• Business property rights denied

Dear sir

My father and 3 uncles started a partnership firm in Kolkata. The firm has got land allotments from WB govt in Saltlake Sector V (Approx 5 cottah) and also in Kasba Industrial Estate (approx 4 cottah) in the name of the company. The Kasba land has a 3 storied building built. The sector V land is still vacant. Both were allotted during 1984-85.

My father passed away in 2004, and my uncles didnt allow me to get into the business. They didnt settle my father's share giving different reasons. Now after all these years, we (me, my mother and sister) demanded a settlement for my father's portion in the business. My uncles handed us a balance sheet dated 2004 with a meagre amount of Rs. 3 lacs. When we denied that sum and demanded our share of the Sector V and Kasba estate lands, they informed us that since these lands are allotted by government to set up industries, there cannot be any valuation for these and hence we cannot demand any money from these properties. 

1. I want to know if it is true or not?
2. Is there any way to get my father's due share claiming these properties. 
3. What are the steps that we should follow?

Kindly help.

Thanks
Dev
Asked 1 year ago in Property Law from Kolkata, West Bengal
Religion: Hindu
While it is true that the land has been allotted by the government for industrial purposes and as such, this land and building constructed upon it and/or part of it cannot be alienated. Hence it is true that you cannot claim a share of the business or the assets of the business which includes the property and or lands as above mentioned

But that does not mean that your dues should be limited to the accounts for the year ending 2004.  According to the Hon'ble Supreme Court : " If a partner dies, the surviving partners may crry on the business by forming another partnership. In such a case, they will have to account for the share of the Deceased partner to his legal representatives. But if a partner dies, his legal representatives may be admitted to the new partnership by the surviving partners"

The legal representatives in my opinion should also include legal heirs in death.

Also Scetion 37 of the Indian partnership Act further states :

 Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of 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: Provided that whereby contract between the partners an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner, or the outgoing partner or his estate, as the case may be, is not entitled to any further or other share of profits; but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof, he is liable to account under the foregoing provisions of this section.

You may first serve a notice upon your uncles as well as the Partnership firm at its registered office either claiming th estate of his share for which you must know what was his share iin the Partnership Agreement or also seek a settlement of dues. For better appreciation you must consult a commercial lawyer with all documents.
Saptarshi Banerjee
Advocate, Kolkata
183 Answers
4 Consultations
4.9 on 5.0
1) is the partnership firm registered? 

2) do you have a copy of partnership deed? 

3) generally on death of partner firm stands dissolved and  accounts of firm ought to have been settled 

4) Section 47 of the Indian Partnership Act continues the authority of partners for the purpose of winding up, and the authority of a partner under that section to do all things necessary for the purpose of winding up the affairs of the firm also includes the rights to sell the partnership property

5) On the dissolution of a firm, all the properties belonging to the partnership have to be sold and the sale proceeds after discharging all the partnership debts liabilities, have to be divided among the partners according to their respective shares, and this is the general rule. 

6)a suit for division of immoveable property forming Part of partnership assets after the dissolution of partnership is governed by Article 106 of the Limitation Act. 

7) suit for accounts have to be filed within period of 3 years on demise of your father . 

8) if however you or your sister were minor at time of demise of your father you can file suit within 3 years of attaining majority 
Ajay Sethi
Advocate, Mumbai
23294 Answers
1220 Consultations
5.0 on 5.0
1. Well, since your father was the partner of the firm, on his death you his legal heirs have right in the property of the firm and the profits so far earned.
2. Yes, you can file a case for dissolution of firm and for rendition of accounts.
3. Filing a suit as stated above.
Feel free to get in touch if you need my assistance in this regard.
Devajyoti Barman
Advocate, Kolkata
5226 Answers
54 Consultations
4.9 on 5.0
1.  In the case of a Partnership Firm if a partner dies the firm dissolves and all the legal heirs of the deceased partner get equal share among themselves. However, this is subject to what has been stated in the partnership deed. 

2. If your lawful share is being denied to you then you can move to court and file a case for partition to get the share of your father. The court will decide then what his share is and give it to you. 
Ashish Davessar
Advocate, Jaipur
18159 Answers
449 Consultations
5.0 on 5.0
1. You have 25%  right of the assets of the Company,

2. Infact  one of you, as decided by you, should step in  to the shoes of your father and acted as one pf the partners in the management of the business,

3. Do not ask for your father's share in the asset of the company but ask for partnership right substituting your deceased father.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0

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