1. Salem Chit Funds and financiers Association represented by its secretary has filed the above writ petition to issue a writ of certiorari calling for the records of the respondent relating to G.O.Ms.747 Commercial Taxes and Religious Endowment Department dated 2.12.1990 inserting the same as Rule 3-A of to the Tamil Nadu Partnership (Registration of firms) Rules and quash the same.
2. The case of the petitioner is briefly stated hereunder:
The members of the association consists of registered partnership firms and individuals, carrying on business in chit funds and financing in Salem District. Most of the members of the association are partnership firms. The partnership Act does not prescribe or provide for the necessity of filing any declaration form by a registered firm, for its continuance after the registration of such firm under section 59 of the act. Under section 61, the firm has to send intimation to the registrar only in cases where it discontinues business at any place or begins to carry on business at any place other than its principal place of business under section 63, the partner has send the notice to the registrar when a firm is dissolved. section 71 of the act empowers the state government to make rules in respect of matters mentioned in sub-section (1) and (2) of section 71. In exercise of the powers vested in them under section 71(3) of the act, the Government of Tamil Nadu issued the impugned notification in G.O.Ms.No.747 dated 2.12.1990 amending the Tamil Nadu Partnership (Regulation of finance) Rules, 1932. As per the rule firms have to file with the registrar a declaration in form II annexed to these Rules to the effect that the registered firm is carrying on business or has been in operation during the financial year. Such declaration together with a rupees 50 shall be filed with the registrar within thirty days from the date of closing of such financial year. According to the petitioner the said notification is ultravires the rule making power of the state Government under section 71(2) of the act, hence it is null and void. In such circumstances, having no other remedy the association has filed the above writ petition.
3. The respondent has filed a counter affidavit wherein it is stated that under powers delegated in section 71(1) and (2) of the Indian Partnership Act, the Government of tamil Nadu in G.O.Ms No.747 commercial Taxes and Religious Endowments Department dated 27.12.1990 have framed Rule 3-A to prescribing a declaration in form II-A to be filed by every registered firm with the registrar of firms with a fee of Rs.50/- within 30 days. The issue of such acknowledgment for declaration and quantum of fine for delay has also been stipulated therein. It is stated that before passing the amendment the same was notified their intention to amend the Tamil Nadu Partnership Rules. 1932, inviting objections or suggestion from the person concerned. The intention of the amendment was to know exactly how many firms registered are functioning at a given point of time. The notification was issued under rule making powers of the State Government under section 71(1) and (2) of the act. In rule 71(2)(j) the state Government are vested with the powers of making rules generally to carryout the purpose of that chapter. The amendments are within the rule making powers of the State Government. If there was any grievance the petitioner could have brought to the notice of the Government within the time given in G.O.Ms.No.13 Commercial Taxes and Religious Endowments Department dated 6.1.1990. The impugned notification amending the rules was notified within the rule making powers of the State Government, hence the petition deserves to be dismissed.
4. In the light of the above pleadings I have heard Mr.V.Shanmugham the learned counsel for the petitioner and Mr.S. Gopinathan, learned Government advocate for respondent.
5. The only point urged by the learned counsel for the petitioner is that the impugned notification is ultravires, the rule making power of the State Government under section 71(2) of the Act.
6. We are concerned with Chapter VII of the Act which deals with registration of firm. Under section 57 the state Government may appoint Registrar of firms for the purpose of this Act and may define the areas within which they shall exercise their powers and perform their duties. Under section 58 it is provided that the registration of a firm may be effected at any time by sending by post or delivering to the register 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. Under section 59 it is provided that, if 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. Under section 60(1) it is provided that, 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 prescribed fee, specifying the alteration and signed and verified the manner required under section 58. Under sub-section (2) of section 60 it is provided, 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. Section 61 speaks about 'Nothing of closing and opening of branches. Under section 62 and 63 it is provided that, when a change occurs in the constitution of a registered firm any incoming, continuing or outgoing partner, 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. Section 71 enables the state Government to make rules prescribing the fees which shall accompany document sent to the registrar of firms or which shall be payable for the inspection of a document in the custody of the Registrar of Firms for copies from the register of firms, by virtue of sub-clause (2) the state Government may also make Rules in respect of matters relating to (a) to (j) mentioned therein.
7. Now, I shall refer Rule 3-A of the rules inserted by way of the impugned Government order. The said notification is as follows:
In exercise of the powers conferred by sub-section (1) and (2) of section 71 of the Indian Partnership act, 1932 (central act ix of 1932) the governor of Tamil Nadu hereby makes the following rules to the Tamil Nadu Partnership (Registration of firms) Rules 1932. The same having been previously published as required by sub-section (3) of section 71 of the said Act.
In the said rules:
1) After rules 3 the following rules shall be inserted, namely:
firm to file declaration for its continuance;(1) After the registration of firm under section 59 of the act every registered firm shall file with the registrar a declaration in form -II A annexed to these rules to the effect that the registered firm has been carrying on its business or has been in operation during the financial year. Such declaration together with a fee of rupees fifty, shall be filed with the registrar within thirty days from the date of closing of such financial year.
(2) On receipt of declaration from the registered firm, the registrar shall issue an acknowledgment for such declaration.
(3) If the registered firm fails to file the declaration within the time allowed, in sub-rule (1) it shall be liable to pay additional fee of rupees twenty five for the delay of every three months.
(2) In the annexure, after form - II to following form shall be inserted namely:-
(FORM OF DECLARATION)
1.Name of the firm
3.Date of registration
4.Place of business
5.Period of declaration
6.Date of declaration
We, ........ declare that the above firm is functioning as an date of declaration with the following partners:
Name of the partner
date of joining
Signature of partner
or Authorised person"
8. The said rule, viz., 3-A has been introduced in exercise of the powers conferred by sub-section (1) and (2) of section 71 of the Act. The reading of Rule 3-A makes it clear that every registered firm has to file with, the registrar a declaration in form II-A annexed the said rules to the effect that the registered firm had been carrying on its business or has been in operation during the financial year. Along with such declaration Rs.50/- shall be paid with the registrar within 30 days from the date of closing of such financial year. Mr.V.Shanmugam, learned counsel for the petitioner in support of his contention took me through sections 56 to 71 provided under chapter VII of the Act. According to him the declaration along with the payment of Rs.50 during each financial year is nowhere contemplated or provided in chapter VII, In other words, such declaration is not at all provided in any one of the sections in chapter VII. Accordingly, by virtue of sub-section (2) of section 71 state Government is not competent or authorised to frame such rule. After going through sections 56 to 71 in chapter VII as well as rule 3-A of the rules, I am unable to accept the said argument. I have already referred to details and the contents of section 57 to 71. Even though filing such declaration by each one of the firm during each financial year is not specifically stated in clause (a) to (i) in sub-clause (2) in section 71, as rightly contented by the learned Government Advocate, sub-clause (j) enables the state Government to make relevant rule in order to know how many firms registered are functioning at a given point of time. I have already stated that details regarding registration of firms and their activities have been specifically mentioned in sections 57 to 70. In order to know the continuance and functioning of the registered firms, they are asked to file a declaration every year and fees to be levied at the rate of Rs.50/-. I am satisfied that in view of sub-clause (j) in sub- section (2) of section 71, the state Government is competent to make a rule to carry out the provisions contained in chapter VII of the Act. Further, as per sub-clause (3) of section 71 the Government have notified their intention to amend the Tamil Nadu Partnership(Registration of firms) Rules, 1932 and the same was notified in G.O.Ms.No.13 commercial Taxes and Religious Endowment Department, dated 6.1.1990. By the said notification the Government have called for objections or suggestions from the general public particularly from the persons concerned. Thereafter, by the impugned Government order dated 2.12.1990 the said amendments were approved and published in the Government Gazettee No.5 dated 6.2.1991. Admittedly, neither the petitioner Association nor its members raised any objection to the Government as per the earlier notification. In this regard it is clear that the intention of the amendment was to know exactly how many firms registered or functioning during each financial year. Accordingly, I hold that the notification was issued rightly under the rule making powers of the state Government under section 71(1) and (2) of the Act. Likewise, the fees prescribed for filing such declaration is Rs.50/- is also within the provisions of 71 (1) of the Act. It is also clear from the counter affidavit that the Government taking into consideration of the representation received have in G.O.Ms.No.456 Commercial Taxes and Religious Endowment Department, dated 11.11.1981 notified their intention to amend. Further the above rule 3-A of the rules to enable the registered firms to remit the fees by means of demand draft and extended the time for filing declaration for a period of three months. The said amendment notification has been published in the gazettee no.40 dated 14.6.1992. In such circumstance, the contention raised by the learned counsel for the petitioner is baseless and really if there was any grievance the petitioner could have brought to the notice of the Government as given in G.O,Ms.No.13 of commercial Taxes and Religious Endowment Department, dated 6.1.1990.
9. In the light of what is stated above, I hold that the impugned Government order 747 Commercial Taxes and Religious Endowment Department dated 27.12.1990 inserting the same as rule 3-A to the Tamil Nadu Partnership(Registration of firms) Rules was notified within the rule making powers of the state Government, accordingly I reject the contra argument made by the learned counsel for the petitioner.
10. Net result the writ petition fails and the same is dismissed. No costs.