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2003 Supreme(All) 255
HIGH COURT OF ALLAHABAD
SUNIL AMBWANI
Subhash Chandra Kesarwani
Versus
Assistant Registrar, Firms, Societies and Chits, Allahabad
C.M.W.P. 47775 of 2002
Decided On : 05 February 2003
C. M. W. P. 47775 Of 2002
A.K.Goel, AMIT KRISHNAN, M.K.Pandey, R.N.Singh, Ravi Kant,
The court emphasized the importance of partnership agreements in determining the conditions for dissolution and reconstitution of a firm, and the Registrar's role in registering such changes.
Headnote:
Registrar - Partnership Dissolution - Indian Partnership Act, 1932, Section 43, 46, 58, 59, 63 - The court discussed the provisions of the Indian Partnership Act, 1932, particularly Sections 43, 46, 58, 59, and 63, and their interpretation in the context of partnership dissolution and reconstitution. The court emphasized the significance of partnership agreements, the conditions for dissolution, and the role of the Registrar in registering reconstituted firms.
Fact of the Case:
The petitioner challenged the rejection of their representation for dissolution of a partnership firm and the registration of the reconstituted firm. The petitioner claimed that the firm had dissolved on the death of a partner and sought to prevent the registration of the reconstituted firm.
Finding of the Court:
The court found that the partnership deed did not provide for dissolution on the death of a partner and allowed for reconstitution. The Registrar's decision to register the reconstituted firm was upheld, and the court dismissed the writ petition.
Issues: The issues revolved around the dissolution of the partnership, the registration of the reconstituted firm, and the Registrar's authority to make such decisions.
Ratio Decidendi: The partnership deed did not provide for automatic dissolution on the death of a partner, allowing for reconstitution. The Registrar acted within the scope of his powers in registering the reconstituted firm.
Final Decision: The writ petition was dismissed, upholding the Registrar's decision to register the reconstituted firm.
( 2 ) PETITIONER has challenged orders dated 8-8-2002 passed by Assistant Registrar, Firms Societies and Chits, Allahabad rejecting petitioners representation; and the registration of respondent No. 2 firm dated 12-10-2001 on the basis of declaration in Form-VII dated 3-10-2001 and has prayed for a direction to Assistant Registrar Firms Societies and Chits, Allahabad not to give effect to the impugned registration dated 12-10-2001.
( 3 ) THE facts giving rise to this case are that M/s. Kesarwani Zarda Bhandar, Village and Post/sahson, Allahabad-respondent No. 2 was reconstituted by partnership deed executed on 4-4-1998 between 16 partners, in accordance with the provisions of the Indian Partnership Act, 1932 (hereinafter referred to as the act ). Clauses 5, 22, 24, 25 and 26 of the Partnership deed relevant for the purpose of this case are quoted as below :
"5. That the duration of the partnership shall be at will and subject to the provisions of Indian Partnership Act, 1932.
22. That the parties to this deed may add and increase number of the partners and may also reduce the number of partners and may also modify/amend the existing terms and conditions and also modify their sharing ratio and may also add any other terms and conditions as they may consider necessary from time to time.
24. That none of the partners shall transfer his/her interest or share in the firm to any outsider but they may do so inter se between the partners and this firm.
25. That the retiring or outgoing partners shall be paid only the credit balance in his capital account if any in the terms within 6 months of his/her retirement or from the date he/she ceases to be a partner of the firm.
26. That in no event the partnership shall be dissolved but the same shall continue with the remaining partners or with any modification in the number of partners, but in no case any outsider will be inducted with the partners in the firm. "
( 4 ) ONE of the partners Sri Vishwanath Prasad Kesarwani died on 10-8-2001. Petitioner Subhash Chandra Kesarwani gave a notice under Section 43 (1) of the Act by registered post on 11-9-2001 allegedly exercising his right of dissolution of firm on the ground that the partnership was at a will and that the firm stood dissolved on the death of Sri Vishwanath Prasad Kesarwani on 10-8-2001 in terms of Section 46 of the Act, and for applying properties of the firm for distributing debts and liabilities amongst the partners. In the meantime since petitioner Subhash Chandra Kesarwani was not willing to continue in the firm, the remaining partners applied to the Registrar on 5-10-2001 and submitted a reconstitution deed dated 11-1-2001. Form-VII was registered on 12-10-2001. Petitioner Sri Subhash Chandra Kesarwani made an application to dissolve the firm enclosing a registered notice of dissolution dated 11-9-2001. Petitioner was informed on 27-10-2001 regarding registration of Form-VII on which he made a representation to the Registrar on 24-11-2001 for dissolution of the firm. The Registrar forwarded the notice to the partners of the firm for their reply.
( 5 ) A Writ Petition No. 9739 of 2002 was filed by Sri Subhash Chandra Kesarwani with the allegation that respondent No. 2 has applied for registration of firm to which the petitioner has filed objection, and that firm should not be registered as it has dissolved on the death of one of the partners. Without expressing any opinion in the matter, the writ petition was disposed of on 8-3-2002, with observation directing the Assistant Registrar Firms Societies and Chits, Allahabad to pass orders after considering petitioners objection by reasoned order. This order was passed on the allegation that Registrar has not yet granted registration to the firm. On receipt of the orders of the High Court, as above, the Registra
