At the application of tender of PSU , the applicant applied for the tender showing the status of the firm as Partnership.. At the time of tender Allotment by the PSU , the actual status of the Applicant was Proprietary because of death of one partner BUT Shown as Partnership . Now PSU is not allowing payment because of some other ground , the Firm wants to sue the PSU for the payment---- The applicant firm ( now Proprietary) wants to file a WRIT PETITION against the PSU for the payment now my question is ----- (1) CAN the Applicant .sue the PSU as proprietary firm ? ( though the status shown earlier as Partnership) (2) What should be the legal status of the Applicant's constitution --Partnership or Proprietary firm for filling the WRIT petition against the PSU? Can the Proprietor sue the PSU on personal basis ? (3 ) Can the PSU stop payment on the ground that at the time of Allotment of tender the constitution of the Applicant though shown as Partnership actually was proprietary? (At the time of tender application the status was Partnership BUT at the time of tender Allotment the status was Proprietary because of Death of one Partner but shown as Partnership As per tender, proprietary firm is not allowed to execute Tender)
1) PSU can stop payment on the grounds that applicant was proprietary firm at time of allotment of tender .
2) any change in constitution ought to have been intimated .
3) since there were only 2 partners in the partnership firm on death of one partner the firm would stand dissolved
4) the legal status of applicant would be as sole proprietor . petition has to be filed in personal name of sole proprietor
1. If partner of a partnership firm having two partners expires, the said partnership firm gets dissolved automatically unless it is specifically mentioned in the partnership deed of the said firm that in such case the partnership firm will become proprietorship firm being owned by the living partner,
2. If not, then your partnership firm did not exist when the tender was alloted to you,
3. Moreover, if it was automatically converted to proprietorship firm as per the clause mentioned in the partnership deed then, the said proprietorship firm should not have submitted the tender showing as partnership firm since it was already mentioned in the tender documents that proprietary firm is not allowed to execute Tender,
4. The PSU is within its right to refuse payment on the ground that the proprietorship firm is not qualified to submit and execute the works as per the tender,
5. However, the proprietor in his own name showing as proprietor of the said firm, can sue the PSU if he so desires.
Dear Querist
first question is The firm is registered or not?
if yes , whether it is partnership firm or proprietor firm?
what are the terms and condition of constitution of the Firm?
1. The PSU can stop the payment as there is a variation in the legal character of the applicant. If the legal character of the applicant underwent a change, the intimation ought to have been sent forthwith to the PSU.
2. On what basis do you say that PSU became a proprietorship after the demise of one of the two partners? Unless there is an agreement to the contrary in the partnership deed, the partnership of two partners would dissolve on the demise of one partner. The dissolution of partnership does not convert it into a proprietorship.
3. The legal status of the suitor will be the residue status to which it is entitled in accordance with the partnership deed.
