The court established that property of a partnership firm automatically vests in a company upon registration, without needing a registered deed for the transfer.

JUDGMENT :

Above writ petition is filed seeking a direction to the 4^th respondent, Village Officer to accept land tax from the petitioner in respect of the property covered by Ext.P3 possession certificate and Ext.P4 certificate of genuinity.

2. Brief facts necessary for the disposal of the writ petition are as follows: Petitioner company was incorporated on 16.01.1996 as per Ext.P1 certificate of incorporation and is in absolute ownership and possession of 6.7825 hectares of land of which 6.5599 hectares is comprised in Survey No.1210 and 22.26 Ares in Survey No.1232 of Peerumade Village. The property was mutated in the name of the petitioner and was assigned Thandaper No.5054 and was remitting tax for the said property till 2017-2018, as evidenced from Ext.P2 land tax receipt for the year 2017-18. The aforesaid property was part of the private property of the erstwhile Ruler of Travancore, which was sold by him to M/s.Kumari Investment Corporation Pvt. Ltd as per sale deed No.252/1973 of SRO, Peermade. The total extent of property sold was 24.50 acres. M/s.Kumari Investment Corporation Pvt. Ltd. sold an extent of 24 acres obtained by them to Swami Athuradas as per sale deed No.252/1973 of SRO, Peermade, dated 18.11.1985. He formed a partnership by the name Travancore Regal Resorts as per the deed of partnership dated 28.11.1994 bringing as his share of capital 17 acres of land which forms part of the land described above. Hence the said property became the capital asset of the firm as per Section 14 of the Partnership Act, 1932. Later the partnership firm ‘Travancore Regal Resorts’ was incorporated as a company (the petitioner company) under the Companies Act, 1956 in accordance with the provisions under Section 565(b) read with Section 567(b) of the Companies Act, 1956. Thus it is contended that the assets of the partnership firm became vested with the petitioner in accordance with Section 575 of the Companies Act, 1956. The 4^th respondent has issued Ext.P3 certificate of ownership and possession of the above-mentioned land and Ext.P4 certificate of genuinity was issued by the 3^rd respondent certifying that the property is held under a genuine patta. Land tax was also accepted. In spite of all these, after 2017-2018, the 4^th respondent declined to accept tax. Therefore representations were submitted by the petitioner before various authorities and ultimately land revenue commissioner, the additional respondent No.5 has called for a report and consequently, the 2^nd respondent Revenue Divisional Officer has submitted Ext.P5 report. Though Ext.P5 report confirms the derivation of title of the property of the petitioner company and payment of land tax by the petitioner, a doubt was expressed as to the validity of the vesting of the property in the petitioner company in the absence of transfer of property by way of a sale deed. Petitioner would contend that such a doubt was raised only due to non-appreciation of Section 575 of the Companies Act. Though Exts.P6 and P7 complaints were filed, the authorities refused to accept tax. The petitioner would contend that it is a ‘landholder’ as defined in the Kerala Land Tax Act, 1961 and it has a statutory liability to pay tax and that there is a corresponding statutory liability on the State to accept tax. The denial of receipt of tax is done in an arbitrary manner, that too without resorting to any procedure established by law. Petitioner also relies on Exts.P9 to P11 documents to prove the derivation of title and contends that the said derivation of title of the aforesaid property of the petitioner company has not been challenged or disputed by any of the prior owners or anyone claiming under them.

3. A statement has been filed by the 2^nd respondent mainly contending that though the property was transferred to one Swamy Athuradas as per Sale Deed No.2124/85 of Peerumade Sub Registrar Office, there are no legally valid documents produced by the petitioner to show that it has obtained 17 a