I need some guidance.
Basant Aggrawal
(Querist) 09 July 2025
This query is : Resolved
Hello respected members,
I need legal guidance regarding the ownership of a HUDA plot in a partnership firm case. Here are the details:
In 1990, a partnership firm named M/s Radheshyam Aggrawal Chemicals was formed with four partners:
Deenchand Aggrawal, Basant Aggrawal, Rajesh Gupta, and Manish Jain.
In 1992, a HUDA industrial plot was purchased in the name of the partnership firm.
In 1997, three partners—Deenchand, Rajesh, and Manish—retired from the firm by signing a dissolution deed, leaving only Basant Aggrawal as the continuing partner.
One important clause in the dissolution deed said:
"Sh. Basant Aggrawal shall have the right to carry on the business of the firm under the same name M/s Radheshyam Aggrawal Chemicals singly or with new partners. The retiring partners shall have no right or claim in the assets, goodwill, or property of the firm and shall not use the firm’s name."
After this, for 3 months, Sh. Basant Aggrawal continued the business alone under the same firm name.
Then, in mid-1997, he brought in two new partners, Sh. Jille Singh and Sh. Ajay Singh, through a new partnership deed. The firm continued in the same name and address, but there was no mention of the HUDA plot being transferred or pooled into this new partnership.
Later the same year, Basant Aggrawal retired from the firm by signing a retirement deed, and the business continued in the same name with Jille Singh and Ajay Singh as partners. In this manner, the constitution of the partnership firm was changed. Again, the retirement deed did not mention the HUDA plot or any asset transfer.
No NOC or transfer permission was ever obtained from HUDA during this entire transition.
Also, the plot is still registered in the name of the original firm as per HUDA records.
My Question:
Given these facts, who is the rightful owner of the HUDA plot?
Is it Basant Aggrawal, who was the sole surviving partner after the dissolution, and never officially transferred the property?
Or is it the reconstituted partnership firm with Jille Singh and Ajay Singh?
What legal view would HUDA or a civil court take in such a situation?
T. Kalaiselvan, Advocate
(Expert) 09 July 2025
The partnership firm is the owner of the HUDA plot.
As the property belonged to the partnership firm asny individual partner cannot transfer the firm's property to his name or to anyone else's name as per his will and wish other than by a resolution passed by the partners of the partnership firm as per the partnership deed.
On restructuring a partnership firm, the immovable property owned by the firm remains with the firm itself, and no formal transfer of ownership is triggered. The reconstitution, which involves changes in the partnership agreement, doesn't equate to a transfer of the property itself.
Reconstitution of a partnership involves changes like the admission, retirement, or death of a partner, or a change in the profit-sharing ratio. It doesn't automatically mean the firm's assets are transferred to the individual partners.
The immovable property continues to be owned by the partnership firm, even after reconstitution. The firm, as a separate legal entity, retains ownership.
Partners have a right to their share of the profits and assets of the firm, including immovable property, but they don't have individual ownership rights over specific assets like a house or land owned by the firm.
kavksatyanarayana
(Expert) 09 July 2025
When the partners quit the firm by signing the dissolution deed, the partnership firm is dissolved, and no single partner can operate the partnership firm in the absence of all other partners. In a partnership firm, if all other partners retire, the firm is dissolved, and the remaining partner cannot continue the business under the original partnership agreement. A dissolution deed signifies the partners' agreement to end the partnership, and in this scenario, the firm ceases to exist as it was dissolved in 1997. One person cannot run it as a partnership firm.
Basant Aggrawal
(Querist) 10 July 2025
Thanks for the reply Mr. Kalaiselvan and Mr. Kavksatyanarayana.
So, when Basant Aggrawal continued the business alone under the same firm name for 3 months after three partners out of 4 retired.
He did not pool the HUDA plot when he signed new partnership deed with new members Jille Singh and Ajay Singh.
So, the HUDA Plot belongs to the Original Partnership firm (Deenchand Aggrawal, Basant Aggrawal, Rajesh Gupta, and Manish Jain) Or Only Basant Aggrawal Or New Partners (New Partnership firm) Jille Singh and Ajay Singh.
Can you please guide?
kavksatyanarayana
(Expert) 10 July 2025
It stands under the name of the Firm. At the time of dissolution, the partners in the firm had equal rights, as mentioned in the deed.
Basant Aggrawal
(Querist) 10 July 2025
So, the HUDA plot stands in the name of the Original firm (Deenchand Aggrawal, Basant Aggrawal, Rajesh Gupta, and Manish Jain)?
T. Kalaiselvan, Advocate
(Expert) 10 July 2025
If all partners except one retire from a partnership firm, the partnership is dissolved because a partnership requires at least two partners to exist; therefore, when only one partner remains, the firm is considered dissolved.
Dissolution of a partnership means all partners cease to carry on the business together.
Upon dissolution of a partnership firm, immovable property loses its character as such and is treated as movable property for the purpose of settling accounts and distributing assets among the partners. This means the property is converted into money, and the partners are entitled to receive their respective shares based on the firm's assets distribution process.
In the above circumstances it is to be noted that what was the agreement entered among the retiring and existing partners of the partnership firm at the time of dissolution of the partnership firm.
Even if one of the partners remained then the property should have been transferred to his name by a registered deed executed by all the partners in his name for the consideration amount to be paid by the beneficiary to the other partners.
Therefore it appears that you do not have proper knowledge of what has happened in the past in this regard, so you can clarify the details from all the partners in cae you are having any interest in this partnership firm's assets
