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2017 DIGILAW 1455 (KER)

I. v. Ahamedkutty VS District Registrar (General)

2017-11-29

K.VINOD CHANDRAN

body2017
JUDGMENT : 1. The petitioners are aggrieved with Ext.P4 order passed by the District Registrar (General), wherein the settlement deed at Ext.P1 produced for registration was directed to be stamped under Article 22 of the Kerala Stamp Act, 1959 (for brevity 'the Stamp Act') as a conveyance. 2. The brief facts to be noticed are that the petitioners are brothers, who had formed a partnership firm, which however was not registered. Ext.P2 is the partnership deed of 14.08.1969. The properties now settled by Ext.P1 were existing in the name of the firm, purchased by the partners for and on behalf of the partnership. The partnership is said to have been dissolved by Ext.P3 on 31.03.1997. There was no separate apportionment of the assets and the petitioners held the property in common after the dissolution of the partnership. 3. The petitioners by Ext.P1 sought to convey the said property in the name of their father, mother, brothers and sisters, which is directed to be stamped as a conveyance. The petitioners assert that since it is a conveyance by the siblings in the name of their father, mother and other siblings coming squarely under Section 2(q)(ii) is to be stamped under Article 51 of the Stamp Act. The learned Counsel for the petitioners rely on Addanki Narayanappa v. Bhaskara Krishnappa [1966 KHC 601]. 4. The learned Government Pleader based on the aforesaid judgment itself would point out that, on dissolution, the assets of the firm have to be applied under Section 48 of the Indian Partnership Act, 1932 and in such circumstance there should be a conveyance in favour of the partners, even if there is a dissolution. The same having not been effected, there can be no settlement made in favour of the father, mother and the siblings of the partners, especially since, the property remains in the name of the partnership firm. The firm cannot settle the properties in the name of the father, mother or siblings of the partners, is the argument. 5. Admittedly, the partnership firm was not registered. Even if registered, it is an established proposition that the partnership has no separate existence as distinguished from its partners. Section 48 only speaks of apportionment in case of the same being done at the time of dissolution. 5. Admittedly, the partnership firm was not registered. Even if registered, it is an established proposition that the partnership has no separate existence as distinguished from its partners. Section 48 only speaks of apportionment in case of the same being done at the time of dissolution. Addanki Narayanappa (supra) is a case in which two families entered into a partnership and some members of the family filed a suit for dissolution. The defendant family contented that there was a dissolution effected long back and the same was evidenced by way of a 'karar' (agreement) which spoke of one party having given up their right in the machine etc. and conceded the business to the other family. It also spoke of the other family having given up a property which formed a share of one of the partners which was purchased and possession delivered. The document was not registered. The issue was whether it was compulsorily register able or not. The Hon'ble Supreme Court framed the issue as to whether the interest of a partner in the assets of a partnership comprising also of immovable property should be treated as movable or immovable property for the purposes of Section 17(1) of the Registration Act. It was held that the document was not to be compulsorily registered. The learned Judges also held that the document itself did not transfer the property and spoke only of a transfer earlier effected. 6. Useful reference can also be made to Vinayakrishnan Vs. Commissioner For Land Revenue 2015 (3) KLT 214 and the following paragraph: 11. The essential distinction hence is in looking at whether there is an allotment of the surplus assets, on dissolution, amongst the partners. If that is so, the partners who owned the assets together, during the existence of the partnership, had a right to share in the business in accordance with their shares. On dissolution and allotment of the remaining assets, even if there is immovable property, each goes with his share, not creating any new right. But when there is an assignment in favour of one or other and consideration is passed then it creates new rights on the immovable property. A deed creating such rights would have to be registered compulsorily and the creation of such right is a “release” under Article 48 (b) to be stamped accordingly. 7. But when there is an assignment in favour of one or other and consideration is passed then it creates new rights on the immovable property. A deed creating such rights would have to be registered compulsorily and the creation of such right is a “release” under Article 48 (b) to be stamped accordingly. 7. In the present case, the dissolution of the partnership was in the year 1997. The petitioners who were the only partners in the firm held the property jointly after the dissolution of the firm. In fact the dissolution deed at Ext.P3 had clause (2) in the following manner:- (2) The assets and properties of the partnership firm as on 31st March 1997 shall belong to and vest on all the partners jointly who shall hold and own such assets and properties jointly. 8. The interest in the assets of the firm hence were jointly with the partners after dissolution. The petitioners, no more in the capacity of partners, acting jointly executed a settlement deed in favour of their father mother and other siblings. Ext.P4 hence is not sustainable and is set aside and there shall be a direction to register the document as coming under Article 51 of the Stamp Act. The petitioners shall produce the document, within a period of three weeks from the date of receipt of the certified copy of the judgment and the same shall be registered, de hors any delay caused, which is only by reason of the dispute raised and the pending writ petition. The writ petition is allowed. No costs.