Periyar Arcade Kottamam, Kalady vs Village Officer Kalady, Kalady Village Office, Kalady, Ernakulam 683574

T.R. Ravi, J

Admit. Government Pleader takes notice for the respondents.

The 1st petitioner is a partnership firm and petitioners 2 & 3 are two of its partners. The prayers in the writ petition are to quash Ext.P8 order and for a direction to the respondents to carry out mutation of the properties of the 1st petitioner firm to the extent of 1.80 Ares in Resurvey No.399/62, 12.62 Ares in Resurvey No.399/2-2 and 1.29 Ares in Resurvey No.399/63/2 in Block No.26 of Kalady Village, Aluva Taluk, in the name of the petitioner firm. The case of the petitioners is that as per Ext.P1 partnership deed, the petitioner firm was constituted by its partners. As capital contribution of the petitioners 2 & 3 they had brought in the properties shown in Schedules A, B & C of the partnership deed and the right to access to the above through properties shown in D & E schedules. It is submitted that the above properties have thus become the partnership properties. Petitioners had applied for mutation of the properties in the name of the firm as per Ext.P4 application. The Village Officer referred the application to the Tahsildar by letter dated 25.02.2022 produced as Ext.P5. The Tahsildar returned the file to the Village Officer directing the Village Officer to act after getting legal opinion. The Village Officer sought legal opinion from the Government Pleader regarding mutation of the properties. It appears that in Ext.P7 opinion, the advice received by the Village Officer was that the mutation can be done only as per the order of the Court. In the above circumstances, the Village Officer returned the application submitted by the petitioners stating that a Court order should be procured for carrying out mutation. Ext.P8 is the order by which the applications were returned. The petitioners have challenged Ext.P8. It is contended that once the properties have been brought in as capital of the firm, which is an action permitted under Section 14 of the Partnership Act, it is a transfer from a partner to the partnership firm by operation of law. It is hence submitted that since the firm is the owner of the property for all purposes, mutation cannot be denied in the name of the firm. Reliance is placed on the judgment in George V.J. & Ors. v. V.V.George & Ors. [2010 (2) KHC 674] and Park Residency (M/s.) v. State of Kerala [2013 (1) KHC 767]. The petitioners submit that the denial of mutation is affecting the right of the 1st petitioner firm to put to use the property of the firm for the purposes of its business and earn income.

Heard Sri.P.Thomas Geeverghese on behalf of the petitioners and Sri.Bimal K.Nath, Sr. Government Pleader on behalf of the respondents.

Ext.P1 clearly says that partners 1 and 2 have brought in capital in the form of immovable property, which have been shown as schedule to the partnership deed. The partnership has been registered with the Registrar of Firms and Ext.P2 is the acknowledgement issued by the Registrar. The mutation has been denied as per Ext.P8, wherein it is stated that as per Section 14 of the Indian Partnership Act, 1932, even though properties can be brought in as capital of the partners, there are no provisions in the Transfer of Registry Rules, 1964 which facilitates effecting of mutation in the name of the partnership firm on the basis of the partnership agreement. It is stated that unless there is a registered document in the name of the firm whereby the firm has become the owner of the property, no mutation can be effected. In George (supra), this Court considered the effect of Section 14 of the Partnership Act and held that partners may convert individual property into the property of the firm by an agreement, which may be express or implied and that no document registered or otherwise is necessary for such conversion. It was further held that the relevant factor is the intention of the partners. In the case of hand, there is an agreement between the partners in which the intention of the partners to bring in their individual property as an asset of the firm is expressly stipulated by stating that the very capital of such partners is brought in, in the form of property. In such circumstances, it cannot be insisted that the manner in which a firm can own property can only be by means of a registered document transferring such property to the firm. In Park Residency (supra), this Court considered a situation where land was purchased in the name of a partnership firm and later two new partners were inducted into the firm and the firm was reconstituted under a new name. The question was whether the mutation which stood in the old name of the firm can be effected under the new name, notwithstanding the fact that there is a change in the partners as well as a change in the name of the firm. This Court considering the effect of Section 14 of the Partnership Act, held that by a reconstitution of the firm, the property of the erstwhile firm was brought into the stock of the new firm. The Court held that registration is required only in a case where the retired partners convey their individual immovable property to the partnership or to the continuing partners in their individual capacity. The case before the Court was one in which an order passed by the District Collector rejecting the revision petition filed by the petitioners under the Transfer of Registry Rules was under challenge. This Court held that the absence of a specific provision under the Transfer of Registry Rules need not deter the authorities from accepting an application for transfer of registry and acting upon it. It was held that there is no prohibition under the Rules and that by operation of law when the firm becomes the owner of the immovable properties, the right of the owner of the property to get mutation of the properties in their name cannot be denied. I am in respectful agreement with the dictum laid down in the above said judgments.

In the case on hand, there is no dispute that the properties originally belonged to two individuals, and they had constituted themselves into a partnership firm along with others bringing in the properties involved in this case as their capital. Once the properties have been brought in as capital, they necessarily become the properties of the firm, and applying the ratio in the above two cases, it has to be held that the firm is entitled to have the mutation carried out in its name.

In the result, the writ petition is allowed. There will be a direction to the respondents to effect mutation of the properties referred to in the schedules A, B and C in Ext.P1 partnership deed (1.80 Ares in Resurvey No.399/62, 12.62 Ares in Resurvey No.399/2-2 and 1.29 Ares in Resurvey No.399/63/2 in Block No.26 of Kalady Village, Aluva Taluk) in the name of the 1st petitioner firm within one month from the date of receipt of a copy of this judgment.