# M/s Sri Maa Chemist, Kanpur Nagar v. State of U.P. & Anr

- **Citation:** (2021) 11 ILRA 347
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-17
- **Case number:** Writ-C No. 18612 of 2021
- **Bench:** Manoj Misra, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sri-maa-chemist-kanpur-nagar-v-state-of-u-p-anr-46544
- **Pages:** 3

## Headnote

A. Drugs and Cosmetics Rules, 1945 - Rule 66
- Licence in favour of a Firm - It's cancellation
after
death
of
one
partner
-
Legality
challenged - Opportunity of hearing, when is
not required to be provided - Nature of the
cancellation order, punitive or declaratory -
Impact - Held, the order impugned is not
punitive but declaratory in nature as it merely
declares about the automatic consequence of
condition no. 5 in the licence. Condition no. 5 is
an enabling provision whereunder a firm even
after losing a partner could continue its
business under the licence for three months -
As no fresh licence was obtained within that
window period and by the time the petitioner
gave information regarding death of one of its
partners, already three months had passed, the
licence stood automatically lapsed in terms of
the aforesaid condition no. 5 - Thus the
impugned order being more of an information
about
automatic
lapse
of
licence,
no
opportunity of hearing was required to be
provided
before
its
issuance
-
Since
cancellation order is based on no misconduct,
High Court issued the direction. (Para 7, 8 and
10)
B. Firm - Nature and status - Distinction from
Body Corporate - A body corporate is distinct
legal entity separate from its shareholders,
whereas an ordinary partnership firm is not a
distinct legal entity. It is only a compendium of
its partners - Even the registration of a firm
does not mean that it becomes a distinct legal
entity like a company. Hence, the partners of a
firm are co-owners of the property of the firm,
unlike shareholders who are not co-owners of
the property of the company. (Para 6)
C. Firm - Death of the partner - Effect - On
death of any of the partners of the firm, the
constituents of the firm change though, by an
enabling clause in the partnership agreement,
the firm may not automatically dissolve on
death of any one of the partners -Nevertheless,
on
death
of
one
of
the
partners,
the
constitution of the firm would definitely
change. (Para 6)
Writ petition disposed of .(E-1)
Cases relied on :-
348 INDIAN LAW REPORTS ALLAHABAD SERIES

## Text

11 All. M/s Sri Maa Chemist, Kanpur Nagar Vs. State of U.P. & Anr.
347
sense of responsibility. Despite the orders of this
Court dated 10.06.2020 and 19.03.2021, passed
in Writ C No.8925 of 2020 and Writ C
No.27614 of 2020 respectively the State
respondents repeatedly passed the same order. It
is only after the present writ petition was filed
and an order dated 05.10.2021 was passed, only
then the State respondents have given protection
to the petitioner by passing the order dated
30.10.2021. This instance itself is sufficient to
discern the truth that various circulars or letters
being issued by the State Government are
merely an eye wash and in truth the Witness
Protection Scheme, 2018 is not being properly
implemented by the State respondents.

12. In view of the aforesaid, we dispose of
this writ petition with the directions to the State
Government
and
all
its
concerned
authorities/committees to implement the Witness
Protection Scheme, 2018 forthwith as well as the
directions issued by the Hon'ble Supreme Court
in the case of Mahender Chawla (Supra)
forthwith.
----------
(2021)11ILR A347
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.08.2021

BEFORE

THE HON'BLE MANOJ MISRA, J.
THE HON'BLE JAYANT BANERJI, J.

Writ-C No. 18612 of 2021

M/s Sri Maa Chemist, Kanpur Nagar
 ...Petitioner
Versus
State of U.P. & Anr. ...Respondents

Counsel for the Petitioner:
Sri Madhusudan Dikshit

Counsel for the Respondents:
C.S.C.
A. Drugs and Cosmetics Rules, 1945 - Rule 66
- Licence in favour of a Firm - It's cancellation
after
death
of
one
partner
-
Legality
challenged - Opportunity of hearing, when is
not required to be provided - Nature of the
cancellation order, punitive or declaratory -
Impact - Held, the order impugned is not
punitive but declaratory in nature as it merely
declares about the automatic consequence of
condition no. 5 in the licence. Condition no. 5 is
an enabling provision whereunder a firm even
after losing a partner could continue its
business under the licence for three months -
As no fresh licence was obtained within that
window period and by the time the petitioner
gave information regarding death of one of its
partners, already three months had passed, the
licence stood automatically lapsed in terms of
the aforesaid condition no. 5 - Thus the
impugned order being more of an information
about
automatic
lapse
of
licence,
no
opportunity of hearing was required to be
provided
before
its
issuance
-
Since
cancellation order is based on no misconduct,
High Court issued the direction. (Para 7, 8 and
10)
B. Firm - Nature and status - Distinction from
Body Corporate - A body corporate is distinct
legal entity separate from its shareholders,
whereas an ordinary partnership firm is not a
distinct legal entity. It is only a compendium of
its partners - Even the registration of a firm
does not mean that it becomes a distinct legal
entity like a company. Hence, the partners of a
firm are co-owners of the property of the firm,
unlike shareholders who are not co-owners of
the property of the company. (Para 6)
C. Firm - Death of the partner - Effect - On
death of any of the partners of the firm, the
constituents of the firm change though, by an
enabling clause in the partnership agreement,
the firm may not automatically dissolve on
death of any one of the partners -Nevertheless,
on
death
of
one
of
the
partners,
the
constitution of the firm would definitely
change. (Para 6)
Writ petition disposed of .(E-1)
Cases relied on :-
348 INDIAN LAW REPORTS ALLAHABAD SERIES
1. V. Subramaniam Vs Rajesh Raghuvandra Rao;
(2009) 5 SCC 608.

(Delivered by Hon'ble Manoj Misra, J.
&
Hon'ble Jayant Banerji, J.)

1. Heard Shri Madhusudan Dixit, learned
counsel for the petitioner; the learned Standing
Counsel for the respondent nos.1 and 2; and
have perused the record.

2. The petitioner is a firm whose partners
were Mannu Lal Manjhi; Anil Kumar; Reeta
Singh; and Anshu Gambhir. The said firm was
granted a drug licence in Form-20 of the Drugs
and Cosmetics Rules, 1945. Condition no.5 of
the licence is as follows:

"The
licensee
shall
inform
the
Licensing Authority in writing in the event of
any change in the constitution of the firm
operating under the licence. Where any change
in the constitution of the firm takes place, the
current licence shall be deemed to be valid for a
maximum period of three months from the date
on which the change takes place unless, in the
meantime, a fresh licence has been taken from
the Licensing Authority in the name of the firm
with the changed constitution"

3. Mannu Lal Manjhi, one of the partners
of the firm, expired on 09.09.2020. An
application giving information of death of
Mannu Lal Manjhi was submitted to the
Licensing
Authority
on
01.07.2021.
The
Licensing Authority, by the order impugned
dated 03.07.2021, declared the licence cancelled
under the Rules.

4. The order impugned dated 03.07.2021
has been challenged by the licencee-firm on
ground that paragraph 12 of the partnership deed
between partners of the firm specifically
provided that in the event of death of any
partner, the partnership shall not dissolve but
shall continue among the surviving partners and
the legal heirs/representatives of the deceased
partner, if they so desired. It has been urged that
since the partnership did not automatically
dissolve on death of any one of the partners,
condition no.5 of the licence, on the basis of
which the Licensing Authority has taken a
decision that licence automatically lapsed,
would not apply as the firm continued with the
remaining partners.

5. In addition to above, the learned counsel
for the petitioner submitted that under Rule 66
of the Drugs and Cosmetics Rules, 1945, the
licence could only be cancelled after giving
opportunity of hearing to the licencee but since
no such opportunity was provided, the order
impugned is liable to be quashed.

6. Insofar as the first contention of the
learned counsel for the petitioner that there was
no change in the constitution of the firm,
therefore, condition no.5 was not applicable, is
concerned, we are of the view that there is a
difference between a firm and a body corporate.
A body corporate is distinct legal entity separate
from its shareholders, whereas an ordinary
partnership firm is not a distinct legal entity. It is
only a compendium of its partners. Even the
registration of a firm does not mean that it
becomes a distinct legal entity like a company.
Hence, the partners of a firm are co-owners of
the property of the firm, unlike shareholders
who are not co-owners of the property of the
company, (Vide V. Subramaniam v. Rajesh
Raghuvandra Rao, (2009) 5 SCC 608, para
11). On death of any of the partners of the firm,
the constituents of the firm change though, by an
enabling clause in the partnership agreement, the
firm may not automatically dissolve on death of
any one of the partners. Nevertheless, on death
of one of the partners, the constitution of the
firm would definitely change. Therefore, the
contention of the learned counsel for the
11 All. Ishwar Singh & Anr. Vs. State of U.P. & Ors.
349
petitioner that on mere death of any one of the
partners, the constitution of the firm would not
change, is liable to be rejected and is,
accordingly, rejected.

7. Insofar as the second contention of
the learned counsel for the petitioner that
licence cancellation stood vitiated as no
opportunity of hearing was given to the
petitioner before passing the order impugned
is concerned, suffice it to say that the order
impugned is not punitive but declaratory in
nature as it merely declares about the
automatic consequence of condition no.5 in
the licence. Importantly, condition no.5 of
the
licence
has
not
been
challenged.
Otherwise
also,
condition
no.5
is
an
enabling provision whereunder a firm even
after losing a partner could continue its
business under the licence for three months.
It thus, gives a time window to the licencee
firm to obtain a fresh licence with the
changed constitution of the firm.

8. In the instant case, as no fresh
licence was obtained within that window
period and by the time the petitioner gave
information regarding death of one of its
partners, already three months had passed,
the licence stood automatically lapsed in
terms of the aforesaid condition no.5. Thus,
in our view, the impugned order being more
of an information about automatic lapse of
licence, no opportunity of hearing was
required to be provided before its issuance.

9. In view of above, we find no merit in
this petition. The prayer of the petitioner to
quash the impugned order dated 03.07.2021
is, accordingly, rejected.

10. However, since the order impugned
is not based on any misconduct on the part
of the firm or any of its partners, we deem it
appropriate to dispose of this petition by
giving liberty to the petitioner to apply for a
fresh licence for the firm by giving its new
constitution. It is expected that if any such
application is submitted after completing all
the necessary formalities, the same shall be
addressed in accordance with law and
appropriate orders shall be passed thereon,
preferably, within a period of one month
from the date of filing of such application
alongwith a copy of this order.

With the aforesaid observations and
directions, the writ petition is disposed of.
----------
(2021)11ILR A349
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 13.09.2021

BEFORE

THE HON'BLE MANOJ MISRA, J.
THE HON'BLE JAYANT BANERJI, J.

Writ-C No. 20607 of 2021

Ishwar Singh & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Abhitabh Kumar Tiwari

Counsel for the Respondents:
C.S.C., Sri Kartikeya Saran

A. Electricity Act, 2003 - Section 67 - Works of
Licensees Rules, 2006 - Rules 3 and 10 -
Shifting of transmission line - Liability of
licensee
-
Compensation
for
damages
-
Though the licensee is empowered to carry out
the works contemplated under the Act, 2003
and
the
Licensees
Rules,
2006
framed
thereunder but, for carrying out such works, it
must keep in mind that minimal damage or
inconvenience is caused to the public or private
person and their property - However, if
damage is caused or the work carried out is to
the detriment or inconvenience of any party,