SHARAD VASANT KOTAK AND ORS. versus RAMNIKLAL MOHANLAL CHAWDA AND ANR.

Citation: [1997] SUPP. 6 S.C.R. 543 · Decided: 17-12-1997 · Supreme Court of India · Bench: S.C. SEN · Disposal: Dismissed
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Judgment (excerpt)

SHARAD VASANT KOTAK AND ORS. 
A 
v. 
RAMNIKLAL MOHANLAL CHAWDA AND ANR. 
DECEMBER 17, 1997 
(SUHAS C. SEN AND K. VENKATASWAMI, JJ.] 
B 
Partnership Act, 1932 : 
Sections 4, 17(a), 31, 39, 58, 59, 63, 69-A and 69(2-A) (as amended 
by State of Maharashtra Amendment introduced by Act 29 of 1984)-Suit for 
C 
dissolution of finn--Maintainability-Conditions for filing a suit are that the 
Jinn must be registered and the persons suing must be shown in Register of 
Finns as partners-Partnership firm 01iginally registered-Reconstitution of 
Jinn after death of a partner in which widow of deceased partner inducted as 
partne1~Reconstitu(ed finn not registered-Suit filed by a founder partner of 
that Jinn whose name. included in the Register of Fi171ls, for dissolution of the D 
fimi-Held, suit maintainable. 
Sections 58, 59 & 63 and 69-A (as in force in the State of 
Maharashtra)-Registration of [inn-Does not cease on reconstitution of the 
firm pursuant to induction of a new partner (widow of a deceased 
E 
partner)-No fresh registration required-Howeve1; infonnation about chan-
ges made after reconstitution must be given-Failure to comply attracts penal-
ties under Section 69-A. 
Sections 17 (a), 31 & 32-lnduction of a new partner will amount to 
reconstitution and not dissolution of the [inn-Dissolution and reconstitution 
F 
are two different legal concepts. 
lnte1pretation of deeds and documents-Substance and not mere words 
used, is relevant. 
A partnership firm with seven partners was registered. One of the G 
partners died and in his place, his widow was admitted as a partner in the 
firm and this was not brought to the notice of the Registrar of Firms. R-1 
gave a notice of dissolution of the firm to the appellant and filed a suit for 
dissolution of partnership firm. Subsequently R-1 sought amendment of 
the plaint to the effect that subsequent changes and/or modificatil!ns in H 
543 
544 
SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R. 
A the original partnership deed and also in the subsequent deed were merely 
in the nature of changes and/or modifications which did not affect registra-
. tion of the said firm, as 1re11uired under the Partnership Act, for entitling 
a partner to institute a suit for relief against the other partners on 
dissolution of the firms and alternatively, the other amendments sought 
B to challenge the vires of Section 69(2-A) of the Act as in force in the State 
of Maharashtra. These amendments were seriously opposed by the appel-
lants inter alia contending that the suit as filed was not maintainable and 
hence amendments cannot be allowed. The Trial Judge accepted the con-
tentions of the appellant and dismissed the suit. On appeal before the 
Division Bench by Respondent No.1, it not only restored the suit but also 
C allowed the amendments. Hence this appeal. 
Dismissing the appeal, this Court 
HELD : 1. The suit in question is not hit by Section 69(2-A) of the 
Partnership Act. On the induction of the second respondent, the existing 
D firm was only reconstituted and, therefore, there was no necessity to get a 
fresh registration. If by virtue of non-compliance of certain mandatory 
provisions in not informing the Registrar of Firms about the change in the 
constitution of the firm, certain penalties provided in the Act alone are 
attracted, that will not lead to the conclusion that the registration of the 
E firm ceased. This conclusion is based on a conjoint reading of Sections 
58-63 and the forms prescribed thereunder. Further, this con~lusion does 
not in any way mitigate the object of the Maharashtra Amendment intro-
duced by Act 29 of 1984. [570-G-H] 
Wazid Ali Abid Ali v. CIT, [1988] Suppl. SCC 193 and Bharat 
F 
Saivodaya Mills Co. Ltd. v. Mis Mohatta Brothers, AIR (1968) Guj. 178, 
referred to. 
2. In view of clause 11 of the second deed of partnership it cannot 
be contended by the appellants that by reason of death of one of the 
partners, the existing firm stood dissolved. By clauses 4 and 5 of the said 
G deed relating to the commencement of the partnership and the accounting 
year, minimal changes were introduced in the second deed of partnership. 
in place of clauses 4 and 5 in the first partnership deed and in other 
respects, namely, the name of the partnership firm, the address and 
location of the firm, the business carried on and shares allotted among the 
H partners and duration of the partnership, are identical. Having regard to · 
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SHARAD VASANT KOTAK v. R.M.
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