Supreme Court Holds Outgoing Partner's Share in Partnership Assets Valued at Date of Final Settlement

Case Snapshot

• Case Name: V. Sumitra Reddy & Anr. v. K. Ranganadha Reddy & Ors.

• Citation: 2026 INSC 979 (Reportable)

• Bench: Justice Ujjal Bhuyan & Justice Vipul. M.

• Date of Judgment: September 9, 2026

• Area of Law: Partnership Law, Dissolution, Valuation of Assets, Final Decree

The Judgment in One Line

Supreme Court upholds High Court decision that outgoing partner's share in partnership assets must be valued as on date of final settlement, not dissolution.

Why This Judgment Matters

This judgment clarifies a crucial question in partnership dissolution: the date for valuing an outgoing partner's share in immovable partnership assets. It establishes that on dissolution of a partnership at will, the partner's right to share in the assets continues until the final decree is passed and assets are liquidated. The ruling prevents the injustice of valuing assets at the date of dissolution—often decades earlier—thereby depriving the outgoing partner of appreciation in value. The judgment also reaffirms that liquidation of assets is mandatory unless all partners agree otherwise.

Background

A partnership firm was constituted in 1964. In 1970, one partner (Kasireddy Lakshmi Narayana Reddy) expressed intention to retire, but the firm continued. In 1983, he issued a notice dissolving the partnership at will under Section 43, effective October 18, 1983. He filed a suit for rendition of accounts. A preliminary decree in 1995 held him entitled to 25% share. The High Court modi

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