Supreme Court rules outgoing partner's share valued on assessment date, not dissolution date

The case concerns a dispute over the valuation date for an outgoing partner's share in a dissolved partnership firm, specifically whether the share should be valued on the date of dissolution or the date of assessment under the Indian Partnership Act, 1932.

Who it concerns: Appellants: V. Sumitra Reddy & Anr.; Respondents: K. Ranganadha Reddy & Ors.; Bench: Justice Ujjal Bhuyan.

What the court decided

• The Court is interpreting Sections 46 and 48 of the Indian Partnership Act, 1932 in the context of Sections 7 and 43.
• The High Court had previously held that the outgoing partner is entitled to a share of profits out of the assets and that the value of movable and immovable properties must be ascertained.
• The High Court set aside a review order dated 26.04.2004 that had limited the plaintiff's rights to profits only up to the date of dissolution.
• The High Court directed that if the remaining partners do not pay the plaintiff's share, the properties must be sold and proceeds distributed rateably.

Also in the document

• The judgment is marked as 'REPORTABLE'.
• The partnership firm was dissolved on 18.10.1983 according to the High Court's modification of the preliminary decree.
• The dispute involves a landed property of Ac. 3.27 Guntas situated at Begumpet, Hyderabad.