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2012 Supreme(Guj) 118
2012 (3) GCD 2101 (Guj)
Hon’ble Mr. Justice S.R. Brahmbhatt
Supreme Tech Engineering - Through Partner Reji P. Mathew
Versus
Registrar of Firms (Vadodara Circle) & Anr.
Special Civil Application No. 2847 of 2011—Decided on 28/02/2012
Appearance :
Mr. Dipen C. Shah, for the Petitioner.
Mr. M.D. Arif S. Ansari, for the Petitioner
Mr. Hardhik Soni, AGP, for the Respondent No. 1.
Notice Served by, D.S., for the Respondents No. 1 – 2.
Mr. M.T. Mathai, for the Respondent No. 2.
Point in Issue :
Whether Registrar of firms is empowered to cancel the entry of Respondent No. 2 that he has resigned.
Headnote:Head Note :
[Indian] Partnership Act, 1932 — Sections 57, 59, 64, 64(1), 65, 71, 71(2)(D) — Gujarat Partnership Rules — Rules 7, 8 and 16 — Cancelling the entry — Accepting the request of Respondent No. 2 — Order by Registrar of firms — Jurisdiction — Validity — The Registrar of firms passed the impugned order dated 18.12.2012 under Section 64(1) of the Act — The language employed by legislature in the said provision goes to show that what is envisaged under is redification of mistake the administrative body can not be said to have power to adjudicate upon disputes as purposed to have been done by Registrar of firms in the case — Court therefore accepted the petition on ground that impugned order passed by Registrar assuming he was empowered under Section 64(1) of the Act.
Held :
The language employed by the legislature in casting the relevant provision namely Section 64(1) would eminently go to show that what is envisaged is rectification of mistake. This in itself is sufficient to persuade the Court to accept the plain and simple purport of the provision namely that provision is only for the purpose of rectifying the mistake. While undertaking the procedure of rectifying the mistake, as could be seen from the procedure itself, at least the statute does not lay down any elaborate scope of enquiry which would render justification to exercise of enquiring into the disputed claims, which otherwise can never be subject matter of adjudication by the administrative authority. Even if it is assumed and presumed that authority is exercising quasi judicial power which is unfortunately is not the present case. So far as the provision of Section 64(1) of the Act is concerned. The principle of administrative law has by now cristalized to conclude safely that where ever there is disputes in respect of veracity of a claim of a party, same is required to be established upon leading of evidences by the administrative authority, if not equipped with proper elaborate procedure enabling it to come to a conclusion, then the said authority cannot be said to have power to adjudicate upon disputes. In the instant case, the plain language of Section 64(1) eminently prescribes the purport of the Section and provision and therefore, in Court view, there exists strong case in favour of the petitioner for quashing of the order impugned. [Para 21]
Law Laid Down :
Where ever there is a dispute in respect of veracity of a claim of a party same is required to be established upon leading of evidence by administrative authority.
S.R. Brahmbhatt, J.—Heard learned advocate for the parties.
2. On 15.02.2012, this Court passed the following order;
“Learned advocate for the petitioner has submitted that the matter was slated for final disposal but there is a leave note, hence it may be placed on appropriate date. Hence, let the matter be come up on 22.02.2011.”
3. Accordingly, the matter was taken up for final disposal. Hence, Rule. Rule is waived by learned advocate for the respective parties. Rule is fixed forthwith in terms of the order made hereinabove.
4. The petitioner by way of this petition filed under Article 226 of the Constitution of India challenged the order dated 18.12.2010 purported to have been passed in exercise of the power under Section 64 of the Indian Partnership Act, accepting the request for cancelling the entry qua one of the partner – Respondent No. 2 in respect of the constitution of partnership firm.
5. Facts in brief leading to filing this petition, as could be culled out from the memo of the petition deserve to be set out as under;
6. The petitioner is a partnership firm constituted under the Indian Partnership Act. All partners are real brothers. The petitioner alleged in the memo of the petition that one of the partners of the partnership firm i.e. Respondent No. 2 tendered his resignation vide letter dated 12.12.2009 sent by Register Post A.D. to the partnership firm and also to Registrar of firms. The firm received the said letter on 12.12.2009. On 15.12.2009, the resignation letter was accepted by the partners. The factum of acceptance of the resignation was communicated to out going partner vide letter dated 24.02.2010, which was also sent by Register Post A.D. and hand delivery with signature of the acceptance as well as Under Certificate of Posting. Pursuant to the aforesaid exercise, the Respondent No. 2 demanded 25% of the profit of the firm, as its legitimate share as an out going partner of the firm. The change in the constitution of firm was accordingly invited to the partnership firm indicating that Respondent No. 2 has resigned. The said change is to register but on account of objection from Respondent No. 2 the Registrar did not exercise power under Section 64 of the Partnership Act and came to the conclusion that the say and objection of Respondent No. 2 was correct and hence passed order dated 18.12.2012, holding that Respondent No. 2 be considered as live partner of the said firm and his representation to that effect is acceptable and therefore, it was decided to cancel the effect from the original date. The amendment dated 16.04.2010 by which the retirement of Respondent No. 2 was recorded in the firm of Messrs Supreme Tech Engineering and to restore Mr. Mathew’s name as live partner from the original effect. This power is exercised under Section 64(1) of the Partnership Act for rectifying the mistake.
7. Being aggrieved and dissatisfied with the order the present petition is filed under Article 226 of the Constitution of India for the reasons stated in the memo of petition.
8. Learned Advocate for the petitioner invited this Court’s attention to the provision of Section 64, 65 and 71 of the Indian Partnership Act, 1932 (hereinafter referred to as the “Partnership Act”, for the sake of brevity) and contended that the action impugned is absolutely without jurisdiction and hence the resultant order is nullity.
9. Learned advocate appearing for the petitioner contended that the Registrar of partnership firm did not have jurisdiction to adjudicate upon the disputed facts with regard to the validity of resignation and/or validity of withdrawal of resignation. The plain reading of provision of Section 64 would clearly indicate that the power is conferred upon the Registrar for rectifying the mistakes only, that too at the behest of all the concerned. In the instant case, when the say of the Respondent No. 2, or the objection of the Respondent No.2, addressed to the Registrar was contested by other partners, then i
