Calcutta High Court
Sushil Khaitan vs Ajay Mittal And Anr on 10 June, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD-3
AP-COM/427/2025
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISON
SUSHIL KHAITAN
VS
AJAY MITTAL AND ANR.
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date : 22nd May, 2025.
Appearance:
Mr. Abhrajit Mitra, Sr. Adv.
Mr. Deepan Kumar Sarkar, Adv.
Mr. Samriddha Sen, Adv.
Ms. Deepti Priya, Adv.
Mr. Diptesh Ghorai, Adv.
. . .for the petitioner.
Mr. Purnasish Gupta, Adv.
Mr. Jayanta Kr. Mukhopadhyay, Adv.
. . .for the respondent no.1.
The Court:
1. This is an application for interim reliefs.
2. Prayers have been made for an injunction, restraining the respondent
no.1 from depicting itself as the majority shareholder of the partnership
business, from excluding the petitioner from the management of the
partnership business, from preventing the participation of the petitioner
2in the said business, from appropriating the profits of the business and
for appointment of Receiver
3. Mr. Mitra submits that the deed of reconstituted partnership was
executed on April 1, 2009. The said deed contains an arbitration
clause. Clause 23A of the said deed provides that the partnership will
continue so long as the parties hereto may desire. The partners were
carrying on business under the name and style of M/s. Ashoka Exports.
Clause 9 of the deed provides that the partnership firm may open new
bank account/accounts and the same shall be operated by the parties
jointly or singly or by any other person/persons duly authorized by any
two partners. The party of the first part, that is, Ajay Mittal will have
30% share in the profit. Sushil Khaitan, party of the second part will
have 30% and the party of the third part M/s. Preview Barter Pvt. Ltd.
i.e. the respondent no.2 will have 40%. Clause 19 provides that each
partner shall be just and faithful to the other partners in all
transactions relating to the partnership firm and at all times give to the
other just and faithful accounts of the firm and furnish true and correct
explanations in respect of the said accounts. The deed permits changes
of the terms and conditions of the partnership business. Lastly on April
6, 2023 the composition of the sharing of profit by the partners was
amended under Point No.15 to the amendment agreement. The profit
sharing was amended as follows:
1. Sri Ajay Mittal 47.5%
Party of the First Part
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2. Sri Sushil Khaitan 47.5%
Party of the Second Part
3. M/s. Preview Barter Pvt. Ltd. 5%
Party of the Third Part
4. The records reveal that the party of the first part had taken over the
profit sharing of M/s. Preview Barter Pvt. Ltd.
5. The disputes arose after the memorandum of understanding was
executed between Ajay Mittal and Sushil Khaitan on October 30, 2024.
The said memorandum of understanding provided that the parties had
been doing business as partners of M/s. Ashoka Exports. In the course
of business, three companies were established Ashoka Jute Products
Pvt. Ltd., Preview Barter Pvt. Ltd., and Cegaro Industries Pvt. Ltd. By
the said memorandum of understanding, the parties in order to avoid
misunderstanding and disputes, had amicably decided to split the
existing business of manufacturing and export of Jute, Cotton, Juco
bags, as per the agreed terms and conditions. The memorandum of
understanding provides that M/s. Ashoka Exports i.e. AE, the
partnership firm will remain a partnership firm with the first part and
second part as equal partners and M/s. Preview Barter Pvt. Ltd., (PBL)
which is the respondent No. 2 will retire.
6. Clause 16 provides for transfer of properties, which also states that
M/s. Ashoka Exports will sell its owned properties to the respective
parties. Cegaro will sell 50% of the land to the respondent no.1.
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Preview Barter will sell land to an outside party. It is contended by Mr.
Mitra that the respondent no.1 reneged on the memorandum of
understanding, although the memorandum of understanding was the
mechanism by which the parties had decided to split the partnership
business and the profit sharing, upon dissolution. It appears that the
dissolution of Ashoka Exports is not complete. It appears that the
intention to dissolve the partnership firm did not fructify. Some
transfers allegedly may have been made as per the terms of the
memorandum of understanding, but the respondent no.1 did not want
to give effect to the said memorandum. Prima facie, it appears that
Ashoka Exports continues to be a partnership business between Ajay
and Sushil. Ajay has a higher profit sharing but all partners have a
right to have equal participation in the business of the firm. As the
reconstituted deed is silent as to how the business will be supervised
individually by the partners, Section 12 of The Indian Partnership Act,
1932 is relevant to determine the mode and manner of conduct of
business by the partners. The said Section is quoted below:
“12. The conduct of the business. – Subject to contract
between the partners,-
(a) every partner has a right to take part in the conduct of the
business;
(b) every partner is bound to attend diligently to his duties in
the conduct of the business;
(c) any difference arising as to ordinary matters connected
with the business may be decided by a majority of the partners,
5and every partner shall have the right to express his opinion,
before the matter is decided, but no change may be made in the
nature of the business without the consent of all the partner;
and
(d) every partner has a right to have access to and to inspect
and copy any of the books of the firm.”
7. Although the law provides that any difference arising as to ordinary
matters connected with the business may be decided by a majority of
the partners, and every partner shall have the right to express his
opinion before the matter is decided, there is nothing on record to show
that any attempt was made by the partners to resolve the disputes in
terms of Section 12(c). Every partner has a right to have access to and
inspect the books of the firm. Thus, Sushil cannot be kept away from
the accounts, papers and books of accounts of the firm and he shall
have access to the same.
8. General duties of the partners under Section 9 of the said Act provides
that partners are bound to carry on business of the firm to the greatest
common advantage, to be just and faithful to each other, and to render
true accounts and full information of all things affecting the firm, to any
partner or his legal representative.
9. It appears that Ajay has proceeded on the basis that upon having taken
over the profit sharing of M/s. Preview Barter to the extent of 5%, he
can project himself as the majority shareholder of a partnership
business, thereby, claiming to have superior rights to represent the
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partnership in the domestic as well as the international market. There
are documents to show that he has also utilized funds without the
consent of the petitioner, but had informed the petitioner later. This
fact indicates that Ajay acknowledged the status of the petitioner in AE.
Thus, a prima facie case for an order of injunction has been made out.
10. The share of respondent no.2 has been taken over by the respondent
no.1. Learned advocate appears for the respondent no.1 and submits
that the contentions of the petitioner are not correct. However, the
discussions hereinabove indicate that balance of convenience and
inconvenience is also in favour of granting interim protection to the
petitioner.
11. Under such circumstances, the petitioner being a partner of the firm
shall enjoy the benefits of the business as per law, shall have equal
right of participation in the business, shall be allowed to visit the office
and access the books of accounts etc. In respect of participation in the
fair at Frankfurt, the participation will be in the name of the
partnership business and Ajay and Sushil will be depicted as the
partners, in the said fair. All rights emanating from the Indian
Partnership Act, 1932, shall be made available to Sushil. Similarly,
Sushil shall include the respondent no.1 in the business of Ashoka
Exports, thereby, giving him equal rights in the management and
control theoreof.
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12. Status quo will be maintained with regard to the assets. The assets
which have allegedly been sold to Green Bridge, will not be further
alienated. The nature and character of the same shall not be changed.
13. These observations are all, prima facie. Respondents will file their
affidavits-in-opposition within four weeks after the vacation. Reply
within two weeks thereafter. The interim order shall continue for a
period of six weeks.
14. Let the matter appear in the list on 21 st July, 2025.
(SHAMPA SARKAR, J.)
sp/B.Pal