Andhra Pradesh High Court
Judges : A.GOPAL RAO, CHENNAKESAVA REDDY
Rajasthan Trading Co - Appellant
Versus
Registrar of Firms - Respondent
Decided On : 02-15-74
PARTNERSHIP - REGISTRATION OF FIRMS - RULE 4 (2) OF ANDHRA PRADESH PARTNERSHIP (REGISTRATION OF FIRMS) RULES, 1957 - VALIDITY - RULE ULTRA VIRES - SECTION 63 (1) OF THE INDIAN PARTNERSHIP ACT, 1932 - SECTION 71 (2) (B) AND (C) OF THE INDIAN PARTNERSHIP ACT, 1932.
Fact of the Case:
The petitioner, a partnership firm, filed a notice of change in the constitution of the firm under Section 63 (1) of the Indian Partnership Act, 1932. The Registrar of Firms returned the notice, stating that it could not be taken on record since it was not filed within 15 days from the date of change as required by Rule 4 (2) of the Andhra Pradesh Partnership (Registration of Firms) Rules, 1957. The petitioner challenged the validity of Rule 4 (2).
Finding of the Court:
The court held that Rule 4 (2) of the Andhra Pradesh Partnership (Registration of Firms) Rules, 1957, is ultra vires of the rule-making power of the State Government under Section 71 (2) of the Indian Partnership Act, 1932. The court found that Section 63 (1) of the Act does not prescribe any limitation for filing the notice of change in the constitution of the firm, and that Section 71 (2) (b) and (c) of the Act only empower the State Government to make rules prescribing the form of the notice and the mode of making entries in the Register of Firms, but do not authorize the prescription of a time-limit.
Issues: Whether Rule 4 (2) of the Andhra Pradesh Partnership (Registration of Firms) Rules, 1957, is ultra vires of the rule-making power of the State Government under Section 71 (2) of the Indian Partnership Act, 1932.
Ratio Decidendi: The court held that the rule-making authority cannot prescribe a time-limit for filing a notice or intimation under Section 63 (1) of the Indian Partnership Act, 1932, as the Act itself does not provide for any such limitation and the delegation of power to make rules under Section 71 (2) of the Act does not expressly or impliedly relate to the power to prescribe time.
Final Decision: The court allowed the writ petition, quashed the proceedings of the Registrar of Firms in returning the notice of change in the constitution of the firm, and directed the Registrar of Firms to make a record of the notice in the Register of Firms and file the notice along with the statement relating to the firm filed under Section 59 of the Act.
( 1 ) THE only question requiring determination in this writ petition presented under Article 226 of the Constitution is as to the validity of Rule 4 (2) of the Andhra Pradesh Partnership (Registration of Firms) Rules, 1957.
( 2 ) THE aforesaid question arises in the following circumstances: The petitioner is a partnership firm named M/s Rajasthan Trading Company, Osmanganj Hyderabad, registered under the Indian Partnership Act, 1932. The firm was registered on 8/10/1968 Subsequently, there were alterations in the constitution of the firm and they were carried out as and when the changes were notified to the Registrar of Firms, Hyderabad On 14-11-1969 the partners of the firm were: Sri Satyanarayan Bhangadia, Smt Ratan Bai Bhattad, Sri Nandlal Sarda, Smt. Yashodabai, Sri Pannalal Hiralaj Bhangadiya, Religious and Charitable Trust, Bidar, represented by their trustees, Sri Srigopal Bhattad, and Sri Raj Kumar and Sri Kant, minors. On 19-10-1971 the last mentioned two minor partners viz. , Sri Raj Kumar and Sri Kant ceased to be the partners of the firm. On 20-10-1971 the firm was reconstituted with the other seven existing partners and the newly admitted partners, Smt. Kesavbai, Sri Venugopal Inani and Sri Srigopal Inani, Sri Kailashanarayan, minor by guardian Satyanarayana Bhangadia and Sri Kachrulal, minor by guardian Smt. Sarjoobai (the last two minors being admitted to the benefits of partnership ).
( 3 ) THE petitioner filed notice of the change in the constitution of the firm as required under Section 63 (1) of the Indian Partnership Act (hereinafter referred to as the Act) in the office of the Registrar of Firms on 4-9-1972 The required amount towards the notice fee was also paid. But the Registrar of Firms returned the said notice to the petitioner in his letter No. F 2/8052/72 dated 30-11-1972 informing that the form V notice cannot be taken on the office record since the petitioner failed to inform the change in the constitution of the firm within 15 days from the date of the said change as required under Sub-rule (2) of Rule 4 of the Andhra Pradesh Partnership Rules. The petitioner alleges that the petitioner-firm underwent number of changes in its constitution after the first registration, that he has been intimating the Registrar of Firms about the said changes and that at no time an objection was taken that the change should be intimated within 15 days from the date of any such change in the constitution although the petitioner had not filed the said notices within 15 days. The petitioner also alleges that the action of the Registrar in returning the notice dated 4-9-1972 is not warranted by the provisions of the Act. The petitioner, therefore, filed the present writ petition seeking to quash the notice of the Registrar of Firms dated 30-11-1972 and to direct the Registrar of Firms to record the change in the constitution of the firm.
( 4 ) IN the counter-affidavit filed on behalf of the Registrar of Firms, it is admitted that in several cases, statements, intimations or notices relating to a firm under Sections 60, 61, 62, 63 (1) or 63 (2) of the Act filed in the office after the expiry of the period of 15 days had been accepted. In this case when the matter was brought to the notice of the Government for clarification the Government in their Memo dated 14-9-1972 informed the Registrar, and in pursuance of the said orders of the Government, notices and statements received, after the prescribed period of 15 days under Rule 4 (2) of the Andhra Pradesh Partnership Rules are to be rejected. It is stated that statements and notices received after the period of 15 days are being rejected in pursuance of the orders of the Government.
( 5 ) THE learned counsel for the petitioner submits that under Section 63 (1) of the Act, a notice to the Registrar may he given when a change occurs in the constitution of the registered firm specifying the date of change and the Registrar shall make a record of the n
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