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1972 Supreme(Pat) 70
PATNA HIGH COURT
N.L.Untwalia and Akbar Husain JJ.
Hiralal Agrawal
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 349 of 1970 ;
Decided On : MAY 25, 1972
The Registrar of Firms does not have the power to refuse registration of a partnership firm based on the ground of a similar firm name, as there is no provision in the Partnership Act enabling such refusal.
Headnote:
Registrar of Firms - Partnership Registration - Refusal to Register - The court held that the Registrar of Firms did not have the power to refuse registration of a firm based on the ground that a firm of the same name had already been registered. The refusal by the Registrar of Firms to register the partnership firm was deemed illegal, and the court directed the registration of the firm named Hind Traders.
Fact of the Case:
Petitioners 1 and 2 sought registration of their partnership firm named 'Hind Traders'. The Registrar of Firms refused to register the firm on the ground that a firm of the same name had already been registered.
Finding of the Court:
The court found that the Registrar of Firms did not have the power to refuse registration of the firm based on the ground he had cited. The refusal by the Registrar of Firms to register the partnership firm was deemed illegal, and the court directed the registration of the firm named Hind Traders.
Issues: The main issue was whether the Registrar of Firms had the power to refuse registration of the firm on the ground he had cited.
Ratio Decidendi: The court interpreted Sec. 58 and Sec. 59 of the Indian Partnership Act, 1932, and compared it with a similar provision in the Companies Act, 1956. It concluded that there was no provision in the Partnership Act enabling the Registrar to refuse registration on the ground of a similar firm name, making the refusal illegal.
Final Decision: The court allowed the writ application, set aside the order of the Registrar of Firms, and directed the registration of the partnership firm named Hind Traders.
1. According to the petitioners case in the writ application, petitioners 1 and 2 started carrying on a partnership business in the firm name "Hind Traders", petitioner No. 3. Under Sec. 58 of the Indian Partnership Act, 1932 (Central Act IX of 1932), hereinafter called the Act, they applied to the Registrar of Firms for registration of their firm. A copy of this application dated 1-9-69 is Annexure 2. The Registrar of Firms, respondent No. 2, has refused to register the firm and, the order has been intimated to the petitioners in letter dated the 19th January, 1970, a copy of which is Annexure 3 to the writ application. The only reason for not registering the firm is that a firm of the name of Hind Traders had already been registered. The petitioners have come to this Court for the quashing of the order contained in Annexure 3 and for a direction to the Registrar of Firms to register their firm.
2. The only question which falls for our decision in this case is whether respondent No. 2 had the power to refuse registration of the firm on the ground he has done.
3. Sec. 58 of the Act reads as follows:
"(1) The registration of a firm may be effected at any time by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee, stating. (a) the firm name,
(b) The place or principal place of business of the firm,
(c) the names of any other places where the firm carries on business,
(d) the date when each partner joined the firm,
(e) the names in full and permanent addresses of the partners, and
(f) the duration of the firm.
The statement shall be signed by all the partners, or by their agents specially authorised in this behalf.
(2) Each person signing the statement shall also verify it in the manner prescribed.
(3) A firm name shall not contain any of the following words, namely:-
- Crown, Emperor, Empress, Empire, Imperial, King, Queen, Royal, or words expressing or implying the sanction, approval or patronage, of ......., except when the State Government signifies its consent to the use of such words as part of the firm name by order in writing."
Section 59 says-
"When the Registrar is satisfied that the provisions of Sec. 58 have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms and shall file the statement." The application for registration is to be filed in form I according to Rule 3 of the Bihar and Orissa Partnership Rules, 1933. In the form the applicants are not required to state any other particular except those mentioned in Sec. 58 of the Act. If the application is in form and the provisions of Sec. 58 have been complied with then a duty is cast upon the Registrar under Sec. 59 to record an entry of the statement in a register called the Register of Firms. On such recording of the statement, the firm stands registered. There are no words either in the Act or the Rules to clothe the jRegistrar either expressly or by necessary implication with the power to refuse registration of a firm on the ground that a firm of the same name or an approaching one had already been registered. In this connection, a comparison would be pertinent with Section 20 of the Companies Act, 1956. The said section provides- "(1) No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.
(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, may be deemed to be undesirable by the Central Government within the meaning of Sub-section (1)."
It seems to us that a similar provision ought to have been there in the Partnership Act so that third parties dealing with a partnership firm may not be under a confusion. But the difficulty is that neither there is
