DEEPTHI GRANITE METALS Vs. STATE OF KERALA

JUDGEMENT

(1.) These writ petitions are filed by two reconstituted partnership firms along with their partners seeking a direction to the Registrar of Firms to record the change in the constitution of the firms. Admittedly, the change of reconstituted firms were intimated to the Registrar after 15 days period. Rule 4(2) of the Kerala Partnership (Registration of Firms) Rules, 1959 (for short, the 'Rules') mandates such intimation to be given within 15 days from the date of reconstitution. The Division Bench of this Court in Kuriachan Chacko and Others v. Registrar of Firms, Thiruvananthapuram, 2015 4 KHC 491 after adverting to Rule 4 as above, in a challenge regarding the validity of the Rule upheld its validity and observed that such prescription of outer limit under the Rule is based on the source of power referable under Section 71 of the Indian Partnership Act, 1932 (for short, the 'Act'). Under Section 71(2)(e), the State Government is having power to regulate the filing of documents received by the Registrar. In fact, the learned Single Judge of this Court in O.Balanarayanan and Others v. Registrar of Firms, Trivandrum and Another, (1984) AIR Kerala 20 held that the State Government cannot make a rule prescribing a rigid time limit and Rule 4(2) is ultra vires the powers of the State Government under Section 71(2) of the Act. That decision was overruled in Kuriachan Chacko's case .

(2.) However, the Division Bench was silent as to the consequence that is to be followed if an application is filed out of time. Therefore, the question arises on the legal effect of an intimation given after the period of 15 days as referred under Rule 4(2) of the Rules. For this, it is necessary to refer various provisions of the Act.

(3.) The registration of a partnership firm is not compulsory and it is only optional. Section 58 of Chapter VII states about the application for registration and procedure for registration, which states that the registration of a firm will be effected at any time by sending by post or delivering to the Registrar of the area in which such business firm is situated or proposed to be situated. Section 59 states that the Registrar on being satisfied with the compliance of Section 58 shall record and make an entry of the statement in the register called the Register of Firms. The Apex Court in Commissioner of Income Tax, Andhra Pradesh, Hyderabad v. M/s.Jayalakshmi Rice and Oil Mills Contractor Company, (1971) AIR SC 1015 opined that the effective date of registration is the date on which the application was presented. Therefore, even if the partnership firm is formed on a date anterior to the date on which it was presented, the effective date of registration is the date on which such application was presented before the Registrar.