Important upfront reality check

Until your name appears in a signed partnership deed or Form A (Registrar of Firms), you are not legally a partner in the firm no matter how much money you invested.

Though under the Indian Partnership Act, 1932, a partnership can be oral but oral partnership is very difficult to prove, especially against 24 partners.

The deed on a Rs. 100/- stamp paper is an acknowledgement for the invested amount hence even if it is unregistered it is under Section 18 & 25, Indian Contract Act and valid as admission of liability.

Though the ₹100 stamp paper does NOT make you a partner, but it proves inducement, promise and liability.

You can issue a Legal notice demanding immediate induction or refund with compensation andinterest. If not complied, you may file Civil Suit for Recovery of ₹67 lakh, interest @ 12 to 18% damages for loss of opportunity, permanent injunction restraining Sale/transfer of hospital assets, diverting funds to Pvt Ltd company etc.

They never intended to make you partner.

You were used as quasi-equity funding.

Your strongest position now is aggressive legal action, not negotiation without pressure.

.

If it’s a registered partnership firm only notary procedure will not be enough 

Under the Indian Partnership Act, a partnership can be formed by a mere oral agreement. However, proving the specific terms (like your 2% share) in court without a formal deed is difficult and relies on circumstantial evidence, such as bank transfer records of your ₹67 lakh investment.

2)₹100 Stamp Paper:acts as a "promise to add you as a partner" and serves as strong documentary evidence of the intent of the other partners to include you.

3)You can file a suit for "Specific Performance of Contract" to force the partners to execute the formal deed as promised in your stamp paper agreement.

4)Alternatively, you can file a suit for "Declaration" in a civil court to be legally declared a partner based on your investment 

5) You should immediately seek a temporary injunction from a civil court to restrain the partners from further altering the firm's structure, selling assets, or transferring business to the new Private Limited company without your consent.

6) Books of Accounts: As a partner (even de facto), you have a legal right to inspect all books of accounts of the hospital.

1. On the basis of the oral and written agreement file a civil suit for declaration and injunction.

2. same as above

3. same as above

4. If they are ready to compensate and then make a calculation and exit this arrangement.

5. Yes

6. Waiting would be endless unless you create pressure upon them by filing a suit.

7. rightly so

On the facts stated by you, the situation is legally serious and you should not delay further. What has been done by the other partners goes far beyond a mere delay in paperwork and raises issues of breach of trust, misrepresentation, and unlawful diversion of a partnership business into a private limited company.

First, on whether an oral partnership is valid and whether the ₹100 stamp paper acknowledgment helps you.

Under the Indian Partnership Act, 1932, a partnership can indeed be created orally; a written deed is not mandatory for the existence of a partnership. However, the problem in your case is not formation alone, but proof and enforceability. The ₹100 stamp paper acknowledgment signed by three partners, promising to induct you as a partner and acknowledging receipt of ₹67 lakh, is a very important piece of evidence. It supports your case that the money was not a loan or gift but was paid towards partnership capital. Even if notarised, it is not a registered partnership deed, but it is valid evidence of contractual obligations and representations made to you. It can be relied upon in court to establish inducement, investment, and promise of partnership.

Second, on enforcing them to execute a partnership deed.

You cannot “force” execution informally. The correct remedy is legal. You can issue a formal legal notice calling upon them to either (a) induct you as a partner and execute a proper partnership deed reflecting your 2% share with effect from the date of investment, or (b) account for the firm’s assets, profits, and goodwill and settle your share. If they refuse, you can file a civil suit for declaration and specific performance, seeking a declaration that you are a partner / entitled to partnership interest, and a direction to execute the partnership deed or render accounts.

Third, on safeguarding your investment.

Right now, your biggest risk is that the assets and business have been shifted to a private limited company without your consent. This can amount to diversion of partnership assets and oppression of investors. You should urgently seek interim relief from a civil court, such as an injunction restraining the partners and the company from alienating assets, creating third-party rights, or further diluting shareholding, until your rights are adjudicated. Delay here can permanently prejudice you.

Fourth, on compensation if they are forcing you to exit.

You should not accept an arbitrary figure dictated by them. If your capital is ₹67 lakh and your agreed share is 2%, you are entitled to a proportionate share in the net worth of the partnership business, including land, building, hospital equipment, goodwill, and brand value, as on the date of exit. Given that the total project value is stated to be around ₹25 crore and has appreciated, your entitlement could be significantly more than the principal invested. This requires valuation and accounts. Exiting without proper accounting would be financially dangerous for you.

Fifth, on validity of the ₹100 stamp paper acknowledgment.

Yes, it is legally usable. While it does not by itself make you a partner, it is valid evidence of receipt of money, promise to induct you, and the understanding between parties. Combined with bank transfer records, communications, and conduct, it strengthens your case substantially. Courts look at substance, not merely nomenclature.

Sixth, on whether to wait further or approach court now.

You have already waited nearly two years. At this stage, waiting further only weakens your position. The conversion of the firm’s business into a private limited company without your consent is a red flag. You should not wait any longer. You should immediately seek legal remedies. Delay can be used against you to argue acquiescence.

Seventh, on the bank refusing to stop transactions.

The bank is technically correct that it owes duties only to the borrower entity. However, once you initiate legal proceedings and obtain interim orders (such as injunctions or directions for status quo), the bank can be formally notified and bound by court orders. Until then, the bank will not act on a request from someone not shown as a partner or director.

In practical terms, your next steps should be:

• Issue a detailed legal notice asserting your investment, partnership rights, and objecting to diversion into a company

• Call for full disclosure of accounts and valuation

• File a civil suit seeking declaration, accounts, injunction, and appropriate relief

• Depending on evidence of deception from inception, consider criminal remedies for cheating and criminal breach of trust as pressure, though civil action should be primary

This is not a minor documentation lapse; it is a potentially fraudulent restructuring that affects your proprietary rights. Immediate legal action is strongly advisable to preserve your investment and bargaining power.

Dear Sir,

1. As the old deed had expired as per Indian partnership act mere oral agreement is enough will my 100 rupees stamp 
paper agreement help?
Ans: Issue a LEGAL NOTICE demanding, induct you as:

• Partner in the firm OR

• Director/shareholder in the company
  (with proportionate 2% stake)

2. How to enforce them to draft deed fast?

Ans: FILE CIVIL SUIT. for the following reliefs:

1. Declaration of your rights

2. Mandatory injunction

3. Permanent injunction

4. Accounts & audit

3. How to safe guard my investment?

Ans: FILE CRIMINAL COMPLAINT for the offences 

• Cheating (false promise of partnership)

• Criminal breach of trust

• Conspiracy

• Dishonest inducement

4. they are forcing me to exit how much compensation i have to ask, i had invested 67 lakh by Feb 2024?

Ans: FILE ROC COMPLAINT in respect of 

• Company formed using same name & address

• Partnership investors suppressed

• No consent taken

• Bank misled

5. The acknowledgement of receipt in 100 rs stamp paper with 3 partners sign will it be valid, can I legally pursue with 100 rs stamp paper with notary public sign promising me join in the partnership firm as partner?

Ans: Serve certified court order on:

• Lending bank

• Branch manager

• Zonal office

6. I already waited 2 years now they are forcing me to exit the firm, should i wait for some more time for the deed to be ready or should i seek court direction?

Ans: EXIT OR CONTINUE. If you WANT TO CONTINUE

• Insist on:

  • Deed execution

  • Share certificate / capital account

  • Audit of past 2 years

If you WANT TO EXIT

• Demand:

  • ₹67 lakh

  • Interest

  • Appreciation

  • Litigation cost

7. I requested bank to stop all financial transaction but bank refused saying i am not a partner.

Ans: You have documentary proof
 Oral partnership is legally recognised
Stamp paper acknowledgment is admissible
2 years delay is not against you
Bank refusal is temporary, not final.

This answer is given based upon my experience as a judicial officer and advocate. It is my preliminary reply and not final as I have not seen the relevant documents as such I am not personally responsible.

1. Is ₹100 stamp paper valid?
Better than nothing, but weak. Get it notarized for stronger proof.

2. Force them to sign deed?
YES—file suit for "specific performance" (court forces them to sign). 

3. Protect investment?
File caveat in court (warns them not to do anything without you) + File suit NOW.

4. How much to demand?

• Your ₹67 lakh back.

• Plus 2% of hospital's profit (2 years).

• Plus 2% of goodwill increase (from ₹? to ₹25 crore).

• Total: ₹1.5–2 Crore at least (get accountant to calculate).

5. Does notary help?
YES—notary + signatures = stronger proof in court.

6. Wait or sue now?
SUE NOW. Don't wait. Every day they have more time to hide assets.

7. Bank won't help?
Send bank a legal notice. You have partnership rights even without registered deed.

it is possible to draft a supplementary partnership deed (agreement) to add more partners, but all existing partners must consent to this change unless the original agreement states otherwise. The maximum number of partners in a general partnership firm is typically limited to 20, which is a potential issue with 24 partners in a hospital business context. 

2) Your ITR filings showing payments (presumably capital contributions or advances) can serve as strong evidence of your financial contribution and involvement in the business, supporting your claim of intended partnership.

3) If forced to exit, you are entitled to compensation for your share, including your capital contribution and share of the firm's goodwill. Goodwill is an intangible asset representing the firm's reputation and ability to earn future profits. 

4) The timeline depends heavily on the cooperation of the other partners and the complexity of the legal challenge.

Supplementary documents can be made only if all others agree to that. If they are refusing now, court cannot force them to add you or others as partners or representatives.

Supplementary deed is legally possible only voluntarily, not by force.

You can file a civil suit for the relief of declaration that the funds were collected on false promise, asset formation was done using misrepresented capital, to restrain misuse of authority, grant compensation and an order of injunction.

However you may note that It cannot declare you as a partner and It cannot override the absence of deed but it will be a strong supporting evidence for cheating and recovery, but not partnership status.

You can file a complaint to ROC through MCA portal “Investor Complaint / General Complaint”.

Complaining with ROC alone is slow, but once civil suit is filed, court can direct ROC to freeze changes, call for records and suspend further filings.

However you may please be aware that you will not become partner now, you will not become director, waiting further only weakens your position. 

Your strongest position is to file a suit for Money recovery with interest, goodwill and injunction.

You can notify the registrar in writing and can do compliance 

Based on the additional facts you have now disclosed, your position is legally stronger than before, and the conduct of the other partners raises serious civil and potential criminal consequences. I will answer your questions directly and in practical terms.

It is not legally permissible for two persons to unilaterally project themselves as the only “legal representatives” of a partnership business when capital has been contributed by 24 persons and when there is written acknowledgment of others being inducted as partners. The fact that land and approvals were taken in the hospital’s name with only two signatories does not extinguish the rights of other contributors if the business was conceived and funded as a partnership.

On whether a supplementary document can now be drafted adding all 24 partners as representatives:
Yes, in theory, a supplementary deed or reconstituted partnership deed can be executed showing all partners and their shares. But in practice, this requires consent and signatures of the existing signatories, which they are clearly refusing. You cannot unilaterally add yourself or others through a supplementary document. This is precisely why court intervention becomes necessary. A civil court can direct execution of a proper deed or hold that the business was carried on for the benefit of all contributors and that the current signatories are holding assets in a fiduciary capacity.

On whether your ITR filings help your case:
Yes, this is very important evidence. Declaring the ₹67 lakh as capital investment / partnership-related amount in your Income Tax Return before the hospital opened shows:
• Your intention was investment, not loan
• The transaction was disclosed to the State
• There was no afterthought or fabricated claim

Courts treat contemporaneous tax disclosures as strong corroborative evidence of the nature of a transaction. While ITRs alone do not create partnership status, they significantly strengthen your claim that you were induced to invest as a partner and not as a mere financier.

On how much goodwill or compensation you should demand if forced to exit:
You should not negotiate based on arbitrary figures or only your principal. Goodwill is calculated based on:
• Net asset value (land + building + equipment – liabilities)
• Earnings potential (current and projected profits)
• Brand value, licenses, operational hospital status

If the total project value is approximately ₹25 crore and your agreed share is 2%, your baseline claim is at least:
• 2% of current net worth
• Plus proportionate share in goodwill and appreciation

This is not limited to ₹67 lakh. In hospital projects, goodwill often exceeds tangible asset value once operations begin. You should insist on formal valuation by a chartered accountant or registered valuer. Any forced exit without valuation and accounts is legally challengeable.

On whether you can insist on a timeline for execution of partnership deed:
Yes, but only through legal notice and court direction. You can issue a legal notice giving a clear timeline (for example, 15 or 30 days) to:
• Execute partnership deed
• Reflect your share
• Disclose full accounts

If they fail, the court can:
• Declare existence of partnership / joint venture
• Order rendition of accounts
• Restrain further alienation of assets

From filing of suit to interim protection, you can usually get interim orders within weeks, not years, if documents are strong.

On notifying ROC Chennai about forced company registration:
You can and should take the following steps:
• File a written complaint to the Registrar of Companies (ROC), Chennai, stating that the company was incorporated by suppressing material facts and without disclosure of partnership contributors
• Attach proof of capital contribution, acknowledgment on stamp paper, ITR entries, and communications
• Point out that partnership assets and business were diverted without consent

ROC has powers to:
• Call for explanation
• Conduct inspection under the Companies Act
• Flag the company for misrepresentation

While ROC action alone may not restore your money, it creates regulatory pressure and documentary trail that strongly supports your civil case.

One crucial legal point you must understand clearly:
Once a partnership business is diverted into a company without consent of contributors, the promoters/directors can be held liable for breach of trust and misrepresentation. Courts have repeatedly held that you cannot defeat investors’ rights by merely changing the vehicle of business.

At this stage, the worst thing you can do is wait quietly or accept a dictated exit. You should immediately:
• Issue a comprehensive legal notice
• Seek injunction against alienation/diversion
• Demand accounts and valuation
• Put ROC on notice

Your case is no longer about “missing paperwork”; it is about enforcement of proprietary rights and prevention of unjust enrichment. Delay will only weaken leverage.

1. Yes, the advice you quoted is legally sound and safer for you as defendant/respondent.​

2. Best option: insist on withdrawal of the appeal under Order 23 Rule 1 CPC, and keep your flat‑gift promise only in a separate MOU/family settlement (not as a decree). This fully protects your title and gift deed.​

3. If you must go for a compromise decree under Order 23 Rule 3 CPC, draft it so that it clearly:

   • affirms your gift deed and title as valid;

   • states that your sister permanently waives any relief for cancellation/partition;

   • limits execution only to getting 2 specific flats after patta, plan and construction deed in your name.​