Partnership act

Querist : Anonymous (Querist) 23 February 2020 This query is : Resolved
my query is regarding an immovable property which was purchased on the name of firm through proprietor. The firm is partnership or sole proprietor is not clear as no record is available as the firm is dissolved in 1987 only after the death of proprietor. However it is clear that firm is unregistered. After the death of proprietor, the two sons in 2019 transfered the same property to each other in blood relation so that stamp duty can be saved. Now the revenue department is of the opinion that since it is firm's property it should be transfered only after paying stamp duty and not in blood relation.
1. Is the view of revenue authority right?
2. How to prove that it is sole proprietorship firm when no evidence is available on record?
3. Even if it is firm's property, how to prove that intention of proprietor was to consider such property as firm's property?

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Raj Kumar Makkad (Expert) 23 February 2020
Refer to last words of first line and initial words of second line of your query which are self contradictory. Property can be purchased by proprietor only if firm was Proprietorship and by partner in case the same was a Partnership Firm. As no record even with the statutory authorities is available, the firm cannot be treated as of partnership rather the same shall be treated as of proprietor. As he expired, so his property shall legally be divided between his legal heirs without paying any stamp duty. The opinion of revenue authorities is wrong. Serve a legal notice to the revenue authorities failing which file a suit for mandatory injunction seeking direction to those authorities to enter the mutual as per partition/succession.

Dr J C Vashista (Expert) 25 February 2020
Contradictory and vague facts posted for the question paper set by an anonymous author.

Querist : Anonymous (Querist) 25 February 2020
i apologies for the vague and contradictory query. but the thing is actual facts are not cleared to me since this firm in question is used to run by my great grandfather. and issue regarding mutation entry came up before us in 2019 only when my father want to transfer his share in property to us (children). neither my father knows that firm was proprietorship or partnership nor me. that's why i want to ask the status of both the situations. the title deed shows purchaser as "in the name of K.B.INDUSTRIES 325 through manmohan rai behl". my father are two brothers. they both divided the property in equal share and transfered in blood relation. but when time came to confirm the mutation entry the revenue authority is like that it should be transfered on paying stamp duty only since it is a firm property. now tell me what to do?i hope i m clear now in terms of facts to some extent.

Querist : Anonymous (Querist) 25 February 2020
my only question is how to prove that it was proprietor ship firm in absence of any evidence?

Raj Kumar Makkad (Expert) 25 February 2020
Until and unless no adverse documents are shown, the firm in the given facts shall be treated as a Proprietorship firm and accordingly it not require stamp duty while getting its partition among the legal heirs of the deceased. You should make an appeal against the order of the revenue authority directing to deposit stamp duty in the given facts.

Raj Kumar Makkad (Expert) 25 February 2020
In a judgment titled Kale v. Dy. Director of Consolidation, (1976) 3 SCC 119 it is clarified that family arrangements are governed by a special equity peculiar to themselves and that the Courts should endeavor to enforce such arrangements if made honestly. The family arrangement may be implied from a long course of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term ―family arrangement‖ is applied.

Raj Kumar Makkad (Expert) 25 February 2020
Latest judgment passed by Delhi High Court is against you, the link of which is submitted here under:

https://indiankanoon.org/doc/56517013/

Querist : Anonymous (Querist) 25 February 2020
Thank you for the advice.

ABDUL RAZIQUE (Expert) 25 February 2020
Nothing to add more after our Ld Experts Raj Kumar Makkad sir