Liability of a partner falsely levied on the firm
Mohammed Rizwan Shaikh
(Querist) 15 September 2016
This query is : Resolved
Dear Experts,
A partnership firm comprised of 3 partners Mr. A, Mr. B and Mr. C having their in proportion of 40:30:30. At the time of formation of the said partnership in 2005 and execution of Development Agreement in respect to the development of the land at Malad, Mr. B and Mr. C were not aware that Mr. A had the liability of Rs. 11 cr in respect to the royalty for the excavation of Mines and Minerals from the land situated at Dahisar. In 2012, the learned Tehsildar issued a Demand Notice on the firm for the recovery of Rs. 11 Cr from Mr. A, subsequently the partnership firm filed WP in the High Court wherein the Hon'ble Judge ordered to deposit 3.5 cr, pursuant to this order and APPEAL was filed and it was admitted. Moreover, the Hon'ble Judge had ordered not to take any coercive steps against the Petitioner. Recently, Mr. B and Mr. C learnt that the Tehsildar through his letter to the Talathi directed to incorporate BoJA on the particular Survey No.
As the matter is subjudced and there is lis-pendency, can the Tehsildar pass an internal order to mutate the entry for incorporating the boja on the said survey no?
Do the partners need to mention the issue before the Hon'ble Court?
Why the other partners should pay for the liability of other partner? Any citations would be really helpful.
What action can be taken against the Tehsildar?
Regards,
Rizwan Shaikh
Kumar Doab
(Expert) 15 September 2016
How are you related with this matter!
Raj Kumar Makkad
(Expert) 15 September 2016
Either this is an academic query and if it is true then tell your relation with the contents of this query. We are here just for the help of needy persons and not for academic discussions.
Kishor Mehta
(Expert) 16 September 2016
Sir,
If it was an individual liability of Mr. A,
then only the share of Mr. A, and not the assets of other partners can be attached.
Good luck,
Kishor Mehta
Raj Kumar Makkad
(Expert) 16 September 2016
B & C cannot be burdened with the individual liability of A but it is to be seen that the property against which lien has been marked by Tehsildar, do belong to A or not. If it belongs to A to which he has introduced in the partnership then it cannot be got challenged by B & C but if the facts are otherwise then such lien should be got vacated in the pending litigation before High Court by affected parties.
Being son of A, you are legally bound to repay the huge liability. Even if the survey against which boja has been made by Talathi, you cannot get it vacated unless you clear the liability.
Kumar Doab
(Expert) 16 September 2016
It is vaguely remembered that you had earlier initiated queries for others.....
You have been properly advised by experts.
adv. rajeev ( rajoo )
(Expert) 16 September 2016
If it is individual liability then partnership firm cannot be touched and partners are not liable, but in my client's case I fought the case on this ground that for individual liability partnership firm moveables cannot be attached, but court attached the moveables of the firm and even high court did the same, its very wonder.
H.M.Patnaik
(Expert) 16 September 2016
Since the stake in the matter is very high and your father has substantial interest in the firm also,it is advisable to consult an experienced civil lawyer locally with all documents and facts for proper advice & guidance.
Mohammed Rizwan Shaikh
(Querist) 16 September 2016
Dear Experts,
Many thanks for your inputs. Let me be precise, Mr. A was carrying on Stone Quarry business at Dahisar, Mumbai but he failed to pay the royalty amount approx Rs. 11 Cr to the Government. In 2005 he entered into partnership with Mr. B and Mr. C for Developing the land which was owned by Mr. A at Malad, Mumbai. And subsequently Development Agreement was executed for Developing the land. All the investment was borned by Mr. B. and Mr. C. At the inception of the partnership Mr. B and Mr. C were unaware of the liability owned by Mr. A. Prior to 2012, on the 7/12 extract Mr. B and Mr. C got their names incorporated on the 7/12 extract of the land at Malad. In 2012, the Tehsildar issued a demand notice followed by 48 HRS notice to the firm and informed that there is liability pertains to Mr. A for other Survey No. at Dahisar for the extracted mines and minerals. Please note that the royalty amount pertains to other Survey No. which was owned by Mr. A and not the Survey No of the partnership firm.
As questioned by Mr. Makkad ji, "B & C cannot be burdened with the individual liability of A but it is to be seen that the property against which lien has been marked by Tehsildar, do belong to A or not". Sir, the property on which Mr. A was extracting Minerals is different and the property on which Tehsildar issued notice is different. Moreover, the property on which Mr. A used to perform Quarrying activity, it has already been taken over by Forest Department.
As the matter is subjudced and there is lis-pendency, can the Tehsildar pass an internal order to his subordinates to mutate the entry for incorporating the boja on the said survey no?
or Do the partners need to mention the issue before the Hon'ble Court?
Why the other partners should pay for the liability of other partner?
Any citations would be really helpful, please help experts
What action can be taken against the Tehsildar?
Can Mr. B and C appeal before the SDO for deleting the said mutation entry?
Regards,
Rizwan Shaikh
Kishor Mehta
(Expert) 17 September 2016
Sir,
The crux of the matter is that the land to be developed by the partnership originally belonged to Mr. A, and he has invested it as a capital investment in the partnership, hence it can be attached to pay for and satisfy his previous legal obligations.
It is also to be noted that the inclusion of the names of the partners, in 7/12 extract, is subsequent to Mr.A's royalty obligations, hence it may be termed as done with malafide intentions.
Good Luck,
Kishor Mehta
Mohammed Rizwan Shaikh
(Querist) 17 September 2016
@ Kishor Sir,
Many thanks for your reply. Mr. B and C included the the firms name on 7/12 extract before the issuance of the demand notice, they were not aware of the liability of Mr. A.Mr. A has executed Development Agreement along with an irrevocable POA in favor of the firm.
Regards,
Rizwan Shaikh
Raj Kumar Makkad
(Expert) 17 September 2016
The liability was since 2005 and the names of B & C have been included in the property during 2012 hence the action of Tesildar is legal and justified, however, still B & C can take the plea of bonafide purchasers of that property.
Guest
(Expert) 17 September 2016
Mr. Rizwan,
I am in a doubt as if it is a query of academic interest or a real problem. If a real problem, you seemed to have confused the issue with a mix-up of three different legal issues, pertaining to past liabilities of the partners, WP by the firm, and recovery of past dues of land revenue from the assets of a partner.
The irony is, all through, you have been silent on the issues pertaining to (1) past liabilities of the partners as per partnership deed; (2) WP for what issue & purpose, under which section by the firm and on whom; and (3) what is the opinion of your own lawyer, who filed WP on behalf of the firm.
Even more and more additions to your description has not cleared the cloud on the above mentioned aspects.
I have the answer to your problem, but not in favour to provide half baked solution without examination of the case related documents, including the opinion of your own lawyer on the issue and how you or he consider the matter as sub-judice?
Still further, I also wonder that yours is a problem of complex commercial nature and you prefer to depend upon charity on your casual query, while your firm can fuly afford to hire some expert on the issues, if your existing lawyer is not able to solve the riddle even when he is supposed to be fully aware of the case after having examined the case related documents in detail. You should be aware that charty based replies on your own layman's assumptions, presumptions and perceptions without getting the case related documents examined by the experts may not be sufficient to serve your purpose.
In fact, if you want solutions to your doubts, you have the need to forward the related documents, e.g., copy of partnership deed, WP, registered sale deed of Partner 'A', 7/12 extract, attachment order isued by Tehsildar, etc., to any of the expert of LCI for appropriate opinion, guidance or advice after due examination and analysis of your case.
Rest depends upon your own and partners wisdom.
Mohammed Rizwan Shaikh
(Querist) 17 September 2016
@Raj Kumar Makkadji, the liability of Mr. A was for the period of 1990, Mr. B and Mr. C were not at all in the picture. In 2005 mr. A entered into partnership and executed the Development Agreement for the land at Malad. Please note that 2 different lands are there.
@Dhingra Sirji,
Let me e precise, actually its a single issue, Since the inception of partnership Mr. B anc C started developing the land, they were unaware of the liability Mr. A. In 2012, they received demand notice from Tehsildar, they challenged it in the HC, the matter is pending in the HC,
My question is that can Tehsildar issue internal order to Talathi for incorporating boja on the land which is under construction whereas the boja is for the other land which State Government has taken over the possession i.e. Forest Department.
Regards,
Rizwan Shaikh
Kishor Mehta
(Expert) 17 September 2016
Sir,
Please understand that collection of Government dues is not selective neither is it time barred,the dues can be collected from any asset belonging to the debtor at the time of inception of the debt.
In you instance the Malad plot belonged to Mr.A who had considerable debt to be paid, hence when Mr.A signed a POA the asset was already indebted for the amount of royalty to be paid.
You state that "My question is that can Tehsildar issue internal order to Talathi for incorporating boja on the land which is under construction whereas the boja is for the other land which State Government has taken over the possession i.e. Forest Department."
The dues of the State or Central Government can be collected as land revenue from any and all assets of the debtor.
Good Luck,,
Kishor Mehta
Guest
(Expert) 17 September 2016
Mr. Rizwan,
If your lawyer is agreeable with your perception that it is merely a single issue and has assured you to win the case for you, I can only wish a good luck for yoy.
Rajendra K Goyal
(Expert) 18 September 2016
Agree with the advice from expert Kishor Mehta.
