Delhi High Court
M/S Universal Promoters & Developers & … vs Government Of Nct Delhi & Ors on 27 February, 2026
Author: Amit Sharma
Bench: Amit Sharma
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 20th December, 2025
Pronounced on: 27th February, 2026
+ W.P.(C) 2506/2015
M/S UNIVERSAL PROMOTERS
& DEVELOPERS & ORS .....Petitioners
Through: Mr. Sandeep Sharma, Senior Advocate
with Mr. Rohit Sharma, Mr. Hunny
Singh & Mr. Ankit Parindiyal,
Advocates
versus
GOVERNMENT OF NCT DELHI & ORS .....Respondents
Through: Mr. Dhananjaya Mishra, Mr. Navneet
Dogra & Mr. Aiman Singh Kler,
Advocates for R-1 to 4
Mr. Rahul Malhotra, Mr. Rahul
Saxena, Ms. Padamja Sharma & Mr.
Mukul Nagpal, Advocates for R-5
alongwith R-5 in-person
CORAM:
HON'BLE MR. JUSTICE AMIT SHARMA
JUDGMENT
AMIT SHARMA, J.
1. The present petition under Article 226 of the Constitution of India,
1950, has been filed seeking the following prayers: –
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SINGH RAWAT
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“It is, most respectfully prayed that this Hon’ble Court may graciously be
pleased to: –
a) Call for the record of the case;
b) Issue a writ of certiorari quashing the impugned illegal orders dated
17/02/2014 and 5/1/2015 respectively;
c) Issue a writ of mandamus. directing the respondents to restore and
revive the Certificate of Registration of Firm “M/s Universal Promoters
and Developers” of the petitioners;
d) Issue any other appropriate writ, order or direction, which this
Hon’ble Court which may deem fit in the facts and circumstances of the
present case;
e) All cost of the writ petition in favour of the petitioners.”
2. By way of the present petition, setting aside of orders dated 17.02.2014
and 05.01.2015 have been sought. Vide order dated 17.02.2014, respondent
No.3 (Deputy Commissioner, Industries (Firms)) issued an order setting aside
and cancelling the Registration of petitioner No.1 (partnership firm), on a
complaint/application made by respondent No.5-Ashok Kataria alleging
fraud, and subsequently, on an application filed by petitioner No.4 seeking
review of the said order, the same was dismissed vide order dated 05.01.2015
passed by respondent No.4, Registrar of Firms. The primary contention on
behalf of the petitioners is that the respondent No.4, Registrar of Firms, had
no power to cancel the Registration Certificate issued to petitioner No.1-
partnership firm.
3. The relevant portion of the impugned order dated 17.02.2014 passed by
Deputy Commissioner, Firms/respondent No.3 reads thus: –
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SINGH RAWAT
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“E. ORDER
On perusal of the facts, submissions made by the partners, complaint
and the records provide a fit case of REVIEW of the registration No. S-
1003/2006 granted by this department on 08.05.2006. It is evident that
Smt. Rekha Sharma, from the records that she was not a partner from
31.03.2006 and as such she lacked the capacity to apply as a partner for
registration under the Partnership Act, 1932. The above facts clearly
reveal that there was a concealment of the facts. Further there is a
concealment regarding Mr. Mahinder Kaushik joining the firm with
effect from 17.02.2006 yet application introducing his name was filed in
this office on 06.12.2010. This is after more than four years. Further, the
said application does not bear the signature of Mr. Mahinder Kaushik.
When Mr. Mahinder Kaushik had already joined on 17.02.2006. then
instead of making declaration and signing of application by Smt. Rekha
Sharma who had already retired on 31.03.2006, in the normal and usual
course of business this application ought to have been signed by Mr.
Mahinder Kaushik on 17.04.2006/20.04.2006.
Filing of the application for deleting the name of Smt. Rekha Sharma
and introduction of partner Mr. Mahinder Kaushik was also approved by
this office and a note to this effect has been made on the relevant form
showing therein the name of Mr Mahinder Kaushik as a partner
introduced pr: 17.02.2006. Name of Mr. Mahinder Kaushik as a partner
of the firm for the first time has been disclosed to this office vide
application dated 06.12.2010, whereas his name ought to have been
disclosed in the original application dated 20.04.2006 and a declaration
to this effect ought to have been signed by Sh. Mahinder Kaushik. In the
application for amendment of the partners/change of partners dated
06.12.2010 Mr. Mahinder Kaushik did not furnish any declaration to this
effect and even did not sign the necessary application for change of name
of the partners.
As Mr. Mahinder Kaushik has not signed any application form and an
affidavit/declaration for registration of partnership as a partner of the
firm on 20.04.2006 further the application bears the name of only two
persons i.e. Mrs. Rekha Sharma and Mr. Sandeep Sharma, whereas Mrs.
Rekha Sharma signed the declaration as a partner on 17.04.2006 by
concealing the facts that she was, not a partner in the above said firm
when she has retired on 31.03.2006.
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SINGH RAWAT
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In view of the aforesaid facts, Mr. Sandeep Sharma is left as a single
partner which does not fulfil the definition of partnership under Section 4
of the Partnership Act, 1932. Subsequent rectification cannot be accepted
in Form A when Smt. Rekha Sharma was not a partner on the date of
application and registration, so how could the firm be registered with one
partner under the Partnership Act, 1932?. It is evident that the
registration certificate No. S-1003/2006 obtained by M/s Universal
Promoters and Builders was obtained by concealing true facts and it
seems that the subsequent amendments by this department made without
due diligence and without proper examination of facts. documents filed
by the firm and the legal position under Section 4 and Section 59 of the
Partnership Act, 1932. The very registration of the partnership firm was
void ab initio. Therefore, subsequent amendments for change in
constitution under Section 63 of the said Act are devoid by merit.
Therefore, the registration of the firm bearing no. S-1003/2006 dated
08.05.2006 is set-aside. Necessary entry in this effect may be made in the
relevant register. A copy of this order be communicated to the
complainant as well as to the firm and its partners, at their last known
addresses.
The above issues with the prior approval of the competent authority.”
4. The relevant portion of the impugned order dated 05.01.2015 passed by
Registrar of Firms/respondent No.4 reads thus: –
“GOVERNMENT OF NCT OF DELHI
OFFICE OF SPECIAL COMMISSIONER: INDUSTRIES
419, FIE, PATPARGANJ INDUSTRIAL AREA, DELHINO. ROS. (F & S)/S-1003/2006/26 Dated:
05/01/2015
ORDERRe: Application by Mrs. Rekha Sharma for withdrawal of the order
dated 17.02.2014 passed by the Office of Registrar of Firms (ROF)(01) Mrs. Rekha Sharma. has filed on record application dated
19.03.2014, 16.04.2014, 27.07.2014 and 20.09.2014 for recalling the
order dated 17.02.2014 by which registration of the firm was recalled.”
“Earlier before passing an order dated 17.02.2014, notices were issued to
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SINGH RAWAT
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Mrs. Rekha Sharma to appear on 28.06.2013, 21.08.2013, 24.09.2013
and 31.12.2013. The aforesaid notices were sent at the residence of No.
17, Church Road, Delhi Cantt., Delhi as per address on record.
(02) Hearings were given to Mrs. Rekha Sharma on 30.09.2014,
20.10.2014, 07.11.2014, 18.11.2014 and 01.12.2014 in response to her
application to recall the order dated 17.02.2014.I have gone through the
record of the case and submissions made by Mrs. Rekha Sharma, I find
no merit, in this application.
(03) The registration of the firm was obtained by misrepresentation
and by concealing true facts. As has been discussed in detail in order
dated 17.02.2014 which may be adverted and are not repeated herein for
the sake of brevity.
(04) By way of present application, Smt. Rekha Sharma wants to
settle her dispute inter-se with Mr. Sandeep Sharma and/or Mr.
Mahender Kaushik for which this is not an appropriate forum. The
application is clearly an afterthought and there appears to be no basis to
recall the orders dated 17.02.2014. There can’t be review of review of
particularly when the facts mentioned in the application seems to be
made up ones without any supportive evidence. On the one hand, Mrs.
Rekha Sharma alleges that the Registrar of Firms was functus officio
when the aforesaid order was passed and again she is asking the same
authority to pass order when the said authority in her eyes is functus
officio.
(05) Application being without merits is DISMISSED.
(K. MAHESH)
REGISTRAR OF FIRMS”
BRIEF BACKGROUND
5. Petitioner No.1, M/s Universal Promoters and Developers, was a
partnership firm constituted between petitioner No.2, Sandeep Sharma, and
petitioner No.4, Rekha Sharma, vide partnership deed dated 01.01.2006.
Petitioner No.3, Mahender Kaushik, was inducted as a partner in the aforesaid
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SINGH RAWAT
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firm vide a supplementary partnership deed dated 17.02.2006 executed
amongst the partners. It is stated in the petition that, thereafter, petitioner No.4
decided to resign from the firm on the assurance that petitioner No.3, newly
inducted partner, will settle the accounts, and it was agreed, as a pre-
condition, that he will make an investment in business of the firm by
15.04.2006. Petitioner No.4 resigned from the firm and an amended
partnership deed was executed on 31.03.2006. It is further stated that
petitioner No.3 failed to honour his commitment, and in view of the same, the
amended partnership deed executed on 31.03.2006 was not given effect to.
6. The partnership deed dated 01.01.2006 executed between petitioner
Nos.2 and 4 was registered vide Registration Certificate dated 08.05.2006
(No. S-1003/2006).
7. Subsequently, Registrar of Firms, vide application dated 02.12.2010,
was notified that petitioner No.4 had retired from petitioner No.1-firm w.e.f.
31.03.2006, and petitioner No.3 has been admitted as partner w.e.f.
17.02.2006 in petitioner No.1. Thereafter, Registrar of Firms, Delhi, issued
Form-C on 07.01.2011 acknowledging the change in the constitution of the
partnership firm.
8. Thereafter, one Ashok Kataria (respondent No.5) filed a complaint
regarding forgery. The respondent Nos.1 to 4 reviewed certificate of
registration of petitioner No.1 issued on 08.05.2006 and cancelled the same
vide impugned order dated 17.02.2014. Petitioner No.4 moved an application
on 18.03.2014 before Special Commissioner, Industries (Firms) Govt. of NCT
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SINGH RAWAT
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of Delhi, for recalling the impugned order dated 17.02.2014 on the ground
that there was no forgery, or fraud, as mentioned in the complaint filed by
Ashok Kataria-respondent No.5, and all the material facts were presented to
the Registrar of Firms from time to time. However, Special Commissioner,
Industries (Firms), did not entertain the application of petitioner No.4.
Subsequently, petitioner No.4 filed another application on 10.09.2014 to
Special Commissioner, Industries (Firms), for deciding her review application
on merits which was disposed of, along with all other applications filed by
petitioner No.4 on 19.03.2014, 16.04.2014, 27.07.2014, and 20.09.2014, by
impugned order dated 05.01.2015. Hence, the present petition has been filed
seeking quashing of the impugned orders and directing respondents to restore
and revive the Certificate of Registration of Petitioner No.1-Firm.
CONTENTIONS ON BEHALF OF THE PETITIONERS
9. Learned Senior Counsel for the petitioners has submitted that the
cancellation of registration of certificate of petitioner No.1 issued on
08.05.2006 by the Office of Special Commissioner: Industries vide the
impugned order dated 17.02.2014 is without jurisdiction and non-est as
Registrar under Section 64 of the Indian Partnership Act, 19321, has power
only to rectify the mistake in order to bring the entry in Register in conformity
with documents relating to that firm. It is further submitted that Registrar of
Firms or any such person is not vested or bestowed with the power to set
aside/cancel the certificate of registration conferred on any partnership under
IPA. It is further submitted that Special Commissioner does not have power to
1
For short, ‘IPA’
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SINGH RAWAT
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set aside the order passed by Registrar of Firms, and Special Commissioner
while exercising review has, in fact, exercised a power which has not been
conferred upon him by any statute or otherwise.
10. Learned Senior Counsel for the petitioners has drawn attention of this
Court to Section 64 of the IPA which reads as under: –
“64. Rectification of mistakes.–(1) The Registrar shill have power at
all times to rectify any mistake in order to bring the entry in the Register
of Firms relating to any firm into conformity with the documents relating
to that firm filed under this Chapter.
(2) On application made by all the parties who have signed any
document relating to a firm filed under this Chapter, the Registrar may
rectify any mistake in such document or in the record or note thereof
made in the Register of Firms.”
11. It was contended on behalf of the petitioners that only power given to
the Registrar, after issuance of certificate of Registration under Section 59 of
the IPA, under the foregoing provisions is to rectify a mistake. It was
submitted that there was no case of fraud as alleged by respondent No.5, and
which was accepted by respondent Nos.1 to 4, inasmuch as initially petitioner
No.1-partnership deed was constituted between petitioner Nos. 2 and 4 on
01.01.2006 vide a partnership deed dated 01.01.2006. It was submitted that
petitioner No.3-Mahender Kaushik was inducted as a partner in the firm, and
a supplementary deed dated 17.02.2006 was executed, and as such, petitioner
No.4-Rekha Sharma decided to resign from the said firm on assurance that the
aforesaid-Mahender Kaushik shall settle the accounts. It is further contended
that on the said assurance of settlement made by petitioner No.3, Ms. Rekha
Sharma resigned from the said firm, and an amended partnership deed was
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SINGH RAWAT
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executed on 31.03.2006. It is the case of the petitioners that since petitioner
No.3-Mahender Kaushik did not honour his commitment, the amended
partnership deed executed on 31.03.2006 was not given effect to, and did not
come into force, and, therefore, the partnership deed dated 01.01.2006 which
was initially executed between Sandeep Sharma and Rekha Sharma
(petitioner Nos.2 & 4) was registered vide Registration Certificate dated
08.05.2006. Thus, resignation letter dated 31.03.2006 by petitioner No.4-
Rekha Sharma was never given effect to. It is also argued by learned Senior
Counsel appearing on behalf of the petitioners that subsequently, petitioner
No.3-Mahender Kaushik made investment in the firm and, therefore, it was
decided to incorporate his name in the partnership firm. It has been argued
that the case of the petitioners, in nutshell, before the Registrar of Firms was
that, although, vide a supplementary partnership deed dated 17.02.2006,
petitioner No.3-Mahender Kaushik was inducted as partner in their firm, and
subsequently, on 31.03.2006 the petitioner No.4-Rekha Sharma had resigned
from the said firm vide an amended partnership deed dated 31.03.2006;
however, Form No.1 dated 20.04.2006 was submitted on 05.05.2006 in the
Office of Registrar of Firms incorporating the original partnership deed dated
01.01.2006, and the supplementary and amended partnership deed were
omitted to be included on account of oversight. It is submitted that this was
sought to be corrected by way of Form No.5 dated 02.12.2010 filed before the
Registrar of Companies on 06.12.2010 alongwith both the supplementary and
amended partnership deeds. It is, thus, submitted that on account of the same,
there is no fraud or mis-statement given initially by petitioner No.1-firm to
cause any loss or damage to society or public at large. Therefore, it is
submitted that, at best, it was a case of correcting the records which was
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SINGH RAWAT
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permissible in terms of Section 64 of the IPA, as no power is vested in the
Registrar of Firms to recall the registration.
12. Learned Senior Counsel for the petitioners further contended that
respondent No.5 had no locus-standi to have filed a complaint, which was
entertained by respondent Nos.1 to 4. Attention of this Court has been drawn
to Rule 6 of the Delhi Partnership (Registration of Firms Rules, 1972), which
reads as under: –
“DELHI PARTNERSHIP (REGISTRATION OF FIRMS) RULES,
1972Rule 6. Procedure on disputes -Where any partner or other person
interested makes a protest in writing to Registrar disputing any entry
made in the register of firms, the Registrar shall record such protests and
make a reference thereto in “Red ink” in the remarks column against the
disputed entry.”
It is, therefore, submitted that as respondent No.5 was alien to the said
firm, he had no locus to raise any dispute with respect to the constitution or
acts of the petitioner No.1-partnership firm.
13. Reliance has been placed on the following judgments by learned Senior
Counsel for the petitioners: –
a) On the judgment of Hon’ble Supreme Court in Common Cause
(A Registered Society) v. Union of India 2 , to contend that power
under Section 21 of General Clauses Act, 18973, cannot be invoked to2
(2023) 10 SCC 321: 2021 SCC OnLine SC 687
3
For short, ‘GCA’Signature Not Verified
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SINGH RAWAT
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enlarge the Government’s power to constitute the commission in a
manner other than that provided in the statute itself (Commissions of
Inquiry Act, 1952). It is submitted that the rule of construction
embedded in Section 21 of GCA cannot apply to the present case as
subject matter, context and effect of section 64 of IPA is inconsistent
with such application.
b) On the judgment of Hon’ble Supreme Court in Sharad Vasant
Kotak v. Ramniklal Mohanlal Chawda 4 , to contend that for non-
compliance of certain mandatory provisions in not informing Registrar
of Firms about the changes in constitution of the firm, certain penalties
provided in the IPA itself, would be attracted, and the same would not
lead to conclusion that the registration of the firm had ceased. It is
further submitted that the changes in the constitution of firm by
inducting a new partner and resignation of an existing partner will not
affect the registration of the firm which was once made in accordance
with law.
c) On the judgment of Hon’ble Calcutta High Court in Durga
Prasad Sarawagi v. Registrar of Firms, West Bengal5, to contend
that the Registrar under Section 63 of the IPA has no power to cancel
the registration certificate of a firm and action beyond the scope of said
Section is clearly unauthorised.
4
(1998) 2 SCC 171
5
1966 SCC OnLine Cal 256: AIR 1966 Cal 573
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SINGH RAWAT
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d) On the judgment of Hon’ble Rajasthan High Court in Rakesh
Dhariwal and Ors. v. Balaji Marble Mines and Ors.6, to contend that
under IPA, the Registrar of Firms is having limited powers for
rectification of mistake, and that could have been exercised only to
remove manifest mistake and not the disputed issues.
14. Reliance has also been placed by learned Senior Counsel for the
petitioners on the following cases: –
i. Sri Lakha Granites v. Eklavya Singh and Ors.7; ii. Shri Balaji Marbels Mines v. State of Rajasthan and Ors.8; iii. Supreme Tech Engineering v. Registrar of Firms (Vadodara Circle) and Ors.9; iv. Areness Foundation v. Govt. of NCT of Delhi & Anr.10; v. Industrial Infrastructure Development Corporation (Gwalior)
M.P. Ltd. v. Commissioner of Income Tax, Gwalior, Madhya
Pradesh11;
15. In view of the aforesaid submissions, it is prayed that the impugned
orders be set aside and the registration of petitioner No.1-Firm be restored and
revived.
6
AIR 2015 Cal 573
7
2010 SCC OnLine Raj 4689: AIR 2011 Raj 49
8
D.B. CIVIL SPECIAL APPEAL NO.109/2010 dated 16.04.2010
9
2012 SCC OnLine Guj 1412
10
2018 SCC OnLine Del 2004: AIR 2019 Del 59
11
(2018) 4 SCC 494
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SINGH RAWAT
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CONTENTIONS ON BEHALF OF RESPONDENT NOS.1 TO 4
16. Per contra, learned counsel appearing on behalf of the respondent
Nos.1 to 4 has submitted that, as per Section 58 of the IPA in order to effect
registration of firm, a statement signed by all partners is required to be filed
with Registrar of Firms. Attention of this Court has been drawn towards
Section 58 of the IPA in this regard. It is submitted that, in the present case,
Form-I was submitted on 20.04.2006 carrying the signatures of petitioner
Nos.2 and 4 and on the basis of the said statement, Registrar had issued Form-
A whereby, petitioner No.1 was registered with petitioner No.2 and 4 as its
partners. It is further submitted that a supplementary partnership deed dated
17.02.2006 was produced bearing signatures of petitioner Nos.2, 3 and 4,
inducting petitioner No.3 as partner in petitioner No.1, and on enquiry, it was
revealed that the signatures of petitioner Nos.2 and 4 in Original Partnership
Deed dated 01.01.2006 are different from that of Supplementary Partnership
Deed dated 17.02.2006. Thus, in these circumstances, Deputy Commissioner,
Firms, passed the impugned order dated 17.02.2014 on the ground that case
was one of fraud/concealment of facts and set-aside the registration of
petitioner No.1-firm. It is further submitted that petitioner No.4 is stated to
have resigned as partner of petitioner No.1-firm on 31.03.2006, and therefore,
she could not have signed as a partner for registration of the firm on
20.04.2006.
17. It is further submitted that, as on date of filing of Form-I, i.e.,
20.04.2006, as well as on the date of registration of firm, i.e., 08.05.2006,
petitioner No.4 was not the partner of the firm, and thus, had no authority to
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SINGH RAWAT
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sign the said form on 20.04.2006 as she is stated to have resigned on
31.03.2006, as per the case of petitioners themselves. It is,, therefore, the case
of the respondents that the registration certificate issued on 08.05.2006 was
on the basis of an application form in which material facts were
misrepresented and concealed by the petitioners. Reliance has been placed on
the judgment of Hon’ble Supreme Court in Indian National Congress v.
Institute of Social Welfare and Ors.12, to contend that it is well settled that
fraud, misrepresentation, and concealment, vitiate any order and such order is
to be set aside/cancelled/reviewed on said basis.
18. Attention of this Court has also been drawn to Delhi Partnership
Registration of Firm Rules, 1972, framed under the exercise of powers
conferred under Section 71(2) of the IPA. It was contended that as per Rule 3,
the documents submitted to the Registrar under Sections 58 and 60 of the IPA
would be in Forms- I and II respectively, annexed to the said Rules and same
shall be verified in the manner indicated therein. Attention of this Court was
further drawn towards Form-I, and it was pointed out that the same requires
the signatures of all of the partners or their authorised agents and the same
would be in presence of a witness who must be a Gazetted Officer, Advocate,
Attorney, Vakil, Magistrate or Registered Accountant and on account of the
same, it is submitted that the contents of this Form-I are akin to that of an
affidavit.
19. It is further submitted that, if the documents submitted before Registrar
are found to be fraudulent or suffered from material concealment of facts, the
12
(2002) 5 SCC 685
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Registrar in exercise of his powers under Section 64 of the IPA can cancel the
registration of the firm. Reliance has also been placed on the following
precedents: –
i. Durga Prasad Sarawagi & Ors. v. Registrar of Firms & Ors13,
paragraph 10 (Division Bench of the Hon’ble Calcutta High Court);
ii. Rakesh Dhariwal v. Balaji Marble Mines, Makrana & Ors.14,
paragraphs 11 to 15 (Division Bench of the Hon’ble Rajasthan High
Court);
iii. Dwarika Prasad Agarwal & Brothers v. Registrar, Firms,
Societies and Chits15, paragraphs 36 to 38, 41 and 42 (Single Judge
of the Hon’ble Allahabad High Court);
20. Learned counsel for the respondent Nos.1 to 4 has, without prejudice to
aforesaid contentions, further submitted that, even if, Section 64 of the IPA is
not applicable, then also, Registrar has power to cancel registration under
Section 21 of the GCA, 1897, which provides that when a power is conferred
on any authority to do a particular act, such power carries with it the power to
withdraw modify, amend, or cancel the act, which is exercisable in the like
manner and subject to like conditions, if any, attached with the exercise of
such power. Thus, the Registrar has power to cancel/rescind the registration
of a firm, especially in cases when the original registration is vitiated by
fraud, and/or material misrepresentation or concealment of facts. Reliance has
been placed on the following observation made in a judgment of Full Bench
13
Supra note 5
14
Supra note 6
15
2014 (2) ADJ 524
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of Hon’ble Gauhati High Court in Atowar Rahman v. The State of Assam
& Ors.16, which reads as under: –
“16. The certificate of registration under section 3 of the Act is issued in
the form of an order whereby the Registrar certifies under his hand a
society to be a registered society and authorises the validity of such
registration to a time-bound period, with provision for extension. The
form and contents of the certificate brings it within the meaning of
“orders” under section 21 of the General Clauses Act. Therefore, in the
absence of provision for cancellation of certificate under the Societies
Registration Act and such certificate being in the nature of an order
issued by the statutory authority i.e. the Registrar of Societies, the
application of section 21 of the General Clauses Act is clearly available
to the Registrar to add to, vary or rescind the certificate.
**** **** ****
18. To sum it up, we hold as follows:
(i) an order of cancellation of certificate of registration (CoR) that had
been granted under section 3 of the Societies Registration Act,
1860, is an order within the meaning of “orders” under section 21 of
the General Clauses Act, 1897 and that of section 23 of the Assam
General Clauses Act, 1915.
(ii) an order of cancellation of certificate of registration (CoR) by the
Registrar of Societies is neither a legislative nor a quasi-judicial
order but purely an administrative order.
(iii) an order of the Registrar of Societies cancelling a certificate of
registration on a complaint and after giving opportunity of hearing
to the contending parties, is an act of expediency and not a quasi-
judicial act dictated by rules.
(iv) the provision of section 21 of the General Clauses Act and/or
section 23 of the Assam General Clauses Act, in the absence of an
16
2018 SCC OnLine Gau 1575
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express power of cancellation of certificate of registration (CoR)
under the Societies Registration Act, is available empowering the
Registrar to order cancellation, as above.”
It is, thus, prayed that since Registrar had power to cancel/rescind the
registration certificate, the impugned orders are not to be interfered, and the
present petition be dismissed.
CONTENTIONS ON BEHALF OF RESPONDENT NO.5
21. Learned counsel appearing on behalf of the respondent No.5 had drawn
the attention of this Court to a Board Resolution filed on behalf of the
petitioner No.1 showing itself to be a private limited company, and signed
by Mahinder Kaushik (petitioner No.3) and Sandeep Kumar (petitioner
No.2) as Directors. It is submitted that the aforesaid Board Resolution was
filed by the petitioner No.1-firm in a suit instituted on its behalf against the
respondent No.5.
22. It is the case of the said respondent that the stand of partners of
petitioner No.1-firm in the said suit was that the firm was a company and the
suit was initially, therefore, filed through one of its directors. It is pointed out
that when the said respondent filed an application in the Court to produce the
proof of the company, then the petitioner No.1 came up with the plea that it is
not a company but a registered partnership firm. It is, therefore, submitted that
since doubt was created, the said respondent made the enquiries and obtained
certified copies of the documents under the Right to Information Act, 2005,
and after obtaining the said documents, a complaint was filed before the
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Registrar of Firms, bringing on record the alleged forgeries committed by
petitioner No.1-Firm.
23. It is submitted that the Rule 6 of Delhi Partnership (Registration of
Firms) Rules, 1972 gives the respondent no. 5 locus to file a complaint. In any
case, it is submitted that by way of the complaint, the necessary facts were
brought to the knowledge of the respondent Nos.1 to 4/authorities, who after
examining the same, decided to review the registration certificate of the
petitioner No.1-Firm. Reliance has been placed on the order dated 04.07.2014
passed by Hon’ble Allahabad High Court in W.P.(C)18808/2013, titled as
“Raj Gramodhyog Sansthan and Anr. v. Assistant Registrar, Firms
Societies & Chits & Others” to contend that in similar circumstances, where
the renewal certificate of the society therein was obtained by fraud and
misrepresentation, Assistant Registrar had cancelled the registration
certificate and same was upheld by Hon’ble Allahabad High Court.
24. Attention of this Court has been drawn to Rule 6 of the Delhi
Partnership (Registration of Firms Rules, 1972), and it is submitted that
respondent No.5 would come in the category of “other person”, and thus, he
had locus to file a complaint against the petitioner No.1-Firm. Therefore, it is
prayed that the present petition be dismissed.
25. Reliance has been placed on the following judgments by learned
counsel for respondent No.5 in support of his case: –
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ii. Indian Bank v. Satyam Fibres (India) (P) Ltd.18;
iii. Chen Khoi Kui v. Liang Miao Sheng19;
iv. Shree Sidhbali Steels Ltd. v. State of U.P.20;
ANALYSIS AND FINDINGS
26. Heard learned counsels for the petitioners, respondent Nos.1 to 4, and
respondent No.5, and perused the records.
27. At the very outset, it is pertinent to note that, the impugned order dated
17.02.2014 has been passed by Deputy Commissioner Firms and not
Registrar (Firms). The impugned order passed by Deputy Commissioner
Firms, in fact, records that a complaint received was at his Office and after
hearing the submissions by the parties and perusing the records, it was
thought to be fit case of ‘REVIEW’ of registration granted by the department
to petitioner No.1-Firm on 08.05.2006.
28. Section 57 of the IPA reads as under:-
“57. Appointment of Registrars.–(1) The State Government may
appoint Registrars of Firms for the purposes of this Act, and may
define the areas within which they shall exercise their powers and
perform their duties.
17
(1994) 1 SCC 1
18
(1996) 5 SCC 550
19
(2023) 9 SCC 376: 2023 SCC OnLine SC 1153
20
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(2) Every Registrar shall be deemed to be a public servant within the
meaning of section 21 of the Indian Penal Code (45 of 1860).”
29. In pursuance of the aforesaid, the Lieutenant Governor of Delhi had
issued a notification dated 26.03.2010 bearing no. CI/Admn. RFS-
I/2009/1703 published in Delhi, Gazette Part-IV, Extraordinary, which reads
as under:-
“Notification
In exercise of powers conferred under section 1 of the Societies
Registration Act 1860 as applicable to the National Capital Territory
Delhi and section 57 of the Indian Partnership Act, 1932 and in
supersession of all previous orders in this regard for the purpose of
decentralisation of the work of registration of societies as well as
partnership firms, the Lt. Governor is pleased to issue orders, as
following:-
a) Sub-Divisional Magistrate (Headquarter) of the nine Revenue areas
of the National Capital Territories Delhi are hereby designated as
Registrar of Societies and Firms also for the purpose of carrying out
function of Registrar under respective Acts
b) The area jurisdiction of these nine Registrars shall be corresponding
with the area under the jurisdiction of the respective revenue areas.
c) The nine Registrars so designated shall also act as State Public
Information Officer for the work allocated to them under the Right to
Information Act, 2005.
d) The nine Registrars shall be under the day-to-day administrative
control and supervision of respective Deputy Commissioner of the
revenue areas, however, the Secretary-cum-Commissioner of Industries
shall be the overall administrative Head of the Office of the Registrars
of Societies and Firms for the purpose of respective Acts
e) The present Registrar, Societies and Firms in Industries Department
shall remain custodian of records of already registered Societies and
Firms till transfer of records to respective Sub-Divisional MagistrateSignature Not Verified
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(Headquarter) and shall act as Nodal Officer for smooth transfer of
records.
These orders shall take effect on the date of their publication in
the official Gazette.”
30. A perusal of the aforesaid provisions would reflect that the Act
recognizes Registrar (Firms) in terms of Section 57 of the IPA, to be the
concerned Authority for all its purposes mentioned therein. Section 57 of the
IPA further provides that the State Government may appoint Registrar (Firms)
and in exercise of such power, Hon’ble Lieutenant Governor was pleased to
appoint Sub-Divisional Magistrate (Headquarter) of the 9 revenue areas of
NCT of Delhi to be designated as Registrar of Societies and Firms in terms of
Clause (a) of the aforesaid notification. The said notification also records that
the 9 Registrars, i.e., the Sub-Divisional Magistrates, would be under day-to-
day control administrative control and supervision of respective Deputy
Commissioner, Revenue Areas; however, Secretary-cum-Commissioner of
Industry shall be overall administrative head of the Office of Registrar Firms
for the purposes of respective acts.
31. Thus, clearly in terms of the aforesaid notification, the Registrar for the
purposes of the present Act would be the SDM (Headquarter) of the
respective revenue areas of NCT of Delhi and not the Deputy Commissioner
of the said area. Power exercised by Registrar of Firms is not delegated but
originated by virtue of Section 57 of the IPA. As pointed hereinabove, in the
present case, the Deputy Commissioner-Firms had passed the impugned order
in his purported exercise of power of ‘REVIEW’ which is not provided for
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under the IPA and the Rules framed thereunder by Administrator of Delhi in
exercise of powers under Section 71(2) of the IPA. In fact, the entire Act and
the Rules are conspicuously silent with regard to provisions of any
appeal/review of orders of action taken by the Registrar of Firms under the
Act.
32. Thus, assuming, arguendo, that the Registrar had the power to cancel
the registration, as contended by respondent Nos.1 to 4, in view of Section 21
of GCA, 1897, the said jurisdiction could not have been usurped by the
Deputy Commissioner in absence of any provision. The notification, as noted
hereinabove, provides that the Registrar would be under day-to-day
administrative control and supervision of the respective Deputy
Commissioner; however, the same would not vest the Deputy Commissioner
or by the Act for that matter, Secretary-cum-Commissioner of Industries with
the power otherwise to be exercised by Registrar of Firms under the
provisions of the IPA.
33. Be that as it may, the legal issue raised in the present petition needs to
be addressed, which is, whether the Registrar of Firms could have cancelled
the Registration Certificate granted to the petitioner No.1/partnership firm
under Section 64 of the IPA with aid of provision of Section 21 of the GCA.
34. Before proceeding further, some of relevant provisions of IPA, referred
to in the judgment, read thus: –
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“57. Appointment of Registrars.–(1) The State Government may
appoint Registrars of Firms for the purposes of this Act, and may define
the areas within which they shall exercise their powers and perform their
duties.
(2) Every Registrar shall be deemed to be a public servant within the
meaning of section 21 of the Indian Penal Code (45 of 1860).
58. Application for registration.–(1) The registration of a firm may be
effected at any time by sending by post or delivering to the Registrar of
the area in which any place of business of the firm is situated or proposed
to be situated, a statement in the prescribed form and accompanied by the
prescribed fee, stating–
(a) the firm name,
(b) the place or principal place of business of the firm,
(c) the names of any other places where the firm carries on business,
(d) the date when each partner joined the firm,
(e) the names in full and permanent addresses of the partners, and
(f) the duration of the firm. The statement shall be signed by all the
partners, or by their agents specially authorised in this behalf.
(2) Each person signing the statement shall also verify it in the manner
prescribed.
(3) A firm name shall not contain any of the following words, namely:–
“Crown”, “Emperor”, “Empress”, “Empire”, “Imperial”, “King”,
“Queen”, “Royal”, or words expressing or implying the sanction,
approval or patronage of 1*** Government 2***,except 3 [when the State
Government] signifies 4 [its] consent to the use of such words as part of
the firm name by order in writing 5***.
59. Registration.–Where the Registrar is satisfied that the provisions of
section 58 have been duly complied with, he shall record an entry of the
statement in a register called the Register of Firms, and shall file the
statement.
60. Recording of alterations in firm name and principal place of
business.– (1) When an alteration is made in the firm name or in the
location of the principal place of business of a registered firm, a
statement may be sent to the Registrar accompanied by the prescribedSignature Not Verified
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fee, specifying the alteration, and signed and verified in the manner
required under section 58.
(2) When the Registrar is satisfied that the provisions of sub-section (1)
have been duly complied with, he shall amend the entry relating to the
firm in the Register of Firms in accordance with the statement, and shall
file it along with the statement relating to the firm filed under section 59.
**** **** ****
63. Recording of changes in and dissolution of a firm. Recording of
withdrawal of a minor.–(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.
(2) When a minor who has been admitted to the benefits of partnership in
a firm attains majority and elects to become or not to become a partner,
and the firm is then a registered firm, he, or his agent specially authorised
in this behalf, may give notice to the Registrar that he has or has not
become a partner, and the Registrar shall deal with the notice in the
manner provided in sub-section (1)
64. Rectification of mistakes.–(1) The Registrar shill have power at all
times to rectify any mistake in order to bring the entry in the Register of
Firms relating to any firm into conformity with the documents relating to
that firm filed under this Chapter.
(2) On application made by all the parties who have signed any
document relating to a firm filed under this Chapter, the Registrar may
rectify any mistake in such document or in the record or note thereof
made in the Register of Firms.
65. Amendment of Register by order of Court.–A Court deciding any
matter relating to a registered firm may direct that the Registrar shall
make any amendment in the entry in the Register of Firms relating toSignature Not Verified
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such firm which is consequential upon its decision; and the Registrar
shall amend the entry accordingly.
**** **** ****
67. Grant of copies.–The Registrar shall on application furnish to any
person, on payment of such fee as may be prescribed, a copy, certified
under his hand, of any entry or portion thereof in the Register of Firms.
68. Rules of evidence.–(1) Any statement, intimation or notice
recorded or noted in the Register of Firms shall, as against any person by
whom or on whose behalf such statement, intimation or notice was
signed, be conclusive proof of any fact therein stated.
(2) A certified copy of an entry relating to a firm in the Register of Firms
may be produced in proof of the fact of the registration of such firm, and
of the contents of any statement, intimation or notice recorded or noted
therein.
**** **** ****
70. Penalty for furnishing false particulars.–Any person who signs
any statement, amending statement, notice or intimation under this
Chapter containing any particular which he knows to be false or does not
believe to be true, or containing particulars which he knows to be
incomplete or does not believe to be complete, shall be punishable with
imprisonment which may extend to three months, or with fine, or with
both.”
Further, Section 21 of the General Clauses Act, 1897, reads as under: –
“21. Power to issue, to include power to add to, amend, vary or
rescind notifications, orders, rules or bye-laws.–Where, by any 1
[Central Act] or Regulations a power to 2 [issue notifications,] orders,
rules or bye-laws is conferred, then that power includes a power,
exercisable in the like manner and subject to the like sanction and
conditions (if any), to add to, amend, vary or rescind any 3
[notifications,] orders, rules or bye-laws so 4 [issued].”
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35. Learned Senior Counsel for the petitioners had placed reliance on the
following judgments to contend that such a power was not available with the
Registrar of Firms: –
a) Reliance is placed on the following paragraphs in Sri Lakha Granites
(supra): –
“In this writ petition, the petitioner, a registered partnership firm has
assailed the validity of the order dated 18.5.09 passed by the Registrar of
Firms, Jaisalmer (“Registrar”) in exercise of the power conferred under
Section 64 of the Partnership Act, 1932 (in short “the Act”), cancelling
the orders dated 7.2.05 and 13.10.06 recording the changes occurred in
the constitution of the firm in the Registrar of firms.
**** **** ****
18. Thus, the conjoint reading of the provisions of Section 58, 59, 63 and
69 makes it abundantly clear that the registration of the firm under the
Act is optional and it entirely lie within the discretion of the firm or
partners concerned. Non registration of the firm does not entail any penal
consequences but, by virtue of the provisions of Section 69, an
unregistered firm will be unable to enforce its claims against third parties
in the civil courts and any partner of unregistered firm will be unable to
enforce his claims against third parties or against his fellow partners
except the claim which falls within the exception carved out by Section
69(3)(a) of the Act. However, once a firm is registered under the Act, the
statement recorded in the register regarding constitution of the firm shall
be treated to be conclusive proof of the facts contained therein against
the partner making them but, it is no manner, affects the mutual rights
and duties of the partners of a firm which shall always be governed by
the contract between the partners. But then, in any case, the Registrar
appointed by the State Government in exercise of the power conferred
u/S. 57 for the purposes of the Act is only a recording officer and
possesses no power to adjudicate upon the mutual rights and duties of the
partners flowing from the contract arrived at between them.
19. Section 64 of the Act confers on the Registrar a power to rectify any
mistake in order to bring the entry in the Register of the Firms relating toSignature Not Verified
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any firm into conformity with the documents relating to that firm filed
under Chapter VII of the Act in exercise of the power conferred u/S. 64,
the Registrar is empowered to rectify any mistake made by himself or on
application made by all the parties who have signed any document
relating to the firm filed under the said Chapter.
20. A bare perusal of Section 64 of the Act makes it abundantly clear
that the Registrar can exercise the power only for rectification of the
mistake so as to bring the entries made into conformity with the
documents relating to the firm. In considered opinion of this Court,
while exercising the power of rectification of mistakes, the Registrar
who is only a registering authority authorised to record the entry in
respect of constitution of the firm, its dissolution etc. has no
authority to enter into roving and fishing inquiry into the rival
claims of the parties and pronounce upon the genuineness or validity
of the documents produced. Suffice it to say that if the alteration
recorded in the register of the firms is in conformity with the
statement made and documents produced in terms of the provisions
of Section 63 of the Act, no proceedings for cancelling or deleting the
entries already made can be initiated by the Registrar in purported
exercise of the power u/S. 64 of the Act. Moreover, as per the
provisions of sub-section (2) of Section 64, the proceedings for
rectification of mistake can be initiated by the Registrar only on
application made by all the parties who have signed any document
related to the firm filed before him and not otherwise. Therefore, no
proceedings could have been initiated by the Registrar for
cancellation of the entry recorded in conformity with the provisions
of Section 63 of the Act, in the garb of the power conferred u/S. 64 of
the Act for rectification of the mistakes and that too at the instance
of one of the partners of the firm who is alleged to have retired after
reconstitution of the partnership.
**** **** ****
22. Indisputably, by way of appeal preferred as aforesaid, the respondent
No. 1 sought cancellation of the registration dated 13.10.06 and 7.2.05
and not the rectification of an error in the entry recorded in conformity
with the provisions of Section 63, invoking the jurisdiction of the
Registrar u/S. 64 of the Act. It is not disputed before this court that no
appeal is maintainable before the Registrar for cancellation of the
entries made in the register of the firms. Thus, the proceedings forSignature Not Verified
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cancellation of the entry initiated by the Registrar on the appeal
preferred by the respondent No. 1 as aforesaid, in purported
exercise of the power u/S. 64 of the Act were ex facie without
jurisdiction.
**** **** ****
26. Rule 13 of the Rules authorising the Registrar to hold inquiry and
investigation can only relate to the matter to be dealt with by the
Registrar under the provisions of the Act and not beyond it. Therefore,
the contention raised by the learned counsel for the petitioner on the
strength of Rule 13 of the Rules is also devoid of any merit.
27. Learned counsel for the petitioner is justified in contending that
the remedy for cancellation of a partnership deed is available under
the general law before the civil Court of competent jurisdiction and
the Registrar has no jurisdiction whatsoever to entertain any appeal
or application for declaring the reconstitution of partnership deeds
as null and void and cancelled the entries made on the basis of such
partnership deeds. If a document is claimed to be void or voidable,
the same could always be so adjudged by the Civil Court of
competent jurisdiction in terms of the provisions of Section 31 of the
Specific Relief Act. Moreover, as per the provisions of Section 65 of
the Act, a court deciding any matter relating to the registered firm
may direct that the Registrar shall make any amendment in the
entry in the Register of Firms relating to such firm which is
consequential upon its decision and the Registrar shall amend the
entry accordingly. This Court is informed that the respondent No. 1 has
already filed a civil suit before the District Judge, Jaisalmer for
cancellation of reconstituted partnership deeds. Suffice it to say that if
the reconstituted partnership deeds are declared to be void and cancelled
by the civil Court, it is always open to the respondent No. 1 to make an
appropriate application before the Registrar for amendment in the entry
in terms of provisions of Section 65 of the Act.
28. Thus, in view of the discussion above, in considered opinion of
this Court, the proceeding initiated by the Registrar for cancellation
of the entries recorded in the Registrar of the Firms in conformity
with the provisions of Section 63 of the Act and the order impugned
passed in purported exercise of the power u/S. 64 of the Act are exSignature Not Verified
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facie without jurisdiction being beyond the power conferred upon
him by Section 64 of the Act.”
(emphasis supplied)
b) Reliance is placed on the following paragraphs in Supreme Tech
Engineering (supra): –
“21. The language employed by the legislature in casting the relevant
provision namely Section 64(1) would eminently go to show that what is
envisaged is rectification of mistake. This in itself is sufficient to
persuade the Court to accept the plain and simple purport of the
provision namely that provision is only for the purpose of rectifying the
mistake. While undertaking the procedure of rectifying the mistake,
as could be seen from the procedure itself, at least the statute does
not lay down any elaborate scope of enquiry which would render
justification to exercise of enquiring into the disputed claims, which
otherwise can never be subject matter of adjudication by the
administrative authority. Even if it is assumed and presumed that
authority is exercising quasi judicial power which is unfortunately is
not the present case. So far as the provision of Section 64(1) of the
Act is concerned. The principle of administrative law has by now
cristalized to conclude safely that where ever there is disputes in
respect of veracity of a claim of a party, same is required to be
established upon leading of evidences by the administrative
authority, if not equipped with proper elaborate procedure enabling
it to come to a conclusion, then the said authority cannot be said to
have power to adjudicate upon disputes. In the instant case, the plain
language of Section 64(1) eminently prescribes the purport of the
Section and provision and therefore, in my view, there exists strong
case in favour of the petitioner for quashing of the order impugned.
22. This Court is unable to accept the submission canvassed on behalf
of the respondent no. 2 for upholding the order on the basis of the
decision of Madras High Court as well as Calcutta High Court, as the
facts of those cases do not warrant applicability of those ratio so far as
the facts of the present case are concerned, as they are distinguished from
the facts of the present case. Those decisions would be of no avail to the
respondent no. 1 in supporting the order passed by respondent no. 1.
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23. The decisions cited at the bar, on behalf of the petitioner, of
Rajasthan High Court and Delhi High Court would go to show that the
facts and ratio of those cases will have applicability to the facts and
circumstances of the present case also. The decision cited at the bar on
behalf of the petitioner have already been listed hereinabove and
therefore, in order to avoid repetition, the Court would not elaborately
delve thereupon. Suffice it to say here that the view expressed by the
Rajasthan High Court in case of “Sri Lakha Granites v. Eklavya Singh”,
reported in 2010 (0) ALJ-RJ 1823320 and Delhi High Court in case of
“Raman Kapur v. Government Of The National Capital Territory Of
Delhi“, reported in 2002 (0) ALJ-DL 1319193, is the ratio which this
Court would follow, as the facts of those cases are much more similar
and similar to the facts of the present case. The Court is unable to accept
the submission of learned advocate for respondent no. 2 that the factum
of resignation being not accepted on account of documentary evidence
would be of no consequence, as this Court is persuaded to hold that so
far as the provision of Section 64(1) is concerned, the adjudication
procedure is unfortunately not prescribed thereunder.
24. Learned advocate for respondent no. 2’s reliance upon the Gujarat
Rules would also be of no avail to support or sustain the order passed by
respondent no. 1, as when plain reading of the parent statute itself is very
clear. Amusing for the sake of argument that there exists some scope of
inquiry under the rule, then, that scope cannot be stretched to justify
adjudicatory process assumed by respondent no. 1 and hence that
submission is also of no avail to the respondent no. 2.
25. The Court is of the considered view that in light of the ratio laid
down by the Rajasthan High Court as well as Delhi High Court, so far as
Section 64(1) of the Partnership Act is concerned, the petitioner’s case is
required to be accepted. The order impugned is required to be quashed
and set aside and is accordingly quashed and set aside. The acceptance of
this petition would not be in any manner construed as pronouncing upon
the claim of the respondent of no. 2 qua his resignation or his entitlement
to continue, as it is absolutely open to him to approach the competent
Court for appropriate adjudication on these issues. This petition is
accepted only on the principle that Section 64(1) of the Partnership Act
would not justify the Registrar in assuming power to himself for
adjudicating the disputed question of facts.”
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(emphasis supplied)
c) On Areness Foundation (supra), wherein, learned Division Bench
while dealing with the provisions of The Registration Act, 1908, regarding
power of Registrar and source of such power to annul a registration of
document, had observed and held as under: –
“16. Even in Thota Ganga Lakshmi (supra) the Supreme Court clarified
by referring to Rule 26(k)(i) that it is only when a sale deed is cancelled
by a competent court that the cancellation deed (in that case) can be
registered and that too after notice to the parties concerned. So in view of
the clear exposition of law, the impugned circular issued, giving power
to the Registrar to annul the registration is ultra vires the Registration
Act.
17. In so far as the other judgments in Indian National Congress
(I) (supra), Mannalal Khetan (supra), Jantia Hill Truck Owners
Association (supra) and Joint Action Committee of Air Line Pilots
Association of India (supra) relied upon by Mr. Singh are concerned, the
same are on the following propositions:
(1) Even if there is no express power under the Registration Act to
cancel/recall the registration of an instrument, it can still be
cancelled/recalled by exercising inherent powers, if the registration
is obtained by fraud.
(2) The source of power to recall a registration on the grounds
mentioned in impugned circular is also found in Section 82 of the
Act.
(3) The power to recall a registration by the registering authority on
account of fraud as contemplated in the impugned circular can be
independently traced to Section 21 of the General Clauses Act.
18. Suffice to say in view of the law laid down by the Supreme Court
in Satya Pal Anand (supra) it must be held that Registrar has no powers
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under Section 82 of the Registration Act nor can invoke Section 21 of the
General Clauses Act, to annul a registration of a document. Accordingly,
the circular dated July 13, 2016 to the extent it empowers the Registrar to
annul a registered document is ultra vires the Registration Act, 1908 and
is set aside.”
d) Reliance has also been placed on judgment of Hon’ble Supreme Court
in Industrial Infrastructure Development Corporation (Gwalior) M.P.
Ltd. (supra), wherein, while dealing with issue whether the Commissioner,
Income Tax can cancel the registration of certificates granted under Section
12A of the Income Tax Act, 1961, it was observed and held as under: –
“17. In our considered opinion, the CIT had no express power of
cancellation of the registration certificate once granted by him to the
assessee under Section 12-A till 1-10-2004. It is for the reasons that,
first, there was no express provision in the Act vesting the CIT with the
power to cancel the registration certificate granted under Section 12-A of
the Act. Second, the order passed under Section 12-A by the CIT is a
quasi-judicial order and being quasi-judicial in nature, it could be
withdrawn/recalled by the CIT only when there was express power
vested in him under the Act to do so. In this case there was no such
express power.
**** **** ****
20. In other words, the order, which can be modified or rescinded by
applying Section 21, has to be either executive or legislative in nature
whereas the order, which the CIT is required to pass under Section 12-A
of the Act, is neither legislative nor an executive order but it is a “quasi-
judicial order”. It is for this reason, Section 21 has no application in this
case.
21. The general power, under Section 21 of the General Clauses Act, to
rescind a notification or order has to be understood in the light of the
subject-matter, context and the effect of the relevant provisions of the
statute under which the notification or order is issued and the power is
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or order. Moreover, Section 21 has no application to vary or amend or
review a quasi-judicial order. A quasi-judicial order can be generally
varied or reviewed when obtained by fraud or when such power is
conferred by the Act or Rules under which it is made. (See Interpretation
of Statutes, Ninth Edn., by G.P. Singh, p. 893.)”
36. Per contra, learned counsel for respondent Nos.1 to 4 has placed
reliance on the judgment of Full Bench of Hon’ble Gauhati High Court in
Atowar Rahman (supra) wherein, the said Court was dealing with following
reference in respect of Societies Registration Act, 1860: –
“Two questions of law have been referred by a Single Bench of this
Court for a decision by a larger Bench. The matter is placed before this
Full Bench, although the same could have been answered by a Division
Bench of this Court. Be that as it may, the two questions are:
(17) Whether registration of a Society by the Registrar of Firms &
Societies, Assam under section 3 of the Societies Registration
Act, 1860 cannot be cancelled once registered?”
37. Answering the aforesaid reference, the Full Bench relied upon a
judgment of Hon’ble Supreme Court in Indian National Congress (supra)
and observed and held as under: –
“11. In Shree Sidhbali Steels Limited (supra) the Supreme Court
explained that section 21 of the General Clauses Act, which is of general
application, is based on the principle that where there is power to create,
it includes the power to destroy as well as the power to add to, amend,
vary or rescind; where there is a power conferred on any authority to do a
particular act, such power carries with it the power to withdraw, modify
amend or cancel the act, which is exercisable in the like manner and
subject to like conditions, if any, attached with the exercise of the power.
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12. One of the primary questions in Indian National Congress
(I) (supra) that fell for consideration and which is relevant to the
case in hand was whether the Election Commission of India, which
wields power to register a political party under section 29A of the
Representation of the People Act, 1951, is equally empowered to
revoke or rescind the order of registration on application of section
21 of the General Clauses Act. To address this issue, the Supreme
Court was of the opinion that another question that arose for
consideration is whether the Election Commission of India in
exercise of its powers under section 29A of the above Act, acts
administratively or quasi-judicially. On consideration of the decisions
referred to at paragraphs 20 to 24 of the reported case, the Supreme
Court underlined the legal principles as to when an act of a statutory
authority would be a quasi-judicial act. The Supreme Court noted the
legal principle in the following words:
“Where (a) a statutory authority empowered under a statute to do any
act (b) which would prejudicially affect the subject (c) although there is
no lis or two contending parties and the contest is between the authority
and subject and (d) the statutory authority is required to act judicially
under statute, the decision of the said authority is quasi-judicial”.
13. Having said that, it was also held that mere presence of one or
two attributes of quasi-judicial authority would not render an
administrative act as a quasi-judicial act. As an illustration, it was
held that an administrative authority may determine question of fact
before arriving at a decision which may affect the right of an
individual but such decision would not be quasi-judicial. Taking it
further, it was held that what distinguishes an administrative act
from a quasi-judicial act is that in the case of quasi-judicial functions
under the relevant law the statutory authority is required to act
judicially, in that, where law requires that an authority prior to
arriving at a decision must make an enquiry, such a requirement of
law makes the authority a quasi-judicial authority. The Supreme
Court took note of another test which distinguishes administrative
function from quasi-judicial function. It was held that an authority
who acts quasi-judicially is required to act according to the rules,
whereas the authority which acts administratively is dictated by the
policy and expediency.
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14. Section 29A of the Representation of the People Act, in the light
of the above principles of law, was answered to be an order of the
Election Commission which is neither a legislative nor an executive
order but a quasi-judicial order. Such conclusion was drawn upon due
examination of section 29A. The Supreme Court made reference to the
provisions under the various sub-sections of section 29A and explained
that it provides as who can make an application for registration as a
political party; the making of application to the Commission; what would
be the contents of the application; provision obligating the Election
Commission to consider all particulars in its possession and any other
necessary and relevant factors and deciding either to register the
association or body as a political party or not after giving the
representatives of the association reasonable opportunity of being heard,
and thereupon, the requirement to communicate its decision to the
political party. The Supreme Court held that from the provisions under
the various sub-sections of section 29A it is manifest that the Election
Commission is required to act judicially and in this view of the matter
the act of the Commission is quasi-judicial.
15. Unlike the rigour of procedure envisaged under section 29A of
the Representation of the People Act, 1951, section 3 of the Societies
Registration Act, 1860 only obligates the Registrar to certify under his
hand that the concerned society is registered under the Act. The
requirement of payment of necessary fess to the Registrar for every such
registration, which would be accounted for to the State Government, is
also envisaged. A perusal of the provision under section 3 of the Act
makes it abundantly clear that the same does not involve any such
procedure as under section 29A of the Representation of the People Act,
1951. In other words, the function to be discharged by the Registrar
under section 3 of the Act is administrative in nature and not a quasi-
judicial one. Thus, unlike the power of the Election Commission
under section 29A which is a quasi-judicial act, the power of the
Registrar under section 3 of the Act is not a quasi-judicial but purely
an administrative act. Having held so, the very next issue for
consideration would be whether the act of cancellation of the
certificate of registration by the Registrar, involving a lis between
parties, would amount to a quasi-judicial act. First and foremost, the
Societies Registration Act does not prescribe any procedure
requiring the statutory authority to act judicially under the statute
for cancelling a certificate of registration. The presence of a lis or
contest between the contending parties before a statutory authority
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will not alone clothe the proceeding as a quasi-judicial one. The
determination of a question of fact and reaching a decision after
affording opportunity of hearing to the person whose right is going to be
affected, would not ipso-facto make it a quasi-judicial act. It would be a
different thing if the concerned statute requires that an authority before
arriving at a decision must make an enquiry. Such a requirement of law
would make the authority a quasi-judicial authority. Taking a leaf out of
the reported case in Indian National Congress (I) (supra), another
test which distinguishes administrative function from quasi-judicial
function is that the authority who acts quasi-judicially is required to
act according to the rules, whereas the authority which acts
administratively is dictated by policy and expediency. Without any
doubt, the act of cancellation of CoR is not dictated by the Act. It is
absolutely in the realm of expediency where, on a complaint that a CoR
issued to a party had been obtained by fraud, misrepresentation and/or on
any sufficient reasons, the Registrar hears the parties and arrives at a
decision. In the scheme of the Societies Registration Act, read with
the Assam Act, no procedure is laid down as to the exercise of power
of rescission or cancellation of a CoR. Notwithstanding such absence,
the compliance of the principles of natural justice is inherently
implicit and has to be read into in the exercise of the power of
rescission or cancellation so as to sub-serve the very principles
underlying section 21 of the General Clauses Act. The above decision
of the Registrar is not the fall-out of any act which the statute specifically
empowers the Registrar to do. It is an act of expediency on the part of the
Registrar, which may involve a lis or contest between the contending
parties. The presence of a lis or one or two attributes of a quasi-judicial
act would not make an administrative act as quasi-judicial act, as in the
instant case.
16. The certificate of registration under section 3 of the Act is issued
in the form of an order whereby the Registrar certifies under his hand a
society to be a registered society and authorises the validity of such
registration to a time-bound period, with provision for extension. The
form and contents of the certificate brings it within the meaning of
“orders” under section 21 of the General Clauses Act. Therefore, in
the absence of provision for cancellation of certificate under the
Societies Registration Act and such certificate being in the nature of
an order issued by the statutory authority i.e. the Registrar of
Societies, the application of section 21 of the General Clauses Act is
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clearly available to the Registrar to add to, vary or rescind the
certificate.
17. To answer the argument advanced by Mr. Choudhury that the
Societies Registration Act only envisages express provision for
dissolution of societies and not cancellation of registration and if the
latter is to be allowed by importing section 21 of the General Clauses Act
the same would distort or nullify the very scheme of the Societies
Registration Act, we say that the provision for dissolution of societies
under section 13 of the Act is an internal act of the required number of
members of any society to determine that it shall be dissolved. Such act
is altogether a different legal concept from cancellation. Dissolution
cannot be an alternative to cancellation. Whereas dissolution of a society
is an act provided under the statute, cancellation of registration is an act
dictated by expediency alone. To make cancellation of registration by the
Registrar by virtue of section 21 of the General Clauses Act on ground of
expediency, it cannot be said that the transaction would amount to
eroding or distorting the very scheme under the Societies Registration
Act. A contrary view cannot have legal sanction.”
(emphasis supplied)
38. In the present case as well, there is no specific provision in the IPA or
Rules made thereunder with regard to a power to cancel the registration
granted by the Registrar of Firms. In these circumstances, power to do the
same is being traced to Section 21 of the GCA. For that purpose, a distinction
which was drawn in the Indian National Congress (supra) followed by Full
Bench of Gauhati High Court in Atowar Rahman (supra), was whether the
act of grant of registration is an administrative or quasi-judicial function. The
Hon’ble Supreme Court in the Indian National Congress (supra) had
observed and held as under: –
“20. On the argument of parties, the question that arises for our
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powers under Section 29-A of the Act, acts administratively or quasi-
judicially. We shall first advert to the argument raised by learned counsel
for the respondent to the effect that in the absence of any lis or contest
between the two contending parties before the Election Commission
under Section 29-A of the Act, the function discharged by it is
administrative in nature and not a quasi-judicial one. The dictionary
meaning of the word quasi is “not exactly” and it is just in between a
judicial and administrative function. It is true, in many cases, the
statutory authorities were held to be quasi-judicial authorities and
decisions rendered by them were regarded as quasi-judicial, where there
was contest between the two contending parties and the statutory
authority was required to adjudicate upon the rights of the parties.
In Cooper v. Wilson [(1937) 2 KB 309 : (1937) 2 All ER 726 : 106 LJKB
728 (CA)] it is stated that “the definition of a quasi-judicial decision
clearly suggests that there must be two or more contending parties and an
outside authority to decide those disputes”. In view of the aforesaid
statement of law, where there are two or more parties contesting each
other’s claim and the statutory authority is required to adjudicate the rival
claims between the parties, such a statutory authority was held to be
quasi-judicial and decision rendered by it as a quasi-judicial order. Thus,
where there is a lis or two contesting parties making rival claims and the
statutory authority under the statutory provision is required to decide
such a dispute, in the absence of any other attributes of a quasi-judicial
authority, such a statutory authority is quasi-judicial authority.
21. But there are cases where there is no lis or two contending parties
before a statutory authority yet such a statutory authority has been held
to be quasi-judicial and decision rendered by it as a quasi-judicial
decision when such a statutory authority is required to act judicially.
In R. v. Dublin Corpn. [(1878) 2 Ir R 371] it was held thus:
“In this connection the term judicial does not necessarily mean acts of
a Judge or legal tribunal sitting for the determination of matters of law,
but for purpose of this question, a judicial act seems to be an act done
by competent authority upon consideration of facts and circumstances
and imposing liability or affecting the rights. And if there be a
body empowered by law to enquire into facts, makes estimates to
impose a rate on a district, it would seem to me that the acts of such a
body involving such consequence would be judicial acts.”
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22. Atkin, L.J. as he then was, in R. v. Electricity Commrs. [(1924) 1 KB
171 : 1923 All ER Rep 150 : 93 LJKB 390 (CA)] stated that when any
body of persons has legal authority to determine questions affecting the
rights of subjects and having the duty to act judicially, such body of
persons is a quasi-judicial body and decision given by them is a quasi-
judicial decision. In the said decision, there was no contest or lis between
the two contending parties before the Commissioner. The Commissioner,
after making an enquiry and hearing the objections was required to pass
order. In a nutshell, what was held in the aforesaid decision was, where a
statutory authority is empowered to take a decision which affects the
rights of persons and such an authority is under the relevant law required
to make an enquiry and hear the parties, such authority is quasi-judicial
and decision rendered by it is a quasi-judicial act.
23. In Province of Bombay v. Khushaldas S. Advani [1950 SCC 551 :
AIR 1950 SC 222 : 1950 SCR 621] it was held thus: (AIR p. 260, para
173)
“(i) that if a statute empowers an authority, not being a court in the
ordinary sense, to decide disputes arising out of a claim made by one
party under the statute which claim is opposed by another party and to
determine the respective rights of the contesting parties who are opposed
to each other there is a lis and prima facie, and in the absence of anything
in the statute to the contrary it is the duty of the authority to act judicially
and the decision of the authority is a quasi-judicial act; and (ii) that if a
statutory authority has power to do any act which will prejudicially affect
the subject, then, although there are not two parties apart from the
authority and the contest is between the authority proposing to do the act
and the subject opposing it, the final determination of the authority will
yet be a quasi-judicial act provided the authority is required by the
statute to act judicially.
In other words, while the presence of two parties besides the deciding
authority will prima facie and in the absence of any other factor impose
upon the authority the duty to act judicially, the absence of two such
parties is not decisive in taking the act of the authority out of the
category of quasi-judicial act if the authority is nevertheless required by
the statute to act judicially.”
24. The legal principles laying down when an act of a statutory authority
would be a quasi-judicial act, which emerge from the aforestated
decisions are these:
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Where (a) a statutory authority empowered under a statute to do any
act (b) which would prejudicially affect the subject (c) although there is
no lis or two contending parties and the contest is between the authority
and the subject and (d) the statutory authority is required to act judicially
under the statute, the decision of the said authority is quasi-judicial.
**** **** ****
33. However, there are three exceptions where the Commission can
review its order registering a political party. One is where a political
party obtained its registration by playing fraud on the Commission,
secondly, it arises out of sub-section (9) of Section 29-A of the Act and
thirdly, any like ground where no enquiry is called for on the part of the
Election Commission, for example, where the political party concerned
is declared unlawful by the Central Government under the provision of
the Unlawful Activities (Prevention) Act, 1967 or any other similar law.
34. Coming to the first exception, it is almost settled law that fraud
vitiates any act or order passed by any quasi-judicial authority even if no
power of review is conferred upon it. In fact, fraud vitiates all actions.
In Smith v. East Elloe Rural Distt. Council [(1956) 1 All ER 855 : 1956
AC 736 : (1956) 2 WLR 888 (HL)] it was stated that the effect of fraud
would normally be to vitiate all acts and orders. In Indian
Bank v. Satyam Fibres (India) (P) Ltd. [(1996) 5 SCC 550] it was held
that a power to cancel/recall an order which has been obtained by forgery
or fraud applies not only to courts of law, but also to statutory tribunals
which do not have power of review. Thus, fraud or forgery practised by a
political party while obtaining a registration, if comes to the notice of the
Election Commission, it is open to the Commission to deregister such a
political party.”
39. In Atowar Rahman (supra), after discussing the judgment of the
Hon’ble Supreme Court in the Indian National Congress (supra), it was
held that unlike the power of Election Commission under Section 29A of the
Representation of Peoples Act, 1951, the power of Registrar under Section 3
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of the Societies Registration Act, 1860, was not quasi-judicial but purely an
administrative act. However, learned Full Bench, after determining that the
power exercised by Registrar under Section 3 of the Societies Registration
Act, 1860, is purely an administrative act, further proceeded to determine,
whether the act of cancellation of registration by Registrar would amount to a
quasi-judicial act. Learned Full Bench held that the Societies Registration Act
does not prescribe any procedure requiring the statutory authority to act
judicially under the statute for cancelling a certificate of registration. It was
observed that, if the concerned statute requires that an authority before
arriving at a decision must make an enquiry then, such a requirement of law
would make the authority a quasi-judicial authority. An additional test,
distinguishing administrative function from quasi-judicial function was also
noted that an authority, who acts quasi judicially, is required to act according
to the Rules whereas the authority which acts administratively is dictated by
policy of expediency. It was further observed that in the scheme of the
Societies Registration Act read with the Assam Act, no procedure is laid
down for exercise of power of recession or cancellation of the certificate of
registration, and thus, it was held that it is within the realm of expediency,
where on a complaint that certificate of registration issued to a party had been
obtained by fraud, mis-representation and/or any sufficient reason, the
Registrar would hear the parties and arrives at a decision. An additional
feature in respect of certificate of registration under Section 3 of the said Act,
was noted that it’s form and contents brought it within the meaning of
‘orders’ under Section 21 of the GCA. Thus, it was held that such certificate
being in the nature of an order issued by the statutory authority, the power
under Section 21 of the GCA would be available to the Registrar. The
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relevant observation in Atowar Rahman (supra) for sake of completeness is
reproduced as under: –
“16. The certificate of registration under section 3 of the Act is issued
in the form of an order whereby the Registrar certifies under his
hand a society to be a registered society and authorises the validity
of such registration to a time-bound period, with provision for
extension. The form and contents of the certificate brings it within
the meaning of “orders” under section 21 of the General Clauses
Act. Therefore, in the absence of provision for cancellation of
certificate under the Societies Registration Act and such certificate
being in the nature of an order issued by the statutory authority i.e.
the Registrar of Societies, the application of section 21 of the General
Clauses Act is clearly available to the Registrar to add to, vary or
rescind the certificate.”
(emphasis supplied)
40. In this background, it will be pertinent to note that, Section 71(2)(d) of
the IPA provides for regulation of procedure of the Registrar in case a dispute
arises in the following terms: –
“71. Power to make rules.–
**** **** ****
(2) The State Government may 3[also] make rules--
**** **** ****
(d) regulating the procedure of the Registrar when disputes arise;”
40.1. Under the present Act, as already noted hereinbefore, Rules, i.e., Delhi
Partnership (Registration of Firms), Rules 1972, have already been made by
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Administrator of Delhi in exercise of power under Section 71(2) of the IPA.
Rules 6, 7, 9 of the said Rules reads as under: –
“Rule 6. Procedure on disputes.
Where any partner or other person interested makes a protest in writing
to Registrar disputing any entry made in the register of firms, the
Registrar shall record such protests and make a reference thereto in “Red
ink” in the remarks column against the disputed entry.
Rule 7. Examination of documents received by the Registrar.
On receipt of every statement, intimation, notice or any other document
required by the Act to be filed or registered in his office, the Registrar
shall examine it, and if it is found to be defective or incomplete in any of
the particulars required to be given therein or not verified in the manner
prescribed by these rules or in any way not in accordance with the
provisions of the Act or these rules, he shall return it to the person who
applied for filing or recording or to the firm concerned, and until proper
rectification or completion is made, he shall not register or file the
document in question nor shall he file or register the same unless and
until the prescribed fees are paid to and received by him. The Registrar
shall pending the payment of the such fees, act in the same way if no
such document or fact have been tendered for filing or recording or
registration.
**** **** ****
Rule 9. Enquiries and investigation by the Registrar in case of
disputes.
The Registrar may in his discretion institute such enquiries or make such
investigations in respect of any matter as may in his opinion be necessary
for the performance of his duties and administration of the Act,
especially when a dispute arises amongst the several partners of a firm,
and the Registrar may in his discretion call upon any of the partner or all-
of them to produce any original deed, document or such evidence as he
thinks fit.”
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Thus, the aforesaid Rule 6 provides for Registrar to record such protests
and make a reference regarding the same in ‘Red Ink’ in the remarks column
against the disputed entry and no more. Further, perusal of Rules 7 and 9 of
the Rules show that the Registrar of Firms has been bestowed with power to
examine the documents received by him and he may in his discretion institute
such enquiries or make such investigations in respect of any matter, as may in
his opinion, he deems necessary for the performance of his duties and
administration of Act, especially when a dispute arises amongst the several
partners of firm. Thus, despite a procedure being prescribed on dispute, there
is no power given to the Registrar for de-registration/cancellation. However,
the aforesaid provisions demonstrates that the authority, i.e., Registrar of
Firms, is required to act as per Rules in case of disputes and therefore, will be
considered a ‘quasi-judicial’. At this stage, it will be apposite to refer to the
judgment of learned Division Bench of Hon’ble Calcutta High Court in
Durga Prasad Sarawagi & Ors. v. Registrar of Firms, West Bengal &
Anr. (supra) 21, wherein while interpreting the Rule 8 of Bengal Partnership
Rules, 1933, enacted in State of West Bengal in exercise of power under
Section 71(2) of the IPA, akin to Rule 9 of the Delhi Partnership (Registration
of Firms), Rules 1972, it was observed and held as under: –
“13. Then Rule 8 provides:
“The Registrar may in his discretion institute such enquiries or
make such investigation in respect of any matter as may in his opinion be
necessary for the proper performance of his duties and administration of
the Act, especially when a dispute arises amongst the several partners of
a firm. The Registrar may in his discretion call upon any of the partners
or all of them to produce any original deed, document or such other21
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evidence as he thinks fit.” This Rule appears to indicate that a
discretion is given to the Registrar to make enquiries. It also makes it
clear that in enquiring the Registrar acts in quasi-judicial manner in
the sense that he should call for the original deeds and documents or
other evidence as he thinks fit. The Registrar did nothing of the kind in
this case. He did nothing at the stage before he made the impugned entry
“dissolved” nor did he make the enquiries when he was called upon by
the appellant to rectify his mistakes. He has powers under Rule 8 which
not only are powers to be exercised in his own discretion but are powers
to make such enquiries or such investigation as he may in his discretion
think necessary for the proper performance of his duty and in the
administration of the Act and especially when the dispute is among the
several partners. That test is more than satisfied here on the ground of
proper administration of the Act, dispute among partners and not to
contradict his own Register and the other entries contained therein. He
should have called for an investigation. He did not.”
(emphasis supplied)
40.2 In these circumstances, in absence of any provision to cancel the
registration certificate, recourse to Section 21 of the GCA could not be taken.
41. Furthermore, the acknowledgement of receipt dated 08.05.2006 issued
by Registrar of Firms, Government of NCT of Delhi, with respect to
registration of the petitioner No.1-firm, has been reproduced thus: –
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Thus, unlike an ‘order’ under Section 3 of the Societies Registration
Act, 1860, as noted by Hon’ble Full Bench in Atowar Rahman (supra), the
registration certificate under IPA is an acknowledgment of acceptance of
statement prescribed by Section 58(1) of the IPA and entering the name of
firm in the register of firm and cannot be considered an ‘order’ and recourse
to Section 21 of GCA will, thus, not be available.
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42. It has been vehemently contended that certificate of registration was
obtained by fraud, and thus, the cancellation of the same was justified. The
essence of complaint was that the partnership deed, which was registered on
08.05.2006 was on the basis of a deed, which was signed between petitioner
Nos. 2 and 4 on 01.01.2006. The deed was accepted and registered and it
continued to operate till amended and supplementary deeds were filed.
Alongwith the aforesaid amended and supplementary deeds, letter of
resignation dated 31.03.2006 of petitioner No.4 was also submitted. This was
filed before Registrar of Firms, Patparganj, Delhi, by way of Form No. V
(Section 63(1)), for ‘Notice of Change in the Constitution of a Registered
Firm’ which is reproduced as under: –
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43. It is pertinent to note that, till that stage, the letter of resignation was
not submitted before any authority or was acted upon. Both the amended andSignature Not Verified
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supplementary deeds are dated 31.03.2006 and 17.02.2006 respectively. Thus,
at the time of registration, there was no misrepresentation or concealment
made by the petitioner No.1 or its partners (petitioner Nos.2 and 4) while
submitting the documents before Registrar of Firms. It is the case of the
petitioners that a resignation letter dated 31.03.2006 of petitioner No.4 was
not acted upon by the partners at that stage for the reasons as stated by them.
In these circumstances, the resignation letter dated 31.03.2006 was brought
into effect by the petitioners only when it was submitted before Registrar of
Companies on 02.12.2010. By way of aforesaid Form V, the petitioners gave
a full disclosure with regard to the resignation letter, amended partnership
deed and the supplementary partnership deed. It is important to note that had
the petitioners not filed the resignation letter dated 31.03.2006 of petitioner
No.4 then, the same would have never seen the light of the day. It is the case
of respondent Nos.1 to 4 since the resignation was dated 31.03.2006,
petitioner No.4 could not have signed the deed dated 31.03.2006 which was
finally registered, and therefore, it amounted to fraud.
44. At this stage, it is apposite to refer to a judgment rendered by learned
Single Judge of this Court in Brij Mohan Gupta v. The Registrar of
Societies22, wherein, while discussing the concept of fraud in public law and
fraud on the statute, the learned Single Judge had observed and held as under:
–
“21. Reference, for the present purposes, is made to the judgment of the
Supreme Court in Shrisht Dhawan v. Shaw Brothers, (1992) 1 SCC
534 : AIR 1992 SC 1555, wherein the Court had the occasion to consider
22
2012 SCC OnLine Del 2535Signature Not Verified
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the concept of fraud in public law and fraud on the statute. The Supreme
Court observed as under:
“But fraud in public law is not the same as fraud in private law. Nor
can the ingredients which establish fraud in commercial transaction
can be of assistance in determining fraud in Administrative Law. It
has been aptly observed by Lord Bridge in Khawaja
Khawaja v. Secretary of State for Home Deptt., 1983 (1) All ER
765 that it is dangerous to introduce maxims of common law as to
effect of fraud while determining fraud in relation to statutory law. In
Pankaj Bhargava ((1991) 1 SCC 556 : AIR 1991 SC 1233) (supra) it
was observed that fraud in relation to statute must be a colourable
transaction to evade the provisions of a statute. ‘If a statute has been
passed for some one particular purpose, a court of law will not
countenance any attempt which may be made to extend the operation
of the Act to something else which is quite foreign to its object and
beyond its scope’ [Craies on Statute Law, 7th Edition, p. 79]. Present
day concept of fraud on statute has veered round abuse of power or
malafide exercise of power. It may arise due to overstepping the limits
of power or defeating the provision of statute by adopting subterfuge
or the power may be exercised for extraneous or irrelevant
considerations. The colour of fraud in public law or administrative
law, as it is developing, is assuming different shade. It arises from a
deception committed by disclosure of incorrect facts knowingly and
deliberately to invoke exercise of power and procure an order from
an authority or tribunal. It must result in exercise of jurisdiction
which otherwise would not have been exercised. That is
misrepresentation must be in relation to the conditions provided in a
section on existence or nonexistence of which power can be
exercised. But non-disclosure of a fact not required by a statute to be
disclosed may not amount to fraud. Even in commercial transactions
non-disclosure of every fact does not vitiate the agreement, ‘In a
contract every person must look for himself and ensures that he
acquires the information necessary to avoid bad bargain’ [Anson’s
Law of Contract]. In public law the duty is not to deceive. For
instance non-disclosure of any reason in the application under Section
21 of the Act about its need after expiry of period or failure to give
reason that the premises shall be required by son, daughter or any
other family member does not result in misrepresentation or fraud. It
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the premises in occupation of the landlord on the date of application
or, after expiry of period were or may be sufficient. A non-disclosure
of fact which is not required by law to be disclosed does not amount
to misrepresentation.”
(emphasis supplied)
22. In light of the aforementioned judgment, the disclosure of incorrect
facts by the President of the society in the affidavit – as regards the
desirous members of the society not being related by blood, would
not amount to committing fraud on the statute, since the disclosure
of the desirous persons being related by blood, or otherwise, is not
required by the statute, in the first place. In fact, the said requirement
is patently illegal. Keeping in view the object and provisions of the
Societies Registration Act, as discussed above, the non disclosure of the
desirous members of the society being related by blood or otherwise,
could not result in exercise of jurisdiction by the registrar to reject the
application to seek registration, or cancel the registration already granted.
**** **** ****
25. I am, therefore, of the view that section 21 of the General Clauses
Act could not have been invoked in the facts of the present case by
the Registrar to cancel the registration of the society. The inter
se disputes between the petitioner and respondent nos. 2 to 6 with regard
to management and control of the society in question cannot be decided
in these proceedings. It shall be open to the parties to raise all such
issues in appropriate civil proceedings, and in accordance with the
law. As above noted, this Court has not gone into the issue of illegality,
if any, committed by the deponent of the affidavit, namely, the President
of the society in the present case. The said issue may be raised and
decided on its own merits, in appropriate proceedings, if and when
raised.”
(emphasis supplied)
45. As already noted hereinbefore, the resignation letter dated 31.03.2006
though in existence was never acted upon, and thus, at the time of first
registration, the same was not required to be disclosed. A letter of resignation
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will be effective only when it is tendered and accepted. Hon’ble Supreme
Court in Dr. Prabha Atri v. State of U.P.23, while analyzing as to when a
letter could be construed to mean or amounted to a letter of resignation or
merely an expression of the intent to resign, had observed and held as under: –
“10. We have carefully considered the submissions of the learned
counsel appearing on either side, in the light of the materials and
principles, noticed supra. This is not a case where it is required to
consider as to whether the relinquishment envisaged under the rules and
conditions of service is unilateral or bilateral in character but whether
the letter dated 9-1-1999 could be treated or held to be a letter of
resignation or relinquishment of the office, so as to sever her services
once and for all. The letter cannot be construed, in our view, to
convey any spontaneous intention to give up or relinquish her office
accompanied by any act of relinquishment. To constitute a
“resignation”, it must be unconditional and with an intention to
operate as such. ……..”
(emphasis supplied)
Thus, in view of the fact that, the resignation letter dated 31.03.2006 was
never acted upon, the initial registration dated 08.05.2006, therefore, cannot
be faulted with.
46. Thus, in these circumstances, what is borne from the records is that the
Form No. V filed on behalf of the partnership firm in 2010 for bringing on
record change in the constitution of the firm was defective inasmuch as the
resignation letter and the deeds were in contradiction with the previous
documents already filed with the respondent Nos.1 to 4. For the subsequent
change, the parties could have brought on record a contemporaneous
resignation letter from petitioner No.4 as well as the supplementary and
23
(2003) 1 SCC 701
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amended partnership deeds. The said defect could have been examined by the
Registrar under Rule 7 of the Delhi Partnership (Registration of Firms) Rules,
1972, which provided for ‘Examination of documents received by the
Registrar’. In these circumstances, whether the initial registration 08.05.2006
was obtained by fraud is doubtful. The letter of resignation dated 31.03.2006
which was placed on record by way of Form No. V on behalf of the petitioner
No.1-firm could not have been given a retrospective effect to nullify the
initial registration.
47. It is the case of respondent No 5 that on an application being moved on
his behalf under Order VII Rule 11 of the CPC read with Section 69(2) of the
IPA in a suit, C.S. OS No.153/15, titled as ‘M/s. Universal Promoters and
Developers v. Gyan Chand and Ors.‘, learned ACJ, Panipat, vide order dated
19.05.2012, asked the plaintiff therein, i.e., petitioner no. 1 herein, whether
they are a registered firm or a company. It is the case of the respondent No.5
that, thereafter, in order to avoid the return of the plaint, these documents
were manipulated. It is pertinent to note that the aforesaid order was passed in
May 2012, and the documents, i.e., resignation letter, supplementary deed and
amended deed were placed on record by petitioner No.1 by way of Form No.
V filed on 06.11.2010.
48. The judgments relied upon by the petitioners in Sri Lakha Granites
(supra), Supreme Tech Engineering (supra), which has been rendered in
terms of the IPA are squarely applicable to the facts of the present case. In
fact, in Sri Lakha Granites (supra), the learned Single Judge of Hon’ble
Rajasthan High Court noted that the cancellation of entries made on an appeal
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preferred in purported exercise of power under Section 64 of the IPA, were
ex-facie without jurisdiction, as there is no appeal maintainable before the
Registrar for the cancellation of such entries in the Register of Firms. In the
present case, as well, as already noted hereinbefore, the cancellation of
registration has been done by the Deputy Commissioner in his purported
exercise of power of ‘REVIEW’ under Section 64 of the IPA, which is non-
existent. Similarly, in the said judgment, it was also noted that the remedy for
canceling a partnership deed is available under the general law before a civil
Court and the Registrar of Firms does not have a jurisdiction to entertain
appeal or application for declaring partnership deeds as null and void or
cancelling the entries made on the basis of such partnership deed. Similarly,
in Supreme Tech Engineering (supra), it was held that while undertaking
the procedures for rectifying the mistakes the statute does not provide for any
elaborate scope of inquiry and it was held as under: –
“21. …. While undertaking the procedure of rectifying the mistake, as
could be seen from the procedure itself, at least the statute does not lay
down any elaborate scope of enquiry which would render justification to
exercise of enquiring into the disputed claims, which otherwise can never
be subject matter of adjudication by the administrative authority. ….”
(emphasis supplied)
49. The judgment given by the Hon’ble Full Bench of Gauhati High Court
in Atowar Rahman (supra) was in respect of the provisions under the
Societies Registration Act, 1860, which, as already noted hereinbefore, is
distinguishable with respect to the provisions and the scheme of the Indian
Partnership Act, 1932.
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50. In view of the above findings, issue of locus standi of respondent No.5
to file a complaint before Registrar of Firms needs no adjudication by this
Court.
CONCLUSION
51. In the considered opinion of this Court, after analyzing the provisions
of the Act and the Rules made thereunder, the act of cancellation of
registration would be quasi-judicial in nature and in absence of any express
power provided in the Act or the Rules made thereunder, the Registrar of
Firms would not have a power to cancel the registration. The power which has
been conferred upon the Registrar by Rule 6 of the Delhi Partnership
(Registration of Firms), Rules, 1972, enacted in exercise of the power under
Section 71(2) of the IPA, is with respect to the noting of protest and making
of reference in the manner as provided in the said Rule. Even otherwise,
Deputy Commissioner, Firms, would not have a power to pass an order of the
nature as has been done in the present case. Finally, as already noted
hereinbefore, it is not a case of fraud as has been noted in the impugned order.
Consequently, impugned orders dated 17.02.2014 and 05.01.2015 passed by
Deputy Commissioner, Firms, and Registrar of Firms, respectively, are set
aside. Registration Certificate dated 08.05.2006 of petitioner No.1-firm is
restored.
52. The present petition is allowed and disposed of accordingly.
53. No order as to costs.
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54. Copy of the judgment be sent to the concerned Registrar of Firms as
well as the Office of Special Commissioner, Industries, Patparganj Industrial
Area, Delhi, for necessary information and compliance.
55. Judgment be uploaded on the website of this Court, forthwith.
AMIT SHARMA
(JUDGE)
FEBRUARY 27, 2026/nk/kr/ns
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