Writ Petition No.4500 of 2005

27th November, 2009

Petitioner Counsel: Shri. R. L. KHAPRE
Respondent Counsel: Shri. A. S. FULZELE,Shri. N. S. BHATTAD,Shri. M. S. GUPTA

Cases Cited:
Khushal Khemgar Shah Vs. Mrs. Khorshed Banu Dadiba Boatwalla, AIR 1970 SC 1147 [Para 7]
V. Subramaniam Vs. Rajesh Raghuvandra Rao, 2009(3) ALL MR 418 (S.C.)=2009(5) SCC 608 [Para 11]
Indian National Company Vs. Institute of Social Welfare, AIR 2002 SC 2158 [Para 21]
Pancham Chand Vs. State of H.P., 2008 ALL SCR 1396 : AIR 2008 SC 1888 [Para 22]
M/s. Adamji Lookmanji and Co. Vs. State of Maharashtra, 2007(1) ALL MR 785=AIR 2007 Bom. 56 [Para 22]
Sharad Vasant Kotak Vs. Ramniklal Mohanal Chawda, 1998(2) ALL MR 57 (S.C.)=AIR 1998 SC 877 [Para 22]
M/s. Harijan Boot House Vs. Registrar of Firms, Ahmedabad City, Ahmedabad, AIR 1988 Guj. 188 [Para 22]

JUDGMENT

JUDGMENT:- By this writ petition filed under Articles 226 and 227 of Constitution of India, the petitioners, who are sons of deceased Sudhakar, challenged the order dated 25.11.2003 passed by Respondent No.2 - Assistant Registrar of Firms and contend that the said order needs to be quashed and set aside and notice of change submitted by the petitioners on 16.03.2004 must be directed to be inquired into and change in Constitution of Firm should be recorded as per their notice.

2. I have heard Shri. Khapre, learned counsel for the petitioners, Shri. Fulzele, learned AGP for respondents No.1 & 2 and Shri. Bhattad, learned counsel for respondents No.3 to 5 and Shri. Gupta, learned counsel for respondent No.6.

3. After hearing parties, the first question which needs to be looked into is whether in terms of Chapter XVII, Rule 18 of Bombay Appellate Side Rules, the learned Single Judge of this Court has jurisdiction to take cognizance of the dispute. Shri. Khapre and Shri. Gupta, learned counsel have contended that Respondent No.2 exercises quasi judicial functions while according to the learned AGP and Shri. Bhattad, learned counsel, the functions are only administrative and hence even if any writ is to be entertained, it must lie before the Division Bench of this Court.

4. In view of the issue which arises initially for determination, the facts necessary only for said purpose are being mentioned. It is not in dispute that there was a registered Partnership in the name and style of M/s. Ruby Ginning and Pressing Factory, which commenced its business from 21.06.1978 with its duration at will. The said Partnership was duly registered on 09.08.1978. It had five partners. Father of present petitioners viz. Sudhakar had 20% share in profit, Respondent No.3 - Madhukar, Respondent No.4 - Murlidhar, Respondent No. 5 - Dilip and Respondent No.6 - Pradeep had also 20% share. These all five partners had equal share of profit at that time. Sudhakar expired on 21.04.1984 and after his death, the problems have started. The registered deed vide its clause (13) provided that in the event of death of any of the partner or his becoming incapable or retiring from firm, the firm would not be dissolved but the remaining partners would continue the business of the Firm.

5. According to the petitioners, after the death of their father Sudhakar, they were brought up by their uncles, the other partners and a deed of Partnership admitting them as partners of said firm was entered into between the parties on 07.01.1993. The attention has been invited to the distribution of equal shares between three heirs of deceased Sudhakar i.e. each heir of Sudhakar was given 7% in his 20% profit share in original firm. It appears that certain properties were purchased and were recorded in revenue records in the name of the firm. Respondents No. 3 to 6 approached Respondent No.2 to register a change and sought deletion of name of Sudhakar and for that purpose they submitted a Deed of Partnership dated 13.06.2003 with a deed titled continuation of partnership. They also mentioned that after death of Sudhakar, their share increased to 25% each in profit of the firm. On 25.11.2003, Respondent No.2 deleted name of Sudhakar because of his death and also amended the constitution of the firm as originally registered on 08.09.1978. It is the contention of the petitioners that thereafter because of this reconstitution, the respondents got their names deleted from the revenue records of immovable property purchased and then they learnt about all this development and that the Deed of Partnership dated 07.01.1993 was never registered with Registrar of Firms and hence they moved Respondent No.2 for rectifying the errors by registering the Deed of Partnership dated 07.01.1993 and by recalling the order dated 25.11.2003 but Respondent No. 2 has not taken any steps. He draws support from Change Report inquiry under Bombay Public Trust Act, 1950.

6. The petitioners state that as certain properties were disposed of by the respondents, they also filed Civil Suit seeking appropriate relief including relief of dissolution of firm and for rendition of accounts. In that suit, objection about maintainability was raised because of provisions of Section 69(2)(a) of Indian Partnership Act, (Maharashtra Amendment). In these circumstances, the petitioners were left with no option to approach this Court to seek necessary writ against Respondent No.2.

7. Shri. Khapre, learned counsel has argued that partnership deed dated 07.01.1993 was in fact acted upon and implemented and it was not registered by the respondents and this constituted a fraud on the petitioners. He further states that as name of Sudhakar was sought to be deleted and was deleted on 11.01.2003, Respondent No. 2 ought to have given notice to heirs of Sudhakar to find out what was their say. He contends that share of remaining/ continuing partners was sought to be increased by said amendment from 20% each to 25% each and hence such notice was more necessary. In view of the judgment of the Honble Apex Court in the case of Khushal Khemgar Shah Vs. Mrs. Khorshed Banu Dadiba Boatwalla, reported at AIR 1970 SC 1147, he states that though the remaining partners could have continued with firm business, the heirs of deceased partner were the owners of 20% share of that deceased partner and that ownership could not have been taken away behind their back. Hence, according to him, issuance of such notice was essential.

8. In the alternative, his argument is because of reconstitution of firm, the names of legal heirs of deceased Sudhakar have been deleted from the revenue records as owners of properties purchased by firm and this removal has got civil consequences hence the order having civil consequences came to be passed behind their back and that order is, therefore, unsustainable. It is his contention that when Respondent No.2 has got capacity and power to pass such orders, the exercise of jurisdiction by him must be treated as quasi judicial. He has also relied upon certain other judgments to which I find it appropriate to make reference at appropriate stage in the course of this judgment.

9. Shri. Bhattad, learned counsel has contended that the Partnership Deed dated 07.01.1993 is not accepted by respondents No. 3 to 6. He states that no such deed is signed by these respondents and therefore, there is no question of its being implemented at any point of time. He has invited attention to preamble in said Partnership deed to show that it does not make reference to registered Partnership Deed dated 09.08.1978 but it makes a reference to partnership executed on 01.09.1987. He points out that no such partnership deed dated 01.09.1987 is produced on record anywhere by the petitioners. According to him, therefore, that document cannot be the base for determining any controversy or for ascertaining alleged rights of the petitioners.

10. He further points out that as per clause 13 of the registered Partnership Deed dated 09.08.1978, after death of Sudhakar, four partners were entitled to continue business of the firm and hence the change was accordingly reported and has been accepted. He further states that when four partners are permitted to continue with firm business, indirectly it implies that four partners only are entitled to share the profit. He, therefore, contends that proportionate increase in profit of each partner is an increase by law and judgment of the Honble Apex Court relied upon by the petitioners has got no application. He further disputes the story of purchase of property by firm or then the deletion of names of the petitioners from 7/12 extracts. According to him, the petitioners were not the owners of said properties at any point of time. In any case, according to him, civil suit has been filed in the matter by present petitioners and all these disputed questions can be looked into by said Court.

11. He also argues that the provisions of Section 69(2)(a) (Maharashtra Amendment) were in force at the time of institution of suit but have been subsequently quashed and set aside by the Honble Apex Court in the case of V. Subramaniam Vs. Rajesh Raghuvandra Rao, reported at 2009(5) SCC 608 : [2009(3) ALL MR 418 (S.C.)]. The apprehension with which the petitioners approached this Court in writ jurisdiction is, therefore, ill founded and they have to prosecute said remedy of suit further. Lastly, he argues that Respondent No.2 is only an Administrative Officer and he is not required to conduct any judicial or quasi judicial enquiry and provisions of The Indian Partnership Act, 1932, do not confer any such power upon him. He invites attention to provisions of Section 65 to urge that said authority is duty bound to implement the orders of Civil Court as Civil Court alone has been conferred with jurisdiction to determine such disputed questions of entitlement or status between the parties.

12. Shri. Fulzele, learned Assistant Government Pleader has adopted the arguments of Shri. Bhattad, learned counsel for respondents No. 3 to 5. He further adds that the analogy sought to be taken from provisions of Bombay Public Trust Act, is totally misconceived because schemes of both the Acts are different. He has invited attention to various provisions of Indian Partnership Act to show that Respondent No.2 has not been empowered to decide any issue after hearing both sides and no powers enabling him to undertake such adjudication are conferred by said Act. He, therefore, states that writ petition as filed is misconceived and it needs to be dismissed.

13. The admitted position which appears is the pending application or notice for recording change moved by present petitioners. The respondents have not stated that the application for recording change moved by the petitioners on 16.03.2004 has been rejected by Respondent No.2. Shri. Bhattad and learned AGP have pointed out that because the registration fee was found to be deficient and the signatures of all partners were wanting, the notice given could not be registered. However, what has been done to that application, has not been disclosed. In any case, if this Court finds that Respondent No.2 exercises quasi judicial powers then only cognizance of that fact can be taken, not otherwise.

14. The provisions of Chapter XVII, Rule 18 deal with powers of Single Judge to finally dispose of the applications under Articles 226 and 227 of Constitution of India. The matters arising out of orders passed by various Tribunal/authorities under 43 Acts mentioned therein can be disposed of by Single Judge of this Court. Clause (3) of Rule 18 is a general provision which enables the learned Single Judge to take cognizance of challenges to decrees or orders passed by any subordinate Court or by any quasi judicial authority in any suit or proceeding. The explanation at the end of Rule 18 states that the expression "order" appearing in clauses (1) to (41) means any order passed by any judicial or quasi judicial authority empowered to adjudicate under the statues mentioned in earlier clauses i.e. clauses (1) to (41). The orders passed under Indian Partnership Act, do not figure in this list of 43 items in Rule 18. Therefore, the learned counsel for the petitioners has attempted to take recourse to clause (3) mentioned above. It is apparent that the impugned orders dated 25.11.2003 must, therefore, be shown to be orders passed by the quasi judicial authority in proceeding. It, therefore, must be shown that provisions of Indian Partnership Act empowered Respondent No.2 to register such proceedings and to decide the controversy in those proceedings.

15. The relevant provisions to which the learned counsel for the petitioners and respondents have invited my attention show that the same are contained in Chapter VII of Partnership Act which deals with Registration of Firms. Section 57 prescribes that State Government has to appoint Registrar of Firms for the purposes of Act and assign to them the areas within which they exercise their powers and perform their duties. Sub-section (3) states that such Registrar is deemed to be a public servants within the meaning of the Indian Penal Code. Section 58 deals with application for registration and it states that such application should be delivered to the Registrar of the Area concerned and it also prescribes the form in which the application is to be made and the details which it should contain or then the words which it cannot include in its name. Section 59 is the important provision which according to the petitioners show that Respondent No. 2 - Assistant Registrar performs quasi judicial function. The said section reads as under :

"S.59. Registration :

(1) When the Registrar is satisfied that the provisions of section 58 have been duly complied with, he shall record an entry of the statement in a register called the Register of Firms, and shall file the statement. On the date such entry is recorded and such statement is filed, the firm shall be deemed to be registered.

(2) The firm, which is registered, shall use the brackets and word (Registered) immediately after its name."

16. The petitioners have placed emphasis upon the word "satisfied" in this Section 59. According to them, because of use of this word, the Registrar is required to apply his mind and while applying mind, he can, therefore, reject any application or change which is not in accordance with provisions of law and this, therefore, enables him to perform quasi judicial function. Attention is invited to provisions of Section 59-A added by Maharashtra Amendment which basically deals with transitory provisions on account of reorganization of State. However, sub-section (3) thereof is pressed into service to show that it gives aggrieved person a remedy of appeal. Section 60 deal with Recording of alterations in firm name or place of its business, Section 61 about closing and opening of branches, Section 62 about changes in names and addresses of partners, Section 63 about recording of changes in and dissolution of firm, are all being relied upon by both sides. Shri. Khapre, learned counsel has stated that the petitioners application dated 16.03.2004 is under Section 64 which enables Respondent No.2 to rectify the mistakes. He further states that though Respondent No.2 is duty bound to amend his register as per orders of Civil Court, Civil Court cannot be approached until and unless Registrar first passes some order or refuses to pass the order.

17. The provisions of Section 59 which uses the word "satisfied" nowhere stipulate that the Registrar has to issue any public notice or then make any enquiry in any particular manner and after considering rival stands, he can register the firm or refuse to register the firm. The requirements in order to register the firm are stipulate in Section 58 and if those requirements are complied with, the Registrar is duty bound to register the firm. The word "satisfied" is used only to denote that he has to apply his mind to the requirements of Section 58. Section 58 again nowhere stipulates that he has to conduct any enquiry in the matter. Section 59-A(3) dealing with provisions of appeal is in respect of the entries to be taken by Registrar of Firms by deleting from the Register entries relating to any firm whose place of business has by reason of the reorganization of States and States Reorganization Act, 1956, ceased to be situated in State of Bombay. The later part requires him to take a note of change in case of firms whose place of business has on account of such reorganization become part of the area within his jurisdiction in the State of Bombay. Sub-section (2) then declares that after such amendment, such Registrar ceases to perform the functions in respect of firms whose entries are deleted and performs function as Registrar in relation to those firms whose entries are added to the register. Because of this provision, sub-section (3) gives aggrieved person a right of appeal. As already mentioned above, this therefore is a transitory provision and right of appeal has been given only in limited situations. The said right of appeal cannot be, therefore, construed to mean that entire exercise of power under Section 59 itself becomes a quasi judicial exercise.

18. The provisions of Sections 60, 61, 62 and 63 again nowhere expressly contemplate any adjudication by Respondent No.2. For noting the changes mentioned therein, the procedure prescribed in Section 59 is required to be followed. The provisions of Section 59 of the Act are already commented by me above. Section 64 (1) enables Registrar to proceed suo motu to rectify any mistake in order to bring the entry in Register of Firms in conformity with documents relating to that firm, filed under Chapter VII. Thus, again scope of rectification is limited and purpose is to see that if there is any divergence or inconsistency in the records and document tendered, such inconsistency is removed. Section 64(2) permits such exercise also upon an application by the party.

19. There is no provision in Indian Partnership Act which enables Respondent No. 2 to hold any enquiry by issuing notices to parties, forcing them to appear before him or then by examining them on oath or otherwise or by verifying the documents which they produce. The analogy sought to be drawn by Shri. Khapre by taking recourse to provision of Section 22 of Bombay Public Trust Act is clearly misconceived. The Joint Charity Commissioner, Assistant Charity Commissioner functioning under the provisions of Bombay Public Trust Act have been given some powers statutorily as they are expected to adjudicate the controversies. In other words, the provisions of Bombay Public Trust Act empower them to decide certain controversies and hence the discharge of those obligations by them is quasi judicial discharge. Sections 79 and 80 of Bombay Public Trust Act exclude jurisdiction of Civil Court in matters required to be decided thereunder. Said Act also contains an hierarchy of Appeals and Revision which reach right up to High Court. No such or similar provisions exist in Indian Partnership Act. Merely because the orders passed by Respondent No. 2 may have some indirect civil consequences, that by itself is not sufficient to hold that exercise of those powers by him is a quasi judicial function.

20. The Legislature has deliberately provided Section 65 in Partnership Act by prescribing that the Registrar is duty bound to carry out any directions or orders of Civil Court in any matter relating to a registered firm. It is to be noted that orders of Civil Court are always binding save as otherwise where expressly the jurisdiction of Civil Court is ousted. Here, there is no ouster of jurisdiction of Civil Court anywhere and provisions of Section 65 clearly show that issues of nature, as are raised by present petitioners, cannot be looked into by Respondent No.2. The various legal facets which arise therefrom or the factual disputes which also spring therefrom cannot be decided by Respondent No.2 within the framework of Partnership Act and hence Legislature has contemplated adjudication by Civil Court and verdict of Civil Court is, therefore, made binding upon the Registrar.

21. If the petitioners succeed in showing that there was any deed of Partnership dated 07.01.1993 and that partnership amended the Partnership deed dated 09.08.1978, said finding of fact of Civil Court would be binding because of Section 65 and in that event their grievance would stand redressed. Also if they show to Civil Court that alleged deed of Partnership dated 13.06.2003 is a fraud upon them, a finding on those lines by Civil Court in their favour will be binding on Respondent No.2 under Section 65 of Indian Partnership Act, 1932. Hon'ble Apex Court in the case of Indian National Company Vs. Institute of Social Welfare, reported at AIR 2002 SC 2158, considers provisions of Section 29-A of Representation of People Act, 1951, which contains an opportunity of hearing and hold that Election Commission's decision to grant registration is quasi-judicial. It also holds that presence of lis or contest between contending parties before statutory authority is sufficient to hold it a quasi-judicial authority. If there is no lis, statutory authority can still be a quasi judicial authority if it is required to act judicially. If there is contest between authority and subject and such statutory authority is required to act judicially under the statute, its decision is quasi judicial. Here, Assistant Registrars of Firms is not adjudicating any lis and he cannot prejudicially affect the rights of the petitioners. It follows that Respondent No.2 lacks power to adjudicate any controversy or lis between the parties and therefore writ petition cannot lie before the Single Judge of this Court.

22. In view of these findings, it is clear that question whether any direction needs to be issued to Respondent No. 2 in the matter, cannot be looked in to by this Court and it needs to be placed before the Division Bench of this Court. In view of this conclusion, it is not necessary for this Court to consider other judgments i.e. in the case of Pancham Chand and Ors. Vs. State of H.P. and Ors., reported at AIR 2008 SC 1888 : [2008 ALL SCR 1396]; M/s. Adamji Lookmanji and Co. and Ors. Vs. State of Maharashtra & Anr., reported at AIR 2007 Bom. 56 : [2007(1) ALL MR 785]; Sharad Vasant Kotak & Ors. Vs. Ramniklal Mohanal Chawda & Anr., reported at AIR 1998 SC 877 : [1998(2) ALL MR 57 (S.C.)] and M/s. Harijan Boot House Vs. Registrar of Firms, Ahmedabad City, Ahmedabad, reported at AIR 1988 Guj. 188, in present matter. The said judgments, if relevant, can be looked into by the Competent Court.

23. The Registry is, therefore, directed to place the present writ petition before the appropriate Division Bench for its further consideration. Said issue about nature of function discharged by Respondent No.2 is disposed of accordingly. Rule is made absolute only to that extent.

Ordered accordingly.