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A cheque dishonoured due to an account block after a partner's death lacks the 'insufficiency of funds' needed under Section 138 NI Act, so the Karnataka HC quashed proceedings, meaning blocks attract no criminal liability for partners and firms.
The Supreme Court held that under Sections 46 and 48 of the Partnership Act, an outgoing partner in a partnership at will is entitled to the value of their share as on the date of liquidation of assets, not the date of dissolution. This ensures partners receive the benefit of any appreciation in asset value during the winding-up period.
The Calcutta High Court nullified an arbitral award that overstepped its mandate by reshaping the partners’ business, deeming such excess a breach of public policy. It further held that Section 69 of the Partnership Act does not forbid arbitration merely because no dissolution plea was filed, guiding future partnership arbitrations.
Bombay HC grants interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, preserving the assets and accounts of M/s. Radio Restaurant pending arbitration. The court directs respondents to disclose assets, produce financial records, and deposit profits, appointing a receiver to prevent dissipation of the deceased partner's 25% share.
Bombay High Court holds that registered retirement and gift deeds carry presumptive validity at the interim stage, shifting the evidentiary burden to the party alleging fraud. The ruling underscores that courts will not grant interim relief unless fraud is prima facie established, impacting partnership and property disputes involving registered instruments.
The Bombay High Court has affirmed that partners retain their statutory right under partnership law to inspect books and records even when arbitration is pending, and an arbitral tribunal may enforce this right under Section 17. This ruling reinforces that commercial transparency cannot be withheld under the guise of procedural delay, protecting minority partners from information asymmetry in ongoing disputes.
The Madhya Pradesh High Court ruled that under Section 11 of the Arbitration Act, courts must limit their inquiry to the prima facie existence of an arbitration agreement at the appointment stage. Substantive objections-such as forgery, lack of authority, or stamp duty deficiencies-are to be adjudicated by the arbitrator, not the court, streamlining the arbitration referral process for commercial disputes.
Bombay High Court clarifies that rejection of a plaint under Order VII Rule 11 CPC does not bar a fresh suit on the same cause of action, as it does not attract res judicata. The ruling underscores the procedural distinction between rejection and dismissal, impacting litigants' rights to re-agitate disputes where pleadings were initially deficient.
Unregistered firms can maintain suits under Section 69(1) of the Indian Partnership Act if registered by the filing date, regardless of registration status during the transaction. The Punjab & Haryana HC upheld a ₹3.89 lakh decree, clarifying that the critical date is filing, not the transaction period, easing compliance for businesses.
Kerala High Court holds that a partnership firm's name change does not affect standing to prosecute under Section 138 NI Act; presumption of liability stands unless rebutted by credible evidence.