Bhupathi and his new doubles partner, Hanley, lost 7-6(2), 4-6, 8-10 after starting well in the opener.
Meanwhile, Karan Rastogi also bowed out in the first round of the singles event at the US $50,000 ATP Challenger Series tournament in Lexingotn, USA.
Seeded seventh, Rastogi surrendered 1-6, 4-6 to against American Breandon Evans at the hard court event.
Now the 21-year-old will be hoping for success in the doubles event where he has paired with Romania's Florin Mergea. They are up against the Slovakian duo of Kami Capkovic and Martir Klizan in the first round.
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