• Property division between claimants

My father and his 4 deceased brothers had a partnership firm that owned an industrial property in Pune. The current partnership is between my father and widow of one of the deceased brother and the firm still continues to run on the said property. In 1990 after the death of the first partner, his son had initiated a court case for settlement/division of assets. There was no conclusion, however there was a preliminary decree by court giving a suggested division of land (by demarcation) and assets. This preliminary decree however was not executed and the case currently is in status quo. 
Out of the many disadvantages of such a situation few important ones that we face are:
- Firm has to bear the overhead of paying all expenses (electric, water, property tax bills etc.) related to the property
- Owner cannot sell/rent/expand his share of the property.
My father wishes to legally resolve this issue, what are the possibilities and what approach should we follow?
Asked 1 year ago in Property Law from Pune, Maharashtra
Religion: Hindu
1) when was preliminary decree passed? 

2) why was decree not executed?

3) what about decreased partners children ? are they partners of firm? 

4) it is necessary to peruse decree passed by court to advice . 

5) if the firm owned the property partner cannot sell the assets of the firm without consent of other partners 

Ajay Sethi
Advocate, Mumbai
23240 Answers
1219 Consultations
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1. Why is the case pending in the court? Has the son of the first partner not taken the necessary steps ordered by the court? Has the court passed a stay order?

2. Since the case is pending in the court there are only two options for your father-Either to ask the court to decide the case expeditiously on merits, or enter into an out of court settlement with the son of the first partner in pursuance of which he may withdraw the case. 

3. Dissolution of partnership is not possible due to the pending case.
Ashish Davessar
Advocate, Jaipur
18102 Answers
448 Consultations
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1. What is the reason behind the delay in the decision of the case if the decree was passed as far back as in 1988? Even if the decree has not been executed it does not prevent the court from deciding the case on merits.

2. Without perusal of the decree it is difficult to formulate an opinion.

3. As I said earlier, your father can request the court to decide the case, or he may explore the possibility of an out of court settlement.

Ashish Davessar
Advocate, Jaipur
18102 Answers
448 Consultations
5.0 on 5.0
1) order XX of CPC Rule 15 provides that where suit is for dissolution of firm or for taking accounts the court before passing a final decree may pass preliminary decree declaring proportionate shares of parties and fixing day  when firm is dissolved or deeemd to be dissolved 

2) Based on the preliminary decree, the interlocutory application in suit has to be filed    for passing of the final decree in which a commissioner was appointed.

3)  Based on the affidavit and counter and the arguments of the counsels, the final decree  will be passed by court 

4) under  Section 37 of the Indian Partnership Act, 1932 contemplates that the Court can grant relief to outgoing partner who has not been made a final settlement and the partnership is carrying out of the business with the surviving partners and the Court has jurisdiction to grant such relief based on the findings of the fact 

5) Under S. 37 the outgoing partner or the estate of a deceased partner, in the absence of a contract to the contrary, would be, entitled to at the option of himself or his representatives to such share of profits made since he ceased to be a partner as may be attributable to the property of the firm or to interest at the rate of six per cent, per annum on the amount of his share in the property of the firm

Ajay Sethi
Advocate, Mumbai
23240 Answers
1219 Consultations
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1. The best course of action by your father should be to buy the shares of other claimants legally,


2. It is a fact that the property shall have to be divided as per Court order passed against applications filed by other claimants.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
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1. What benifit the plaintiff got for not partitioning the property on the plea of land ceiling act since he only had filed the said partition suit?

2. All the legal feirs of the deceased partners are entitled to the share of their father's in the business and demand say in the management of the company,

3. The applicant against whose application the said decree was passed, should persue the execution of the said decree,

4. Yes, the properties of the firm can not be sold unless consented by all the partners or unless the properties are divided after dissolving the firm.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0

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