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IN THE HIGH COURT OF BOMBAY
G.H. Guttal, J.
Nariman Aspandiar Irani (Dr.).... Plaintiff.
Versus
Adi Merwan Irani (Dr.).... Defendant.
Suit No. 756 of 1977, decided on 20-6-1989.
Advocates appeared :
Mrs. G.P. Bharucha, for plaintiff.
N.D. Vyas with E.J. Balsara i/by Payne and Company, for defendant.
There is no community or unity of interests between partners. Therefore they hold immovable property of the firm as tenants-in-common and not as joint tenants. Having regard to the incidents of tenancy-in common, one partner has not interest in the share in the property of an other partner. Where one partner transfers or relinquishes his share in the partnership business to another, the transferee partner has not antecedent title to the share of the transferring partner. Therefore the making over or relinquishment of leasehold interest as a part of the transfers share in the assets of the firm constitutes transfer of such leasehold interest. Such transfer of tenancy is forbidden by Section 15 (1) of the Bombay Rent Act and is therefore, void. The transferee partner does not therefore acquire the transferors interest in the tenancy.
PARTNERSHIP ACT, 1983 Section 14.
See Bombay Rents Hotel and Lodging House Rates Control Act, 1947, Section 15 (1).
Sections 14, 29, 48 - Bombay Rents, Hotel and lodging houses rates control Act, 1947, Section 15 (1)-Restrictions on transfer- Gift of tenancy as partners share-Held, such transfer is prohibited transfer.
The partnership Act conceives the interests of partners in severalty.
There is no community or unity of interests between partners. Therefore, they hold immovable property of the firm as tenants in common and not as joint tenants. Having regard to the incidents of tenancy-in-common. One partner has no interest in the share in the property of another partner. Where one partner transfers or relinquishes his share in the partnership business to another, the transferee partner has no antecedent title to the share of the transferring partner. Therefore, the making over or relinquishment of leasehold interest as a part of the transferors share in the assets of the firm, constitutes transfer of such leasehold interest. Section 15 (1) of the Bombay Rent Act prohibits transfer of tenants interest in the premises not only by subletting or assignment but also "any other manner". The words "in any other manner" mean a manner other than by sub letting and assignment. The effect of giving up of his share in the tenancy by a partner as part of his share in the partnership is to make over his share in the tenancy. Such making over of tenancy or parting with tenancy, constitutes transfer of tenants interest in any other manner. Such transfer of tenancy is forbidden by Section 15 (1) of the Bombay Rent Act and is, therefore, void. The transferee partner does not, therefore, acquire the transferors interest in the tenancy.
REGISTRATION ACT, 1908
Section 17.
See Bombay Rents Hotel and Lodging House Rates Control Act, 1947, Section 15 (1).
TRANSFER OF PROPERTY ACT, 1882
Sections 3, 5.
See Bombay Rents Hotel and Lodging House Rates Control Act, 1947,
Section 15 (1).
Section 123-Interest of partners in partnership firm-Is movable properly Relinquishment of interest of one partner by way of gift-Registration.
Held, such gift not registrable. The interest of partners in a partnership firm, although it owns immovable property including leasehold interest, is movable properly and. therefore document evidencing relinquishment of interest of one partner is not compulsorily registrable.
"In any other manner" - Meaning of.
The words "in any other manner" in Section 15(1) of Bombay Rents Hotel and Lodging House Rates Control Act, 1947 mean a manner other than by subletting and assignment. The effect of giving up of his share in the tendency by a partner as a part of his share in the partnership is to make over his share in the tenancy. Such making over of tenancy or parting with tenancy, constitutes transfer of tenants interest "in any other manner", Such transfer of tenancy is forbidden by Section 15(1) and is, therefore, void. The transferee partner does not, therefore, acquire the transferors interest in the tenancy.
Partners hold that partnership property as tenants-in common and not as
joint tenants. Besides the presumption in India must always be in favour of lenancy-in common rather than joint tenancy.
The suit instituted by Dr. Nariman Irani, the partner of the Defendant Dr. Adi Merwan Irani in the business known as "Dr. Irani's Maternity and Surgical Nursing Home, at 7, Jer Mansion, 1st Floor, 70-B, Gowalia Tank Road, Bombay-26", is mainly for a declaration that two writings executed by him on 13th October, 1976, purporting to "gift" his share in the partnership in favour of the Defendant are not valid and that the partnership firm continues to exist as it did, before the execution of the two writings.
2. The plaintiff's case is as under :---
The plaintiff and the defendant together hold, on lease, a flat at Jer Mansion, Gowalia Tank Road, Bombay-26. Subsequent to the acquisition of the lease, they started the Nursing Home in partnership in accordance with the terms embodied in the partnership deed, dated 31st July 1967. (Exh. `C'. It records that the business was of running "Maternity and Surgical Nursing Home at 7, Jer Mansion, 1st Floor, 70-B, Gowalia Tank Road, Bombay 26. The plaintiff and the defendant each brought Rs, 15,000/- into the capital. Due to the debts, the expenditure on repairs and so on, the plaintiff never earned profits. Disputes started between the plaintiff and the defendant, as the plaintiff thought that the defendant was making profits contrary to the partnership deed. According to the plaintiff, the defendant wrongfully retained his consultation fees which were agreed to be part of the partnership assets he, treated the patients expected to be treated at the Nursing Home, at some other place and always showed losses though the Nursing Home earned profits. On 19th February, 1973. (Exh 3'), the defendant wrote a letter to the plaintiff which illustrates how strained the relations between the partners were. By this letter, he recalled the discussion in regard to the dissolution of the firm and set out certain conditions which included payment of Rs. 72,000- to the plaintiff. The partnership was proposed to be terminated with effect from 1st April, 1973. But the partnership continued. The relations between the partners continued to be none too happy due to the frequent demands for contribution for the repairs of the building, furniture and so on. The absence of any profits troubled the plaintiff; so much so, that on 13th October, 1976, out of sheer disgust and huff he wrote a letter to the defendant, enclosing therewith the declaration. These writings (Exh. 'D'-Pages 1 and 2) are in his own hand. In the letter, he states "I am enclosing herewith a declaration making you the sole proprietor of Dr. Irani's Maternity and Surgical Nursing Home, Jer Mansion, 1st Floor, Gowalia Tank, Bombay, as of today the 13th October, 1976". Then, he goes on to record "I have no claim whatsoever over the said Nursing Home-------". The enclosed declaration was also in similar language. It declares "I am giving my half partnership of the hospital named as Dr. Irani's Maternity and Surgical Nursing Home--------". Then he described the transaction "as a gift-----as of today the 13th October, 1976."
Nothing happened for a considerable time. According to the plaintiff, on 21st November 1976 he and the defendant met in the Nursing Home. The plaintiff explained to the defendant that the harassment and continuous demand of money by the latter disgusted him and, therefore, he wrote the letter and declaration in a huff without intending that they be carried out. The defendant accepted this position. Both of them decided that the letter and the declaration dated 13th October, 1976, should be treated as non-extant an
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