The Supreme Court ruled that a decision based on adjustment of equities between the parties will be far more beneficial than rendering a decision based on inferences drawn on contested facts and pure legalities.
A deed of partnership was entered into between Late Gopirathnam, Late P. S. Ranganathan, Late Lavakumar and Basanth Kumar.
The partners were related to each other with Gopirathnam, Lavakumar and Basanth Kumar being brothers and P.S. Ranganathan being the brother in law of Gopirathnam. The partnership firm, which was named as M/s. High Clere Stud and Agricultural Farms, was a “partnership at will”.
It is alleged that Gopirathnam sent a letter to Ranganathan, expressing his desire to retire from the Firm. Ranganathan is said to have replied to the letter and accepted the resignation of Gopirathnam. Pursuant to this retirement, Gopirathnam is alleged to have been paid Rs. 20,000 as full and final satisfaction of his share in the Firm.
Senior Advocate Ranjit Kumar, along with Ankur S. Kulkarni, AOR, appearing for the Appellants submitted that there can be no retirement which is contrary to the intention of the parties.
They contended that a retirement is nonest in law if it has taken place in disregard to the statutory framework. The Appellants became partners of the Firm automatically after the death of Gopirathnam.
Senior Advocate Gurukrishna Kumar, appearing for the Respondent submitted that the Appellants do not automatically become partners after the death of Gopirathnam.
He contended that such is the scheme of the Act too. A partnership is a creature of a contract and not of status, with the only exception being Section 30(5) of the Act.
The division bench of Justice B.R. Gavai and Justice Pamidighantam Sri Narasimha observed that its impression that the parties must settle their disputes amicably got strengthened after it heard the parties in detail.
“Adversarial litigation focuses on the enquiry into the truth or otherwise of every disputed fact, which most of the time is technical in nature. By the end of it, when a Court takes a decision, there is no scope for reconciliation or sharing, which is essential for enduring happiness in a family” the court said.
It was viewed by the court that a decision based on adjustment of equities between the parties will be far more beneficial than rendering a decision based on inferences drawn on contested facts and pure legalities.
The court noted that from the very inception of the legal proceedings, the interests of the parties were secured with the Trial Court passing an order directing the Defendant/Respondent to set aside an extent of eight acres of land. This was an interim order subject to the outcome of the proceedings.
The bench said that the orders passed by the Trial Court, High Court as well as this Court to keep aside eight acres of land was only to secure the probable share of the Appellants, in the event they succeeded.
The bench further observed that though, the Appellants have lost in the suit as well as in the appeal, a direction can be given for granting a portion of the said land to the Appellants so that their claim to some extent stands satisfied.
The court opined that such an order could ensure to the benefit of not only the Appellants, but also that of the Respondents herein, for building and reviving the relationship between the close members of the family.
The court while upholding the impugned judgment passed by the High Court of Karnataka, directed that the Appellants will be entitled to three acres, out of the eight acres of land set aside under the orders passed by the Trial Court, the High Court and also by the Court.
Case title: Usha Gopirathnam & Ors. v/s P.S. Ranganathan (d) thr. lrs. & ors.
Citation: Civil appeal no. 2741 of 2009