1 Ramesh and Others vs. Laxmi Bai AIR 2021, Madhya Pradesh 56 Date of order: 1st March, 2021 Bench: Vivek Rusia J
Condonation of delay – Appeal cannot be decided without deciding on the application for condonation of delay in favour of the appellant [Civil Procedure Code, 1908, Ord. 41, R. 3A; Limitation Act, 1963, S. 5]
FACTS
The plaintiffs had filed a civil suit for declaration of title and partition of joint family property. By the judgment dated 24th January, 2009 it was held that they were entitled to partition through the Court. Defendant No. 1 was restrained from getting a mutation in his name. Being aggrieved by the aforesaid judgment and decree, the Defendants filed an appeal in the year 2013 along with an application for condonation of delay u/s 5 of the Limitation Act.
On 24th February, 2019, it came to the notice of the Additional District Judge that the application u/s 5 of the Limitation Act had not been decided so far. Both the parties agreed to first argue on the aforesaid application. The arguments were heard and kept for order on 27th April, 2019. By an order dated 27th April, 2019, the Additional District Judge decided that the application u/s 5 of the Limitation Act would be decided along with the first appeal on merit.
The plaintiffs filed a petition challenging this order of 27th April, 2019 on the ground that the Additional District Judge had committed an error of law while keeping the application u/s 5 for consideration along with the appeal while finally hearing the appeal on merit.
HELD
The Court referred to the decision in the case of State of M.P. vs. Pradeep Kumar 2000 (7) SCC 372. In that the Supreme Court held that the object of enacting Rule 3-A of Order 41 of the Civil Procedure Code seems to be two-fold. The first is to inform the appellant himself that appeal is time-barred and it would not be entertained unless it is accompanied by an application explaining the delay. The second is to communicate to the respondent a message that it may not be necessary for him to get ready to meet the grounds taken up in the memorandum of appeal because the Court has to deal with the application for condonation of delay as a condition precedent.
The Court also referred to the decision in S.V. Matha Prasad vs. Lalchand Meghraj and Others (2007) 14 SCC 772 wherein the Supreme Court had held that the Division Bench of the High Court had not only condoned the delay but took a decision on the merit as well and such exercise was not justified as the only issue before the Division Bench was the question of limitation; accordingly, the judgment of the High Court was set aside to the extent that it went on to the merits of the controversy but maintained it insofar as it dealt with the question of limitation.
In view of the above, the Court held that the Additional District Judge was required to decide first the application u/s 5 of the Limitation Act and if it condoned the delay then there would not be any impediment to deciding the appeal on merit. Further, the Court held that although there is no specific bar which restrains the appellate Court from hearing and deciding the appeal along with the application for condonation of delay, the provisions put a bar on the appellate Court on deciding the appeal unless the application for condonation of delay is decided in favour of the appellant. The petition was allowed.
2 Amola Saikia and Others vs. Pankajit Narayan Konwar AIR 2021, Gauhati 50 Date of order: 23rd January, 2021 Bench: Anchintya Malla Bujor Barua J
Intestate succession – Property of Hindu female – Grant of succession certificate to husband held to be proper [Indian Succession Act, 1925, S. 372; Hindu Succession Act, 1956, S. 15]
FACTS
The respondent-husband filed an application u/s 372 of the Indian Succession Act for grant of succession certificate. The respondent had succeeded in the said application vide order dated 10th June, 2015.The appellants, viz., the mother, sisters and brother of the deceased, challenged the said order of 10th June, 2015.
HELD
As per section 15(1) of the Hindu Succession Act, 1956 it is clearly provided that the property of a female Hindu dying intestate shall devolve firstly upon the sons and daughters and the husband. Thereafter, it would devolve upon the mother and father and then upon the heirs of the father, and finally upon the heirs of the mother. Hence, the grant of succession certificate was in accordance with law.
The appeals were dismissed.
3 Sozin Flora Pharma LLP vs. State of Himachal Pradesh and another AIR 2021, Himachal Pradesh 44 Date of order: 7th January, 2021 Bench: Tarlok Singh Chauhan J and Jyotsna Rewal Dua J
Stamp Duty – Conversion of partnership firm to limited liability partnership – No stamp duty or registration fee [Limited Liability Partnership Act, 2008, S. 58(1), 58(4)(b); Himachal Pradesh Tenancy and Land Reforms Act, 1974, S. 118]
FACTS
The petitioner was registered as a partnership firm on 14th December, 2005 in the office of the Deputy Registrar of Firms. With the intention of availing of the benefits of the Limited Liability Partnership Act, 2008, the petitioner firm converted itself from ‘Firm’ to ‘Limited Liability Partnership’ (LLP). The conversion was as per section 55 of the LLP Act.
The petitioner applied to the Deputy Commissioner for changing its name in the revenue record from ‘M/s Sozin Flora Pharma’ to ‘M/s Sozin Flora Pharma LLP’. The permission to change the name in the revenue record was granted on the condition that stamp duty and registration fee shall be chargeable. The petitioner submitted a representation to the respondent on 25th June, 2019 against the imposition which was rejected on 23rd August, 2019. Hence the writ petition.
HELD
Upon conversion of a registered partnership firm to an LLP under the provisions of the Limited Liability Partnership Act, all movable and immovable properties of the erstwhile registered partnership firm automatically vest in the converted LLP by operation of section 58(4)(b) of the Limited Liability Partnership Act.
The transfer of assets of the firm to the LLP is by operation of law. Being a statutory transfer, no separate conveyance / instrument is required to be executed for transfer of assets.
Since there is no instrument of transfer of assets of the erstwhile partnership firm to the limited liability partnership, the question of payment of stamp duty and registration charges does not arise as these are chargeable only on the instruments indicated in section 3 of the Indian Stamp Act and section 17 of the Indian Registration Act.
The partnership firm’s legal entity after conversion to limited liability partnership does not change. Only the identity of the firm as a legal entity changes. Such a conversion or change in the name does not amount to a change in the constitution of the partnership firm.
Therefore, stamp duty and registration fee cannot be levied upon conversion of a partnership firm to an LLP.
4 Kiran Gupta vs. State Bank of India and another AIR 2021, Gauhati 50 Date of order: 2nd November, 2020 Bench: Hima Kohli J and Subramonium Prasad J
Recovery of dues – Pendency of IRP proceeding against principal borrower – Bank can proceed against guarantor under SARFAESI Act [SARFAESI Act, 2002, S. 13; Insolvency and Bankruptcy Code, 2016, S. 14, S. 31; Contract Act, 1872, S. 128]
FACTS
The short question that arises for consideration in this writ petition is whether a bank / financial institution can institute or continue with proceedings against a guarantor under the SARFAESI Act when proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) have been initiated against the principal borrower and the same are pending adjudication.
HELD
The view expressed by the Supreme Court in the case of State Bank of India vs. V. Ramakrishan and Another, (2018) 17 SCC 394 amply demonstrates that neither section 14 nor section 31 of the IBC place any fetters on banks / financial institutions from initiation and continuation of the proceedings against the guarantor for recovering their dues. That being the position, the plea taken by the counsel for the petitioner that all proceedings against the petitioner, who is only a guarantor, ought to be stayed under the SARFAESI Act during the continuation of the Insolvency Resolution process qua the principal borrower, is rejected as meritless. The petitioner cannot escape her liability qua the respondent / bank in such a manner. The liability of the principal borrower and the guarantor remain co-extensive and the respondent / bank is well entitled to initiate proceedings against the petitioner under the SARFAESI Act during the continuation of the Insolvency Resolution process against the principal borrower. The petition is dismissed.
Editor’s Note: The Supreme Court in the case of Lalit Kumar Jain vs. Union of India [2021] 167 SCL 1 had held that a personal guarantor is also liable under the Insolvency and Bankruptcy Code, 2016.
