Case Law Details
Venkataraya S Nayak Vs D Vijaygopal Mallya (Karnataka High Court)
Karnataka High Court held that it is not necessary for each partner to contribute towards share capital for becoming partner in the partnership firm.
Facts- Plaintiff stated that he has been running the business of “Glow Sign Boards and Labels”. The defendant joined the said business as working partner without any investment and a formal partnership deed was entered into between the parties on 01.12.1998. Entire capital of Rs.2,50,000/- has been contributed by the plaintiff and 30% of the profit of the business was agreed to be shared with the defendant and 70% of the profit has to be paid to the plaintiff. The said partnership business was running in the name and style of M/s Vinyl Prints and Designs.
Even after entering into partnership and change in the name of business, it has been run as proprietary concern. The role of the defendant was like a servant or subordinate. In the place of salary, he has been paid 30% of the profit of the business. Therefore, in fact, it was not a partnership firm.
Due to non-cooperation of the defendant and his miss-deeds, plaintiff could not carry on the business. Therefore, he issued a notice dated 26.12.2000 and dissolved the firm. Defendant replied to the notice with false contentions, which were not maintainable. Defendant unnecessarily interfering in the business of plaintiff and causing loss to him. With these reasons, plaintiff filed the suit
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