TaxTMI 
TaxTMI 
2015 (12) TMI 847
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....untants to M/s Arun Khanna & Associates Chartered Accountants of demerger w.e.f. 1st July, 2015 satisfies the criteria laid down by "the Council" and that "the firm is eligible to demerge the firm" w.e.f. 1st July, 2015. The petitioner also seeks a declaration of restoration of his rights as partner of respondent no.2 M/s Sawhney Verma & Co. under the Partnership Deed dated 14th October, 2013. Direction to the respondent no.1 Institute to take disciplinary action against the other partners of respondent no.2 M/s Sawhney Verma & Co. is also sought. 2. It is the case of the petitioner, (i) that he is a practising Chartered Accountant and was working in the name and style of M/s Arun Khanna & Associates; (ii) w.e.f. 14th O....
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....uly, 2015 of M/s Arun Khanna Associates from respondent no.2 M/s Sawhney Verma & Co.; (viii) the respondent no.1 Institute has vide impugned letter dated 10th August, 2015 to the petitioner intimated to the petitioner that notice dated 24th July, 2015 served by the original partners of respondent no.2 M/s Sawhney Verma & Co. of de-merger meets the rules of merger / de-merger and satisfies the criteria laid down by the Council of the respondent no.1 Institute. 3. Though the counsel for the petitioner has not placed the Rules of Merger & De-merger framed by the respondent no.1 Institute before this Court but has in List of Dates quoted Rule 4 of the said Rules stated to be relevant and which is as under:- "Rule 4 ....
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....ce of their own de-merger and not of the de-merger of M/s Arun Khanna & Associates which was the sole proprietary of the petitioner. 5. In the present case, only two firms namely that of which the petitioner was the sole proprietor and respondent no.2 M/s Sawhney Verma & Co. of which there were six partners had merged. It is not in dispute that within five years of the said merger, the Rules permitted de-merger in the manner provided therein. All the partners of respondent no.2 M/s Sawhney Verma & Co. which was one of the merging firms, within the said period of five years opted to de-merge, resulting in uncoupling of the two merging firms. I have as such enquired from the counsel for the petitioner as to how the effect of the respondent....
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.... out. There is nothing to show that the original partners of respondent no.2 M/s Sawhney Verma & Co. on 24th July, 2015 were not entitled to notify of the de-merger w.e.f. 1st July, 2015. 10. The challenge in this writ petition, in so far as to the action of the respondent no.1 Institute of accepting the de-merger, therefore has no merit. 11. The petitioner, with respect to the partnership disputes, would have his remedies in accordance with law. 12. The petition is dismissed. 13. I have however before signing this order examined the "Rules of NETWORK AND Merger - Demerger Amongst The Firms Registered With The Institute Of Chartered Accountants OF INDIA" available on the website of Institute of Chartered Accountants of India. Th....
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....its 198th Meeting held from 25th to 27th February, 1999 and in 223rd Meeting held from 2nd to 5th February, 2002 considered the Seniority and Mergers of the firm and implications of the decisions, are enclosed in Tabular form. (iii) In order to have an orderly and sustainable growth of the CA firms, it is desirable that the coming together of the firms begins with networking and then matures to mergers. Networking will enable the firms to develop working relationships with each other. However, it is not to suggest that there cannot be mergers without networking. (iv) The mergers should be effected to develop core competencies and to render professional services of a larger range spread over bigger geographical area. A merg....
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....m the other continuing partners of the merged firm. The partners of such demerged firm shall execute a partnership deed. The merged firm as well as the demerged firm shall submit fresh Form 18 as prescribed under the Chartered Accountants Regulations, 1988 to the Institute within the prescribed period. 5. In case of 75% or more of the continuing partners of one of the erstwhile merging firm have demerged after giving due notice to the other partners, then in such case, the merger shall come to an end and if the remaining erstwhile merging firms/partners of the erstwhile merged firm decided to continue, then they should enter into a fresh Merger/Partnership Agreement and shall submit fresh Form 18 as prescribed under the Chartered A....