HIGH COURT OF CALCUTTA
P. B. Mukharji, S. A. Masud
DURGA PROSAD SARAWAGI - Appellant
Versus
REGISTRAR OF FIRMS - Respondent
A. F. O. O. 212 Of 1963
Decided On : APRIL 30, 1965
PARTNERSHIP - DISSOLUTION - NOTICE - REGISTRAR OF FIRMS - POWER TO RECTIFY MISTAKE - PARTNERSHIP ACT, 1932, SECTIONS 63(1), 64(1), 65 - PARTNERSHIP RULES, 1932, RULES 5, 6, 8.
Fact of the Case:
The Registrar of Firms, acting on a notice from one Manickchand Sarawagi, dissolved a partnership firm called Ramballabh Rameswar without giving notice to the other partners. The appellants, who were the other partners, challenged this dissolution order under Article 226 of the Constitution.
Finding of the Court:
The court held that the Registrar's action was illegal and in violation of Section 63(1) of the Partnership Act, 1932, as Manickchand Sarawagi was not a partner immediately before the dissolution and therefore not authorized to give notice of dissolution. The court also held that the Registrar failed to comply with the provisions of Section 64(1) of the Act, which empowered him to rectify mistakes in the Register of Firms, and Rule 8 of the Partnership Rules, 1932, which required him to make inquiries and investigations in cases of disputes among partners.
Issues: 1. Whether the Registrar of Firms had the authority to dissolve the partnership firm without giving notice to the other partners? 2. Whether Manickchand Sarawagi was a partner immediately before the dissolution and therefore authorized to give notice of dissolution? 3. Whether the Registrar complied with the provisions of Section 64(1) of the Partnership Act, 1932, and Rule 8 of the Partnership Rules, 1932?
Ratio Decidendi: 1. The Registrar of Firms does not have the authority to dissolve a partnership firm without giving notice to the other partners. 2. Manickchand Sarawagi was not a partner immediately before the dissolution and therefore not authorized to give notice of dissolution. 3. The Registrar failed to comply with the provisions of Section 64(1) of the Partnership Act, 1932, which empowered him to rectify mistakes in the Register of Firms, and Rule 8 of the Partnership Rules, 1932, which required him to make inquiries and investigations in cases of disputes among partners.
Final Decision: The court allowed the appeal, set aside the Registrar's order of dissolution, and directed the Registrar to rectify the mistake in the Register of Firms.
( 1 ) THIS is an appeal from the order of Banerjee, J. dismissing the appellant's application under Article 226 of the Constitution against the Registrar of Firms and one Manickchand Sarawagi.
( 2 ) THE dispute relates to a firm of partnership by the name Ramballabh Rameswar. On receiving a notice from respondent Manickchand Sarawagi dated 30th August, 1961 under Section 63 (1) of the Indian Partnership Act, the Registrar of Firms ex parte without giving any notice to the appellants and who are She other contending partners, dissolved the firm by entering the word dissolved' in the Register. The alleged notice of dissolution signed by the respondent Manickchand on which this extraordinary step was taken by the Registrar of Firms is in these following terms;"to The Registrar of Firms. West Bengal. Calcutta. Notice is hereby given pursuant to Sub-section (1) of Section 63 of the Indian Partnership Act 1932, that the firm Ramballabh Rameswar, 19, Nurmal Lohia Lane, Calcutta was dissolved on April 11, 1954. (Number of the firm on the Register --19655.)Manickchand Sarawagi Signature of any partner or his agent. Date August 30, 1981. "
( 3 ) BANERJEE, J. in dismissing this application referred to a suit in this Court being Suit No. 645 of 1958 between the appellants here and the representatives and heirs of another deceased partner by the name Ram Kumar Khatuwalla and the Judgment delivered by A. N. Ray. J. in that suit. That judgment is under appeal before us. Banerjee, J. also referred to the petitioners' own statement that the firm had been dissolved and which statement was made in that suit. On that point also there is an application for amendment of the plaint by the petitioners which is also before us. The reason for which Banerjee, J. dismissed the appellants' petition under Article 226 of the Constitution may be stated in his Lordship's own words:"the question, whether the firm was dissolved on April 11, 1954 appears to be a disputed question of fact and it is impossible for me in this Rule to come to a conclusion, without more, which is the true version, namely, whether the firm was dissolved on April 11, 1954 or was still continuing. That being the position I am disinclined to interfere with the entry made by the Registrar in this Rule. "
( 4 ) IN the appeal before us Mr. Sankar Ghose for the appellants has attacked this judgment on the ground mainly that the whole procedure adopted by the Registrar of the Firms was utterly illegal and in violation of the Partnership Act and Rules made thereunder and on that ground alone apart from any question of disputed facts, he contends that the order dissolving the firm, must be deleted. He has also advanced the argument that this was not really a question of disputed fact but a question about the interpretation of the document or documents of the partnership. Admission of one partner as to the effect of such a document is not a question of fact but a question of law, because the controversy touched on the question of construction and legal effect of that document. We are inclined to accept that submission and hold that the learned Judge was not right in just dismissing the application on the ground of disputed facts.
( 5 ) IT is necessary, in the first place, to refer to the notice of dissolution which is quoted above. This notice is given under Section 63 (1) of the Indian Partnership Act. The language of Section 63 (1) of the Indian Partnership Act reads as follows:"when a change occurs in the constitution of a registered firm any incoming, continuing or outgoing partner, and when a registered firm is dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorised in this behalf, may give notice to the Registrar of such change or dissolution specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms, and s
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