KURIACHAN CHACKO Vs. REGISTRAR OF FIRMS

JUDGEMENT

(1.) Rejection of the request of the petitioners to record the amendment brought about to Clause No. 12 of Ext. P1 Partnership Deed dated 12.11.2002, whereby the specified tenure of '5 years' was sought to be amended as '30 years' with some other modifications, which was refused to be registered as per Ext. P5 communication issued by the respondent, on the ground that the tenure of the firm was already over, years back in 2007; is the subject matter of this Writ Petition. The petitioners constituted a firm in the name and style as "M/s. LIS Ernakulam", as borne by Ext. P1 Deed of Partnership executed on 12.11.2002, which was got registered on 26.11.2002 as borne by Ext. P2 Certificate of Registration. Admittedly, the tenure of the firm was stipulated as 'five years'. But according to the petitioners, as per Resolution 3 dated 30.10.2006, the members of the firm, vide Ext. P3, had amended Clause No. 12 of the partnership deed, stipulating that the duration of the firm shall be for a minimum period of '30 (Thirty) years'; that the firm shall not stand dissolved on the death of any of the partners and shall continue the business of the firm with the legal representatives of such deceased partner's. It is made clear in Ext. P3 that the amendment has been brought about by virtue of the enabling provision under Clause 24 of Ext. P1 Partnership Deed. The petitioners contend that, even though the resolution was taken as early as in the year 2006, it was unfortunately omitted to be brought to the notice of the respondent, for being incorporated in the Register. The lapse was noticed only in September 2013 and immediately thereupon, the first petitioner who is described as the Managing Trustee/Partner as per Ext. P1 Partnership Deed, preferred Ext. P4 representation before the respondent, also forwarding a copy of the Minutes dated 30.10.2006 and an affidavit to that effect, seeking to have the modifications incorporated in the relevant Register. After considering the request, it was rejected by the respondent as per Ext. P5 communication dated 23.09.2013 as mentioned hereinbefore, which in turn is under challenge in this Writ Petition.

(2.) The specific contention of the petitioners is that the right to extend the time limit or tenure of the firm stands vested with the partners, as per the Indian Partnership Act and the Deed of Partnership. Since a decision had already been taken by the partners to extend the tenure as per resolution No. 3, as borne by Ext. P3 extract of the Minutes of the meeting held on 30.10.2006, the respondent is duty bound to have the same registered, more so when registration of the firm itself is optional under the Partnership Act There is a further contention raised (as raised in Ground B) that the only Rule that fixed a time limit for filing such resolution before the respondent is 'Rule 4' of the Kerala Partnership (Registration of Firms) Rules 1959, which has been struck down as illegal and ultra vires to the Partnership Act as per the decision reported in Balanarayanan v. Registrar of Firms, 1983 KerLT 441 and as such the petitioner is entitled to succeed.

(3.) The respondent has filed a statement seeking to sustain Ext. P5 and pointing out that the idea and understanding of the petitioners is thoroughly wrong and misconceived. It is stated that the tenure of the firm was admittedly for a period of 'five years' and the firm was accordingly registered, issuing Ext. P2 Certificate of Registration, stipulating that the tenure of the firm shall expire on 25.11.2007. Ext. P4 request made by the petitioners as to the modification/change by way of Ext. P3 resolution was filed after a lapse of 'six years' from the date of expiry of the tenure of the firm. Reliance is sought to be placed on S. 42 of the Indian Partnership Act 1932, which clearly stipulates under clause (a) that, if the firm is constituted for a fixed term, it will stand dissolved at the expiry of that term. It is further pointed out in paragraph 4 of the said statement, that the decision (Balanarayanan's case ) sought to be relied on by the petitioners stands on a different footing, and is with reference to sub-rule (2) of R. 4 of the Partnership (Registration of Firms) Rules 1959, prescribing the time limit of 15 days from the date of occurrence of the event for every statement or notice relating to a firm under Ss. 60, 61, 62, 63(1) and 63(2) of the Partnership Act. The striking down of the said Rule as ultra vires to the 'Act' will in no way improve the case of the petitioners, as long as the substantive provision under the Act [S. 42(a) referring to the dissolution of the firm on expiry of the tenure], prescribing automatic dissolution of the firm stands intact.