LIMITED LIABILITY PARTNERSHIP PART-XXXXIII - Miscellaneous Provisions

[Dr. Sanjiv Agarwal]

Application of other laws not barred (Section 71)

Section 71 of the LLP Act, 2008 provide that the provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force,

 This section seeks to provide that other laws are also applicable to the LLP in addition to the provisions of this Act and their application is not barred. This section provides that the provisions in this Act shall be in addition to, and not in derogation of the provisions of any other law for the time being in force.

 This section provides that for the LLP Act, application of other laws in not barred, ie, the provisions of LLP Act shall be in addition to provisions of other law which are in force. Provisions of LLP Act will not be in derogation of provisions of other statutes inIndia.

 However, in section 4 of LLP Act, it has been provided that save as otherwise provided, the provisions of Indian Partnership Act, 1932 shall not apply to LLP.  Thus application of section 4 shall be subject to provisions of section 71.

 The application of other Indian Acts to LLP would thus be as follows –

-  The Partnership Act 1932                                           not applicable

-  The Companies Act, 1956                                          Applicable subject to section 67

-  Other Acts                                                                   Applicable under section 71

   (eg, Competition Act, Information

 Technology Act, Foreign Exchange

    Management  Act, Transfer  of Property Act,

    Indian Contract Act, Negotiable Instruments Act,

    Insurance Act, Income Tax Act, Stamp Act etc.)

Jurisdiction of Tribunal and Appellate Tribunal (Section 72)

 Section 72 of the LLP Act, 2008 provide that -

(a)        The Tribunal shall exercise such powers and perform such functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force.

(b)        Any person aggrieved by an order or decision of Tribunal may prefer an appeal to the Appellate Tribunal and the provisions of sections 10FQ, I0FZA, 10G, 10GD, 10GE and 10GF of the Companies Act, 1956 shall be applicable in respect of such appeal.

Section 72   seeks to provide that the Tribunal shall discharge such powers and perform such functions as are, or may be, conferred on it by or under the provisions of this Act or any other law for the time being in force. The section  also seeks to allow filing of appeal to the Appellate Tribunal by any person who is aggrieved by an order or decision of Tribunal. This section prescribes for jurisdiction of Tribunal and Appellate Tribunal. The powers and functions of Tribunal have been prescribed under provisions of the LLP Act and other Acts.

Powers and Functions [Sub-section (1)]

It provides that Tribunal shall exercise powers and perform functions as are prescribed in LLP Act or other Acts in force.

 The term ‘tribunal’ has been defined in section 2(1) (a) of the LLP Act to mean National Company Law Tribunal (NCLT) to be set up under section 10 FB of the Companies Act, 1956.

 Section 81 of the LLP Act dealing with transitional provisions state that the powers and functions of the Tribunal shall be exercised by Company Law Board (CLB).

Appellate Mechanism [Sub-section (2)]

This sub-section provides for appellate mechanism in case any person is aggrieved by order of the Tribunal (Company Law Board). The appeal can be made before the Appellate Tribunal set up under section 10 FR of Companies Act, 1956.

Since Appellate Tribunal has not been set up because of legal challenge in Supreme Court [Union of India v. R Gandhi (20078) 76 SCL 350 (SC),. Section 81 of LLP Act which deals  with transitional provisions provide that the powers and functions of  Appellate Tribunal shall be exercised by high court. Sub-section (2) further states that following provisions of Companies Act, 1956 shall be applicable in respect of appeals under LLP Act-

Section                                                   In relation to

10 FQ                                         Appeal from order of Tribunal

10 FZA                                        Procedure and power of Tribunal and Appellate Tribunal

10G                                            Power to punish for contempt

10GD                                          Right to legal representation

10GE                                          Limitation

10GF                                          Appeal to Supreme Court

Penalty on non-compliance of any order passed by Tribunal (Section 73)

Section 73 of LLP Act, 2008 provides that whoever fails to comply with any order made by the Tribunal under any provision of this Act shall be punishable with imprisonment which may extend to six months and shall also be liable to a fine which shall not be less than fifty thousand rupees.

Section 73 seeks to provide that whoever fails to comply with any order made by the Tribunal under any provision of this Act shall be punishable with imprisonment which may extend to six months and shall also be liable to a fine which shall not be less than fifty thousand rupees.

This section provides for penalty for non-compliance with the orders of the Tribunal (Company Law Board) and the person who shall be punishable shall be any person (whoever) who fails to comply with Tribunal’s order under any section of LLP Act. Any person would include LLP itself, its partners, its designated partners, employees of officers or any other person.

The punishment prescribed is both- imprisonment as well as monetary fine. The imprisonment may extend upto a period of six months. For the monetary fine, while no maximum limit is prescribed, such fine shall not be less than Rs 50,000 (rupees fifty thousand)

= = = = = = =