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2005 Supreme(Bom) 1271

IN THE HIGH COURT OF BOMBAY
Balaji Constructions Co.
Versus
Lira Siraj Shaikh
Decided On : (September 20, 2005) 2006

Headnote:Civil Procedure Code, 1908 - Section 90 - Partnership Act, 1932, Section 69 - First appeal - Against judgment and order dismissing suit for specific performance of agreement - Plaintiffs firm registered under Partnership Act at Bombay - Agreements dated 3.9.1990 and 2.2.1991 entered into with defendants 1 and 2 - Plaintiff paid Rs. 50,000/- as part payment of price of suit property - Defendants failed to do necessary acts for sale - Defendants filed written statement - Trial Court dismissed suit holding that suit hit by Section 69(2) of Act - Plaintiff firm not registered on date of filing of suit - Subject contracts not entered into during course of business dealings with plaintiff firm - Impugned judgment not suffers from any infirmity - First appeal dismissed. - It is not mistaken supposition in law that the right that is sought to be enforced by the unregistered firm must be a right arising out of the contract with the third party in the course of business transactions. Adverting to the averments made in the plaint, it would be seen that there is no averment made by the plaintiffs that the agreements were not entered into during the ordinary course of business dealings of the first plaintiff-firm. Rather a close scan of the plaint shows that the subject agreement were in the course of the business dealings of the first plaintiff-firm and the plaintiffs have set up the case that due to non- performance of the contracts by the defendants, the first plaintiff-firm suffered loss of business profit in the proposed building project. In this view of the matter, Court finds no merit in the submission of the senior counsel for the appellants that the question whether the subject contracts were entered into during the course of business dealings of the first plaintiff- firm ought to have been decided after recording the evidence. As indicated above, from the facts averred in the plaint, it cannot be said that the subject contracts were not entered into during the course of business dealings. The impugned judgment does not suffer from any infirmity.

       Partnership Act, 1932 - Section 69(2) - Unregistered firm - Right of - Right that is supposed to be enforced by unregistered firm has to be a right initiated out of contract with third party during business transaction. - It is not mistaken supposition in law that the right that is sought to be enforced by the unregistered firm must be a right arising out of the contract with the third party in the course of business transactions. Adverting to the averments made in the plaint, it would be seen that there is no averment made by the plaintiffs that the agreements were not entered into the ordinary course of business dealings of the first plaintiff- firm. Rather a close scan of the plaint shows that the subject agreements were in the course of the business dealings of the first plaintiff-firm and the plaintiffs have set up the case that due to non-performance of the contracts by the defendants, the first plaintiff-firm suffered loss of business profit in the proposed building project. In this view of the matter, Court finds no merit in the submission of the senior counsel for the appellants that the question whether the subject contracts were entered into during the course of business dealings of the first plaintiff-firm ought to have been decided after recording the evidence from the facts averred in the plaint, it cannot be said that the subject contracts were not entered into during the course of business dealings. The impugned judgment does not suffer from the any infirmity.

Judgment

R. M. LODHA, J.

( 1 ) THIS First Appeal is at the instance of the Original Plaintiffs. Their suit came to be dismissed by the learned Civil judge, Senior Division, Margao, being hit by the provisions contained in Section 69 (2) of the Indian Partnership Act, 1932.

( 2 ) MR. S. D. Lotlikar, the learned senior Counsel for the Appellants strenously urged that there was nothing on record to indicate that the agreements dated 03-09-1990 and 02-02-1991, of which specific performance is sought, were entered into during the ordinary course of business of the first Plaintiff-firm with the Defendant Nos. 1 and 2 and, therefore, bar of Section 69 (2) of the Indian Partnership Act, 1932 was not attracted. The learned Senior Counsel placed reliance on the Judgment of the Supreme Court in the case of M/s. Haldiram Bhujiawala and another Vs. M/s. Anand Kumar Deepak kumar and another, (AIR 2000 SC 1287 ).

( 3 ) THE Appellants (hereinafter referred to as "the Plaintiffs") filed a suit against the Respondents (hereinafter referred to as "the Defendants") seeking specific performance of the agreements dated 03-09- 1990 and 02-02-1991, in the alternative claim tor damages and other incidental reliefs. In the light of the controversy involved in this appeal it is not necessary to refer to the facts in details. Suffice it to say that the Plaintiffs averred that the firm (first Plaintiff) was registered under the Indian Partnership Act, 1932 at Bombay. The details of the two agreements dated 03-09-1990 and 02-02-1991 were given and it was averred that the Plaintiffs had so far paid a consideration of Rs. 50,000/- as part payment ot the price of the suit property. The Plaintiffs averred that the Defendant Nos. 1 and 2 failed to obtain the requisite permission from the reserve Bank of India for the sale of the suit property and do necessary acts for the sale. The plaintiffs claimed that in the event the specific performance as prayed for was not being granted, the damages in the sum of rs. 50,00,000/- being 10% profit in the building project proposed to be undertaken on the site of the suit property, be granted.

( 4 ) THE Defendant Nos. 1 and 2 and the Defendant Nos. 3 to 16 filed separate written Statements. They raised the objection that the first Plaintiff firm was not registered as a partnership firm and the Plaintiff Nos. 2 and 3 were not registered partners of the first plaintiff-firm on the date of filing of the suit and. therefore, the suit was hit by Section 69 (2) of the Indian Partnership Act, 1932.

( 5 ) IN the light of the objection raised by the Defendants that the suit was hit by the provisions contained in Section 69 (2) of the indian Partnership Act, 1932 the trial Court heard the parties on the said question and by the impugned Judgment dated 10-06-1999 held that since the firm was not registered on the date of the filing of the suit, the provisions of section 69 (2) of the Indian Partnership Act, 1932 were attracted and the suit was liable to be dismissed and was dismissed accordingly.

( 6 ) THE learned Senior Counsel for the Appellants/original Plaintiffs did not dispute the position that on the date of the filing of the suit i. e. 30-08-1993, the first Plaintiff- firm was not registered nor the second and the third Plaintiffs were shown as partners in the register of firms. He, however, submitted that on 19-8-1993 (before the suit was filed) the application for registration of the first Plaintiff- firm was made and during the pendency of suit on 20-09-1993 the first Plaintiff-firm was registered.

( 7 ) THAT on the date of the filing of the suit, the first Plaintiff-firm was not registered, thus, is not in dispute.

( 8 ) IN M/s. Shreeram Finance corporation Vs. Yasin Khan and others (AIR 1989 SC 1769) the Supreme Court held that if on the date of the filing of the suit by and on behalf of a firm against any third party, if the firm is not registered and the persons suing have not been shown in the Register of the Firms as p






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