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CITATION

Civil appeal No. diary No. 32601 of 2018

APELLANT

Ms. Vineeta Sharma

RESPONDENT

Ms. Rakesh Sharma

DECIDED ON

24^th August 2020

COURT

Supreme court of India

JUDGES

Justice Arun Mishra, Justice S. Abdul Nazeer, justice M.R. Shah

AREA OF LAW

Section 6 of Hindu succession act, 1956

BACKGROUND

Mr Dev dutt Sharma and his wife had 3 sons and a daughter named Rakesh Sharma, Satyendra Sharma and vineeta Sharma respectively. Mr Dev dutt Sharma passed away on 11 December 1999 and one of his three sons who were unmarried passed away on 1^st July 2001. Later, Ms. Vineeta Sharma filed a case against rakesh Sharma, satyendra Sharma and her mother stating her right to receive 1/4^thshare of her father’s property. The respondents claimed that she ceased to become the member of joint family once she got married.

ISSUE

Earlier according to Hindu succession act, 1956 only male members of the family were considered as co- parceners. But later according to the 2005 amendment act (section 6) daughters were also considered as co- parceners since birth and they are also equally liable. But the question raised was as the amendment got implemented on 9^th September 2005, whether it is applicable to the cases if the father got expired before the date of implementation of amendment or it’s important for the father to be alive.

JUDGEMENT

Before this case, several other cases were taken as an account for property succession of daughters. The landmark cases that finally worked as a precedent for the case was:

Prakash v. phulwati [1]: in this case the two judge bench consisting justice Anil Dave and Justice A.K Goyal stated that it’s necessary for the father to be alive to pass his property rights to his daughter.
Danamma v. Amar[2] : in the case the two judge bench consisting justice A.k sikri and justice Ashok Bhushan stated that even if the father passed away on 2001 ( years before the implementation of the amendment) still the property can be passed on to his daughter.

Finally after all these judgements, the three judge bench stated that women acquire their right for ancestral property by birth even if the father is alive or not.

RATIO DECIDENDI

The verdict passed for the case had ended the legal ambiguity regarding the transfer of property rights for women by granting equal rights to acquire ancestral property.
The judgement had made clear that no one can discriminate citizens on the basis of gender and gender cannot be deemed as an account for granting property rights. It thus strengthens the ideology of article 14 ( right to equality) and article 15 ( right against discrimination)
It also empowers woman who are economically backward to cease the implication of male authority over them.

CONCLUSION

This case helped to implement the idea of women empowerment by providing equal property rights for both male and female.

END NOTES

(2016) 2 SCC 36
2018(4) ADJ406
https://indiankanoon.org/doc/67965481/

This case analysis is written by Nourien Nizar studying at Government Law College, Ernakulum

Case Number:

Writ Petition (Civil) No. 1074 of 2019

Bench:

Rohinton Fali Nariman

Aniruddha Bose

V. Ramasubramanian

Date of Judgment:

27/11/2019

Relevant Acts:

Arbitration and Conciliation Act, 1996

Constitution of India

Insolvency and Bankruptcy Code, 2016

Facts of the Case:

The petitioners were construction firms that had worked as contractors for government agencies on large-scale infrastructure projects such as roads, bridges, hydropower, and nuclear reactors, tunnels and rail facilities, etc. The petitioners were aggrieved by the fact that if a cost surge occurred, the government bodies contested it, resulting in a delay in the recovery of their rightful dues, which could only be retrieved either through an arbitration process or civil proceedings. They were unable to recover their debts from government bodies through insolvency proceedings as government bodies were not covered by the Insolvency and Bankruptcy Code, 2016.

The petitioner argued that the unamended Act violated the UNCITRAL Model Law by prohibiting the use of two key aspects of award debtor, one during setting aside procedures under section 34 and the other during enforcement proceedings under section 36 of the Arbitration and Conciliation Act, 1996. It was also contended that Section 87 enacted was violative of Article 14, 21, and 300-A of the Constitution as it weakened the binding nature of an arbitral ruling by removing the vested power of enforcement.

The respondents stated that the 2019 amendment inserting Section 87 and revocation of Section 26 by claiming that the interpretation of Section 26 in the BCCI case was purely declaratory and there was no merit in the petitioner’s statement that the interpretation is unconstitutional. The respondents also asserted that the BCCI ruling, it was said, was just declaratory and did not invalidate any executive action. As a result, section 87 merely clarified the original legislative meaning and had no incidence on the BCCI judgment.

The issue before the High Court:

Whether Section 87 of the Arbitration and Conciliation Act, 1996 introduced by the 2019 Amendment Act is valid?

The ratio of the Case:

The SC concurred with the respondents that no direct and substantiating reference to the BCCI decision was required to negate it through legislation. The court also concluded that, when read in conjunction with the IBC, Section 87 had ludicrous effects, such as award holders being unable to recover funds from award debtors and being insolvent. Subsequently, the court ruled that the addition of Section 87 and the repeal of Section 26 were in violation of Article 14.

The Supreme Court explained in BCCI v. Kochi Cricket Private Limited (2018) that while the 2015 Amendment Act was prospective in nature, the change in the position regarding the former automatic stay against enforcement was applicable retrospectively. The Supreme Court stated that section 87 was enacted solely to implement the Srikrishna Committee Report’s advice to remove doubt around the potential applicability of the 2015 Amendment Act when such uncertainty had already been resolved by the BCCI ruling.

The decision of the Court:

The Supreme Court concurred with the Petitioner that the addition of section 87 resurrects the problem that the 2015 Amendment Act attempted to address and is thus unconstitutional. The SC further agreed with the Petitioners that, when read in conjunction with the IBC, section 87 results in an illogical result, namely, the award holder becoming insolvent due to its inability to recover money under arbitral awards. As a result, the Supreme Court concluded that the 2015 Amendment Act’s inclusion of section 87 and deletion of section 26 violated Article 14 of the Indian Constitution.

The present article has been written by Aathira Pillai.

The present article has been edited by Shubham Yadav, a 4th- year student from Banasthali Vidyapith.

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Case Number:

Letters Patent Appeal No. 699 of 2021 in Special Civil Application No. 6853 of 2021

Bench:

Chief Justice Vikram Nath

Justice Biren Vaishnav

Date of Judgment:

23/08/2021

Relevant Acts:

Gujarat Prohibition Act, 1949

Gujarat Prevention of Anti-social Activities Act, 1985

Facts of the Case:

The appellant being in jail was detained according to the provisions of the Gujarat Prohibition Act under Sections 66(1)(b), 65(a), 65(e), 116-B, 98(2), and 81 concerning the order dated on April 06, 2021, in the backdrop of registration of offenses against the appellant.

Contentions were raised under Article 226 of the Indian Constitution about the detention of the appellant stating that the appellant was arraigned in the offenses where he does not fall within the scope of the definition of “Bootlegger” section 2(b) of the Gujarat Prevention of Anti-social Activities Act, 1985.

Advocate Mohddanish M. Barejia, representing the appellant-detenue, argued that the detenu does not fit the definition of a “bootlegger” as defined by Section 2(b) of the Gujarat Prevention of Anti-social Activities Act, 1985, and that there was no violation of the law, indicating “public order,” entailing his detention.

Assistant Government Pleader Shruti Pathak rejected the prayer, claiming that the detaining authority’s powers and procedural precautions were not designed to allow people to continue criminal acts, and thus the detention was justified and is in accordance with the law’s procedures.

The issue before the High Court:

Whether the subjective satisfaction exercised by the detaining authority deserves no interference?

Whether there was any disturbance of public because a solitary offense has been registered against the detenue?

The ratio of the Case:

In the case of Aartiben W/o Nandubhai Jayantibhai Sujnani vs. Commissioner of Police in L.P.A. No.2732 of 2010, the court cited a clear distinction made by the Supreme Court between public and law.

The court stated that the term “public order” implies that not every assault or harm to a specific person results in public disorder. Any law infringement impacts order, but before it can be called to affect public order, it must affect the community or the general public at large. Thus, a simple disturbance of law and order that leads to disruption is not always adequate for proceedings under the Preventive Detention Act, but a disturbance that will impact public order qualifies.

Based on a detailed examination of the order of detention, which includes the grounds for the custody and the materials on record, the Court examined the contentions, albeit the Court was hesitant to interfere with the detaining authority’s subjective satisfaction.

The decision of the Court:

The Court stated that based on the facts of the case and an examination of the law, the appellant could not be classified as a bootlegger. The Court decided that numerous instances could not designate a person as a bootlegger in this case because there is only one FOR connected to prohibition offenses.

The appeal of the Letters Patent has been granted. The learned Single Judge’s judgment and ruling in Special Civil Applications No.6853 of 2021, dated June 24, 2021, was quashed and set aside by the Division Bench and the appellant was ordered to be set free if not wanted for any other offense.

The present article has been written by Aathira Pillai.

The present article has been edited by Shubham Yadav, a 4th-year from Banasthali Vidyapith.

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Equivalent Citation

Criminal Writ Petition no. 6065 of 2019

Bench

Prithviraj K. Chavan

Date of judgment

30 September 2020

Act

Immoral Traffic Prevention Act, 1956

Facts

The complainant, who is a constable in the police, has approached the social service branch, Mumbai. Mr. Revle has secretly informed that a person Mr. Nijamuddin Khan, a pimp provides women for prostitution in Malad’s guest house. A trap has been set out for the raid in the guest house. The raiding team had arrested a client and victim girls and taken them into custody. The victim girls were produced in Metropolitan Magistrate (MM). They were allowed to contact their parents. In an inquiry it found that the victims belong to the Bediya community, the community has a custom that the girl after attaining puberty sent for prostitution. The victims’ parents were aware of their profession and they did not have a problem. The Magistrate has observed that the girls have not been sent to their parents because it is not safe. The court held that the victims need care and protection. Victims were directed to be detained in shelter homes. They were sent to ‘Nari Niketan’ for one year for shelter and vocational training. The MM order has been challenged and appealed in the session court. The appeal dismissed and confirmed the order passed by MM.

The issue before the court

Indulging in prostitution is not punishable under the Immoral Traffic (Prevention) Act, 1956, if the victims are not being forced.

The ratio of the court

Petitioners argued that the lower court’s interpretation of Section 17 of the Immoral Traffic Act is not correct. The victims could not be accused and prosecuted according to Sections 3 and 9 of the Immoral Act. The victims were indulged in prostitution because of their choice. They were not forced by someone. The law clarified by High Court that it does not criminalize sex workers and instead, it seeks to protect them. Sexual exploitation for commercial purposes like pimping and also soliciting or seducing in public places is prohibited under law. Running brothels or allowing prostitution from a place is also illegal. The law assumes that the persons offering their bodies in exchange for money are victims and not doing immoral acts. The Immoral Traffic (Prevention) Act, 1956 criminalize sexual exploitation and abuse of a person for commercial purpose and does not criminalize the commission of prostitution. The court observed that petitioners were indulging in the seduction of any person nor were they running a brothel to seduce a person. The Court has observed the order passed by MM because they belong to a particular caste but the magistrate ought to have considered their willingness and consent before detention. Victims have the right to reside at the place of their choice.

High court decision

The court observed that victims were not prosecuted under the Immoral Traffic Prevention Act so they cannot be detained in ‘Nari Niketan’ or any other institution. The Metropolitan Magistrate does not have the right to hold custody of the victims for more than three weeks in the absence of a final order which is due process of law. The purpose of the Immoral Traffic Prevention Act is prohibited where the victim is forced by a person or seducing any person in public places. But Act does not prohibit prostitution or punished prostitutes. There is no provision under law that criminalizes prostitution or punishes a person who indulges.

The present article has been written by Prachi Yadav, a 2nd-year student from Mody University of Science and Technology, Lakshmangarh, Rajasthan.

The present article has been edited by Shubham Yadav, a 3rd- year student from Banasthali Vidyapith.

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Case Number

Civil Appeal No. 5837 of 2006 with Contempt Petition (C) No. 38 of 2006.

Equivalent citation

(2007) 3 SCC 169.

Bench

S.B. Sinha, Markandey Katju.

Date Of Judgment

15/12/2006

Relevant Act

The Protection of Women from Domestic Violence Act, 2005

Facts

The petitioner Smt. Taruna Batra was married to Amit Batra, son of the respondent, on 14^th April 2000. After the marriage, Taruna Batra was living with Amit Batra in her in-law’s house. Amit Batra has filed a divorce petition against his wife. In response, Taruna Batra also filed an F.I.R. against his husband, mother-in-law, father-in-law, and sister-in-law under Indian Penal Code Section 406, 498A, 506, and 34. They were arrested by police and after three days they got bail. Taruna Batra started living in her mother’s house. Later, she tried to enter the appellant’s house, but she could not enter because of the lock. Amit Batra had bought a house in Ghaziabad and was living there.

Arguments

The argument made by the petitioner

Smt. Trauma Batra has raised the issue that she has the right to live in the respondent’s house because it is her matrimonial house.

The argument made by respondent

The petitioner has no right because it cannot be her matrimonial house. After all, her husband is not living in the suit property. Her matrimonial house had shifted to her husband’s new house.

The issue before the Court

A woman has the right to reside in the shared household of her husband. Shared household which is defined under Section 2(s) of the Domestic Violence Act, 2005.

Lower Court Judgment

The Senior Civil Judge held that Amit Batra was not living with his parents at their house. Hence, home does not mean where the wife was residing. The respondent had only right to her husband’s property.

After the Lower Court decision Smt. Trauma Batra filed a petition in the High court under Article 227.

High Court Judgment

The High Court held that in India, there is no specific law like the British Matrimonial Homes Act, 1967. The rights may be provided under any statute against the husband’s property and but not against in law’s house. The suit property belongs to her mother-in-law and it does not belong to her husband.

Supreme Court Judgment

The Supreme Court held that a wife is entitled to reside in a shared household which is defined under Section 2(s) Protection of Women from Domestic Violence Act, 2005. A Shared household means the house belongs or is taken by the aggrieved person or the husband and property which belongs to a joint family where the husband is a member. The court decided Smt. Trauma Batra has the right to reside in her matrimonial home. But the Court also held that the wife has no right to reside in the residence which is owned by her in-laws whether it is a matrimonial home. The court observed the High Court decision and disagreed with the High Court concerning the Matrimonial Homes Act which does not exist in India.

Conclusion

The issue is ruling in the case that the wife has the right to reside in a shared household where the husband owns some share. In the decision of the Supreme Court, there is some fallacy in the definition of the shared household.

The case analysis has been done by Prachi Yadav, a 2nd-year student from Mody University of Science and Technology, Lakshmangarh, Rajasthan.

The case analysis has been edited by Shubham Yadav, a 4th-year Law student of Banasthali Vidyapith.

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Equivalent citations:

1993 SCR (1) 58, 1993 SCC (1) 589

Bench:

AHMADI, A.M. (J)

BENCH:

AHMADI, A.M. (J)

PUNCHHI, M.M.

RAMASWAMY, K.

Date Of Judgment –

11/01/1993

Acts –

Arbitration Act, Registration Act, Indian Partnership Act

Facts:

A business was run in collaboration consisting of 6 brothers namely four appellants and respondents 1 and 2.in due time, conflicts arose among the 6 brothers regarding the business run by them. By addressing the disputes to three arbitrators, they entered into a negotiable agreement that would serve their purposes. After lending an attentive ear to the parties, they entered upon the reference and circulated a draft award. After contemplating the reaction of the squabblers, a final award was drafted by the arbitrators where each one of the 6 brothers got their fair proportion of the valuables and worldly riches. Some of the disputants filed a petition pleading for a direction to the arbitrators to lodge their award in court; a petition requesting the court to pass a decree in terms of the award was also submitted to the court.

Two other squabblers filed a petition under section 30 of the arbitration act to set aside the award. All these matters were given an ear to by a single judge. It was contended before him that having regard to the allotment of partnership properties including immovable objects under the award. Registration of the award was obligatory under section 17(1) of the registration act and since it lacked registration the court had no jurisdiction to consider it as the rule of the court and grant a decree in terms thereof.

Ratio Of The Court:

SC. Addanki Narayanappa V. Bhaskara Krishnappa –

The members of the two joint families, the Addanki family, and the Bhaskara family had thrown themselves into a partnership for running a business of hulling rice. Each family was given half share in that venture. The capital required for the business consisted of certain lands possessed by the two families. In the course of business, the firm attained more lands. Differences arose and a suit for dissolution was filed by the members of the two families. All the members were made parties to the suit either as plaintiffs or as defendants. The Bhaskara family grappled within the boundaries of defense that the partnership was disintegrated back in 1936 and the matter was brought to an end between the two families under a karat executed in favor of Bhaskara Gurappa Setty, the head of the Bhaskara family, by 5 members of the Addanki family representing that family. The defendants argued that the plaintiffs had no cause of action and the suit for dissolution of partnership and accounts was not maintainable.

In Commissioner of Income – Tax, West Bengal, Calcutta v. JUggilal Kamlapat–

This court pointed out that the deed by one in which one person releases his legal right to the property – the deed of relinquishment, was to serve the interest of the three brothers in the assets of the partnership firm in favor of the Trust and consequently did not require registration even though the assets of the partnership included immobile objects.

Madhya Pradesh v. Dawes Cine Corporation –

After the dissolution, a pact was decided between the farmers that the theaters should be returned to their actual owners.

U.P. v. Bankey Lal Vaidya –

This court pointed out that on the dissolution of the partnership, the assets of the firm are valued and the partner is paid a certain amount in lieu of the share of his assets. The transaction is not a sale, exchange, or transfer of the firm and the amount received by the partner cannot be considered as capital gains.

Malabar fisheries co. Calicut v CIT –

No separate rights were given to the firm as such and the partners jointly own the assets of the partnership. The distribution, division, and allotment of the assets are a resulting factor of the mutual adjustments between the partners and there is no chance of the abolition of the firm’s rights in the partnership assets amounting to the transfer of assets within the meaning of s. 2(47) of the act.

Decision Of The Court:

The Supreme Court held that the stock of property acquired by the firm in the course of business shall constitute the property of the firm unless the firm provides otherwise. It further held that since the partnership is not a legal entity and is only a succinct part, where each partner has beneficial interest and he can never claim any earmarked portion. Therefore when he receives any property from the residue it cannot be evaluated that he had a definite limited interest in the property and there is the transfer of the remaining interest in his goodwill within the meaning of section 17 of the Registration Act.

The case analysis has been done by Shruti Bose, a student at Christ (Deemed to be University), Lavasa.

The case analysis has been edited by Shubham Yadav, a 4th-year law student at Banasthali Vidyapith,

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Case Number:

Civil Appeal No. 3717 of 1982, arising out of SLP (Civil) No. 8056 of 1981

Case Citation:

(1983) 1 SCC 22 : 1983 ALJ 488 : AIR 1983 SC 523

Bench:

D.A. Desai and R.B. Misra

Decided On:

18 November 1982

Section:

Section 32(1)(b) of the Indian Partnership Act, 1932

Section 32 of the Indian Partnership Act, 1932 deals with the retirement of a partner. Section 32(1)(b) has provided for the retirement of a partner in accordance with an agreement. According to this, a partner may retire if there is an express agreement between the parties for the same.

Facts of the Case

The plaintiff-appellant had filed a suit in the Trial Court for the dissolution of the partnership firm and also for the rendition of the accounts of “Shyam Bricketing Udyog”. The firm was situated in Etah in the state of Uttar Pradesh. which was also the principal place of business of the firm. The trial court granted the relief of dissolution effective from 23 November 1976 and also passed the decision in favor of rendition of accounts. The respondents-defendants were not pleased by this and approached the High Court. The High Court allowed the suit and set aside the concurrent findings. The High Court dismissed the suit of the plaintiff along with the costs. Thus this appeal is by special leave.

The plaintiff had filed a suit for the dissolution of the firm and rendition of accounts. He alleged that the partnership was at will and that the firm had been dissolved on 23 November 1976 by notice. The respondents argued that the partnership wasn’t, in fact, a partnership at will.

Issues before the High Court

Whether the partnership was a partnership at will
Whether the respondent (now appellant) was entitled to retirement or dissolution of the firm itself.

After listening to the arguments of both sides and after a thorough discussion, the High Court held that the partnership wasn’t a partnership at will. This court shall not take up the first contention and only take up the second contention.

The present issue before the Court

Whether the appellant is entitled to retirement or the dissolution of the partnership itself.

The ratio of the Bench

The two-judge bench of the Supreme Court did a thorough reading of Clauses 18 and 20 of the instrument of Partnership. The bench also discussed Section 32(1) of the same. Upon reading Clauses 18 and 20 the court observed that a partner can in fact disassociate from the firm. In the same way, Section 32(1)(b) provides for the retirement of a partner in accordance with the terms of the partnership The bench held that the High Court made an error and did not view the plaintiff’s contention from the correct angle. The High Court went into the appreciation of the contention as a breach of contract and did not go into the absolute right to retire from a partnership conferred by Clause 18.

The court upon a combined reading of the Clauses 18 and 20 observed that there was no bar on the right to the retirement of a partner within one year of the commencement of the partnership and that there was only a consequence to such an action. The consequence is that the capital shall not be refunded until the expiry of the period of one year.

The decision of the Court

The two-judge bench of the Supreme Court decided that the plaintiff had retired from the partnership and that such retirement is effective from the day of the institution of the suit.

They held that the partnership is not dissolved and that the accounts shall be taken up to and inclusive of the day which precedes the institution of the suit.

The case analysis has been done by Om Gupta, a first-year law student pursuing BBA-LLB from the University School of Law and Legal Studies.

The case analysis has been edited by Shubham Yadav, a 4th year Law student at Banasthali Vidyapith, Jaipur.

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Case Number:

Award No 36 of 1951

Equivalent Citation:

AIR 1960 Cal 463

Bench:

Single Judge Bench, Justice G Mitter presiding

Decided On:

Thursday, 30^th July 1959

Relevant Acts And Sections:

Section 45 of the Partnership Act, 1932
Sections 249 and 251 of the Contract Act, 1872
Section 264 of the Contract Act, 1872
Section 45 of the Indian Partnership Act, 1932
Section 36 of the Partnership Act, 1932
Section 208 of the Contract Act, 1872
Section 36 of the English Contract Act
Section 50 of the Civil Procedure Code, 1908

Facts Of The Case In Brief:

M/s Juggilal Kamlapat and M/s Sew Chand Bagree had entered into a contract in the year 1948. M/s Juggilal Kamlapat (hereafter referred to as Juggilal) demanded Rs 31,000 in lieu of this contract from M/s Sew Chand Bagree (hereafter referred to as Sew Chand). There were various disagreements about which partners from Sew Chand were actually liable to pay the amount which only further delayed the payment. Aggrieved by this situation, Juggilal approached the High Court of Calcutta to reach a settlement. According to the application made to the Court, Manik Chand Bagree, Moti Chand Bagree, and Jankidas Bagree have been projected as the partners of the Sew Chand as even mentioned in the Registrar of Firms who owe money to Juggilal. This was opposed by Manik Chand and Moti Chand who submitted to the Court that Manik Chand and Moti Chand had dissolved their partnership in 1945. Long after the dissolution of the firm, Jankidas had assumed the name of this firm and started his business. However, this was not disclosed to the Registrar of Firms.

Issues Before The Court:

The issues which needed to be decided by the Court include:

If Manik Chand and Moti Chand were liable to pay M/s Juggilal Kamlapat the amount of claim
If the partnership firm of M/s Sew Chand Bagree stood dissolved as in the year 1945

Ratio Of The Case:

Since it was not possible to determine if Manik Chand and Moti Chand were to be made liable to pay the amount of claim demanded by the claimant, the case proceeded to an evidence-based trial. The counsel appearing for Juggilal pointed out to the Court that no public disclosure was made about the dissolution of the firm. The absence of evidence on paper corroborated this argument in favor of the claimant. The counsel further pointed out that the Bagrees did not attempt to produce any witness other than Sriratan Damani who would support their statements. However, the Court deemed it fit to consider other evidence such as the memorandum of understanding prepared by M/s Dutt and Sen, bearing signatures of the Bagree brothers, the Corporation of Calcutta’s issuance of the trade license, the opening of the account with Hindustan Commercial Bank Ltd., and the letter written to Bank of Baroda Ltd. All these verify the Bagrees’ oral version of events. Thus Judge G K Mitter concluded that M/s Sew Chand Bagree had been dissolved in 1945. The Court also referred to various sections of the Indian Partnership Act, 1964 as well as the Indian Contract Act, 1870 Judge G K Mitter after considering the shreds of evidence presented in Court and the intricacies connected with it, came to a conclusion that Manik Chand and Moti Chand were not a partner of M/s Sew Chand Bagree while the contract was being executed.

Decision Of The Court:

The Court considered the fact that although the Registrar of Firms did not reflect the dissolution of M/s Sew Chand Bagree; it also kept in mind that Juggilal while entering into the contract with Sew Chand did not run through these records as a basis for entering this contract. Thus Moti Chand Bagree and Manik Chand Bagree were rescued from having any liability. Jankidas Bagree was directed to pay a sum of Rs 31,000 to M/s Juggilal Kamlapat and the claimant was allowed to add costs to this claim as they deemed fit.

The case analysis has been done by Debasmita Nandi, a first-year law student of CHRIST (DEEMED TO BE UNIVERSITY), LAVASA.

The case analysis has been edited by Shubham Yadav, a student of Banasthali Vidyapith, Jaipur.

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Civil Appellate Jurisdiction:

Civil Appeal No. 545 of 1967.

Equivalent citations:

1971 AIR 1015, 1971 SCR (3) 365

Bench:

Grover, A.N.

Date Of Judgement:

15/01/1971

Act:

Income Tax, 1922 – S. 26A

Partnership Act, 1922 – S. 58, 59, 69-Rule 2(b)

Facts:

A deed of a partnership signed October 6, 1955, established the assessee firm. It was scheduled to go into force on November 5, 1954. The assessee applied for firm registration under section 26A of the Act for 1956-57. The firm’s prior year was shown as ending on October 26, 1955. On October 14, 1955, the Income-tax Officer received the application. The assessee submitted a statement under section 58 of the Indian Partnership Act, 1932, with the Registrar of Firms on October 20, 1955. The Registrar of Firms filed the assessee’s statement and made entries in the register of firms on November 2, 1955. The Income-tax Officer issued an order on March 23, 1961, and refused to register the company under s. 26-6A, citing, among other things, the fact that the application had not been submitted on time. The Appellate Assistant Commissioner’s appeal was dismissed. The Tribunal also supported the decision of the lower courts. The High Court ruled in favor of the assessee, holding that on the date the application is filed, the partnership should be considered registered and the rules would be satisfied if the partnership was registered under the Partnership Act after s.26A application was filed.

Issue:

The underlying question is whether a partnership’s registration under the Partnership Act results on the day the application for registration is filed under section 58 of the Act.

Ratio Of The Case:

A partnership is registered under the Partnership Act when the requisite entry is made in the register of firms, according to Ram Prasad v. Kamta Prasad. Even under the Partnership Act’s section 69, which addresses the repercussions of non-registration, it has been decided repeatedly that a firm’s registration did not resolve the problem after a complaint was filed.

Kerala Road Lines Corporation v. Commissioner of Income-tax, – a firm cannot be considered as registered when The Registrar receives the statement required by sections 58 and 59 of the Indian Partnership Act. The case has been referred to the Supreme Court for further hearing in January.

Decision Of The Court:

The appeal is granted, and the High Court’s decision is reversed. The answer to the referred question must be approbative and adverse to the assessee. In this Court, the appellant is entitled to costs.

The case analysis has been done by Shruti Bose, a student of Christ (Deemed to be University), Lavasa

The case analysis has been edited by Shubham Yadav, a student at Banasthali Vidyapith, Jaipur.

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Equivalent Citation

1964 AIR 1882, 1964 SCR (8) 50

Bench

HIDAYATULLAH, M.

WANCHOO, K.N.

GUPTA, K.C. DAS

AYYANGNAR, N. RAJAGOPALA

Decided on

29 APRIL, 1964

Relevant Act/ Section

S. 69 OF INDIAN PARTNERSHIP ACT, 1932 (9 OF 1932)

S. 8(2) OF ARBITRATION ACT, 1940 (ACT 10 OF 1940)

Petitioner

JAGDISH CHANDRA GUPTA

Respondent

KAJARIA TRADERS (INDIA) LTD.

Facts

On 30 July 1955, the respondent Messrs. Kajaria Traders (India) Ltd. and Messrs. Foreign Import and Export Association (exclusively owned by the appellant Jagdish C. Gupta) entered into a partnership to export between January and June 1956, 10,000 plenty of manganese ore to Phillips Brothers (India) Ltd., New York. Each partner was to provide a particular quantity of manganese ore. The agreement has arbitration clauses. The corporation claimed that Jagdish Chander Gupta did not carry out his part of the partnership agreement. The corporation wrote to Jagdish Chander Gupta on February 28, 1959, that they had appointed an arbitrator and asked Jagdish Chander Gupta either to confirm Mr. Kolah’s appointment as the only arbitrator or to appoint his arbitrator. Jagdish Chander Gupta postpones consideration and on St Patrick’s Day, 1959, the corporate informed Jagdish Chander Gupta that as he had not assigned an arbitrator within 15 days, they were appointing Mr. Kolah as the only arbitrator. Jagdish Chander Gupta discovered this. And on March 28, 1959, the company filed a plea under s. 8 (2) of the Indian Arbitration Act, 1940 for the nomination of Mr. Kolah or any other person as arbitrator. Jagdish Chander Gupta appeared and demurred the petition.

Issues before High Court

Whether S. 8(2) of the Indian Arbitration Act was applicable in this agreement because it was not expressly provided in the Letter of Intent that the arbitrators were to be appointed by consent of the parties?
Whether S. 69(3) of the Indian Partnership Act, 1932 petition can be filed because the partnership was not registered?

Judgment by High Court

Mr. Jagdish Gupta firstly argued that if the appointment is not made within 15 days of notice, on the application of the party who has given the notice, and following the principle of Audi Alteram Partem, the court may appoint an arbitrator. The Bombay High Court bench consists of Justice Mudholkar and Justice Naik, who agreed on the first contention constructed by Mr. Jagdish.

But the division bench contradicts the 2nd point. Justice Mudholkar believed that the application cannot be filed under s. 69(3) of the Indian Partnership Act, 1932, while Justice Naik has a different opinion. Then the case went to Justice KT Desai who agreed with Justice Naik’s view. And the court held that the application was held to be competent.

Contentions before Supreme Court

After the Bombay High Court Judgement, the appeal was filed in which it was contended that the High Court wrongly interpreted the grounds under S. 69(3) of the Indian Partnership Act, 1932.

Judgment by Supreme Court

The Supreme Court held that the words ‘other proceeding’ in S. 69(3) of the partnership act must receive their meaning and must be unaffected by words’ claim of set-off. Therefore, the appeal is allowed to rescind the decision of the Bombay High Court.

Conclusion

The judgment answers the question of whether an unregistered firm can initiate arbitration proceedings negatively. Despite the arbitration clause, the arbitration proceedings were barred in this case. Hence, to function like a well-oiled machine, the firm must get registered.

The case analysis has been done by Megha Patel, a 2^nd year Law Student at the Mody University of Science and Technology, Laxmangarh, Rajasthan.

The case analysis has been edited by Shubham Yadav, a 4th-year student at Banasthali Vidpyapith, Jaipur.

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