMESH (RETD. JUDGE HONBLE HIGH COURT OF KARNATAKA) AT ARBITRATION AND CONCILIATION CENTER, BENGALURU PRODUCED AT ANNEXURE-E AND CONSEQUENTLY DISMISS THE APPLICATIONS PRODUCED AT ANNEXURE-C AND C1 AND B) GRANT SUCH OTHER WRIT, ORDER OR DIRECTION, HAS THIS HONBLE COURT DEEMS FIT GRANT UNDER THE CIRCUMSTANCES OF THE CASE AND C) GRANT SUCH OTHER RELIEF (s) AS THIS HONBLE COURT MAY BE DEEMED FIT TO GRANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE.

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THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE KRISHNA S DIXIT and HON'BLE MR JUSTICE C M JOSHI

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4 - NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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ORAL ORDER

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(PER: HON'BLE MR JUSTICE KRISHNA S DIXIT)

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This Petition is structured on the proposition that in the absence of Dissolution/Resolution, no claim be made in respect of Goodwill of the firm which continues to be in existence despite death of a partner. In support of this, learned Sr. Counsel appearing for the Petitioner draws our attention to the provisions of the Partnership Act, 1934 more particularly to Sections 14, 15 & 55.

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Learned counsel appearing for the contesting Respondent resists the Petition contending that the question is no longer res integra in the light of Apex Court decision in KHUSHAL KHEMGHAR SHAH & OTHERS v.

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KHORSHED BANU DABIDA BOTAWALLA &

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ANOTHER¹ , wherein Paragraph No.6 reads as under:

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“6.We are unable to agree with Mr. Nariman that in the interpreting a deed of partnership, business whereof its is stipulated shall be continued by the surviving partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the

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1 1970 (1) SCC 415

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5 - NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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absence of an express stipulation to the contrary. The goodwill of a firm is an asset. In interpreting the deed of partnership, the Court will insist upon some indication that the right to share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished. In the absence of a provision expressly made or clearly implied, the normal rule that the share of a partner in the assets devolves upon his legal representatives will apply to the goodwill as well as to other assets.”

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At this stage, learned Sr. Advocate appearing for the Petitioner on instruction of advocate on record seeks leave of the Court to withdraw the Petition with liberty to move an appropriate application before the learned Arbitrator to treat the question as to arbitrability of dispute relating to claim for the Goodwill as property of the firm as a Preliminary Issue.

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Having heard the learned counsel for the parties and having perused the Petition papers, we are inclined to grant leave to withdraw the Petition coupled with liberty as sought for to move the application of the kind before the

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NC: 2024:KHC:45927-DB WP No. 29557 of 2024

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learned Arbitrator. In that connection, all contentions are

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kept open.

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Ordered accordingly and Writ Petition is disposed off,

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costs having been made easy.

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