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2011 Supreme(Bom) 781
High Court of Judicature at Bombay
A.S. OKA
Shavak Burjorji Patell
Versus
Jamshid Kersi Dalal & Others
APPEAL FROM ORDER NO. 1028 OF 2005
Decided on : 11-07-2011
For the Appellant:G.S. Godbole, Advocate.
For the Respondents:R1, Vineet Naik a/w Ms. Deepa Ahuja, R3, M.R. Deshpande, Advocates.
A suit by a partner of an unregistered firm for dissolution, accounts, and realization of share is maintainable, despite the bar created by Section 69(2A) of the Indian Partnership Act, 1932, which was held unconstitutional by the Supreme Court.
Headnote:
Appeal from Order - Partnership Dispute - Indian Partnership Act, 1932, Section 69 - The court held that a suit by a partner of an unregistered firm for dissolution, accounts, and realization of share is maintainable, despite the bar created by Section 69(2A) of the Indian Partnership Act, 1932, which was held unconstitutional by the Supreme Court in V.Subramaniam Vs. Rajesh Raghuvandra Rao ([2009] 5 SUPREME COURT CASES 608). The court set aside the order directing that the issue of maintainability cannot be decided as a preliminary issue and held that the suit is maintainable. The suit was directed to be decided expeditiously with all contentions of the parties on the merits of the suit kept open. The appeal was partly allowed with no order as to costs.
Fact of the Case:
The case involved a dispute between partners of an unregistered firm, where the Plaintiff sought accounts of the firm and a declaration of dissolution of the partnership. The trial court dismissed the suit on the ground of non-maintainability due to the absence of firm registration. The Plaintiff appealed, and the District Court ordered a remand for the Plaintiff to adduce evidence on the preliminary issue of maintainability.
Finding of the Court:
The court held that the suit is maintainable despite the bar created by Section 69(2A) of the Indian Partnership Act, 1932, which was held unconstitutional by the Supreme Court. The court set aside the order directing that the issue of maintainability cannot be decided as a preliminary issue and held that the suit is maintainable. The suit was directed to be decided expeditiously with all contentions of the parties on the merits of the suit kept open. The appeal was partly allowed with no order as to costs.
Issues: The main issue was the maintainability of the suit in light of the bar created by Section 69(2A) of the Indian Partnership Act, 1932.
Ratio Decidendi: The court held that a suit by a partner of an unregistered firm for dissolution, accounts, and realization of share is maintainable, despite the bar created by Section 69(2A) of the Indian Partnership Act, 1932, which was held unconstitutional by the Supreme Court in V.Subramaniam Vs. Rajesh Raghuvandra Rao ([2009] 5 SUPREME COURT CASES 608).
Final Decision: The court set aside the order directing that the issue of maintainability cannot be decided as a preliminary issue and held that the suit is maintainable. The suit was directed to be decided expeditiously with all contentions of the parties on the merits of the suit kept open. The appeal was partly allowed with no order as to costs.
1. By this appeal from order, the Appellants have taken an exception to the judgment and decree passed by the District Court in an appeal by which an order of remand has been passed. This is an Appeal against an order of remand. In the case of Narayanan versus Kumaran [(2004)4 SCC 26], the Apex Court held that an Appeal under clause (u) of Rule 1 of Order XLI of the Code of Civil Procedure, 1908 can be entertained only on the ground available under Section 100 of the said Code. Accordingly, by order dated 16th March, 2007, this Court has framed the substantial questions of law.
2. The present appeal has been preferred by the original Defendant Nos.1, 3, 4 and 10. The Respondent No.1 is the original plaintiff and the other Respondents are the other Defendants. On 15th March, 1982, a deed of partnership was executed by and between the Defendant No.1 and one Mr.Framroze Burjorji Patell for carrying on the business in partnership under the name and style as M/s.Dorabjee and Company. The said Mr.Framroze Burjorji Patell withdrew himself from the partnership. On 1st April, 1984, a deed of partnership was executed between the Plaintiff and the Defendant No.1. for the running the business in partnership under the name and style as M/s.Dorabjee and Company in partnership at 1B, Moledina Road, Pune 1. This partnership is not registered. On 19th August, 1988, the Plaintiff issued notice to the Defendant No1. By the said notice, the Plaintiff called upon the Defendant no.1 not to circumvent his rights. In the reply dated 9th September 1988 issued to the said notice by the Defendant No.1, it was pointed out that the partnership of M/s.Dorabjee and Company formed on 1st April, 1984 has been dissolved. In the year, 1991, the Plaintiff filed the present suit. The substantive relief claimed is of directing the Defendant No. 1 to render the truthful accounts of the firm M/s.Dorabjee and Company in pursuance of the deed of partnership dated 1st April, 1988 till about two days after 9th September, 1988 and for a declaration that the said partnership may kindly be declared as dissolved. The Plaintiff claimed 50% share in the partnership. Another prayer was made for permanent injunction restraining the Defendant No.1 from appropriating the assets and amounts of the said partnership.
3. In the said suit, the Plaintiff filed an application praying for interim relief of temporary injunction and appointment of Court Receiver. The Defendant No.1 filed an application at Exhibit – 51 praying for framing preliminary issue of the maintainability of the suit in view of bar created by Sub-Section (2A) of Section 69 of the Indian Partnership Act, 1932 (hereinafter referred to as “the said Act”) inasmuch as the said partnership firm was admittedly unregistered. The Defendant No.1 as well as the Defendant Nos.3 to 6 filed a detailed written statement raising the said contention. Accordingly, a preliminary issue regarding maintainability of the suit was framed by the trial Court. By the judgment and order dated 23rd April, 1999, the said suit was dismissed on the ground that it was not maintainable in view of the bar created by Section 69 (2A) of the said Act as amended by the Maharashtra Act No.29 of 1984. An appeal was preferred by the Plaintiff against the dismissal of the suit. In the appeal, various amendments were permitted to be made to the plaint. The Plaintiff also made an application at Exhibit – 73 seeking amendment of the plaint by adding paragraph Nos.2A and 131A. By the amendment, the Plaintiff wanted to incorporate an allegation that after the execution of the deed of partnership dated 1st April, 1984, an application for registration of the partnership was made to the Registrar of the Firms and even requisite registration fees were paid on 20th December, 1985. A prayer was sought to be added seeking mandatory injunction against the heirs of the Defendant No.1 to duly sign and submit requisite application forms and documents in the office
