WP/7538/2004 of M/s.Vishal Enterprises, A Gegistered partnership firm Vs Smt.R.S.Noorjahan Sultana, on 26 December 2007

ORDER:

This Writ Petition has been filed by the petitioners seeking to callfor the records relating to and in connection with the proceedingsdated 23.02.2004 issued by the second respondent- Registrar of Firmsat the instance of the first respondent in dissolving the PartnershipDeed dated 09.06.1999 without following the procedure prescribedunder law and declare it as illegal and unconstitutional and violative ofprinciples of natural justice.

2) The petitioners are contending that as per Condition No.18of the Partnership Deed dated 09.06.1999, the Partnership shall not bedissolved and it will be continued with the remaining partners even incase of retirement, insolvency or death of any partner.

3) For proper appreciation, it is appropriate to extract therelevant conditions of the Partnership Deed dated 09.06.1999 i.e.,Condition Nos.15 and 18, which read as under respectively:

“15. That the parties to the Partnership Deed agree that they shallnot, during the currency of the Partnership agreement with theCorporation, either jointly or individually, change the constitution ofthe Firm in any manner, either by taking a new Partner or by reducingor relinquishing their interest in the firm either fully or in part, eitherdirectly or indirectly without the consent and concurrence of IndianOil Corporation Limited.”

“18. That the retirement, insolvency or death of any Partner shallnot dissolve the Partnership and the remaining Partner shall continuethe Partnership with or without admitting new Partners subject to priorwritten approval of M/s. Indian Oil Corporation Limited.”

4) A perusal of the Condition No.15, it is clear that the retiringpartner is supposed to obtain prior consent and concurrence of theIndian Oil Corporation Limited.

5) The learned counsel for the petitioners’ further submittedthat under Section 63 of the Indian Partnership Act (for short ‘the Act’),the Registrar of Firms has to be informed the changes, if any, in theprescribed Form No.V prescribed under the Andhra Pradesh Partnership Rules, 1957, which was filled up under Section 59 of theAct and non sending of the information in the prescribed form alsoamounts to violation of the mandatory provision of the Act. Therefore,the Firm is not liable to be dissolved and the Registrar of the Firmsought not to have passed the orders dissolving the Partnership Firmwithout following the procedure prescribed under law.

6) The learned counsel for the respondents submitted thatSection 43 of the Act comes into play as the partnership deed wasexecuted agreeing with the parties at will to issue notice to dissolvethe firm.

7) Section 43 of the Indian Partnership Act, 1932 reads asfollows:

“43. Dissolution by notice of partnership at will:-- (1) Where thepartnership is at will, the firm may be dissolved by any partner givingnotice in writing to all the other partners of his intention to dissolvethe firm.partnership is at will, the firm may be dissolved by any partner givingnotice in writing to all the other partners of his intention to dissolvethe firm.

(2) The firm is dissolved as from the date mentioned in the noticeas the date of dissolution or, if no date is so mentioned, as from thedate of the communication of the notice.”as the date of dissolution or, if no date is so mentioned, as from thedate of the communication of the notice.”

8) After going through the partnership deed dated 09.6.1999, Ido not find any such term that the partnership can be dissolved at thewill of the one of the partners. Therefore, I do not find any force in the contention raised by the respondentscounsel.

9) In the light of the foregoing reasons, I am inclined to setaside the impugned order passed by the second respondent, dated23.02.2004 by declaring that it is illegal, unconstitutional and violativeof principles of natural justice.

10) Accordingly, the Writ Petition is allowed. No costs.

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Dr.G. YETHIRAJULU, J

Date: 26-12-2007Isn