Sachin Jaiswal Vs Hotel Alka Raje & Other (Supreme Court of India)
Supreme Court order that contribution made by the partner to the partnership firm becomes the firm’s property as per Section 14 of the Partnership Act, 1932
In the case of Sachin Jaiswal Vs Hotel Alka Raje & Others, the Supreme Court of India addressed a dispute regarding ownership of a hotel property that was contributed to a partnership firm by one of its founding partners, late Bhairo Prasad Jaiswal. The legal heirs of the deceased partner argued that the property, originally acquired by their father, should not have been transferred to the partnership firm and sought ownership claims over it.
The Trial Court, in its judgment, decreed that the property belonged to the partnership firm, and the legal heirs had no claim over it. This decision was upheld by the Allahabad High Court, which clarified that the partnership firm, M/s Hotel Alka Raje, was the sole owner of the property. The legal heirs challenged this decision before the Supreme Court, arguing that the property could not have been transferred to the partnership firm via a relinquishment deed and that it remained their father’s personal property.
The Supreme Court, affirming the decisions of the lower courts, ruled that once a property is contributed to a partnership firm, it becomes the firm’s property under Section 14 of the Indian Partnership Act, 1932, unless there is evidence to the contrary. The Court noted that Bhairo Prasad Jaiswal had contributed the land and building to the firm, as evidenced by the construction of the hotel and the registered relinquishment deed executed in 1983. The deed explicitly stated that neither he nor his legal heirs would have any claim over the property.x1
