RIGHT TO INFORMATION AND MEDIA LAW

(PROJECT REPORT)

INDIAN PARTNERSHIP ACT : MEDIA TRIAL AND JUDICIARY

SUBMITTED TO:
MS MEENA
UILS, PU

SUBMITTED BY :
Naveen Rana
273/21
B.Com L.L.B
7th Semester

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 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistance from many
people and I am extremely fortunate to have got this all along the completion of my project report.
Whatever I have done is only due to such guidance and I would never forget to thank them.
I take this opportunity to record deep sense of gratitude to my teacher, Ms. Meena , University
Institute of Legal studies, Chandigarh for her incontestably perfect unmatched guidance,
encouragement, valuable suggestions and efforts made during the preparation of this project and
during her lectures which enabled me to complete this project successfully on the topic:
MEDIA TRIAL AND JUDICIARY
I owe my regards to the entire faculty of the Department of Legal Studies, from where I have learnt
the basics of Law and whose informal discussions, intellectual support helped me in the entire
duration of this work.

Naveen Rana
Roll No. 273/21
B. Com. LLB (Hons.)
7th Semester, Section-E

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 TABLE OF CONTENTS

INTRODUCTION ……………………………………………………4

INTRODUCTION TO IPA 1932 ……………………………………...4

OBJECTIVES OF IPA 1932……………………………………………4

REGISTRATION OF PARTNERSHIP FIRM ……………………..5-7

EFFECT OF NON REGISTRATION ……………………………….8-9

CONCLUSION …………………………………………………………10

BIBLIOGRAPHY ……………………………………………………….11

INTRODUCTION

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Introduction to Indian Partnership Act, 1932:

The Indian Partnership Act, 1932 is an act of the Indian Parliament that governs partnerships in
India. It came into force on 1st October 1932 and has since been amended several times. The Act
provides for the registration of partnership firms and the rights and obligations of partners in a
partnership. It is applicable to the whole of India, except for the state of Jammu and Kashmir. The
Act defines partnership as the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all. It lays down the essential elements of
partnership, such as agreement, sharing of profits, carrying on of a lawful business, number of
partners, mutual agency, and unlimited liability.

"Partnership" is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all. Persons who have entered into partnership with one
another are called individually, "partners" and collectively "a firm", and the name under which their
business is carried on is called the "firm-name". Partnership is a form of business organization in
which two or more persons come together to carry on a business with a view to earning profits. The
Indian Partnership Act, 1932 defines partnership as the relation between persons who have agreed to
share the profits of a business carried on by all or any one of them acting for all. The agreement
between the partners can be written or oral, express or implied. The partners can carry on any lawful
business as long as it is not prohibited by law. The partnership agreement can be for a fixed term or it
can be at will.

Objectives of the Indian Partnership Act, 1932:

• The Act aims to provide a legal framework for partnerships and to ensure transparency and
accountability in the management of partnership firms.

• It seeks to provide a mechanism for the resolution of disputes among partners and between partners
and third parties.

• The Act also aims to protect the interests of minority partners and to prevent fraud and
mismanagement in partnership firms.

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• It encourages the formation of partnerships by providing a legal framework for the creation and
dissolution of partnerships.

REGISTRATION OF PARTNERSHIP FIRM

The Indian Partnership Act, 1932 provides for the registration of partnership firms. The Act
empowers the State Government to exempt the provisions of the Act from any state or any part
thereof. The State Government also has the power to appoint Registrars of Firms, and the registration
process requires submitting a statement containing the necessary information to the Registrar of
Firms.

Section 56 of the Indian Partnership Act, 1932 gives power to the State Government to exempt the
provisions of the Act from any state or any part thereof. This means that the State Government can
choose not to apply the provisions of the Act to any particular state or a specific area within a state.
This power is exercised by issuing a notification in the Official Gazette.

Illustration: The State Government of Gujarat issues a notification in the Official Gazette, stating
that the provisions of the Indian Partnership Act, 1932 will not apply to the state of Gujarat. This
means that partnerships registered in Gujarat will not be governed by the provisions of the Act.

Section 57 of the Indian Partnership Act, 1932 deals with the appointment of Registrars for the
purpose of the Act. The State Government has the power to appoint Registrars of Firms and define
the areas within which they shall exercise their powers and perform their duties. The Registrar of
Firms is considered a public servant within the meaning of section 21 of the Indian Penal Code.

Illustration: The State Government of Uttar Pradesh appoints Mr. Rajesh as the Registrar of Firms
for the state of Uttar Pradesh. The State Government also defines the areas within which Mr. Rajesh
shall exercise his powers and perform his duties as the Registrar of Firms.

Section 58 of the Act deals with the application for registration of a firm. The registration of a firm
can be done by sending a statement in the prescribed form and accompanied by the prescribed fee to
the Registrar of Firms in the area where the business is situated or proposed to be situated.

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The statement must contain the following information:

• The name of the firm ‘

• The place or principal place of business of the firm

• The names of any other places where the firm carries on business

• The date when each partner joined the firm

• The names and full and permanent addresses of the partners

• The duration of the firm

• The statement must be signed by all the partners or their agents specially authorized on their behalf.
Each person signing the statement must also verify it in the prescribed manner

The firm name must not contain certain words such as "Crown," "Emperor," "Empress," "Empire,"
"Imperial," "King," "Queen," "Royal," or words expressing or implying the sanction, approval or
patronage of Government, except when the State Government signifies its consent to the use of such
words as part of the firm name by order in writing.

Illustration: Ram, Shyam, and Mohan wish to start a partnership firm for a construction business in
Delhi. They prepare a statement in the prescribed form containing all the necessary information such
as the name of the firm, the place of business, the names of partners, etc. They sign and verify the
statement and submit it to the Registrar of Firms in Delhi along with the prescribed fee. The
Registrar of Firms examines the application, and if satisfied, he will enter the name of the firm in the
Register of Firms and issue a Certificate of Registration.

Section 59 of the Indian Partnership Act, 1932 states that when the Registrar of Firms 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 file the statement.

Once the Registrar of Firms receives the statement in the prescribed form, he examines it to ensure
that all the necessary information is included, and the prescribed fee has been paid. If the Registrar is
satisfied that the provisions of section 58 have been duly complied with, he will enter the name of
the firm in the Register of Firms and file the statement.

The procedure for such a registration is as follows,

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1] Application to the Registrar of Firms in the prescribed form (Form A). Nowadays this facility is
even available online. Such an application must contain certain basic details about the firm such as,

• Name of the Partnership Firm

• Name and address of all partners
• Place of business (address of main and branch offices)
• Duration of the partnership
• Date of joining of partners
• Date of commencement of business

2] The duly signed copy of the Partnership Deed (which contains all the terms and conditions) must
be filled with the registrar

3] Deposit/pay the necessary fees and stamp duties

4] Once the registrar approves the application, the firm will be entered into the records. And the
registrar will also issue a certificate of incorporation.

The Register of Firms is a public document that contains details of all the registered firms in a
particular area. The entry made in the Register of Firms is proof that the firm has been registered
under the Indian Partnership Act, 1932.
Illustration: After receiving the statement in the prescribed form from Ram, Shyam, and Mohan, the
Registrar of Firms in Delhi examines it to ensure that all the necessary information is included, and
the prescribed fee has been paid. Once satisfied, the Registrar enters the name of the firm in the
Register of Firms and files the statement. The entry made in the Register of Firms is proof that the
partnership firm has been duly registered under the Indian Partnership Act, 1932. In conclusion,
Section 59 of the Indian Partnership Act, 1932 mandates that once the Registrar of Firms is satisfied
that the provisions of Section 58 have been duly complied with, he shall record an entry of the
statement in the Register of Firms and file the statement. The entry made in the Register of Firms is
proof that the firm has been registered under the Act.

EFFECT OF NON-REGISTRATION OF PARTNERSHIP FIRM

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Under the English law, the registration of firms is compulsory. Therefore, there is penalty for non-
registration of firms. But the Indian Partnership Act does not make the registration of the firms
compulsory nor does it impose any penalty for non-registration.

However, under section 69, the consequences of non-registration of partnership firm includes a
number of disabilities which are as follows:

1. No suit to enforce rights arising from a contract under this Act- A firm which has not
undergone the process of incorporation cannot file a suit against any other firm or third party. A
non-registered firm does not have the privilege to file a suit like all other registered firms.
Another important essential about this sub-point is that the person or the third party suing the
non-registered firm shall be already registered in the register as a firm.

2. No proper relief- If the firm is not registered, the claim exceeding ₹100 cannot be set off by a
third party, so there is no relief in this regard to the party. Such a right can be only enjoyed by
the registered firm.

3. Partners cannot bring legal action against each other– An aggrieved partner of an
unregistered firm cannot bring legal action towards each other as they are in no position to file
a suit in the court or have the power to enforce any right.

The high court dismissed the petition on the grounds of sec 69(2) as the plaintiff was not a registered
firm thus the suit was not maintainable. Hence, it is strongly recommended to register the
partnership firm with the registrar of firms (ROF). An unregistered firm can be registered at any
time. Every state government has established the office of the registrar of firms, which is vested with
the powers to register the firm and issue the Certificate of Registration of the Firm and a copy of the
extracts of the register of firms where the partnership name has been entered.

V. Subramaniam Vs.Rajesh Raghuvandra Rao

Facts of the case:

The case originated in the city civil court of Bombay wherein the appellant prayed for the dissolution
of the unregistered partnership between appellant and the respondent. A defence in the case involved
that the suit was not maintainable according to the Sub-section (2A) of the section 69 of the Indian
Partnership Act, 1932.

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The Sub-section 2A which was introduced by the Maharashtra Amendment 1984 states as follows:

(2A) No suit to enforce any right for the dissolution of a firm or for accounts of a dissolved firm or
any right or power to realize the property of a dissolved firm 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 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:
Provided that the requirement of registration of firm under this Sub-section shall not apply to the
suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm
for accounts of a dissolved firm or to realize the property of a dissolved firm.

Held :

The Supreme court supported the decision of Bombay City Civil Court in which it was held that the
view that this sub-section introduced by the Maharashtra Amendment to the Act, being the
Maharashtra Act No. 29 of 1984 was unconstitutional as it was in violation of Articles 14 and 19(1)
(g) of the Constitution of India. Then the City Civil Court made reference to the High Court under
Section 113 of Code of Civil Procedure. The High Court impugned the judgement and held the
section to be not violative of the Constitution of India. This decision of the High Court has been
further appealed in the present case.
Rights Not Affected By Non-Registration of Partnership Firm

Non-registration of the partnership firm does not affect the following rights:

1. The right of the partner to sue for dissolution of the firm or for accounts of and his share, the
dissolved firm.

2. The rights of the firm or its partners having no place of business in India.

3. Suits not exceeding ₹100.

4. The power of an official assignee to realise the property of an insolvent partner.

5. Suits arising otherwise than under a contract, for example, a suit against the third party for
infringement of trademarks of the firm.

CONCLUSION

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Registration of a firm is affected by the Registrar of Firms by recording in the Register of Firms an
entry of the statement relating to registration furnished to him. The does not make the registration of
the firm compulsory, yet the effect of the rules relating to the consequences of non-registration is
such as practically necessitates the registration of the firm at one time or other.

Certain disabilities have been imposed on partners of an unregistered firm seeking to enforce certain
claims in the Civil Courts; and any partner who is not registered is not able to enforce his claims either
against third parties or against the fellow partners. An unregistered partner may, however, sue for the
dissolution of the firm or for accounts only if the firm is already dissolved.

The benefit given to the unregistered business is nevertheless unfortunate because they lack the
fundamental absolute right to operate as a firm. It has been noted that a company’s operation is more
complicated than a firms. The company will not consider doing business with an unregistered
corporation. In the perspective of the law, a corporation that has not through the registration process
does not even exist. The Indian Partnership Act of 1932 gave unregistered firms extensive privileges
despite the fact that being unregistered has several restrictions.

The main reason that many firms choose a partnership firm is because it is simple to set up and does
not need to be registered. However, the partners will pay a steep price if they decide to ignore it and
do nothing about it. Unregistered partnership firms are nonetheless lawful in the eyes of the law and
are still able to conduct business as usual, but they come with a lot more drawbacks than positives. A
business can’t operate in an ideal environment for very long since it is prone to dispute. When this
happens, the business and its associates will need to take legal action to resolve the issue, which they
wouldn’t be able to do without the firm’s registration.

On a concluding note it can be observed that the essential notion associated with the partnership and
its associated statutory provision needs an essential visitation as the relics of the colonial past are
fundamentally needed to be polished to accommodate them to our social realities which requires a
visitation to our social realities.

BIBLIOGRAPHY

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Books:
a) Introduction to Law of Partnership - Including Limited Liability Partnership by Avtar Singh
b) LLP Ready Reckoner by V S Datey

Websites:
a) iblogpleaders.com
b) vakilsearch.in
c) cleartax.com
d) www.legalserviceindia.com
e) estartindia.in

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