Partnership property
Querist :
Anonymous
(Querist) 18 January 2012
This query is : Resolved
I bought a land in maharashtra owned by a partnership firm. I bought the land from XYZ partnership Firm. And XYZ had bought it from ABC in 2008. My lawyers gave me a clear title signal. The ABC Company had five partners and now one of the partners has objected to the sale by ABC to XYZ as his sign was not taken on the sale deed. The sale deed was signed only by one partner on behalf of the firm and XYZ had bought it. In the sale deed between ABC and XYZ it is mentioned " duly authorised by resolution Dated : XXXXXXX. " The said resolution is not a part of document in the sale deed between ABC and XYZ. It is only mentioned. Now what should be my legal action and also is my title safe as if the title XYZ is faulty, my title could also be bounced. Please Help!!
Querist :
Anonymous
(Querist) 18 January 2012
Also note that the objecting partner says that no resolution has been taken from him and he has not authorised the working partner for the sale of the property. The person signing the sale deed on behalf of ABC is unable to provide copy of said resolution also. The concerned ABC firm is a real estate firm.
ajay sethi
(Expert) 18 January 2012
before certifying title to the property th lawyer must have gone through the provisions of partnership deed .
whether _partner had authority to sign on behalf of all partners ?
a copy of resolution ought to have been enclosed to sale deed between ABC and XYZ .
if any suit is filed you will have to defend the suit .
take serach at registrar of firms . you will get all the details
Querist :
Anonymous
(Querist) 18 January 2012
The partnership deed is not submitted is the registrar of firms. But i got a copy of the deed. It has a clause that for matters other than mentioned in the deed, The partners may take voting and resolution may be passed by majority. But there is no copy of resolution with everybody's signatures. Also right in the para above the said resolution clause, it is mentioned that no partner shall without the written consent of the other, Mortgage, hypothecate or transfer property of the firm without written consent of the others. Also the single partner who has sold says he has a POA, But it is not registered. It is a magistrate POA issued by others in 1989 on Rs. 20 Stamp Paper. Can the POA Point be of any use. But kindly note POA is not even mentioned in the sale deed.
ajay sethi
(Expert) 18 January 2012
is firm registered ?
if consent of other partners not obtained then one partner has no powers to sell the property .
if power of attorney is not registered the partner has no right to dispose of the [property .
you have a weak case .
Querist :
Anonymous
(Querist) 18 January 2012
The firm is registered. And the partner who has sold has got POA of 1989. The rule for registered POA was applicable only after 2001. SO will that work. Also they have sold to XYZ and i Bought from XYZ. So what will be my standing. Moreover, all other partners of theirs are agreeing to the sale deed though they have not signed. Also they have filed distributed the profit from the sale to all partners including the one objecting. The only thing that the objecting partner says is that she was unaware of the sale. And the income given in that year was told to her that it was rental income. Also note i have made complete payment and got my name on property card. So can i ask them to claim only compensation from XYZ and not land from me??
Devajyoti Barman
(Expert) 18 January 2012
The Act of a partner in regular business of the Firm and if not without the express bar of other partners bind other partners.
Whether it does include his sign or not, the sale is valid and his objection is not going to affect the sale anyway.
Querist :
Anonymous
(Querist) 18 January 2012
But the objecting party has not even filed a suit against me. And they are issuing paper notices mentioning the plot number. Now if i construct who will buy my flats when a dispute is pending. Is there some petition that i can file to get my title cleared or what should i do now??
Raj Kumar Makkad
(Expert) 18 January 2012
Barman! What is the base of your reply? How can you say that the sale is legal?
Raj Kumar Makkad
(Expert) 18 January 2012
The sale of property of firm by a single partner claiming his authorization by way of a unanimous resolution is against law and facts. This is a fraud with the firm as well as with the silent partner raising her objection.
If she files a suit for setting aside the sale and subsequent sales, definitely her suit shall be got decreed and in that case you shall have to hand over the vacant possession to the firm so it is better to first finally settle the dispute and then proceed further for investing your money over the construction of flat.
You can personally meet the objecting partner and can settle the matter with her by offering additional money.
Querist :
Anonymous
(Querist) 19 January 2012
Sir, can you please tell me any case or section number of a law wherein such a case has been resolved. Also since I have made complete payment to XYZ and bought, can I claim the land and ask the ABC Objecting partner to claim compensation. Also The objecting partner is not filing any suit. They are just wasting time and giving newspaper notices. Can i file a suit against them for declaration of the title as clear. They are not ready to settle.
R.Ramachandran
(Expert) 19 January 2012
Dear Mr. Sethi and Mr. Makkad,
As we all know,
As per Section of The Indian Partnership Act, 1932, 'partnership' is 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.
Under partnership law, a partnership firm is not a legal entity, but only consists of individual partners for the time being. It is not a distinct legal entity apart from the partners constituting it.
A partner is the agent of the firm for the purposes of the business of the firm. [section 18].
Implied authority of partner as agent of the firm - Subject to the provisions of section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a partner to bind the firm conferred by this section is called his “implied authority”. [section 19(1)].
As per Section 22 of the Partnership Act, In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.
Partners jointly and severally liable acts of the firm - Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. [section 25].
If that be the position, how the sale effected by the partner, and appears to have been ratified by other partners (except the one objecting), sale proceeds accounted for in the books of accounts, can still be contested by any partner?
To my mind, the only thing that needs to be doubly checked is when the property sold by the partner of ABC to XYZ the sale deed was executed "on behalf of the Firm / executed in the name of the Firm". If the sale deed had been executed in the name of the Firm by the partner (whether authorised or unauthorised), it will be binding on the partners.
As usual, I am ready to stand corrected, if any other legal point is brought forth.
ajay sethi
(Expert) 19 January 2012
MR Ramchandran
i had stated that sale by partner would not bind the firm based on inputs from the querist
the querist has mentoned as follows _
"Also right in the para above the said resolution clause, it is mentioned that no partner shall without the written consent of the other, Mortgage, hypothecate or transfer property of the firm without written consent of the others."
Querist :
Anonymous
(Querist) 19 January 2012
Also the partnership deed is not registered and not even notarised. Now my biggest problem is that can i file a suit and call the objecting partner in court as they are not filing suit nor settling the issue. Also can you refer some case of partnership dispute of similar pattern, which i can refer.
Advocate. Arunagiri
(Expert) 19 January 2012
Without going through the partnership deed of ABC, we can not determine the power of the managing partner.
Under the normal circumstances, if the sale is done and signed on behalf of he firm, it is a valid sale.
In case of defective title the seller to you has to refund your money. Send a notice, if there is no response, go for civil suit.
Querist :
Anonymous
(Querist) 19 January 2012
Dear Sirs,
As i have mentioned earlier in the sale deed between ABC and XYZ it is written under the name of the signing working partner "duly authorised vide resolution dated : XX/XX/XX." The resolution is not a part of document in the said sale deed. On asking for it they are saying that it was oral resolution. No copy is made available. The objecting partners advocate says that deed powers are not required to be reffered to also as they have mentioned in sale deed themselves about resolution. Moreover my advocate says that the deed is not registered and not even notarised. Is it necessary for a partnership deed to be notarised or registered???? Also the said XYZ is the sons of the signing partner of ABC. And now they are also not interested in settling with the disputing partner as i have already paid them. I think that they have done some fraud i am trapped.
V R SHROFF
(Expert) 19 January 2012
Once a Partner sold the entire partnership property to his own son, keeping other partners in dark, and son occupied it.
A Partnership is a Irrevocable Power, and a Agency, that bind all the other partner, and very dangerous. It attach your personal property also, in case of lose & liability, without your fault.
One must take due car, Never go for partnership with person u cannot trust. Slightest doubt, and must dissolve partnership, or it harm a lot, can ruin your entire life.
THERE ARE REMEDY, BUT I HAD NOT GONE THROUGH YOUR DETAILS, basically for want of time. .
Querist :
Anonymous
(Querist) 19 January 2012
Dear Mr. VR Shroff,
with all due respect, your answer is just not relevant to my question. It is good for general knowledge. But it does not solve the problem that i am facing. Thanks. Somebody please help me!!
