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M.M. Pulimood Vs. Registrar of Firms - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKerala High Court
Decided On
Case NumberO.P. No. 2180 of 1984
Judge
Reported in[1987]61CompCas209(Ker)
ActsIndian Partnership Act, 1932 - Sections 4, 48 and 59
AppellantM.M. Pulimood
RespondentRegistrar of Firms
Appellant Advocate S.A. Nagendran and; K.B. Subhagamani, Advs.
Respondent AdvocateGovernment Pleader
DispositionPetition allowed
Excerpt:
- - it was also stated that an incorporated company is a separate legal entity which can very well be a partner of the firm. it is a 'person 'within the meaning of sections 4 of the indian partnership act and can very well be a partner of a firm......that an incorporated company is a separate legal entity which can very well be a partner of the firm. exhibit p-7 is a reminder to exhibit p-6 by the auditors of the firm, ' pulimood plantations '. exhibit p-7reminder was returned with an endorsement that reads as follows: ' we have returned your application noting defects on january 3, 1984, please retransmit the application after rectifying the defects for registration ' signed for registrar of firms. the application itself was returned along with a memo, a photostat copy of which is produced as exhibit p-8 dated december 31, 1983. the defect noted in exhibit p-8 memo is that 'a company cannot be made partner of a partnership firm '. on receipt of the return of the application along with exhibit p-8 memo, the auditors of the firm as.....
Judgment:

P.C. Balakrishna Menon, J.

1. The petitioner and six others formed into a partnership for the purpose of owning and managing plantations under the name and style of 'Pulimood plantations', The firm came into existence on June 1, 1983. Exhibit P-1 dated June 1, 1983, is the partnership deed. Partner No. 7 is the 'Wynad Plantations P. Ltd.' which is a private limited company registered under the Companies Act, 1956. An application under Sections 58 of the Indian Partnership Act, 1932, in the proper form signed by all the partners was presented to the respondent, the Registrar of Firms, for the purpose of registration of the partnership under Sections 59 of the Partnership Act. Exhibit P-4 is a photostat copy of the application in Form No. I submitted to the respondent. The requisite fee for registration was also paid. The application was returned as per exhibit P-5 memo for the reason stated therein that 'A firm cannot be recognised as partner'. The application was re-presented with exhibit P-6, letter of the auditors of the firm, stating that the Wynad Plantations P. Ltd., one of the partners of the firm, M/s. Pulimood Plantations, is not a partnership firm, but a company duly incorporated under the provisions of the Companies Act. It was also stated that an incorporated company is a separate legal entity which can very well be a partner of the firm. Exhibit P-7 is a reminder to exhibit P-6 by the auditors of the firm, ' Pulimood Plantations '. Exhibit P-7reminder was returned with an endorsement that reads as follows: ' We have returned your application noting defects on January 3, 1984, please retransmit the application after rectifying the defects for registration ' signed for Registrar of Firms. The application itself was returned along with a memo, a photostat copy of which is produced as exhibit P-8 dated December 31, 1983. The defect noted in exhibit P-8 memo is that 'A company cannot be made partner of a partnership firm '. On receipt of the return of the application along with exhibit P-8 memo, the auditors of the firm as per exhibit P-9 letter dated January 30, 1984, requested the respondent for clarification as to the reason why a company cannot be a partner of a firm. Exhibit P-9 was returned with the endorsement ' A company cannot be admitted as a partner as per Sections 4 of the Partnership Act' signed for the Registrar of Firms. The application was re-presented with exhibit P-10, letter of auditors of the firm, wherein it was stated that Sections 4 has no relevance and that a company is a person entitled to be a partner of the firm. Exhibit P-ll dated February 27, 1984, is a reminder after the re-presentation of the application along with exhibit P-10. The application is still pending before the respondent and the firm is not yet registered under Sections 59 of the Indian Partnership Act. This original petition is to quash exhibit P-8 memo and the endorsement on exhibit P-9 as per which the respondent has taken the view that a company cannot be a partner of a firm.

2. Section 4 of the Indian Partnership Act referred to in the endorsement on exhibit P-9 defines the expressions ' partnership ', ' partner ', ' firm ', and ' firm name '. There is nothing in Sections 4 that precludes a company from becoming a partner of a firm. 'Partnership' is defined as ' the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all'. The expression ' person ' is defined in Sections 3, Clause (42), of the General Clauses Act, 1897, to ' include any company or association or body of individuals, whether incorporated or not', unless there is anything repugnant in the subject or context to exclude a company registered under the Indian Companies Act from becoming a partner of the firm. It is a ' person ' within the meaning of Sections 4 of the Indian Partnership Act and can very well be a partner of a firm. Exhibit P-2 is the memorandum of association of the Wynad Plantations P. Ltd. shown as partner No. 7 in exhibit P-4 application. The memorandum of association shows that one of the objects of the company is ' to enter into any partnership or joint adventure, or any agreement for co-operation or sharing or pooling of profits, or controlling or limiting profits or output, or otherwise for mutual assistance, with any other person or company carrying on or proposing to carry on any business which this company can carry on, and to amalgamatewith any other company or companies in such manner as this company shall think fit.'

3. As per Sections 58 of the Indian Partnership Act 'the registration of a firm may be effected at any time by sending by post or delivering to the Registrar of the area in which any place of business of the firm is situated or proposed to be situated, a statement in the prescribed form and accompanied by the prescribed fee' and containing the particulars mentioned in the said section signed by all the partners or their agents with verification 'of the signatures in the prescribed manner. As per Sections 59, the Registrar shall record an entry of the statement in a register called the register of firms, and shall file the statement on his satisfaction that the provisions of Sections 58 have been duly complied with. A company being a ' person ' within the meaning of Sections 4 of the Indian Partnership Act, registration cannot be declined for the reason of its being a partner of the firm. I, therefore, quash exhibit P-8 and the endorsement by the respondent on exhibit P-9 and direct the respondent to register the firm as applied for as per exhibit P-4. The original petition is allowed. There will be no order as to costs.


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