In V Subramanian v Rajesh Raghuvandra Rao, the Supreme Court declared a provision introduced by a state amendment in Maharashtra to be unconstitutional and invalid.
The provision stated that a partner in an unregistered partnership could not file a suit for dissolution or for the accounts of a dissolved firm, or to realize the property of a dissolved firm. The Supreme Court noted that the effect of the state amendment was that an unregistered partnership firm was allowed to come into existence and to function, but could not be dissolved and become non-existent (subject to certain exceptions).
The appellant, Subramanian, had filed a suit before the Bombay City Civil Court for the dissolution of an unregistered partnership firm between himself and the respondent, Rao. Rao submitted that the suit was not maintainable in view of section 69(2-A), as incorporated by the state amendment.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
