Civil court compromise decree binding on parties; no further NOC from erstwhile partners required for partnership reconstitution and license transfer.

ORDER

The present Writ Petition has been filed challenging the rejection of approval for re-constitution of the partnership firm by the 2^nd respondent through the impugned summary report dated 18.01.2024.

2. Brief facts that are necessary for disposal of the Writ Petition are as follows:-

The petitioner is the partner of SSM Auto Service, a registered partnership firm having its Retail Outlet i.e., Indian Oil Petrol Bunk, under the 2nd respondent situated in the National Highway-544 (Old No.NH-47) which has been in operation for the past 48 years and the license in respect of which was allotted to seven members of the joint family who were the signatories to the original Dealership Agreement dated 14.03.1977 by the 2nd respondent. The other partners are the petitioner’s mother vi., E.Nirmala and his brother P.E.Eshwar. However, on account of several family partitions among the family members of the joint allottees and prolonged litigations through various family arrangements, family settlements, memorandum of understanding and arbitration awards by way of courts of law, the joint allottees relinquished their rights from the partnership except the petitioner's mother E.Nirmala.

3. The petitioner's mother being a continuing partner to the original Dealership Agreement, holding 52% of controlling interest in the above partnership, had applied for registration of re-constitution of the partnership, before the 2nd respondent which claim was rejected by the impugned summary report insisting for the ‘No Objection Certificate’ from the other signatories or their legal heirs/nominees to the original dealership agreement. Aggrieved by which, the present Writ Petition has been filed.

4. Learned counsel appearing for the petitioner submitted that the act of the

2nd respondent in rejecting the claim for approval of re-constitution of the petitioner's partnership firm is manifestly illegal and unsustainable as the respondent authority, while considering the petitioner’s claim, had failed to take note of the fact that the erstwhile partners had already been retired from the partnership after a prolonged litigation among the family members and also the fact that the rights of the parties had been conclusively determined in O.S.No.1236 of 2012 by a compromise decree dated 13.03.2023 before the 13^th Assistant Judge, City Civil Court, Chennai and that it is based on the terms of the said comprise which is binding on all the parties concerned, the retail outlet was allotted to the petitioner’s family and therefore, the rejection through the impugned summary report is arbitrary and the same requires interference of this Court. Accordingly, he prayed for allowing the Writ Petition.

5. Learned standing counsel appearing for the respondents submitted that, as per the relevant rules, the petitioner has to necessarily obtain the ‘No Objection Certificate’ from the erstwhile partners or their legal heirs who were the erstwhile signatories to the original partnership agreement however, in the absence of any concurrence from the other signatories, the transfer of license in the name of one of the partners would be impermissible. That being the case, the 2^nd respondent authority had rightly rejected their claim and that said rejection cannot be found fault with. It is however, submitted by the learned counsel for the respondents that the petitioner may be directed to submit the application for transfer of license along with a compromise decree passed in the suit, the same will be considered in accordance with law and appropriate orders would be passed by the respondents.

6. Heard the learned counsel appearing on either side and perused the materials availa