- The Hon’ble Supreme Court (SC), in the case of State of Kerala v Laxmi Vasant, has held that sub section 5 of Section 30 of the Indian Partnership Act, 1932 (Act) shall apply only if a person who was admitted into partnership when he was a minor, continues to be a partner on the date of attaining majority.
- The SC held that the such person shall not be liable for any past dues of the firm when he/ she was a partner, being a minor.
- Brief facts are that the Respondent, Laxmi Vasanth and one J. Raj Mohan Pillai were inducted as partners of a partnership firm, when they were minors. The firm was later reconstituted and the two minor partners were removed. Thereafter, a sales tax demand was raised against the partnership firms and the two minors, who had then attained majority.
- The Kerala High Court allowed the writ petition filed by the minor duo quashing and setting aside the tax demand against them.
- Before the SC, the Appellant contended that the minors did not give any notice required under Section 30(5) of the Act and upon such failure, they became deemed partners of the partnership firm. The Respondents, in their argument, stated that a notice must be given if they still the partners on attaining majority. However, since they were removed as partners, they cannot be deemed to be the partners on account of non-compliance of Section 30(5).
- Disagreeing with the contentions raised by the Respondent and dismissing the appeal, the SC observed that in the instant case, Section 30(5) shall not be applicable at all.
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