Supreme Court: Section 30(5) of Partnership Act does not apply to Minor Partner

Partnership Act Partners Law Insider

Ambika bhardwaj

Published On: February 15, 2022 at 17:29 IST

The Supreme Court in the Case of State of Kerala vs Laxmi Vasanth noted that Sub-Section (5) of Section 30 of the Partnership Act should not be applied on a minor partner who was not a partner at the time of his attaining the majority.

The Bench of Justices MR Shah and BV Nagarathna ruled that, “One should not be responsible for any previous dues of the Partnership Firm while he was a minor.”

In this Case, Lakshmi Vasanth and J. Raj Mohan Pillai were incorporated as Partners of the Partnership Firm, M/s. Malabar Cashew Nuts and Allied Products, when they were minors. On 1st January 1976, the Partnership Firm was reconstituted and these two were eliminated from the Partnership.

In 1987, Lakshmi Vasanth attained majority whereas J. Rajmohan Pillai attained majority in 1984.

The Department asked for Sales Tax against the Partnership Firm as well as Lakshmi Vasanth and J. Raj Mohan Pillai, for the period of 1970-71 and 1995-1996

The Kerala High Court granted the Writ Petition filed by the duo and Quashed the demand against them.

It was asserted before the Supreme Court Bench by the Appellant that because these persons did not give any Notice after attaining the majority as required by Sub-Section (5) of Section 30, they are deemed to be Partners and thus their responsibility to pay the Partnership Firm’s dues continued.

The Respondents asserted that as they were eliminated as Partners, there could be no deemed continuation as a partner based on non-compliance with Sub Section (5) of Section 30.

Hence, the Bench held that Sub-Section (5) of Section 30 shall not be applicable in the present case, while dismissing the appeals.

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