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TMI Blog1966 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... of Juggilal Kamalapat Cotton Spinning and Weaving Mills Ltd. Under this deed, the three brothers became the first trustees. On December 2, 1942, a deed of relinquishment was executed by the three brothers, relinquishing their rights and claims to all the properties and assets of the firm, Juggilal Kamalapat, in favour of Jhabbarmal Saraf and of themselves in the capacity of the three first trustees of the Kamla Town Trust. This relinquishment deed purported to recognise an earlier oral relinquishment which was stated as having been operative with effect from March 26, 1942. On December 1, 1942, a partnership deed was executed between Jhabbarmal Saraf and the three trustees, by which they purported to constitute a partnership taking effect from March 27, 1942, the two partners in the firm being Jhabbarmal Saraf and the Kamla Town Trust represented by these three trustees. The shares of the two partners in this partnership were: Kamla Town Trust----As. 12, and Jhabbarmal Saraf----As. 4. The firm, Juggilal Kamalapat, which had been carrying on the business of hosiery, owned both movable and immovable properties at Belur near Calcutta. The immovable properties consisted of lands and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed of 1st December, 1942, legally came into existence and as such should be registered ? " When this reference came up before the High Court on two different occasions, the High Court sent back the case for submission of further statements of the case to the Tribunal, because the High Court felt that facts necessary to hold whether the respondent firm claiming registration was a genuine firm or not had not been properly found by the Tribunal in its appellate order. On the first occasion, when submitting the supplementary statement of the case, the Tribunal purported to submit two different questions, in lieu of the question which had been already submitted for opinion to the High Court. The two questions thus newly suggested were: " (1) Whether, on the facts and circumstances of this case, the non-registration of the relinquishment deed can invalidate the transfer of the business assets to the new partnership ? and (2) Can the registration application be rejected merely on the ground that the business assets were not legally transferred to the new partnership ? " The High Court disposed of the reference by giving the following answer: " Regard being had to the admissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay. When the case first came up before the High Court, the question that was referred in the statement of the case was, as we have mentioned above, whether the partnership legally came into existence and, as such, should be registered. The existence of a firm could be challenged on two alternative grounds. One was that, in fact, on the evidence, it could not be held that such a firm had at all been constituted and had come into existence. The other was that, even though it purported to come into existence as a fact, it could not claim to be a valid partnership because of some legal defect, or, in other words, whether its existence was valid in law. On the face of it, the question that was referred to the High Court for opinion was the second question and not the first one. The first question, in fact, could not have been referred to the High Court at all for opinion, because that would be a pure question of fact on which the decision of the Tribunal would be final and no reference to the High Court would lie under section 66. A reference to the High Court lies only on a question of law. The High Court, when requested to answer the question referred in the first statement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner has not been able to show to us any provision of law, or any decision of a court laying down that a deed of relinquishment executed by partners of a firm in respect of their share and interest in a firm required registration, in case the firm owned immovable properties. In this connection, learned counsel for the respondent-firm brought to our notice a recent decision of this court in Addanki Narayanappa v. Bhaskara Krishnappa, where the question that came up for consideration was whether the interest of a partner in partnership assets comprising of movable as well as immovable property should be treated as movable or immovable property for the purposes of section 17(1) of the Registration Act, 1908. The court upheld the view of the Full Bench of the Andhra Pradesh High Court in Addanki Narayanappa v. Bhaskara Krishnappa. Mudholkar J., speaking for this court, held : " It seems to us that looking to the scheme of the Indian Act, no other view can reasonably be taken. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done, whatever is brought in would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded in the assets of the firm; but to the extent that it purported to transfer movable assets of the firm, the document would remain valid. The deed could clearly be divided into two separate parts, one relating to immovable properties, and the other to movable assets; and the part of the deed dealing with movable assets could not be held invalid for want of registration. A deed of relinquishment is in the nature of a deed of gift, where the various properties dealt with are always separable, and the invalidity of the deed of gift in respect of one item cannot affect its validity in respect of another. This view was expressed by the Madras High Court in Perumal Ammal v. Perumal Naicker. A deed of relinquishment, or a deed of gift, differs from a deed of partition in which it is not possible to hold that the partition is valid in respect of some properties and not in respect of others, because rights of persons being partitioned are adjusted with reference to the properties subject to partition as a whole. In the case before us, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration, thus, became owner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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