LIMITED LIABILITY PARTNERSHIP PART-XXXXVII -(Power to alter Schedule)

[Dr. Sanjiv Agarwal]

Power to alter Schedule [Section 78]

Section 78 of LLP Act, 2008 seeks to confer upon the Central Government the power to alter schedules to the Act. The said section further seeks to provide that every notification in respect of such alteration shall be laid before both the Houses of Parliament.

Schedules of LLP Act, 2008

The LLP Act, 2008 contain four Schedules and this section empowers the Central Government to alter the provisions of these schedules. The schedules are as under –

Schedule I Provisions regarding matters relating in mutual rights and duties of partners and limited liability partnership and its partners applicable in the absence of any agreement on such matters           

Schedule II Provisions regarding conversion from firm into limited liability partnership

Schedule III Provisions regarding conversion from private company into limited liability partnership

Schedule IV Provisions regarding conversion from unlisted public company into limited liability partnership

Sub-section (1)

Any of the provisions of these schedules can be amended or altered by the Central Government by way of a notification in the Official Gazette.

In respect of Companies Act, it was held in J.K. Industries Ltd v ROC (1997) 4 Comp. Cas LJ 388 (Cal) that alteration was unreasonable and against the legislative policy where the power under this section was used for altering only one clause, ie, clause 1.3. of Schedule X having effect of effacing the fees already paid to the Registrar of Companies for filing information regarding increase of capital and requiring the petitioner to pay the same amount again.

In Re New Sind AIR 1942 Sind 65 (71), it was held that such schedules can not govern or control the words of the statute under which they are made.

Sub-section (2)

This sub-section specifies that any alteration or amendment in any of the schedules shall be effective from the date of notification, unless the notification provides any other date of its enforcement. The alteration notified shall have the same effect as if those changes have been enacted in the Act.

Sub-section (3)

This sub-section and subsection (3) of section 79 are analogous

Sub-section (3) provides that the rules made for altering the schedule under the LLP Act shall be laid before both the houses of Parliament for a total period of thirty days. Such laying of the rules shall be soon after such rules are made and the period of thirty days should be the days when house is in session. Thus, laying of rules (notifications) could be thirty days in one or more sessions but such sessions should be successive ones. When rules are issued but Parliament is not in session, such rules may be laid before the parliament in first session after the rules are made. Once the rules are so laid, if the Parliament decides that the subject rules need not be made, such rules shall be annulled. If the Parliament agree that rules shall have effect after the suggested modifications, the rules, as modified shall be notified and only modified rules shall be effective.

In the event, the rules as laid in the Parliament are modified or annulled, then such modification or annulment will not effect the validity of acts previously done under the rule.

Thus, parliamentary approval of the rules is mandatory for having legality valid rules.

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