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ANDHRA PRADESH HIGH COURT AT AMARAVATHI
U. Durga Prasada Rao, J.
Venkata Lakshmi Raw & Ors. - Appellants
Versus
State of Andhra Pradesh - Respondent
Writ Petition No. 4142 of 2021
Decided On : 09-08-2021
REGISTRATION ACT - SECTION 22-A - RIGHT RELINQUISHMENT DEED - PROHIBITORY LIST - CMR DUES - ARBITRARY REFUSAL TO REGISTER - WRIT OF MANDAMUS - LEGAL FRAMEWORK:
Fact of the Case:
Petitioners sought a Writ of Mandamus to declare the action of the Sub-Registrar in refusing to receive and register the Right Relinquishment Deed of Partnership as illegal, arbitrary, and unconstitutional. The petitioners, partners in a rice mill, executed the deed to relinquish their shares in favor of the continuing partners. The Sub-Registrar refused registration due to the inclusion of the mill's property in the prohibitory list, citing CMR dues owed by the mill to the Civil Supplies Corporation.
Finding of the Court:
The Court held that the refusal to register the Right Relinquishment Deed was arbitrary and illegal. The execution of the deed would not affect the rights of the Civil Supplies Corporation to realize CMR dues from the mill. The mill's assets and books of accounts would remain intact and subject to a lien by the Corporation until all dues were cleared.
Issues: 1. Whether the Sub-Registrar's refusal to register the Right Relinquishment Deed was arbitrary and illegal? 2. Whether the execution of the deed would affect the rights of the Civil Supplies Corporation to realize CMR dues from the mill?
Ratio Decidendi: 1. The Court relied on the principle that the mere execution of a relinquishment deed does not absolve the liability of the transferor towards third parties. In this case, the CMR dues owed by the mill to the Civil Supplies Corporation would remain the liability of the mill, even after the execution of the deed. 2. The Court also noted that the mill's assets and books of accounts would remain intact and subject to a lien by the Corporation until all dues were cleared. Therefore, the execution of the deed would not adversely affect the Corporation's rights.
Final Decision: The Court allowed the Writ Petition and directed the petitioners to present the Right Relinquishment Deed of Partnership with a clear term stating that the deed would not affect the rights of the Civil Supplies Corporation to realize CMR dues from the mill. Upon presentation of the deed with this term, the Sub-Registrar was directed to receive, process, and register the deed.
JUDGMENT
The petitioners pray for Writ of Mandamus declaring the action of the 2nd respondent in not receiving and registering the Right Relinquishment Deed of Partnership in respect of land admeasuring Ac.3.32 cents in Survey No.273/A, 274/A, 274/B, 275/A, 275/B in Applipuram village within the limits of Nellore Municipal Corporation as illegal, arbitrary and unconstitutional and for a consequential direction to the 2nd respondent to receive and register the Right Relinquishment Deed of Partnership.
2. The petitioners’ case succinctly is thus:
The petitioners are aggrieved by the action of the 2nd respondent in not receiving and registering the Right Relinquishment Deed of Partnership executed by the petitioners 4 to 9 in favour of the petitioners 2 and 3.
Initially, the 1st petitioner-Partnership Firm was formed with the petitioner No.4, Mr. Mallineni Venkateswara Rao and others under a Partnership deed dated 23.12.1998 to carry on business in manufacturing and sale of rice, broken rice, bran and trading in paddy. In due course of time, the 1st petitioner-Firm acquired an extent of Ac.3.32 cents in Survey No.273/A, 274/A, 274/B, 275/A, 275/B in Applipuram village within the limits of Nellore Municipal Corporation and constructed rice Mill thereon.
During the crop year 2014-2015, the 1st petitioner-Firm undertook custom milling of rice (CMR) to an extent of 2239.760MTs (Metric Tons) from A.P.State Civil Supplies Corporation Limited, Nellore and delivered 813.880 MTs. For the balance of the CMR payable by the 1st petitioner, its erstwhile Managing Partner Mr.Mallineni Venkateswara Rao made a representation to permit payment of CMR dues without penal charges and the said request was forwarded by the Joint Collector, Nellore to the Managing Director, A.P.State Civil Supplies Corporation Limited, Vijayawada vide proceedings dated 27.10.2018, whereby the Joint Collector, Nellore suggested consideration of the said request made by the petitioner No.1.
While so, at that juncture, the erstwhile partners of the 1st petitioner- Firm i.e. the 4th petitioner herein and Mr. M.Venkateswara Rao approached the petitioners 2 and 3 and requested to join as Partners in the 1st petitioner- Firm to mobilize capital and necessary infrastructure and accordingly, a partnership deed dated 27.03.2019 was executed and the same was registered as Document No.105/2019 before the Sub Registrar, Nellore.
While the matter stood thus, Mr. M.Venkateswara Rao died on 18.11.2019 and therefore, his legal heirs i.e. the petitioners 5 to 7 were admitted to the partnership vide an agreement dated 11.03.2020 and changes in the Constitution were registered under section 63(1) of the Indian Partnership Act, 1932, with the Registrar of Firms, Nellore.
Thereafter, petitioners 4 to 9 intended to retire from the 1st petitioner- Firm with the consent of other partners i.e. petitioners 2 and 3 and accordingly, they executed a Right Relinquishment Deed of Partnership on 22.10.2020 and presented the same before the 2nd respondent for registration on the same day. However, the 2nd respondent, who is the Sub Registrar, Nellore, refused to receive and register the same stating that the immoveable property of the 1st petitioner-Firm, which is shown as schedule property in the Right Relinquishment Deed of Partnership and as such the property was included in the prohibitory list under Section 22-A of the Registration Act, 1908.
However, when the petitioners verified the prohibitory list, the schedule property under the Right Relinquishment Deed of Partnership was not, in fact, included in the prohibitory list. The petitioners reliably came to know that the 3rd respondent has given instructions to the 2nd respondent to include the properties of the 1st petitioner in the prohibitory list in view of the CMR dues payable by the 1st petitioner to the Civil Supplies authorities.
The action of the 2nd respondent in refusing to r
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