A suit to enforce a right arising from a contract or conferred by the Partnership Act by a person suing as a partner in an unregistered firm is barred under Section 69(1) of the Partnership Act.

ALLADI KUPPUSWAMI, J.

( 1 ) THE plaintiffs in O. S. 12/79, Sub-Court, Parvathipuram have filed this appeal against the judgment and decree dismissing their suit with costs. They are the sons of the Pydi Narasimha Apparao (referred to shortly in this judgment as Apparao who died and one Papainaidu entered into a partnership for the purpose of running a cinema hall at Palakonda. They started the business in 1947. At the time the licence for running the cinema was in the name of Apparao. On 1 2/02/1950 a formal partnership deed was executed. Each of the partners was to have a one-third share in the business. Once of the clauses in the deed was that if any of the partners desired to sell his share, he should sell it to the other two partners or any one of them for a reasonable price and it is not permissible for him to sell the share to others. Even if he effected such a sale, it would not be valid. The case of the plaintiffs as stated in the plaint was that in accordance with this provision Papainaidu sold his share in favour of the other partners on 16-5-1959 and thereafter their father Apparao and the first defendant continued the partnership each being entitled to half a share. On the 9/04/1960 the plaintiffs after executed a will whereby he bequeathed his half share to the plaintiffs though as members of a joint Hindu family they were already entitled to the share. Almost immediately after the will there was a partition among the members of the family and under that partition the half share in the cinema hall was allotted to the plaintiffs to the full knowledge of the other partners. The plaintiff and the first defendant were thereafter continuing the business as partners on the same terms as contained in the original deed of partnership. On 5/01/1970, however the plaintiffs came to know that the first defendant had executed a sale deed in respect of his half share in the cinema hall in favour of defendants 2 and 3. The plaintiffs thereupon objected to the registration of the sale deed, but in site of their objections the registration was effected. The plaintiffs came to know that there was a recital in the sale-deed that the first defendant had offered to sell his share to the plaintiffs father, but the plaintiffs father was not agreeable to purchase his share and he therefore gave a letter dated 9-9-1968 to the first defendant that he may sell his share to outsiders. The plaintiffs filed the present suit praying for a decree directing the defendants to execute a registered-sale deed in their favour and for other reliefs. The plaintiffs contended that the alleged letter stated to have been executed by their father is a rank forgery he was never asked whether he would purchase the half share and he never gave any letter that he would not purchase it. The sale in favour of defendants 2 and 3 was in violation of the terms of the partnership deed and was absolutely null and void. The sale-deed also referred to an alleged agreement of sale dated 29-9-1968. This agreement also is an ante-dated document brought into existence at or about the time of the sale-deed.

( 2 ) THE first defendant contended that the suit was not maintainable as the partnership was not registered under the Partnership Act. The recital in the sale-deed executed by him that an offer was made to Apparao whether he would purchase the half share, and that he executed a letter consenting to the sale by the 1st defendant to the outsiders was true. The agreement of sale mentioned in the sale-deed was true and was not ante-dated. It was further contended that after the sale of Papinaidus share to other partners, the original partnership ceased to exist and the partnership deed was no longer in operation and hence the plaintiffs are not entitled to rely on any of the clauses and ask for specific performance of the agreement contained in those clauses. After the death of the plaintiffs father the plaintiffs also became co-owners along with the first defendant as there

Click Here to Read the rest of this document