Allowed

George Thomas v. Meenu Korah

Kerala HC10 Feb 2022RFA/761/2013

Case brief

AI extract

What is this about?

Appeals challenging the dissolution of two partnership firms (Anupama and Apsara Theatres). The Court held the partnerships were not 'at will' despite the executive clause, as the deeds implied a duration tied to the business's continuation and retirement was restricted. Appeals allowed to grant rendition of accounts instead of dissolution.

What did the court decide?

Prayer for dissolution of partnership dismissed; prayer for rendition of accounts allowed. Preliminary decree for accounts and appointment of valuer by petitioner's choice passed.

George Thomas Vs Meenu Korah — Company and Corporate | Kerala HC (2022)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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THE HONOURABLE MRS. JUSTICE C.S. SUDHA

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THURSDAY, THE 10^TH DAY OF FEBRUARY 2022 / 21ST MAGHA, 1943

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RFA NO. 406 OF 2012 (I)

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AGAINST THE JUDGMENT AND DECREE IN OS 55/2009 OF PRINCIPAL SUB COURT, KOTTAYAM

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APPELLANT/PLAINTIFF

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MEENU KORAH, W/O.THOMAS KORAH, VAZHAKKALA PUTHUSSERIL HOUSE, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT.

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BY ADVS. SRI.MATHEW JOHN SRI.DOMSON J.VATTAKKUZHY

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RESPONDENTS:DEFENDANTS

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*1 RAJU KORAH ABRAHAM, S/o.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY KARA & VILLAGE, KOTTAYAM TALUK & DISTRICT-686011. (RECORDED AS THE LEGAL REPRESENTATIVE OF DECEASED 3RD RESPONDENT AS PER ORDER DATED 7.2.2022 IN I.A.2/2022)

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*2 DEEPU VARGHESE ABRAHAM, S/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY KARA & VILLAGE, KOTTAYAM TALUK & DISTRICT-686011. (RECORDED AS THE LEGAL REPRESENTATIVE OF DECEASED 3RD RESPONDENT AS PER ORDER DATED 7.2.2022 IN I.A.2/2022)

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*3 LALITHA ABRAHAM, (DIED) W/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY KARA & VILLAGE, KOTTAYAM TALUK & DISTRICT-686011.

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R.F.A.Nos.406 of 2012 and 761 of 2013

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*4 DEEPU THOMAS ABRAHAM, S/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY KARA & VILLAGE, KOTTAYAM TALUK & DISTRICT-686011. (RECORDED AS THE LEGAL REPRESENTATIVE OF DECEASED 3RD RESPONDENT AS PER ORDER DATED 7.2.2022 IN I.A.2/2022)

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5 V.K.KORAH, S/O.THOMAS KORAH, VAZHAKKALA VLIYAVEETTIL, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686 538.

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6 ANNAMMA KORAH, W/O.V.V.KORAH, VAZHAKKALA VLIYAVEETTIL, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686538.

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7 GEORGE THOMAS, S/O.C.K.THOMAS, VAZHAKKALA KEEZHAR HILLS, PUTHUPPALLY VILLAGE & KARA, KOTTAYAM DISTRICT-686011.

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8 THOMAS ABRAHAM,

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S/O.C.K.THOMAS, VAZHAKKALA AGENCIES, VAZHAKKALA COMPLEX, 4TH PHASE, PINIA INDUSTRIAL AREA, BANGALORE-560 058 FROM VAZHAKKALA HOUSE, THRICKOTHAMANGALAM KARA AND POST VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686538.

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9 ABRAHAM THOMAS,

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S/O.C.K.THOMAS, MANAGING PARTNER, ANUPAMA THEATRE T.B.ROAD, KOTTAYAM MUNICIPAL TOWN FROM VAZHAKKALA HOUSE, THRICKOTHAMANGALAM KARA AND POST VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686538.

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10 ASHA KURIAN, W/O.KURIAN THOMAS, VAZHAKKALA HOUSE, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686538.

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R.F.A.Nos.406 of 2012 and 761 of 2013

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11 LEYA MARIAM THOMAS (MINOR), D/O.KURIAN THOMAS, VAZHAKKALA HOUSE, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686 538.

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12 ABU THOMAS KURIAN (MINOR), S/O.KURIAN THOMAS, VAZHAKKALA HOUSE, THRICKOTHAMANGLAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686538.

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13 AJU JOHN KURIAN (MINOR), S/O.KURIAN THOMAS, VAZHAKKALA HOUSE, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686 538.

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MINORS 11 TO 13 REPRESENTED BY GUARDIAN AND MOTHER 10TH RESPONDENT.

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14 TH0MAS KORAH, S/O.THOMAS KORA, VAZHAKKALA PUTHUSSERIL HOUSE, THRICKOTHAMANGALAM KARA AND POST, VAKATHANAM VILLAGE, KOTTAYAM DISTRICT-686 538.

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*15 ADDL R.15. SOOSAN SAJI CHERIAN, W/O.SAJI PARAPPURAM CHERIAN,PRASHANTH BHAVAN, MATHA NAGAR,ELAMKULAM P.O, ERNAKULAM – 682 017

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**(LEGAL HEIR OF DECEASED 3RD RESPONDENT IS IMPLEADED AS ADDITIONAL 15TH RESPONDENT AS PER ORDER DATED 7.2.2022 IN I.A 3/2022)*

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BY ADVS. JAGAN ABRAHAM M.GEORGE ACHU SUBHA ABRAHAM P.JAYABAL MENON K.JAYASANKAR (KAPRASSERY) S.JANAKI PHILIP T.VARGHESE, THOMAS T.VARGHESE,

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REJI GEORGE, RAJEEV P.NAIR, BINITHA T.M., RISTO K.JOHN

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R.F.A.Nos.406 of 2012 and 761 of 2013

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 10.02.2022, ALONG WITH RFA.761/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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R.F.A.Nos.406 of 2012 and 761 of 2013

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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THE HONOURABLE MRS. JUSTICE C.S. SUDHA

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THURSDAY, THE 10^TH DAY OF FEBRUARY 2022 / 21ST MAGHA, 1943

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RFA NO. 761 OF 2013

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AGAINST THE JUDGMENT AND DECREE IN OS 131/2009 OF ADDITIONAL SUB COURT, KOTTAYAM

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APPELLANTS/ DEFENDANTS 6 TO 12

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1 GEORGE THOMAS,

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AGED 56 YEARS, S/O.C.K.THOMAS, VAZHAKKALA KEEZHAR HILLS HOUSE, PUTHUPPALLY VILLAGE, PUTHUPPALLY KARA, KOTTAYAM, PIN: 686 011.

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2 THOMAS THOMAS, AGED 54 YEARS, S/O.C.K.THOMAS, VAZHAKKALA HOUSE, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, KOTTAYAM DISTRICT, NOW RESIDING AT VAZHAKKALA AGENCIES, VAZHAKKALA COMPLEX, 4TH FAISE, PEENIA INDUSTRIAL AREA, BANGALORE - 560 058.

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3 ABRAHAM THOMAS, AGED 41 YEARS, S/O.C.K.THOMAS, VAZHAKKALA HOUSE, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, THRIKKOTHAMANGALAM P.O., KOTTAYAM DISTRICT, NOW WORKING AS MANAGING PARTNER, ANUPAMA THEATRE, T.B.ROAD, KOTTAYAM MUNICIPALITY, KOTTAYAM, PIN: 686 001

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R.F.A.Nos.406 of 2012 and 761 of 2013

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4 ASHA KURIAN, AGED 46 YEARS, W/O.KURIAN THOMAS, VAZHAKKALA HOUSE, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, KOTTAYAM DISTRICT, PIN: 686 011.

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5 LEYAM MARIYAM THOMAS, AGED 21 YEARS, D/O.KURIAN THOMAS,VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, KOTTAYAM DISTRICT, PIN: 686 011.

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6 ABU THOMAS KURIAN, AGED 17 YEARS, S/O.KURIAN THOMAS, REPRESENTED BY NEXT FRIEND AND MOTHER ASHA KURIAN, VAZHAKKALA HOUSE, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, KOTTAYAM DISTRICT, PIN: 686 011.

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7 AJU JOHN KURIAN, AGED 16 YEARS, S/O.KURIAN THOMAS, REPRESENTED BY NEXT FRIEND AND MOTHER ASHA KURIAN, VAZHAKKALA HOUSE, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, KOTTAYAM DISTRICT, PIN: 686 011.

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BY ADVS. SRI.REJI GEORGE SRI.RAJEEV.P.NAIR

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RESPONDENTS/PLAINTIFF AND DEFENDANTS 1 TO 5 & 13

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1 MEENU KORAH,

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AGED 55 YEARS, W/O.THOMAS KORAH, VAZHAKKALA PUTHUSSERIL HOUSE, VAKATHANAM VILLAGE THRIKKOTHAMANGALAM KARA, THRIKKOTHAMANGALAM P.O., KOTTAYAM DISTRICT, PIN: 686 011.

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R.F.A.Nos.406 of 2012 and 761 of 2013

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2 RAJU KORAH ABRAHAM, AGED 47 YEARS, S/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY VILLAGE, PUTHUPPALLY KARA, KOTTAYAM TALUK, KOTTAYAM DISTRICT, PIN: 686 011.

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3 DEEPU VARGHESE, AGED 43 YEARS, S/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY VILLAGE, PUTHUPPALLY KARA, KOTTAYAM TALUK, KOTTAYAM DISTRICT, PIN: 686 011.

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*4 LALITHA ABRAHAM, (DIED) AGED 63 YEARS, W/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY VILLAGE, PUTHUPPALLY KARA, KOTTAYAM TALUK, KOTTAYAM DISTRICT, PIN: 686 011.

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5 ROOPU THOMAS ABRAHAM, AGED 37 YEARS, S/O.V.O.ABRAHAM, VAZHAKKALA GARDENS, PUTHUPPALLY VILLAGE, PUTHUPPALLY KARA, KOTTAYAM TALUK, KOTTAYAM DISTRICT, PIN: 686 011.

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6 V.K.KORAH, AGED 62 YEARS, S/O.C.K.THOMAS, VAZHAKKALA VALIYAVEETTIL, VAKATHANAM VILLAGE, THRIKKOTHAMANGALAM KARA, THRIKKOTHAMANGALAM P.O., KOTTAYAM DISTRICT, PIN: 686 011.

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7 THOMAS KORAH, AGED 25 YEARS, S/O.THOMAS KORAH, VAZHAKKALA PUTHUSSERIL HOUSE, VAKATHANAM VILLAGE, VAKATHANAM KARA, KOTTAYAM DISTRICT, PIN: 686 538.

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R.F.A.Nos.406 of 2012 and 761 of 2013

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*8 ADDL.R8 SUSAN SAJI CHERIYAN, AGED 58 YEARS, W/o.SAJI P.CHERIAN, 9A, RDS OASIS, 4TH CROSS ROAD, NETHAJI NAGAR, KADAVANTHRA, COCHIN, PIN-682 020.

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*** ADDL. R8 IS IMPLEADED AS THE LEGAL HEIR OF DECEASED 4**^th RESPONDENT VIDE ORDER DATED 7/02/2022 IN I.A.No.1 of 2022.

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BY ADVS. JAGAN ABRAHAM M.GEORGE – R2 to R5 SMT.ACHU SUBHA ABRAHAM - R6 SRI.P.JAYABAL MENON – R2 to R5 SRI.MATHEW JOHN K - R1 SRI.PHILIP T.VARGHESE - R6 SRI.THOMAS T.VARGHESE – R6 DOMSON J VATTAKUZHY - R1

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THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON 10.02.2022, ALONG WITH RFA.406/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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R.F.A.Nos.406 of 2012 and 761 of 2013

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“C.R.”

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P.B. SURESH KUMAR & C.S. SUDHA, JJ.

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R.F.A.Nos.406 of 2012 and 761 of 2013

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Dated this the 10^th day of February, 2022

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JUDGMENT

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C.S.Sudha, J.

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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

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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,

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the appeals are being disposed of together. Both the aforesaid suits were filed by the plaintiff for dissolution of partnership and rendition of accounts.

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O.S.No.55/2009 was for dissolution of partnership by name ‘Anupama

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R.F.A.Nos.406 of 2012 and 761 of 2013

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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.

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In O.S.No.55/2009, the learned Principal Sub Judge,

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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 clause

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R.F.A.Nos.406 of 2012 and 761 of 2013

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16(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.

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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

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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 additional 15th respondent in R.F.A.No.406/2012.

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The only point to be decided is - whether the partnership

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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 partnerships are 'AT WILL’, a harmonious

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R.F.A.Nos.406 of 2012 and 761 of 2013

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reading of the clauses in both the deeds would show that there is in fact a duration for the business, which can be implied from the terms contained therein. The partners intended the business, which is a family business, to be continued till the business of owning and running cinema theatres continued to be conducted by the partners. Hence the partnership business is not one 'AT WILL’ and therefore the same cannot be terminated at the will and pleasure of the plaintiff. The decisions relied on in support of the argument are – Karumuthu Thiagarajan Chettiar vs. E.M.Muthappa Chettiar [AIR 1961 SC 1225]; Suresh Kumar Sanghi vs. Amrit Kumar Sanghi [AIR 1982 DELHI 131]; M.O.H. Uduman vs. M.O.H. Aslum [AIR 1991 SC 1020]; Anant Purushottam Athavale vs. Govind Purushottam Athavale [AIR 2005 BOMBAY 301], Ramesh Kumar vs. Smt.Latha Devi [AIR 2007 MP 153] and Vishnu Chandra vs. Chandrika Prasad Agarwal [AIR 1983 SC 523].

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Per contra, the learned counsel for the plaintiff in both

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the suits pointed out that the specific case in the plaint that the partnerships are one ‘AT WILL’ is not only not denied/disputed by the contesting defendants, but it is in fact admitted in their respective written statements. It

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R.F.A.Nos.406 of 2012 and 761 of 2013

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was pointed out that there is no clause(s) in the deeds which either expressly or impliedly provide for a duration or determination of the partnerships and so the twin conditions contemplated under Section 7 of the Partnership Act, 1932 (the Act) are not attracted in this case. It was also submitted that clauses 15 and 16 in the deeds only provide for the course to be adopted in the event of death, insolvency or retirement of a partner. The said clauses in no way changes the character of the partnerships, which continue to be partnerships at will and hence the plaintiff has every right to seek a dissolution by sending a month’s notice to the other partners, which formality has been complied with by sending Ext.A2 notice, goes the argument of the plaintiff.

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6. Section 7 of the Act reads-

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“ Partnership at will. - Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is “partnership at will”

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Section 43 provides that where the partnership is at will,

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the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. If the partnership is not at

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R.F.A.Nos.406 of 2012 and 761 of 2013

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will, Section 42 applies and Section 44 provides for dissolution by the court.

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Karumuthu Thaigarajan ( supra ) was a case in which the partners had entered into a partnership in order to carry on the business of managing agency of two mills. The partners contemplated that the management should be carried on in rotation between them in four yearly periods. It was also contemplated that the heirs of the partners would also carry on the management in rotation. The terms of the contract of partnership showed that it was entered into for the purpose of carrying on managing agency business. The question that arose was whether it was possible to infer from the contract of partnership that there was an implied term as to its duration or at any rate an implied term as to when it would determine. Reference was made to Halsbury's Laws of England, Third Edition, Vol. 28, p. 502, para 964, where it is said that where there is no express agreement to continue a partnership for a definite period, there may be an implied agreement to do so. Further, reference was made to Crawshay v. Maule, (1818) 1 Swans 495 : 36 ER 479 at p. 483, wherein also the same principle was laid down thus- "The general rules of partnership are well-settled. Where no term is expressly limited for its duration, and there is nothing in

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R.F.A.Nos.406 of 2012 and 761 of 2013

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the contract to fix it, the partnership may be terminated at a moment's notice by either party......Without doubt, in the absence of express, there may be an implied, contract, as to the duration of a partnership. " It was further held that the same principle applies to a case of determination also. The contract may expressly contain that the partnership will be determined in certain circumstances; but even if there is no such express term, an implied term as to when the partnership will determine may be found in the contract.

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The Apex Court found that the term in the contract of partnership relating to the turns to be taken by the two partners in the actual management and the further term that these turns would go on even in the case of their heirs, clearly suggested that the duration of the partnership would be the same as the duration of the managing agency. This would not however mean that the partnership would become permanent. The terms of the contract made it clear that the partnership was for the sole business of carrying on the managing agency and therefore by necessary implication it has to follow that the partnership would determine when the managing agency determines. On the terms of the contract, it was held that even if there is some doubt whether any duration is implied, there could be no doubt

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R.F.A.Nos.406 of 2012 and 761 of 2013

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that the contract implied that the partnership would determine when the managing agency terminated. In this view, it was held that the partnership would not be a partnership at will as Section 7 of the Act makes it clear that a partnership in which there is a term as to its determination is not a partnership at will. The attention of the Apex Court was also drawn to a term in the contract which provided that either partner could withdraw from the partnership by relinquishing his right of management to the other partner. But this however, was held, not to make the partnership one at will, for the essence of a partnership at will is that it is open to either partner to dissolve the partnership by giving notice. Relinquishment of one partner's interest in favour of the other, provided in the contract, is a different matter. It was noticed that in the said case there were only two partners and so the partnership would come to an end as soon as one partner relinquished his right in favour of the other. The Apex Court then went on to give an illustration and referred to a situation where the partnership consisted of four partners. In such a case, in the event of one of the partners relinquishing his right in favour of the other partners, the partnership would not come to an end. This clearly would show that a term as to relinquishment of a partner's

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R.F.A.Nos.406 of 2012 and 761 of 2013

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interest in favour of the other would not make the partnership one at will. Reference was also made to the case- Abbott v. Abbott, (1936) 3 All ER 823 . That was a case where there were more than two partners and it was provided that the retirement of a partner would not terminate the partnership and there was an option for the purchase of the retiring partner's share by other partners. It was held that in the said circumstances, the partnership was not one at will and it was pointed out that only when all the partners except one retired that the partnership would come to an end because there could not be a partnership with only one partner. Therefore, it was concluded by the Hon’ble Supreme Court that the contract in the said case disclosed a partnership, the determination of which was implied, namely, the termination of the managing agency and, hence, under Section 7 of the Act, it was not a partnership at will.

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In the light of the aforesaid principles, even if a partnership deed specifically says that the partnership is 'AT WILL’, it need not necessarily mean that it is so, if a contrary intention is revealed from the terms/clauses in the deed or if its duration can be implied. Having understood the law on the point, now the question to be considered is –

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R.F.A.Nos.406 of 2012 and 761 of 2013

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whether from the terms contained in Ext. A1 deeds any duration can be

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implied? As the terms in both the partnership deeds are the same, we will extract the relevant clauses from Ext. A1 in O.S.No.55/2009, which reads:-

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“(1). The name of the partnership firm shall be “ANUPAMA THEATRES” with its principal location at T.B. Road, Kottayam. This name may be changed in accordance with the decision of the partners from time to time.

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(2). The main activity of the firm shall be to continue to carry on business of owning and running cinema theatre and for the said purpose to do everything possible and acquire buildings, landed properties, dealerships, licences, agencies, permits etc. and to do any other business the partners may determine to do from time to time.

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(3) This deed of partnership shall be deemed to come into force on the Seventh day of July 2003. This partnership shall be AT WILL.

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xxxxxxxx

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(14) Any partner may retire from the partnership business after giving one month’s prior notice in writing to the other partners.

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(15) On the death, retirement or insolvency of any of the partners, the partnership shall not be dissolved. The remaining partners may continue the business in

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R.F.A.Nos.406 of 2012 and 761 of 2013

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partnership by admitting a representative of the legal heirs of the deceased partner.

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(16) (a) The value of the share or interest of the partner, who dies or becomes an insolvent and if the legal heirs do not opt to become a partner in the firm, shall be an amount equal to the aggregate of the balances in his/her capital, loan and drawing accounts as on the date of the last annual taking of accounts plus or minus his/her share of profit or loss for the remaining period calculated in proportion of the number of days elapsed since the date of the last annual taking of accounts to the date of death or insolvency as the case may be, on the profit or loss for the whole year in which he/she dies or becomes an insolvent. The above said amount shall be paid to his/her legal heirs, or receiver as the case may be. The proportionate share in the goodwill shall also be paid.

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(b) Any partner who wants to retire shall sell his/her share to any other partners individually or jointly and his/her share shall be settled as (a) above.”

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It is true as pointed out by the learned counsel for the plaintiff that the case put forward in the plaints that the partnerships are ‘AT WILL’ is not disputed by the contesting defendants. On the other hand, they also admit it to be so. The learned counsel for defendants 6 to 12 submitted that the said admission

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R.F.A.Nos.406 of 2012 and 761 of 2013

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is only a mistake and that the said question being a question of law, the admission made is immaterial. It is also true that the deeds describe the partnerships to be 'AT WILL’. Now if the partners intended the partnerships to be 'AT WILL’, there was no necessity for incorporating clauses 15 and 16 referred to herein above. As held by the Hon'ble Supreme Court in M.O.H. Uduman ( supra ) a contract of partnership must be read as a whole and the intention of the parties must be gathered from the language used in the same by adopting a harmonious construction of all the clauses contained therein. The cardinal principle is to ascertain the intention of the parties to the contract through the words they have used, which are key to open the mind of the makers. As has been further held, a technical or pedantic rule of construction should not be adopted and the guiding rule really is to ascertain the natural and ordinary sensible meaning to the language through which the parties have expressed themselves, unless the meaning leads to an absurdity.

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As noticed, it is true that clause (3) in both the deeds say

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that the partnerships are 'AT WILL’. If that clause alone is taken into consideration and an interpretation given, clauses 15 and 16 in the partnership deeds would be rendered nugatory. Clause 14 says that any

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R.F.A.Nos.406 of 2012 and 761 of 2013

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partner may retire from the partnership after giving a month’s notice in writing to the other partners. Clause 15 is quite clear on the point that death, retirement or insolvency of a partner would not dissolve the partnership firms. The remaining partners have been given the option of continuing with the business by admitting a representative of the legal heirs of the deceased partner. The course to be adopted in the eventualities referred to in clause 15 have been clearly specified in sub-clauses (a) and (b) of clause 16. Sub clause (a) describes how the share of a deceased or insolvent partner is to be dealt with. Sub clause (b) of clause 16 says that in the event of a partner opting to retire from the partnership, he shall sell his/her share to any other partner(s) individually or jointly and the said share would be settled as provided in Sub clause (a). Therefore, it is clear that death, retirement or insolvency would not put the partnerships to an end. On the other-hand it would continue. It is also to be noted that the plaintiff and her son came into the partnership business on the death of their predecessor- in- interest, namely, Thomas Korah, the husband of the plaintiff and the father of her son. At that time also, the firms were only re-constituted. The aforesaid clauses make it clear that the partners never intended the partnership

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business to be dissolved on the death, retirement or insolvency of a partner. On the other hand, a harmonious reading of all the aforesaid clauses would show that the intention of the partners was to continue the partnerships till the business referred to in clause (2) of the deeds was carried on. Admittedly, both the businesses are still continuing. Therefore, the duration or term of

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the partnerships can be implied from a harmonious reading of all the aforesaid clauses and the partnerships would come to an end when the business referred to in clause (2) is stopped or discontinued. That being the position, the partnerships in question cannot be one 'AT WILL’. Hence, the plaintiff cannot dissolve the partnership at her will and pleasure. As noticed earlier, as per clause (14) she can retire from the partnership business after giving one month’s prior notice in writing to the other partners and as per sub- clause (b) of clause 16 she has to sell her share to any other partner individually or jointly and then her share would be settled as provided in sub-clause (a). So, the remedy open to the plaintiff is only to seek for rendition of accounts. Defendants 6 to 12 in O.S.131/2009 (appellants in RFA 761/2013) submitted that they have no objection to relief (b) sought for in both suits. However, the plaintiff is not amenable to the said suggestion

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R.F.A.Nos.406 of 2012 and 761 of 2013

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and insisted for a decree for dissolution of the two partnerships. It was submitted that the grievance of the plaintiff would be redressed only by such a decree because only then the assets of the firms would be brought for public auction by which she would get her legitimate share in the businesses. Otherwise, the valuation undertaken would merely be a paper valuation resulting in great loss to the plaintiff. As we have already found that the partnerships are not “AT WILL’, the prayer for dissolution cannot be allowed. However, the interest of the plaintiff too needs to be protected and hence to avoid the contingency pointed out on her behalf, we direct that the plaintiff be given the liberty to choose a valuer of her choice for the purpose of assessing the value of the assets of the two partnership firms.

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In the light of the above discussion, a decree allowing prayer (b) for rendition of accounts alone can be allowed. To that extent the judgment and decree in both the suits require to be interfered with. The share of the plaintiff is not disputed and so the same will be computed as provided in clause 16(a) of Ext. A1 deeds. The judgment and decree dismissing O.S.No.55/2009 is set aside and the suit is partly decreed. A preliminary decree is passed directing the taking o account of the credits,

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R.F.A.Nos.406 of 2012 and 761 of 2013

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property, effects and account of the debts and liabilities of the partnership by name ‘Anupama Theatres’. The assets, profits and liabilities be allotted to the plaintiff in proportion to her share in the business. An expert commissioner shall be appointed for the purpose of examination, rendition and adjustments of the accounts. The valuer to be appointed for assessing the value of the assets will be as per the choice of the plaintiff alone. The parties are at liberty to move the court concerned for passing a final decree.

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The judgment and decree in O.S.No.131/2009 are

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modified and the suit dismissed as far as prayer (a) seeking the relief of dissolution of the firm is concerned and the suit is partly decreed by which prayer (b) alone stands allowed. The share of the plaintiff is not disputed and so the same will be computed as provided in clause 16(a) of Ext. A1 deed. A preliminary decree is passed directing the taking of account of the credits, property, effects and account of the debts and liabilities of the partnership by name ‘Apsara Theatres’. The assets, profits and liabilities be allotted to the plaintiff in proportion to her share in the business. An expert commissioner shall be appointed for the purpose of examination, rendition and adjustments of the accounts. The valuer to be appointed for assessing the value of the

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R.F.A.Nos.406 of 2012 and 761 of 2013

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assets will be as per the choice of the plaintiff alone. The parties are at liberty to move the court concerned for passing a final decree.

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In the result, both the Appeals are allowed to the extent stat ed in

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paragraphs 12 and 13. Parties shall suffer their respective costs.

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Interlocutory applications, if any pending, shall stand disposed