Civil Procedure Code (CPC)

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Partnership and property

Querist : Anonymous (Querist) 14 June 2021 This query is : Resolved 
Person X had a 99 year leasehold property in his individual name. He entered into a partnership with Y.

In the Partnership Deed it says that business shall be conducted at this property address.

Further in the Partnership Deed it says as below

"Land and building should be transferred in the name of both partners and expenses shall be borne by the partnership firm and the amounts so invested by the partners shall form the capital of the partnership and the same shall be used as per this presents in partnership business."

In the deed, this particular leasehold property is not mentioned as being transferred to the firm, it only says Land & Building in one of the clause.

Partner Y never made any monetary contribution to this partnership firm nor it is mentioned in the deed as to what he is bringing into the firm.

This partnership firm never did any business since it was formed. Court cases were filed by partners against each other. No Transfer Deed or Assignment Deed has been made by X to the firm. The partnership deed is neither notarized nor registered.

So now what is the status of the property in this situation?
kavksatyanarayana (Expert) 14 June 2021
When there are court cases, wait till the outcome of the judgment. No comments.
T. Kalaiselvan, Advocate (Expert) 15 June 2021
Since the proeprty was not transferred to the partnership firm by a sale deed or any other form of registered transfer deed, the proeprty shall remain with the original lessee alone.
This property do not belong to partnership firm since it was never transferred to the firm even though there was a clause mentioned in the deed.
Querist : Anonymous (Querist) 15 June 2021
Kalaiselvan Sir. Thank you for your response.

X had signed an Agreement to Lease with the Grantor of this property but no Final Lease Deed was executed by X. So Grantor of this property says that No Transfer Deed or Assignment Deed is needed to transfer the property from X to the partnership firm.

The Grantor had passed an Transfer Order where it specifically says in the Transfer Order the consent shall not be operative unless certain documents are not executed. None of these documents are executed.

But the Grantor keeps saying that even in this case the Partnership Deed is a valid document and their transfer order is also valid even though the documents as per their Transfer Order are not executed and even though there is no Transfer or Assignment Deed.
Sankaranarayanan (Expert) 15 June 2021
what is your status in this query? Need more clarity in your query. based on the query the property is still in the hands of lessee only.
Sankaranarayanan (Expert) 15 June 2021
Without seeing the partnership deed not easy to put suggestions. So need to verify the lease agreement and partnership deed. consult local lawyer and get clarity will be easy,
Advocate Bhartesh goyal (Expert) 15 June 2021
Immovable properties are always transferred by registered deed, in your case no such transfer deed has been registered so ownership of property still vests to mr "x" .Moreover partnership firm never started or carried it's business and remained non operative. Mr "x"is absolute owner of property and partnership firm has no ownership rights and title over property.
Querist : Anonymous (Querist) 15 June 2021
Lessor of the leased property keeps saying there is no need of Assignment Deed as per their policy.
P. Venu (Expert) 15 June 2021
Is the property a grant or a lease?
Querist : Anonymous (Querist) 15 June 2021
It is a leasehold property
T. Kalaiselvan, Advocate (Expert) 15 June 2021
The property was purchased by X on a leasehold basis.
Though X with another person intended to start a partnership firm and a partnership deed was drawn, it was not on the basis of the property that belonged to the firm.
As a matter of fact the partnership firm never started its business and admittedly it remained non functional since beginning.
The property in the possession of X was never transferred to the firm except there was a proposal for a lease agreement between the X (owner ) and the partnership firm, which was not even executed.
Hence the assertion by the so called grantor that this lease agreement was the basis for the transfer order that was passed by the grantor is not valid in law and it can be construed that such transfer order was obtained by the vested interest playing fraud on the grantor or the government, flouting the laws in this regard to their benefits.
If this is challenged in the court of law, then the court would set aside the transfer order and restore the property back to X.
So the X is advised to file a suit for declaration to declare the said transfer order as null and void and also to declare his title to the property and for possession.
P. Venu (Expert) 16 June 2021
Any suggestion depends upon whether the alleged lessor is a party to the case and his standing on the possession/occupation of the property by X.


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