Thursday, August 27, 2026
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From Partnership to Company – MP HC Clarifies

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Judgment 31.7.2026 of the High Court of Madhya Pradesh at Indore in Writ Petition No.11806 of 2026 of Pacmor Flexile Limited Company and another   Vs.   The State of Madhya Pradesh and others

On 1.3.2014, a partnership deed was executed in the name of Gopal Print Pack and on 20th October 2020, lease deed executed by Gopal Print Pack for the plot in the Smart Industrial Park Indore and the entire stamp duty on the lease deed was paid at the relevant point of time. On 23.1.2025, supplementary agreement was executed by Gopal Print Pack to convert the partnership firm into limited company as per Section 366 of the Companies Act, 2013 and the liability of the original partners in the partnership firm remained unchanged. On 10.2.2025, the Registrar of Companies has issued the certificate of incorporation and the petitioner has also a lease land at GIDC and the same was amended on the basis of the conversion without any objection as regards stamp duty. Thereafter on 7.7.2025, the petitioner applied for lease amendment permission pursuant to name change on conversion which was granted by MPIDC. On 25.7.2025, the amended lease deed was executed and on 30th July, 2025, the amended deed was presented for registration with the Sub Registrar. On 14.8.2025, the respondent no. 3 had issued the notice under Section 33 of the Indian Stamp Act for the deficit stamp duty.

Considering these relevant Sections and considering the fact that when the directors/shareholders of petitioner company are having same profit and sharing ratio as that of the partnership firm, it cannot be said that there is transfer of any asset by partnership to the petitioner company and considering the judgment of Anup Industries (supra) and other judgments of other High Courts, the case is with regard to the change in ownership/title to the leasehold rights of the erstwhile partners of the partnership firm to the private limited company. Whereas in the facts of the case, the stamp duty has to be computed in relation to the amount of consideration as mentioned in the instrument of conveyance.

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