Category: Non Litigation

EFFECT OF NON-REGISTRATION OF PARTNERSHIP FIRMS

Indian Partnership Act

Section “69 Effect of non-registration-

(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

(3) The provisions of subsections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect – (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1909, to realise the property of an, insolvent partner.

Under Section 69(1), a suit, inter alia to enforce right arising from a contract cannot be filed by a person Suing as a partner in a firm against the other partners of the firm unless the firms registered. Under sub-section (3) any other proceeding to enforce a right a arising from a contract by a person suing as a partner against the other partners of an unregistered Firm is also barred. Since the right to resort to arbitration flows from the contract between the parties contained in the partnership deed, a suit or any other proceeding by a partner to enforce this term in the contract against the other partners would, therefore, normally be barred under the first part of sub- section (3) of Section 69. (Vide Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd. [AIR 1964 SC 1882 infra]). Subsection (3) in its later part, however, carves out certain exceptions to the bar contained in sub-sections (1), (2) and the first part of sub section(3).

Under sub-section (3)(a) this bar will not affect the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm.

Therefore, although the partnership firm may be unregistered, one partner can sue other partners for dissolution of the firm and for accounts. The words “to sue” used in sub-section (3)(a) cannot be construed narrowly to refer only to suits for dissolution of partnership and accounts. The exception contained in sub-section (3)(a) applies not merely to sub-sections (1) and (2) but also to the first part of sub-section (3) which deals with proceedings other than suits. Therefore, in order that subsection (3)(a) would apply to all these provisions, the words “to sue” section (3)(a) must be understood as applying to any proceedings for dissolution of partnership or for accounts of a dissolved firm or to realise the property OF a dissolved firm. This proceeding may be either by way of a suit or it can even be a proceeding under the Arbitration Act to secure these rights through arbitration. [Vide Prem Lata (Smt)] & Anr. v. M/s IsharDass Chaman&Ors. (1995 2 SCC 145), a judgment to which one of us was a party.] Therefore, an arbitration clause in a partnership deed of an unregistered partnership can be enforced for the purpose of securing, inter alia, a dissolution and accounts of the partnership or for enforcing any right or power for obtaining the property of a dissolved firm.

RAJASTHAN HC ISSUES STAY ON REAL ESTATE REGULATORY AUTHORITY

Rajasthan HC in Grj Distributors and Developers private limited Vs Union of India, through secretary, Govt. Of India-

Rajasthan HC issued stay order on 31.7.2018 staying the execution of the orders passed by the Real Estate Regulatory authority. Thus the order passed by the RERA authority could not have been executed.

The Division Bench of the Rajasthan High Court has clarified further that the order as under:

“Taking into consideration the peculiar facts of this case, we stay execution of the orders passed by the Real Estate Regulatory authority, till next hearing date.”

It is on this ground that the Real Estate Regulatory authority and even the tribunal is proceeding with the hearing of the case other than the cases where interim order has been passed by the court.

The issue was raised as to whether the Real Estate Regulatory authority/Tribunal can hear the matter without it proper constitution. A period of one year has been given under the act for its constitution. but there is no proper authority set up even after the expiry of one year period. A period of one year has been given under the act for its constitution.

That even after the period of one year given under the act No action for it was initiated by the state govt. according to the state govt. the provisions of the Act for constitution of the authority or the Tribunal within a period of one year is directory in nature. The court said that the period of one year is directory or mandatory would be decided in the writ petition. Since the constitution of the Authority and the tribunal is in question, they should not undertake hearing till the matter is decided. As there is code of conduct imposed by the Election commission in the state that needs to be decided.

Therefore till then hearing in all the cases would be deferred by the authority as well as the tribunal so that it can be taken up by the duly constituted Authority and Tribunal.

RERA Karnataka orders Refund of money with interest

RERA Karnataka orders Refund of money with interest

Recently RERA Karnataka In some of the cases against the Builder/Developer who has defaulted in handing over the constructed  house, Villa and Apartment the  Aggrieved home Buyers have approached the RERA Karnataka Seeking for cancellation of Agreement and Refund of the amount with interest as per RERA provisions.

The home buyers have entered into agreement with the builder/developer in the year 2014-15 and as per the Agreed terms the builder/developer was supposed to handover the possession of the homes within a period of 24 months from the date of Agreement and the hard truth was like any other builder/developer here also there was a default of the builder/Developer and he has not handed over the possession to home buyers who have paid 70 to 80 % of the amount to purchase the home. In the meanwhile there was a dispute between the Builder/Developer and the landowner, the Builder having entered into a registered JDA has defaulted even with the landowners and the quality of construction was very bad that the building would have collapsed within few years of the construction as construction activity was not carried out properly. thus the landowners have got stay in the court. the construction has come to a standstill with no development in the project. Thus the home buyers who had entered into agreement with the Builder/developer came asking for cancellation of Agreement with Builder/Developer and to refund the amount with interest. The RERA Karnataka has after hearing the case issued the orders for refund of the amount with interest at the rate of 10.25% interest on the amount paid by the home buyers.

Unsigned Arbitration Agreements not invalid in all cases: SC

Unsigned Arbitration Agreements not invalid in all cases: SC

Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed.’…

Supreme Court in Caravel Shipping services pvt ltd.., VS  M/s Preimer Sea foods Exim pvt ltd.,

a document styled as “Multimodal Transport Document/Bill of Lading” dated 25.10.2008. This Bill of Lading states that the Consignor/Shipper is one M/s Premier Seafoods Exim Private Limited of Kerala, and that Caravel Shipping Services Private Limited, who is the appellant before us, is the agent who facilitates transport. The very opening Clause of the Bill of Lading specifies:

“In accepting this Bill of Lading the Merchant expressly agrees to be bound by all the terms, conditions, clauses and exceptions on both sides of the Bill of Lading whether typed, printed or otherwise.”

The Respondent filed a Suit being O.S. No. 9 of 2009 before the Sub-Judge’s Court in Kochi to recover a sum of Rs.26,53,593/- in which the Bill of Lading was expressly stated to be a part of cause of action. Soon after the Suit was filed, an I.A. being I.A. No. 486 of 2009 was filed by the appellant under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) in which it was pointed out to the Court that an arbitration clause was included in the printed terms annexed to the Bill of Lading.

The law in this behalf, in Jugal Kishore Rameshwardas vs. Mrs. Goolbai Hormusji, AIR 1955 SC 812, is that an arbitration agreement needs to be in writing though it need not be signed. The fact that the arbitration agreement shall be in writing is continued in the 1996 Act in Section 7(3) thereof. Section 7(4) only further adds that an arbitration agreement would be found in the circumstances mentioned in the three sub-clauses that make up Section 7(4). This does not mean that in all cases an arbitration agreement needs to be signed. The only prerequisite is that it be in writing, as has been pointed out in Section 7(3).

Hon’ble Supreme court has held that the Arbitration agreement need not necessarily be a signed document to invoke the arbitration clause of the agreement. it prerequisites that the agreement shall be in writing.

CONDITIONAL GIFT DEED AND CANCELLATION

The Hon’ble supreme court has held that a conditional gift deed and its cancellation is valid while the condition of such a gift deed is not satisfied.

Question was: whether a document styled as gift deed but admittedly executed for consideration, part of which has been paid and the balance promised to be paid, can be treated as formal document or instrument of gift. Another related question is whether a gift deed reserving the right of the donor to keep possession and right of enjoyment and enforceable after the death of the executant is a gift or a will.

A purported gift deed was executed by Donor in favor of the done, in consideration that the done will take care of her and her husband. further gift deed also clearly mentioned that the gift would take effect after the death of herself and her husband.

later on Donor who had executed the gift deed has cancelled by executing the cancelation of a gift deed. A suit came to be filed seeking for declaration of such cancellation as null and Void and to declare the donee as having right over the property under gift deed.

Under sec. 122 to 126 of Transfer of Property act 1882, mentions Gift Deed and Circumstances of gift deed. Under sec.126 of the act, Donor and donee may agree that on certain specified event the gift shall take place and such gift shall be revocable. as such in the present case as it is very clear that the Gift deed shall take place only after the death of the donor and her husband, thus it’s a revocable and gift to take place on happening of specified event.

A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during lifetime of the donor. When a gift is incomplete and title remains with the donor the deed of gift might be cancelled.

A conditional gift only becomes complete on compliance of the conditions in the deed. That there was no completed gift of the property in question by the Donor to the Donee and the Donor was within her right in cancelling the deed.