Nation v. Deputy State Tax Commissioner

Vikram Nath, C.J.:— Both these appeals are filed by the respective appellant-original petitioner under Clause 15 of the Letters Patent for challenging the common judgment and order dated 26.06.2019 passed by the learned Single Judge in respective petitions, namely, Special Civil Application No. 5230 of 2018 and Special Civil Application No. 5231 of 2018. Since both these appeals are arising out of the similar controversy of law and arising out of common judgment and order, by treating Letters Patent Appeal No. 1497 of 2019 as a lead matter, the controversy is being decided by the present order as per the request of the learned counsels.

2. The background of fact is that in a petition bearing Special Civil Application No. 5230 of 2018, M/s. Diamond Nation, a registered partnership firm (original petitioner) has invoked writ jurisdiction which is a registered partnership firm under the provisions of the Indian Partnership Act, 1932, which came into existence on 18.10.2014 and the firm is engaged in the business of manufacturing, processing, trading and exporting Diamonds and Jewellerys etc. Since the partnership firm is at Will, certain partners retired from the firm and new partners were introduced under such Retirement-cum-Admission Deed dated 01.04.2017. The controversy which has erupted in the present proceedings is with regard to the introduction of M/s. Go Green Diamond LLP as a partner in the petitioner firm. It is the case of the original petitioner that subsequently the partners, namely, (1) Chirag Bakulbhai Limbasiya, (2) Nirav Shaileshbhai Patel, (3) Niranjanaben Sunilbhai Patel and (4) M/s. Go Green Diamonds LLP were introduced as partners in the firm on account of two partners having retired from the firm by virtue of Retirement-cum-Admission Deed dated 16.08.2017 with effect from 01.08.2017. As per the requirement upon such effect of constitution of partnership firm, an application was submitted in Form ‘E’ under Section 63 of the Indian Partnership Act, 1932 before the respondent - Registrar of Firms on 11.10.2017. However, by virtue of order dated 18.11.2017, the application came to be rejected substantially on the ground that in view of Section 2(42) of the Indian Partnership Act, 1932, M/s. Go Green Diamonds LLP cannot become a partner in the partnership firm. As a result of this, the petitioner through his Chartered Accountant under letter dated 21.11.2017 addressed to the Assistant Commercial Tax Commissioner (ROF) pointed out specifically that Limited Liability Partnership (for short ‘the LLP’) can be a partner of the petitioner firm under the provisions of the Indian Partnership Act, 1932 since LLP is a body corporate having distinct legal entity from the partners constituting it. In view of the aforesaid communication, the respondent addressed a communication to the Vice Secretary, Finance Department, Sachivalaya on 04.12.2017 soliciting appropriate directions with regard to this question as to whether, M/s. Go Green Diamonds LLP can become a partner in the petitioner firm. Yet another letter was written by the petitioner through its Chartered Accountant on 22.02.2018 requesting to provide the letter containing decision of the Finance Department, but the same had not been provided till filing of the petition and subsequently, by virtue of impugned order dated 13.03.2018, the application of the petitioner came to be rejected on the ground that LLP cannot become a partner in the partnership firm. As a result of this, these two impugned orders dated 18.11.2017 and 03.03.2018 were challenged by way of aforementioned petition.

3. Same is the case with respect to petition being Special Civil Application No. 5231 of 2018 relating to Letters Patent Appeal No. 1498 of 2019, wherein also, a decision is taken on the ground that LLP cannot become partner in the partnership firm. This petition is filed by M/s. New Diamond Era, a registered firm. Since the issue related to both these petitions is very same in nature, the learned Single Judge consolidated both the petitions and by judgment and order dated 26.06.2019, both the petitions came to be dismissed and it is this common judgment and order, which is made the subject matter of present Letters Patent Appeals before us.

4. Common submissions have been made by Shri. S.N. Soparkar, learned Senior Counsel assisted by Shri. Jaimin R. Dave, learned counsel for the appellant and it has been vehemently contended that the learned Single Jude has not properly construed the relevant provisions of law and has committed an error in construing the concept of partnership and definition of word ‘person’ and also the structure of LLP. According to Shri. Soparkar, learned Senior Counsel, by virtue of provisions contained under Section 3(42) of the General Clauses Act, LLP can become a partner as falling within the definition of word ‘Person’ and furthermore, has contended that by virtue of conjoint effect of provisions of Sections 4, 49 and 63 of the Indian Partnership Act, LLP can become a partner in the partnership firm. It has been submitted that Section 3 read with Section 2(d) of the Limited Liability Partnership Act, 2008 (for short ‘the LLP Act’) which defines a Limited Liability Partnership to be a body corporate and a legal entity and as such, would be clearly covered under the definition of word ‘Person’ used in Section 4 of the Indian Partnership Act. The LLP as such can become a partner/and there can be no bar in such introduction in the firm. Even under the provisions of the Companies Act, a body corporate can be there as a partner in a partnership firm and for that, Shri. Soparkar, learned Senior Counsel, has given an illustration of one Shanti Developers along with its additional affidavit. It has been pointed out that one Swapna Enterprise, a registered firm, was permitted to enter Jeeva Vanijya Private Limited as a partner and as such, constitution of partnership was duly accepted. Thus, the respondent authority, while rejecting the request of the petitioner, has committed a serious error in not properly construing the provisions and the erroneous order of the said authority ought to have been corrected by the learned Single Judge.

5. Shri. Soparkar, learned Senior Counsel, has ultimately contended that there are few decisions delivered by the Apex Court substantially covering the issue and the learned Single Judge has failed to appreciate the said decisions in its true perspective. To strengthen his submissions, Shri. Soparkar, learned Senior Counsel, has referred to and relied upon a decision delivered by the Apex Court in Civil Appeal No. 217 of 1955 decided on 17.05.1957 in case of Steel Brothers and Co. Ltd. v. Commissioner of Income Tax and by referring to the observations made in the said decision, Shri. Soparkar has submitted that a serious error is committed by the learned Single Judge. Another decision was also brought to the notice of this Court rendered in Civil Appeal No. 195 of 1955 which came to be decided by the Apex Court on 17.02.1956 in case of Dhulichand Lakshminarayan v. The Commissioner of Income Tax, Nagpur and by referring to the observations made in para 19, a request is made that the error which is committed by the learned Single deserves to be corrected by quashing and setting aside the impugned order. It has been submitted that by introduction of LLP, the consequences are not being altered in any form. On the contrary, the same would determine proportion inter alia in the main firm and as such, simply because LLP is being introduced as a partner in the partnership firm, no prejudice is likely to be caused. Apart from that, Shri. Soparkar, learned Senior Counsel, submitted that this rejection of request tantamounts to be violation of fundamental right of the petitioner to carry on the business and profession as enshrined under Article 19(1)(g) of the Constitution of India. It has been submitted that the respondent authority, on the contrary, appears to have not incidentally exercised the jurisdiction. As a result of this, the learned Single Judge ought to have appreciated the said exercise of jurisdiction by the authority. By referring to Section 4 of the Act, and Section 3 read with Section 2(d) of the LLP Act, 2008, a contention is raised that the decision-making process is abruptly made by the respondent authority and LLP being a body corporate having a legal status, can always become a partner in the partnership firm. This concept has not been properly appreciated. As a result of this, the order passed by the learned Single Judge deserves to be corrected. Even from perusal of the provisions, it has been contended that the authority has no power to examine the validity of induction of partner. It has got power only to examine whether the requirement is fulfilled or not and, therefore also, the order passed by the authority is without any competence.

6. As against this, Shri. Chintan Dave, learned Assistant Government Pleader appearing for the State - respondent, has vehemently contended that by virtue of Section 25 of the Indian Partnership Act, LLP cannot be fully held responsible in view of its limited character. Thus, the decision taken by the authority in not allowing introduction of LLP in the partnership firm, is just and proper. Further, it has been vehemently contended that LLP cannot fall within the definition of word ‘Person’ and as such, cannot enter into partnership. The learned Single Judge has rightly appreciated and analyzed the definition and arrived at a conclusion which is strictly in consonance with the provision of law and, therefore, in absence of any illegality or irregularity of any nature, the view taken by the learned Single Judge does not require to be interfered with. It has further been submitted that the learned Single Judge has rightly appreciated and interpreted the effect of relevant provisions contained therein and has also rightly held that Section 63 of the Partnership Act can be resorted to by the Registrar of Firms since he has to examine and act within and in consonance of the concept of ‘person’ to be included as partner, no error appears to have been committed by the learned Single Judge. Not entertaining the change as desired by the original petitioner is as such a just and proper step by the authority. As a result of which, no case is made out by the appellant. Hence, both the appeals deserve to be dismissed.

7. Having heard the learned counsel appearing for the respective parties and having gone through material on record, few circumstances cannot go unnoticed by this Court while examining the correctness of the order passed by the learned Single Judge.

8. First of all, the agreement related to Retirement-cum-Admission Deed reflecting on page-15, by virtue of which M/s. Go Green Diamonds LLP appears to have been introduced in the firm on their desire and simultaneously, one Shunishkumar Bharatkumar Thaker retired from the firm w.e.f. 1.8.2017. The deed also stipulates that liability, if any, arising in future against the firm on account of income-tax or any other Government or Semi Government dues of partnership firm for the period upto 1.8.2017 shall be born by continuing partner and retiring partner as well. It further indicates that the profit and loss sharing of partners in Column No. 8 of the deed in which M/s. Go Green Diamonds LLP's share is determined and agreed upon to 26.10%. Clause 10 is indicating about the relationship of partners in which parties to the agreement declared and affirmed that insofar as the firm is concerned, all transactions shall be in the name of firm alone and any private dealing, if indulged into by any one of them, shall be at the cost and risk of said individual in his private capacity and the firm will neither be liable or concerned with such unauthorized commitment. This agreement has been signed as one of the partners by induction of M/s. Go Green Diamonds LLP.

9. The notice of change in the constitution of partnership firm is also given as required under Section 63 of the Act in the prescribed Form ‘E’ in which also there is a declaration about the share of LLP which also is affirmed and signed by M/s. Go Green Diamonds LLP.

10. This change in the firm was requested to be acknowledged and given effect to in the registration and such request has been rejected by the authority on the ground that by virtue of provisions of the Indian Partnership Act, 1932, LLP cannot be included as a partner in the firm. Resultantly, the petitions were brought before the Court.

11. In the aforesaid background, in substance, two submissions were made by Shri. S.N. Soparkar, learned Senior Counsel, firstly that LLP being a body corporate is entitled to be included and introduced as a partner in the partnership firm and there is no embargo and secondly, it has been submitted that it is not within the domain of authority or the Registrar to refuse the acknowledgment of change and, therefore, action on the part of authority cannot be sustained in law. These submissions have been dealt with by the learned Single Judge, who, after considering the effect of Sections 4 and 25 of the Act, has come to the conclusion that upon a conjoint reading of the Indian Partnership Act and the LLP Act, the submissions made by the learned counsel were not liable to be accepted and accordingly, the petitions came to be dismissed.

12. To examine this, one may have to look at the scheme of the Indian Partnership Act vis-a-vis the Limited Liability Partnership Act. Brief reading of the Indian Partnership Act postulates Partnership as a compendious name of partners which does not have a distinct legal entity. Section 4 defines the term ‘partnership’, ‘partner’, ‘firm’ and ‘firm name’. Section 6 is giving effect to the mode of determining existence of partnership. From the reading of this, it postulates that every partner is an agent of the partnership and his rights, powers duties and obligations are in many respects governed by the same rules and principles as those of an agent and as such, a partner virtually embraces the character of both a principal and agent. As a part of general duty, a partner must observe the utmost good faith in dealing with other partners. Section 10 casts duty upon partner to indemnify the firm for any loss caused to it by his fraud in the conduct of business. Section 13 is relating to mutual rights and liabilities, whereas Section 14 is dealing with the subject of property of firm. Reading of this is indicating that property exclusively belonging to a person, does not become a property of the partnership merely because it is used for the business of partnership and such property will become the property of the firm only if there is an agreement. In respect of liability of a partner for act of the firm, Section 25 of the Act indicates that every partner is liale jointly with all other partners and also severally for all acts of the firm done while he is a partner. Section 26 of the Act is dealing with liability of a firm for wrongful acts of partner. Section 34 of the Act is indicating that where a partner in the firm is adjudicated an insolvent, is ceases to be a partner on the date on which the order came to be passed and sub-section (2) thereof is indicating that where under a contract between partners of the firm is not dissolved by adjudication of partner as an insolvent, the estate of a partner so adjudicated, is not liable for any act of the firm and the firm is not liable for any act of the insolvent done after the date of order.

13. A further glance at relevant provisions of the Act indicates that Chapter VII deals with the purpose of registration of firm. Section 58 of the Act is prescribing the mode on which application for registration is to be submitted and Section 59 is empowering the Registrar to record an entry in the statement in register called ‘Register of Firms’ the moment he is satisfied about compliance of requirement of Section 58 of the Act. Further, Section 59 of the Act is authorizing the Registrar to examine the application and so long as the application if submitted with all particulars as required, an obligation is cast upon the Registrar to register a firm. In respect of alteration in the firm name and place etc, Section 60 onwards is dealing with the same. Section 62 is about noting of change in the names and addresses of the firm, whereas Secton 63 is regarding recording any changes in the firm and dissolution of the firm, if any. So, in substance, this Indian Partnership Act is providing the measures for registering the partnership firm.

14. This Act, however, has not defined the word ‘person’ nor has provided any exclusion clause as to who may not be a partner.

15. For the controversy which has erupted in the present litigation, the crucial interpretation which is to be given to a word ‘person’ and since the same is not clear from the Indian Partnership Act, a resort to be made to the General Clauses Act, 1897. The definition of word ‘person’ which is described in Section 2(42) reads as under:

“2(42) “person” shall include any company or association or body of individuals, whether incorporated or not.”

16. This definition includes any company or association or body of individuals whether incorporated or not and as such, to give effect to this prescription to decide the controversy here, now the provisions contained under LLP Act, 2008 will have to be looked into.

17. This LLP Act is enacted by the Legislature, for a further boosting to country's economic growth. With a stiff growth of Indian economy, the role played by entrepreneurs as well as technical and professional manpower has been acknowledged in recent past internationally and as such, it was found opportune that entrepreneurship, knowledge and risk capital combine to provide a further impetus to India's economic growth and in that background, a need has been felt for a new corporate form that would provide an alternative to traditional firm of partnership with unlimited personal liability on one hand and statute-based governance structure of a limited liability company on the other and in the above background, this LLP Act has been enacted.

18. Section 2(n) of the LLP Act defines the word ‘Limited Liability Partnership’ to mean a partnership formed and registered under this Act and the ‘Limited Liability Partnership Agreement’ is defined under Section 2(o) to mean any written agreement between the partners of the limited liability partnership or between the limited liability partnership and its partners. It determines the mutual rights and duties of the partners and their rights and obligations to that limited liability partnership. Section 3 has postulated a limited liability partnership as a body corporate formed and incorporated under this Act and is a separate legal entity from that of its partners and has a perpetual succession. Section 4 has provided that Partnership Act shall not apply to a limited liability partnership. Section 12 is dealing with incorporation by registration of limited liability partnership, whereas Section 14 is dealing with effect of registration. In the same manner as that of Partnership Act wherever any change is effected, Section 18 is requiring an application to be made and such change will have to be mutated in relevant register as required under Section 19 and the names are to be published as prescribed under Section 21 of the Act.

19. This Act has prescribed an eligibility of persons, who can be partners in limited liability partnership. Section 22 reads as under:

“22. Eligibility to be partners.:— On the incorporation of a limited liability partnership, the persons who subscribed their names to the incorporation document shall be its partners and any other person may become a partner of the limited liability partnership by and in accordance with the limited liability partnership agreement.”

20. The rights, liability, obligation and the duties shall be governed by limited liability partnership agreement and in the absence of any agreement, such mutual rights and duties shall be determined as set out in first schedule of the Act and for this, Section 23 is prescribing relationship of partners. Every partner of limited liability partnership is, for the purpose of business of limited liability partnership, the agent but not of other partners. The extent of liability of limited liability partnership is prescribed under Section 27 which reads as under:

27. Extent of liability of limited liability partnership. -(1) A limited liability partnership is not bound by anything done by a partner in dealing with a person if—

(a) the partner in fact has no authority to act for the limited liability partnership in doing a particular act; and

(b) the person knows that he has no authority or does not know or believe him to be a partner of the limited liability partnership.

(2) The limited liability partnership is liable if a partner of a limited liability partnership is liable to any person as a result of a wrongful act or omission on his part in the course of the business of the limited liability partnership or with its authority.

(3) An obligation of the limited liability partnership whether arising in contract or otherwise, shall be solely the obligation of the limited liability partnership.

(4) The liabilities of the limited liability partnership shall be met out of the property of the limited liability partnership.”

21. From this Section it is also culled out that LLP shall be liable for a wrongful act or omission by partner in the course of business of LLP to and further to what extent, a partner is liable is prescribed under Section 28 which is reproduced below:

“28. Extent of liability of partner.—(1) A partner is not personally liable, directly or indirectly for an obligation referred to in sub-section (3) of section 27 solely by reason of being a partner of the limited liability partnership.

(2) The provisions of sub-section (3) of section 27 and sub-section (1) of this section shall not affect the personal liability of a partner for his own wrongful act or omission, but a partner shall not be personally liable for the wrongful act or omission of any other partner of the limited liability partnership.”

22. Further, the provision of Section 30 of the LLP Act is determining unlimited liability in case of fraud and further provisions are also indicating that basically, the LLP is a body corporate, having a separate legal entity.

23. So far as the offence by LLP is concerned, Section 76 provides that where an offence under this Act is committed either with consent or connivance with a partner or partners or designated partner or designated partners of the LLP they shall be liable to be prosecuted. So, in substance, the conjoint reading of this Act is indicating that in LLP, all partners are body corporate and are responsible for all acts, matters and things as are required to be done by LLP in respect of compliance of provisions of LLP and also can be liable for penalty. Such LLP can come within the periphery of ‘person’ as defined under the General Clauses Act as basically, it is a body of individuals.

24. A comparable provisions of Indian Partnership Act and the Limited Liability Partnership Act is giving a clear impression that no doubt, LLP is a body corporate and a separate legal entity, but, in essence, it is a partnership firm under a separate statute and as such, when there is no express exclusion found from the Indian Partnership Act, who can enter into partnership, LLP can become a partner in partnership firm. Basically, the rights and obligations of partner under both in the partnership firm as well as in LLP are governed by the contract/agreement between them and their respective liabilities are also defined and prescribed as per the agreement, the decision taken by the respondent authority that since LLP is not permissible to be introduced as partners in partnership firm cannot be accepted. This view, in our considered opinion, appears to be not in consonance with the basic object of both the Acts.

25. The apprehension which has been voiced out by the authority basically about the difference of liability issue as reflecting from the tenor of affidavit. But if we look at the basic provisions as analyzed above, there seem to be no substantial difference. But, on the contrary, a conjoint reading of provisions of both the’ Acts and keeping in view the definition of ‘person’ as defined under the General Clauses Act, the view taken by the authority appears to be not germane.

26. Additionally, a perusal of the agreement in question reflecting on page-15 onwards, has specifically determined the extent of profit and loss sharing in which also LLP's portion is specifically determined and as such, since firm is also an association of individuals akin to the association of LLP, the decision taken by the authority does not inspire any confidence. Further, it also appears that the authority while taking a decision, has not given any clear justification and the order otherwise is also found to be not sustainable.

27. So, in the aforesaid background, if the object of LLP enactment is to be looked into, it has merely provided an alternative to the traditional firm of partnership and as such, there is no doubt about the fact that LLP can become a partner in partnership firm and, as a result of which we are not convinced by the view taken by the learned Single Judge in upholding the decision delivered by the authority.

28. The relevant corresponding provisions and the comparison thereof, is clearly suggesting that there can be a partnership in which the LLP can be introduced as a partner.

29. Additionally, while arriving at this conclusion, we have an advantage of some of the observations made by the Apex Court which have been brought to our notice. While interpreting the word ‘person’, the Apex Court in a decision in case of Oswal Fats and Oils Limited v. Additional Commissioner (Administration), Bareilly Division, Bareilly, reported in (2010) 4 SCC 728, of-course under a different statute, has observed that the word ‘person’ cannot be given a restricted meaning. Since the definition expresses ‘shall include’, the word ‘include’ is generally used in interpretation clause in order to enlarge the meaning of words or phrases occurring in the body of statute and this word ‘include’ is susceptible of another construction and as such, when the word used in an inclusive definition denote extension and cannot be treated as restricted in any sense and, therefore, if a wider meaning is to be given to this word, it specifically indicates that ‘person’ includes company or association or body of individuals and as such also, since LLP can be termed as ‘person’ and in the absence of any express exclusion under the Indian Partnership Act, there remains hardly any doubt that LLP can become a partner in the firm. The relevant observations contained in Para.36, 37 and 38 are reproduced hereinafter:

“36. A reading of Section 3(1) reproduced above makes it clear that the provisions contained in the U.P. General Clauses Act are applicable to all Uttar Pradesh Acts including the Act with which we are concerned. To put 27 it differently, by virtue of Section 3(1) of the General Clauses Act, the definition of the word person’ contained in Section 4(33) will be deemed to have been engrafted in the Act and the same cannot be given a restricted meaning as suggested by the learned counsel. Rather, in view of the definition contained in Section 4(33) of the U.P. General Clauses Act, the word person’ appearing in Section 154(1) would include any company or association or body of individuals, whether incorporated or not. This view of ours is strengthened by the language of explanation added to Section 154(1) whereby it was declared that the expression person’ shall include a cooperative society. The word ‘include’ is generally used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statue and when it is so used those words or phrases must be construed as comprehending, not only such things, as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. The word ‘include’ is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions used. It may be equivalent to mean and include’ and in that case it may afford an exhaustive explanation of the meaning which for the purposes of the Act must invariably be attached to those words or expressions. - Dilworth v. Commissioner of Stamps [1899] A.C. 99.

30. In State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610, Gajendragadkar, J. observed:

“It is obvious that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense. Where we are dealing with an inclusive definition, it would be inappropriate to put a restrictive interpretation upon terms of wider denotation.

38. In CIT v. Taj Mahal Hotel, (1971) 3 SCC 550, this Court interpreted the word plant’ used in Section 10(2)(vi-b) of the Income Tax Act, 1922. Speaking for the Court, Grover, J. observed:

“The very fact that even books have been included shows that the meaning intended to be given to ‘plant’ is wide. The word ‘includes’ is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include.”

31. Further, Shri. S.N. Soparkar, learned Senior Counsel, has submitted that if a company can become a partner, the LLP can certainly be introduced as a partner. To substantiate this submission, a reliance is placed on a decision of the Apex Court rendered in Civil Appeal No. 217 of 1955, decided on 17.5.1957, wherein while examining the issue, it has been opined by the Apex Court that on interpretation and construction of an agreement on oath, it has been held that Burma Company Limited (Burma) was a partner along with Steels and Ellermans in the combination and had a joint share with the Steels in the profit or loss of the combination. It was entitled to terminate the partnership by giving notice to the other partners as specified in the agreement and as such, it has been canvassed before us that when that eventuality was also recognized by the Apex Court, there can be no doubt here that LLP can become a partner in the partnership firm. This submission appears to have substance, as a result of which we are inclined to accept the same.

32. Additionally, we are also of the opinion that looking to the object of both the Acts, no restrictive meaning can be given to a word ‘person’ so as to defeat the agreement and decline registration of change. For appreciating this submission, we may refer to Section 58 of the Indian Partnership Act which deals with submission of application for registration. This provision is indicating about compliance and submission of certain requirements as stated in the provision itself and moment these particulars are found in order, the Registrar is under an obligation to record an entry for registering the firm in the Register of Firms and what is to be seen is the compliance of provision of Section 58 of the Act. Now, in the light of this provision, when a change is taking place, the same will have to be brought before the Registrar for giving effect to in the register and Section 63 is obliging the Registrar to make a record of such change. Section 63 of the Indian Partnership Act reads as under:

63. Recording of changes in and dissolution of a firm. - (1) When a change occurs in the constitution of a registered firm any incoming, continuing or outgoing partner, and when a registered firm is dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorised in this behalf, may give notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms, and shall file the notice along with the statement relating to the firm filed under section 59.”

33. Prima facie, a perusal of this provision is suggesting no such power of refusal and as such, in the absence of any such power to the contrary, we are unable to accept the submission of the authority and, therefore also, the action of the authority appears to be not in consonance with the provisions.

34. In addition to aforesaid situation, in the order of the authority, there is no justification as to why LLP cannot become a partner or introduced in the firm. Hence, the order appears to be laconic in nature as well and we are unable to approve such exercise of jurisdiction by the authority as also, by the learned Single Judge.

35. Additionally, the provisions are not suggesting anything that such change requires a fresh application for registration. On that count also, we are unable to accept the stand of the authority. Since the original firm is already registered in consonance with the provisions of the Act, the change which has taken place is to be taken note of by the Registrar.

36. In view of aforesaid discussion and in view of comparative analysis of both the statutes, it appears that limited liability partnership is a competent person to be included as a partner in the firm, the view taken by the learned Single Judge appears to be not sustainable. Resultantly, we hereby quash and set aside the order dated 26.6.2019 passed by the learned Single Judge as also the orders dated 18.11.2017 and 3.3.2018 passed by the respondent - Registrar of Firms and as a consequent thereof, we hereby direct the respondent - Registrar of Firms to pass fresh orders keeping in mind the findings and observations made herein above.

37. Both the Letters Patent Appeals accordingly stand allowed.

38. Consequently, connected civil applications also stand disposed of.