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Sachin Jaiswal v. M/s Hotel Alka Raje

Civil Appeal · 2025 INSC 275Decided 27 Feb 2025
Civil Appeal (arising out of SLP(C) No. 18717 of 2022)
Justice Sudhanshu Dhulia · Justice Ahsanuddin Amanullah

Background

The appellant's late father, Bhairo Prasad Jaiswal, bought a plot of land in 1965 and later formed a partnership with his brother in 1972, under which the two jointly built and ran "Hotel Alka Raje." In 1983 he executed a registered relinquishment deed giving up his personal rights over the property in favour of the firm, and stated his heirs would have no claim to it. After his death, his son (the appellant) tried to assert ownership over the property based on his father's original 1965 purchase, prompting the firm and remaining partners to sue for a declaration of title.

Decision Breakdown

The Supreme Court agreed with the High Court that once a partner brings property into a firm's business, as Bhairo Prasad did by jointly constructing the hotel after forming the partnership, that property becomes the firm's property under Section 14 of the Partnership Act, regardless of whether a formal transfer document exists. Relying on precedent (Addanki Narayanappa v. Bhaskara Krishnappa), the Court held that clear evidence of intent to contribute property to the partnership is enough; the relinquishment deed's validity was not even necessary to decide the case. The appeal was dismissed.

Lesson Learnt

Once an individual's personal property is brought into a partnership's business and used for its purposes, it legally becomes property of the firm under Section 14 of the Partnership Act: no formal deed of transfer is required, and the original owner's heirs cannot later claim personal ownership over it.

Official source (sci.gov.in)View Judgment (PDF)

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