Sachin Jaiswal Vs M/S Hotel Alka Raje & Other
The case is between Sachin Jaiswal and M/S Hotel Alka Raje, embodying a critical question of law, i.e., when the Property is being transferred to the firm as the contribution via the partner to the partnership firm under that circumstance the Property will have the absolute ownership of the Property as per Section 14 of the Partnership Act, 1932. Neither the partner nor the legal heirs of any partner or the partner who was the absolute owner of the Property would have an exclusive right over the property after the partner’s death or retirement, excluding the share in profit of the contribution made via a partner in a partnership firm.
The facts of the Case were that Mr. Bhairo Prasad Jaiswal, father of the Appellant, was the owner of the suit property and had built the Hotel Alka Raje on the Suit Property along with his brother. However, eventually, two more individuals became partners in the Firm. Subsequently, before Mr. Bhairo decreared, he executed the relinquish deed in favour of the partnership firm. Despite that, his son, the Appellant of the case, was claiming the ownership right over the suit Property.
The Hon’ble Supreme Court of India has held that even the suit property belongs to Mr. Bhairo. However, when the Partnership firm established and Mr. Bhairo has voluntarty transferred the property in the name of the firm as his contribution in the Firm under those circumstance the Partnership firm will became the absolute owner of the Suit Property and nor the legal heirs of Mr. Bhairo or the partner would have the absolute ownership of the Suit Property.
The significance of this case lies in interpreting property rights within the framework of partnership law. This reaffirms that when a partner voluntarily transfers property to a partnership firm as a contribution, the firm attains absolute ownership under Section 14 of the Partnership Act, 1932. This ruling settles a crucial legal question by clarifying that neither the contributing partner nor their legal heirs can claim exclusive ownership after the partner’s death or retirement. The Legal heirs of the partner can claim the share in profit of the contribution made via a partner in a partnership firm; however, they do not have the right to the property. As legal and business communities reflect on this judgment, it underscores the importance of understanding property contributions in partnerships, ensuring legal certainty while upholding the principles of business integrity