Fresh partnership after a partner's death was valid where the interest devolved on heirs individually, supporting firm registration.

Where a deceased partner held the partnership interest in his individual capacity, that interest devolved on his heirs, who were competent to enter into a fresh partnership for the business. The assumption that the interest belonged to a Hindu joint family was incorrect on the facts found, and the objection that the widow could not act as karta was irrelevant to the true legal position. The Supreme Court held that the partnership was valid and that registration could not be denied on that mistaken basis, restoring the Tribunal's decision granting registration to the assessee-firm.

---

---

Issues: Whether the firm constituted after the death of a partner was a valid partnership and whether registration of the assessee-firm was rightly granted.

Analysis: The partnership deed had been misconstrued on the assumption that the deceased partner's interest in the firm survived to a Hindu joint family. On the admitted facts, the deceased had held the partnership in his individual capacity. On his death, his interest devolved on his widow and son in equal shares, and they were competent to enter into a fresh partnership in respect of the business. The objection that the widow could not act as karta was irrelevant to the true legal position on the facts found.

Conclusion: The partnership was valid and the Tribunal was correct in granting registration to the assessee-firm.

Final Conclusion: The appeal was allowed and the Tribunal's decision was restored, resulting in affirmation of the assessee-firm's entitlement to registration.

Ratio Decidendi: Where a deceased partner held the partnership interest in an individual capacity, his heirs may validly enter into a fresh partnership on devolution of that interest, and registration cannot be denied on a mistaken assumption that the interest belonged to a joint Hindu family.

---