Buying property. with partnership deed
Deeksha nayyer
(Querist) 29 April 2020
This query is : Resolved
Hello dear lawyers,
Since I want to buy this industrial plot, Partner Rajender gupta told me that he will add us in the M/S Balaj traders as a partner and will reconstitute the constitution of the firm in Registrar of firms
(i.e He is telling to sell the industrial plot by new partnership deed-- NO REGISTRY REQUIRED).
MY QUESTIONS ARE-
This industrial plot is in the name of Partnership firm ( M/S Balaji Traders) or Rajender gupta
Thank you..
#Staysafe
Raj Kumar Makkad
(Expert) 29 April 2020
You are right in your understanding. First of all, a partnership firm cannot sustain legally having only one partner. As the meaning of Partnership shows that partnership between more than one person. As Rajender Gupta is now in the individual capacity and plot belongs to partnership firm which is non-existant now so Rajender Gupta is having no right to either include in the partnership firm nor has authority to sale you without consideration.
Though the partnership firm can be re-formed/re-constituted on the fresh terms and conditions including Rajender Gupta and he can retire thereafter. In this scinario, though the desired act can be done but there are many hudles in adopting this procedure.
Deeksha nayyer
(Querist) 29 April 2020
Thanks for the reply R K Makkad Sir,
Sir let us assume he change the constitution of firm and add me , then retire himself, But sir still REGISTRY OF THE INDUSTRIAL PLOT has to be done and I have to pay the stamp duty of the plot? Right?
The owner is saying to sell the plot by notarized partnership deed without sale deed and registry.
Sir, In this case SALE DEED / CONVEYENCE DEED EXECUTION IS REQUIRED OR NOT?????
kavksatyanarayana
(Expert) 29 April 2020
The Partnership Firm cannot be with only one partner. If all the partners except Mr.Rajender Gupta left the firm means the partnership is said to be dissolved. so Mr. Rajender Gupta cannot sell the property to you. As the property is in the name of Partnership firm, all partners shall sell the property or the partners shall relinquish their rights over the property to Mr.Rajender Gupta through executing the relinquishment deed. Then only Mr.Rajender Gupta may sell the property.
Deeksha nayyer
(Querist) 29 April 2020
@kavksatyanarayan sir Thanks for reply,
1) Sir, In conveyance deed of that industrial plot there is Signature of only Mr Rajender gupta , no other partner..
2) The older partner has transffered all the rights to Mr Rajender gupta vis dissolution .deed.
Raj Kumar Makkad
(Expert) 29 April 2020
The property stands in the name of partnership firm which is not in existance as on the day so how Rajender Gupta can it to any other person even if the stamp duty is paid?
Theonly way is to reform partnership firm including at least two persons. After sometime, even if Rajender Gupta retires on the terms and conditions to be settled, the rest two persons still be continuing partnership firm status. In that event, the problem can be got sorted out. The property shall remain in the partnership firm.
Raj Kumar Makkad
(Expert) 29 April 2020
The property stands in the name of partnership firm which is not in existance as on the day so how Rajender Gupta can it to any other person even if the stamp duty is paid?
The only way is to reform partnership firm including at least two persons. After sometime, even if Rajender Gupta retires on the terms and conditions to be settled, the rest two persons still be continuing partnership firm status. In that event, the problem can be got sorted out. The property shall remain in the partnership firm.
Deeksha nayyer
(Querist) 29 April 2020
Ok, Mr RK makkad, sir,It means I should not buy the property, since it has complications. right sir?
Dr J C Vashista
(Expert) 30 April 2020
Be sure about the title of the industrial plot by confirming from the records of vendor/ allottee the other signitary of Conveyance Deed .
In case the it is allotted to M/s Balaji Traders, find out status of the firm, whether the partnership stood dissolved before registration of Conveyance Deed or it has been dissolved thereafter?.
Raj Kumar Makkad
(Expert) 30 April 2020
Yes. I am of the firm opinion that the property under discussion should not be purchased by you as the same is duly owned in the name of BDA and not in the name of proposed seller.
Hemant Agarwal
(Expert) 30 April 2020
1. IF the immovable property stands "REGISTERED" in name of "Rajender Gupta", in the Revenue /Municipal records (check the original Sale Deed), THEN said property can be purchased from "Rajender Gupta" via a registered "Sale Deed" alongwith with a irrevocable indemnity bond in your favor signed by Rajender Gupta.
2. IF the immovable property stands "REGISTERED" in name of "Balaji Traders", in the Revenue /Municipal records (check the original Sale Deed), THEN said property can be purchased from "Balaji Traders" via a registered "Sale Deed" which "MUST" compulsorily be signed by "ALL" the Partners mentioning them as "Consenting & Confirming Parties", alongwith with a irrevocable indemnity bond in your favor signed by ALL the partners. This is irrespective of whether the Partners are retired /resigned /whatever.
3. IF both above is NOT possible .... THEN "DO NOT STRUGGLE" and forget the property, more so since there would be scores of other properties worth your money.
4. Forget about becoming Partner in Balaji Traders, since you would become civilly /criminally liable for ALL previous liabilities & for past non-compliance's of statutory provisions /laws and so on....
Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com
Rajendra K Goyal
(Expert) 30 April 2020
You asked:
Q1. This industrial plot is in the name of Partnership firm ( M/S Balaji Traders) or Rajender gupta?
Reply:
Partnership firm (Balaji Traders) can sell the plot. From facts, it seems the partnership has been dissolved.
You said:
Q2. Can we really buy the industrial plot by just partnership and retirement deed by reconstituting the firm. I MEAN NO STAMP DUTY TO BE PAID, NO REGISTRY?? As per my research it is against Transfer of property act sec 54. Please clarify dear lawyers, Is the owner trying to scam me???
Reply:
Entering in the partnership and retiring afterwards may sound OK but it is open to following risks:
a) Old partnership has already been dissolved; no partnership exists at present.
b) Clear title of the property has not been given to said Rajender Gupta in the dissolution deed. The fact is not confirmed documentary.
c) The act can be irregular ab-initio.
d) The procedure would be treated as a method to save stamp duty.
e) Any partner can sign on behalf of partnership while purchasing the property, (even sign of purchaser is not mandatory on the sale deed) after dissolution, if no clear title is passed on to any partner, all retiring partners should sign on sale deed with indemnity.
Rajendra K Goyal
(Expert) 30 April 2020
You said:
Thanks for the reply R K Makkad Sir, Sir let us assume he change the constitution of firm and add me , then retire himself, But sir still REGISTRY OF THE INDUSTRIAL PLOT has to be done and I have to pay the stamp duty of the plot? Right? The owner is saying to sell the plot by notarized partnership deed without sale deed and registry. Sir, In this case SALE DEED / CONVEYENCE DEED EXECUTION IS REQUIRED OR NOT?????
Reply:
Legally if you enter in the partnership, any partner is retiring afterwards, is OK. But in this case, the partnership has already been dissolved.
Rajendra K Goyal
(Expert) 30 April 2020
You said:
1) Sir, In conveyance deed of that industrial plot there is Signature of only Mr Rajender gupta , no other partner..
Reply:
In the conveyance deed, signatures of purchaser not mandatory/ Only one partner can sign on the basis of partnership as purchaser, nothing illegal in it.
You said:
2) The older partner has transffered all the rights to Mr Rajender gupta vis dissolution. deed.
Reply:
Whether rights specifically of this plot also has been transferred and vested in the name of Rajender Gupta? If so, under which terms. Full document need to be referred, show to some local lawyer.
Deeksha nayyer
(Querist) 30 April 2020
@Ragendra K Goel Sir.. Thanks for replly..
Sir you asked the question - Whether rights specifically of this plot also has been transferred and vested in the name of Rajender Gupta in dissolution deed?
Ans- In partnership deed and the dissolution deed, Nowhere this industrial plot is mentioned and they have not put the industrial plot in the stock . THIS INDUSTRIAL PLOT IS NOT MENTIONED ANYWHERE IN THE PARTNERSHIP DEED AND DISSOLUTION DEED.
P. Venu
(Expert) 30 April 2020
Who had executed the conveyance to Rajendar Gupta Prop. Balaji Traders? When was the proprietory firm become a partnership? Had you perused the partnership deed?
What do you mean by "the plot was reallotted to M/s Balaji Traders through Rajender Gupta" - what has been the consideration mentioned in the conveyance deed? Was the conveyance registered? Consequent to the reallotment was the mutation carried out in the public records?
When was the partnership dissolved? What was arrangement for dealing with the particular industrial plot?
Raj Kumar Makkad
(Expert) 30 April 2020
After considering your subsequent facts, it transpires that the said plot was purchased by the partnership firm which is not in existance as on day hence it is not advised to go for the said property.
Rajendra K Goyal
(Expert) 01 May 2020
The property was registered in the name of the Partnership deed, it was not assigned / given / decided at the time of dissolution. The property remained in the ownership of partnership. It is not under the absolute / indisputable / head of clear title / marketable with only one partner Rajender Gupta. If certain property is not distributed while dissolution of partnership, it does not become ownership of one partner. Its fate can be decided at some future date.
Rajendra K Goyal
(Expert) 01 May 2020
Under the circumstances, you have options:
Leave the property thinking it as having no clear marketable title.
Get the sale deed executed by all the partners, firm, with indemnity to be signed by all.
Raj Kumar Makkad
(Expert) 01 May 2020
The property can never be registered in the name of Partnership Deed as wrongly assumed by one of the experts. It can be in the name of Partnership Firm which is seen in the present case.
Raj Kumar Makkad
(Expert) 01 May 2020
Similarly one person cannot be called a partner. Rajender Gupta cannot be designated as a partner now even though the property of the partnership was purchased through him and thus the property of the partnership also do not belong to Rajender Gupta in the given case.
Deeksha nayyer
(Querist) 01 May 2020
Thank u experts..................
Rajendra K Goyal
(Expert) 02 May 2020
You are welcome, may revert in case of any further question.
Raj Kumar Makkad
(Expert) 02 May 2020
You are most welcome Mr. author and are advised to approach again in case of any advice.
