Law:

Section:

Section 17 of the Indian Registration Act, 1908 - Document of which registration is compulsory - Whether on dissolution of a partnership firm, allotment of assets to individual partner is not a case of transfer of any assets of firm - Held, yes - On dissolution of partnership firm, an arbitrator distributed assets of firm between partners and made an award - Some of partners challenged said award on ground that award was not registered under section 17 - Whether a document which records distribution of assets done either by way of an arbitration award or by mutual settlement does not require registration under section 17 since such document does not transfer or assign interest in any assets - Held, yes FACTS A partnership firm, comprising of four persons belonging to the same family, was dissolved. Dispute and differences arose between the partners were referred to arbitration. The arbitrator made an award. The award was challenged by some partners on ground that the award was not registered under section 17. The trial court and the High Court accepted the objections and held that award was required to be compulsorily registered and since the award was not registered, the same could not be made rule of the Court. On appeal to the Supreme Court : HELD A perusal of the award showed that the instant case was simply a case of distribution of assets of the dissolved firm amongst the partners themselves. A partnership firm is not an independent legal entity, the partners are the real owners of the assets of the partnership firm. Actually the firm name is only a compendious name given to the partnership for the sake of convenience. The assets of the partnership belong to and are owned by the partners of the firm. So long as the partnership continues, each partner is interested in all the assets of the partnership firm as each partner is owner of the assets to the extent of his share in the partnership. On dissolution of the partnership firm, accounts are settled amongst the partners and the assets of the partnership are distributed amongst the partners as per their respective shares in the partnership firm. [Para 3] On dissolution of a partnership firm, the allotment…

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