Chapter IX - Investigation
Section 52
Section 52: Proceedings for recovery of damages or property
The Central Government may bring public-interest recovery proceedings following an investigation report.
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Need advice on Section 52?
This article is for general information. Refer to the Limited Liability Partnership Act, 2008 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
If, from any report under section 49, it appears to the Central Government that proceedings ought, in the public interest, to be brought by the limited liability partnership or any entity whose affairs have been investigated,—
(a) for the recovery of damages in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation, or the management of the affairs, of such limited liability partnership or such other entity; or
(b) for the recovery of any property of such limited liability partnership or such other entity, which has been misapplied or wrongfully retained,
the Central Government may itself bring proceedings for that purpose.
Key takeaways
Public-interest trigger
The Government acts where a section 49 report indicates that proceedings ought to be brought in the public interest.
Damages
Clause (a) concerns fraud, misfeasance or other misconduct connected to formation or management.
Property
Clause (b) concerns property misapplied or wrongfully retained.
When this section applies
The Central Government may bring public-interest recovery proceedings following an investigation report.
Key steps
- Review the report: Identify the section 49 findings and the LLP or investigated entity concerned.
- Identify the claim: Distinguish a damages claim under clause (a) from a property recovery claim under clause (b).
- Assess public interest: The Central Government decides whether it should itself bring proceedings.
Practical preparation
Check these section-specific points against the facts and records.
- Review the section 49 report and record why Government proceedings would serve the public interest.
- Identify alleged fraud, misfeasance or misconduct in promotion, formation or management, if damages are sought.
- Identify property allegedly misapplied or wrongfully retained, if recovery is sought.
- Identify the LLP or other investigated entity to which the proposed recovery relates and preserve supporting records.
Practical checklist
Do
- Preserve the report and documents tracing the property or loss.
- Identify the investigated entity for whose benefit recovery is sought.
Avoid
- Do not assume the report itself transfers property back.
- Do not apply this Government route without the public-interest assessment stated in the section.
Illustrative example
Hypothetical: section 52 in practice
An investigation report identifies property of an LLP that a former manager wrongfully retained.
Review the report
Identify the section 49 findings and the LLP or investigated entity concerned.
Identify the claim
Distinguish a damages claim under clause (a) from a property recovery claim under clause (b).
Assess public interest
The Central Government decides whether it should itself bring proceedings.
Outcome
- If the Government considers proceedings appropriate in the public interest, section 52 allows it to bring the recovery case.
Glossary
- Misfeasance
- Wrongful conduct in performing entrusted functions.
- Wrongfully retained property
- Property of the LLP or investigated entity retained without entitlement.
Frequently asked questions
Can the Government sue for damages under section 52?
Yes, where the report and public-interest conditions in the section are met.
Does the section cover another investigated entity?
Yes. It expressly refers to an entity whose affairs have been investigated.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026