Allowed

M/S Jai Bharath Mills Pvt. Ltd. v. the Regional Commissioner

Karnataka HC7 Nov 2024WP/16207/2015

Case brief

AI extract

What is this about?

The High Court quashed the registration of a reconstituted partnership deed and the associated Form 5 issued by the Registrar of Firms. The Court held that once the parties contested the reconstitution and the dispute was referred to the Civil Court, the Registrar ought to have stayed the registration process rather than issuing Form 5.

What did the court decide?

Writ of certiorari issued quashing the order dated 03.03.2010 of the Registrar of Firms issuing Form 5 and the order dated 27.02.2012 of the Appellate Authority.

M/S Jai Bharath Mills Pvt. Ltd. Vs the Regional… — Company and Corporate | Karnataka HC (2024)

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NC: 2024:KHC:45390 WP No. 16207 of 2015

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 7^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 16207 OF 2015 (GM-ST/RN)

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BETWEEN:

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M/S JAI BHARATH MILLS PVT LTD A COMPANY REGISTERED UNDER THE COMPANIES ACT AND HAVING ITS REGISTERED OFFICE AT SYNDICATE HOUSE, MANIPAL-576104 D K DISTRICT REPRESENTED BY ITS DIRECTOR MR T SUDHAKAR PAI

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M/S EFFICIENT MANAGEMENT SERVICE PRIVATE LIMITED COMPANIES ACT AND HAVING ITS REGISTERED OFFICE AT SYNDICATE HOUSE, MANIPAL-576104 D K DISTRICT REPRESENTED BY ITS DIRECTOR MR SHASHIDHAR BHAR

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Digitally signed by SHWETHA RAGHAVENDRA

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Location: HIGH COURT OF KARNATAKA

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(BY SRI. VIJAYA KRISHNA BHAT M.,ADVOCATE)

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AND:

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THE REGIONAL COMMISSIONER AND THE APPELLATE AUTHORITY MYSORE REGION MYSORE-572001.

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…PETITIONERS

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THE DISTRICT REGISTRAR AND DEPUTY COMMISSIONER OF STAMPS AND VALUATIONS UDUPI DISTRICT UDUPI-574201.

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2 - NC: 2024:KHC:45390 WP No. 16207 of 2015

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SRI Y N RAMACHANDRA RAO S/O P NARAYANA RAO AGED ABOUT 60 YEARS R/O NO. 15, BANGARU RESIDENCY OPP PRASANNA GANAPATHI TEMPLE HIG-HUDCO COLONY MANIPAL-576104 D K DISTRICT

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SRI SUBRAMANYA RAO S/O P NARAYANA RAO AGED ABOUT 57 YEARS R/O BANGARU HOUSE, ALIVE-KODI THENKA YERMAL, PADUBIDRI POST UDUPI TALUK AND DISTRICT-574201.

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…RESPONDENTS

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(BY SRI. SPOORTHY HEGDE AGA FOR R1 & R2; R3 & R4 SERVED AND UNREPRESENTED)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE IMPUGNED ORDER DT-27.02.2012 PASSED BY THE R-1 IN APPEAL NO. RA/STP/7/2010-11 VIDE ANNEXURE-Y.

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THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE SURAJ GOVINDARAJ

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ORAL ORDER

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The petitioners are before this Court seeking for the

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following reliefs:

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a. Issue a writ of certiorari quashing the impugned order dated 27.02.2012 passed by the 1^st

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3 - NC: 2024:KHC:45390 WP No. 16207 of 2015

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Respondent in Appeal No.RA/STP/7/2010-11 vide Annexure-Y;

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b. Issue writ of certiorari quashing the impugned order dated 03.03.2010 passed by the 2^nd Respondent in proceeding No. FIRM/61/2006-07 vide Annexure-V and consequently reject the Form No.5 with the reconstitution deed dated 01.04.2009.

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c. Grant costs of the proceedings and such other and further relief, as this Hon’ble Court deems fit to grant, under the facts and circumstances of the case and in the interest of justice and equity.

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The petitioners claim that a proprietary concern by name of MOTCO agency has been run by one Mrs.Jaya S. Pai. Said proprietary concern was converted into a partnership concern by inducting the petitioners herein. The said Jaya S.Pai also retired and the partnership continued with only the petitioners as its partners vide reconstitution deed dated 1.04.2007.

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It is claimed that respondent No.3 was a Director in one of the group companies, namely CCI Limited and he was removed from the directorship on 23.07.2009. Respondent No.3 holding a grudge against the group by making use of the documents

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4 - NC: 2024:KHC:45390 WP No. 16207 of 2015

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which were available, had submitted a fraudulent reconstitution of partnership deed by he himself representing petitioner No.1 and inducted his brother Respondent No.4 as a partner and while so reconstituting, the profit and loss ratio was also redone with 80% being allocated to respondent No.4 and 10% each to petitioner No.1 and 2.

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The petitioners on coming to know of the presentation of the said document had objected to the registration thereof. The said objections were considered by the respondent No.2-Registrar of Firms and the claim of the petitioners though stood rejected by directing them to approach the appropriate forum for adjudication of the civil dispute, respondent No.2 went ahead and directed the issuance of Form-5. Aggrieved by the same, the petitioner had challenged the said order of respondent No.1 before respondent No.1, which came to be dismissed by holding that the said appeal was not maintainable since there was no adjudication

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NC: 2024:KHC:45390 WP No. 16207 of 2015

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done by respondent No.2 and the matter had been referred to the Civil Court. It is aggrieved by the same, the petitioners are before this court.

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Notice having been issued to respondents, respondents No.3 and 4 though served have chosen to be unrepresented.

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The submission of Sri.V.K.Bhatt, learned Counsel for the petitioners is that the petitioners have never consented to reconstitution of the partnership firm. In fact the petitioners had on 27.07.2009 taken steps to dissolve the partnership firm. Respondent No.3 had submitted a reconstitution of partnership deed backdated to 1.04.2009 which was submitted on 5.08.2009 and as such, he submits that there being no consensus of the petitioners to be partners, Form-5 could not have been issued when the petitioners had categorically objected to the same even before such issuance.

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NC: 2024:KHC:45390 WP No. 16207 of 2015

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Heard Sri.Vijaya Krishna Bhat, learned counsel for the petitioner and Sri.Spoorthy Hegde, learned AGA for respondents No.1 and 2. Perused papers.

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A perusal of the documents would indicate that respondent No.3 had represented petitioner No.1 and one Mr. U. Muddanna had represented petitioner No.2 and the other partner who was inducted as the brother of respondent No.3, namely respondent No.4.

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The petitioners being represented by their Directors, having categorically stated that they had never agreed for reconstitution, respondent No.2 has accepted the same and directed the parties to approach the appropriate civil forum. Having done so, I am of the considered opinion that respondent No.2 could not have directed issuance of Form-5 registering a partnership firm taking on record the reconstituted partnership deed when the same had been objected to by the parties to the alleged reconstitution deed. Once a reference of the dispute

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NC: 2024:KHC:45390 WP No. 16207 of 2015

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is made to the Civil Court, respondent No.2 ought to

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have stayed its hand and could not have taken the

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said document on record and issued Form 5.

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In that view of the matter, I pass the following:

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ORDER

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i. Writ petition is allowed, a certiorari is issued. The order dated 3.03.2010 passed by respondent No.2 in proceeding No. FIRM/61/2006-07 insofar as issuance of Form No.5 is quashed.

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ii. Consequently, the order passed by respondent No.1 in Appeal No.RA/STP/7/2010-11 at Annexure-Y is also quashed.

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Sd/(SURAJ GOVINDARAJ) JUDGE

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LN List No.: 1 Sl No.: 45

M/S Jai Bharath Mills Pvt. Ltd. v. the Regional Commissioner

Case brief

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M/S Jai Bharath Mills Pvt. Ltd. v. the Regional Commissioner

Case brief

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