Petitioners sought writ to declare proceedings illegal barring their inclusion as successors in a dissolved partnership firm. Court found petitioners failed to prove incorporation of their names and dismissed the petition.
Writ petition dismissed; no order as to costs.
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HONOUERABLE SRI JUSTICE M. GANGA RAO
Writ Petition No.19307 of 2020
ORDER:
This writ petition, under Article 226 of the Constitution of India, is filed seeking a mandamus to declare the proceedings vide Lr.No.E1/1312/2019, dated 19.09.2020 issued by the 3rd respondent as per the proceedings dated 01.09.1987 as illegal, arbitrary and contrary to the violative of principles of natural justice.
The case of the petitioners is that their father started business in the name of their grandfather viz., M/s. Salaruddin Grey Barytes, vide Regd. No.2677 of 1982 in the premises bearing Door No.5/132, Kotagadda Street, Kadapa City along with other partners viz., G.M. Mustafa Shariff; 3) Chennamsetty Sree Ramulu; 4) Pandra Venkata Chalapathi; 5) Pandra Chandra Sekhar and 6) Pandra Mohan Kumar. Now, there are no partners alive and no legal heirs are interested to join in the business. At the time of death of their father, all the petitioners are being minors and their names were incorporated on 01.09.1987 by way of Form-V under Section 63 (1) of the Partnership Act, 1932. Now all the partners were died due to old age and the mother of the petitioners also died on 12.04.2006 and as of now the petitioners are the successors of the business. The petitioners further stated that they approached the 3rd respondent on 18.09.2019 for inclusion of their names in the firm as successors on the ground that they were now declared as majors, but the 3rd respondent issued proceedings vide Lr.No.E1/1312/2019, dated 19.09.2020 informing the petitioners that as the partners were
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expired, there would be no provision for the reconstitution of the firm. Aggrieved by the said order, the present writ petition is filed.
Heard the learned counsel for the petitioner and the learned Government Pleader for Revenue.
Learned counsel for the petitioner states that the proceedings of the 3rd respondent is not valid and bad in law as the 3rd respondent issued the impugned proceedings in accordance with the provisions of Sections 42 and 31 of the Partnership Act, 1932. In fact, the provisions of Sections 42 and 31 have no application to the case of the petitioners as there was no fixed term for the partnership firm and as they were already incorporated as minor partners as way back as on 01.09.1987. The 3rd respondent without considering the said facts simply issued the impugned proceedings. Hence, the proceedings issued by the 3rd respondent are bad in law and is liable to be set aside.
Having considered the facts and circumstances of the case and submissions of the counsel and on perusal of the record, this court found that the 3rd respondent issued the impugned proceedings following the procedure as contemplated under Section 42 and 31 of the Partnership Act, 1932.
Section 42 of the Indian Partnership Act, 1932 reads thus:
“ Dissolution on the Happening of certain Contingencies:
Subject to contract between the partners a firm is dissolved (a) if constituted for a fixed term, by the expiry of that term; (b) if constituted to carry out one or more adventures or undertakings, by the completion thereof; (c) by the death of a partner; and (d) by the adjudication of a partner as an insolvent.
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A reading of the above provision makes it clear that the partnership firm itself got dissolved, if the firm is constituted for a fixed term, by the expiry of that term; if constituted to carry out one or more adventures or undertakings, by the completion thereof; by the death of a partner; and by the adjudication of a partner as an insolvent. Further, Section 31 of the Indian Partnership Act reads thus:
“ INTRODUCTION OF A PARTNER : (1) Subject to contract between the partners and to the provisions of section 30, no person shall be introduced as a partner into a firm without the consent of all the existing partners. (2) Subject to the provisions of section 80, a person who is introduced as a partner into a firm does not thereby become liable for any act of the firm done before he became a partner.
The above provision makes it clear that no person shall be introduced as a partner into a firm without the consent of all the existing partners. In the instant case, it is an admitted fact that all the partners have died. However, it is the case of the petitioners that the names of the petitioners had been incorporated way back on 01.09.1987, but the petitioners have not filed any proof showing the incorporation of their names. In the absence of any proof, no relief as sought for can be granted to the petitioners. Hence, the contention of the petitioners that their names were incorporated on 01.09.1987 by way of Form-V under Schedule 63 (1) of the Partnership Act, 1932, has no merit consideration. In the circumstances, this court found that there is no illegality or irregularity in the order passed by the 3rd respondent and the writ petition is devoid of any merit and the same is liable to be dismissed.
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Accordingly, the writ petition is dismissed. There shall be no
order as to costs.
As a sequel thereto, miscellaneous petitions, if any, shall
stand closed.
________________ M. GANGA RAO, J
Date: 03-11-2020 Ksn
2 issues framed by the court
Whether the 3rd respondent acted illegally in refusing to reconstitute the partnership firm after all partners died.
Whether the petitioners proved their names were validly incorporated as minor partners in 1987.
2 provisions across 1 enactments
Petitioners (Successors of M/s. Salaruddin Grey Barytes)
3rd Respondent
M. GANGA RAO
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
