PICTURE FINANCIERS A PARTNERSHIP FIRM HAVING ITS OFFICE BY ITS MANAGING PARTNER A MEENAKSHI Vs. GOVERNMENT OF TAMIL NADU

JUDGEMENT

(1.) A partnership firm, represented by its Managing Partner, has moved this Court seeking inter alia , to declare that the proceedings of the respondent herein under Rule 8(3) of the Tamil Nadu Urban Land (Ceiling and Regulation) Rules, 1978, under which the land in excess of the ceiling area, has been declared in its hands, is illegal and without jurisdiction.

(2.) THE petitioner is a registered partnership firm. It is said that it consisted of seven partners all belonging to one family, and as per the deed of partnership dated 2.12.1975, the net profit or loss has to be equally divided amongst the partners. THE partnership, it is not in dispute, is in possession of a property constituting urban land of 5686 sq. metres. According to the petitioner, there are several structures, the total built up area being 721 sq. metres and the buildings upon the land, are used for residential purposes of the partners and their families. According to the petitioners, when divided equally amongst the partners, the vacant land in possession of the partners will not be in excess of the ceiling area, excepting an extent of 23.6 Sq. metres pertaining to one A. Rajagopal, a partner and the husband of the Managing Partner of the firm.

(3.) PATHWAY 100 Sq. met. Total non vacant land 1848 Sq. metres. Total vacant land 3794 Sq. metres. Vacant land eligible to hold under Section 5(1)(i)(a) 500 Sq. metres. 3294 Sq. metres?. It is asserted in the counter affidavit that the Government has acquired the excess vacant land in the possession of the petitioner strictly in accordance with law. 4. The relation of partnership, section 5 of the Indian Partnership Act says, arises from a contract and not from status. There are some consequences of the registration of a partnership, but it does not mean that without registration, the relation of partnership cannot be created. In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together, and it is explained, that the sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners and that the receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business. The concept of partnership is, however, shown in the definition thereof under Section 4 of the Partnership Act, which says, partnership is the relation between persons, who have agreed to share the profits of a business carried on by all or any of them acting the view that since the relationship of partnership arises from contract and not from status, the concept of partnership law is that a firm is not an entity or a person in law, but only a compendious mode of designating persons, who have agreed to carry on the business in partnership. (See I.T. Commissioner v. G.P. Naidu & Sons AIR 1980 A.P. 158 @ 164). It is not a distinct legal entity apart from the persons constituting it and equally in law the firm as such has no separate rights of its own in the partnership assets and when one talks of the firm's property or firm's assets, all that is meant is property or assets in which all partners have a joint or common interest (See Messrs. Malabar Fishneries Co. v. Commissioner of I.T. A.I.R. 1980 S.C. 176 at 183).