Citation: V. Sumitra Reddy & Anr. v. K. Ranganadha Reddy & Ors., Civil Appeal No. 8167 of 2017, with the neutral citation 2026 INSC 979.
Upon the dissolution of a partnership (including a partnership at will), a partner’s right to their share in the firm’s assets is not frozen to the historical value or price prevailing on the initial date of dissolution. Instead, unless the remaining partners buy out the asset at current market value or an agreement is reached, the partnership assets must be properly realized, valued at current market rates (or through public auction), and distributed so that every partner shares fairly in the actual, modern value of the residue rather than a decades-old valuation.
a family construction partnership from 1964 that was dissolved by one of the partners back in 1983. The main dispute was over a valuable plot of land in Hyderabad. The remaining partners argued that the founding partner who left should only get a share of the land’s value as it was back in 1983, without benefiting from decades of property price increases. The Supreme Court ruled in favor of the partner who left, holding that the land must be valued at its current market price (or sold at a public auction) so that he receives his proper 25% share of the actual modern value rather than a frozen 1983 price.
In 1964, a construction partnership called M/s Viraj Constructions was formed by several individuals, including Kasireddy Lakshmi Narayana Reddy (who held a 25% share) and other family members. The firm’s primary asset was a large plot of land in Begumpet, Hyderabad. After a dispute arose, the founding partner decided to retire and later served a legal notice on October 15, 1983, officially dissolving the partnership at will, which took effect on October 18, 1983.
When the remaining partners continued running the business and refused to properly settle his share in the property, the original plaintiff filed a civil suit seeking rendition of accounts and his rightful share. This triggered decades of legal battles through various courts over whether his share should be calculated based on the property’s frozen 1983 value or its current market worth. Following the original plaintiff’s death, his legal representative pursued the matter up to the Supreme Court, which ultimately ordered that the land be valued at current market rates or sold via public auction so he could receive his rightful 25% share.
