The main legal point established in the judgment is the admissibility of unregistered partnership deeds as evidence and the applicability of Section 69 of the Indian Partnership Act, 1932, rendering suits not maintainable.

JUDGMENT

1. This is the defendant's appeal against the decree and judgment passed in RA No.126/2004 on the file of II Addl. Civil Judge (Sr. Dvn.) Hubballi dated 12.12.2006.

2. I refer the parties as per their rankings before the trial Court, for the sake of convenience.

3. To dispose of this appeal, brief facts of the case of both the parties before the trial Court were as under:

It was the case of the plaintiff that he has been running the business of 'Glow Sign Boards and Labels'. The defendant joined the said business as working partner without any investment and a formal partnership deed was entered into between the parties on 01.12.1998. Entire capital of Rs.2,50,000/- has been contributed by the plaintiff and 30% of the profit of the business was agreed to be shared with the defendant and 70% of the profit has to be paid to the plaintiff. The said partnership business was running in the name and style of M/s Vinyl Prints and Designs.

4. Even after entering into partnership and change in the name of business, it has been run as proprietary concern. The role of the defendant was like a servant or subordinate. In the place of salary, he has been paid 30% of the profit of the business. Therefore, in fact, it was not a partnership firm.

5. Due to non-cooperation of the defendant and his miss-deeds, plaintiff could not carry on the business. Therefore, he issued a notice dated 26.12.2000 and dissolved the firm. Defendant replied to the notice with false contentions, which were not maintainable. Defendant unnecessarily interfering in the business of plaintiff and causing loss to him. With these reasons, plaintiff filed the suit praying to declare that the 1) M/s Vinyl Prints and Designs exclusively belongs to the plaintiff and it is a proprietary concern of the plaintiff. 2) After terminating association of defendant with the plaintiff, defendant has no right, title or interest in the business run by the plaintiff. 3) Defendant be restrained by permanent injunction from interfering and obstructing in running the business of the plaintiff in his own rights. 4) Claim for damages of Rs.5,000/- due to mental stress created by the defendant.

6. It is the contention of the defendant that suit is not maintainable. Partnership deed contains Arbitration clause to settle the dispute. Instead of invoking the provisions of Arbitration clause, plaintiff has filed the suit. Therefore, suit is not tenable before the Court. Defendant has specialized knowledge and he is expert to mobilize raw materials and marketing of the products. Plaintiff himself offered to invest money in the business, accordingly, he invested Rs.2,50,000/- which was required for purchasing of computer and cutting machine. The share of the plaintiff is fixed at 70% for 36 months, which includes installments towards refund of his capital amount, together with interest at 18 % per annum, Therefore, it was not a formal partnership and defendant was not workman or subordinate of the plaintiff.

7. Defendant further contended that plaint averments are false. Plaintiff has not issued the notice in accordance with law and the firm should be a necessary party in the suit. He also contended that he is partner of the said firm and entitle for share of 30% in the profit and loss of the firm. The dispute could be settled by arbitration. With these reasons prayed to dismiss the suit.

8. From the rival contentions of the parties, the trial Court framed the following issues:

1) Whether the plaintiff proves that M/s Vinyl Prints and Designs Exclusively belongs to him and it is his proprietary concern as stated in para 5 of the plaint?

2) Whether the plaintiff further proves that by way of notice dated 26.12.2000 partnership is dissolved and subsequent there to the defendant is not concerned to the same?

3) Is the plaintiff entitled for the relief of declaration and consequential relief of injunction as prayed for in the suit?

4) Whether the defendant proves that the suit is not maintainable without av