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1989 Supreme(Pat) 322

HIGH COURT OF PATNA RANCHI BENCH
S. ROY, J.
Prahlad Chandu Dutta - Appellant
Vs.
M/s. Dinaram Radhakishan & Ors. - Respondents
Appeal From Appellate Decree No. 179 of 1980(R).
Decided on : 4-9-1989

Advocates appeared:
For the appellant: Mrs. Jaya Roy;
For the respondents: Mr. V. Shivnath

Headnote:(Indian) Partnership Act; 1932-Section 69(2) - suit by Firm for recovery of amount lent-person becoming partner of the Firm in 1960-his name not appearing in the Register of Firm as one of the partners on the date (21-3-1975) when the suit Was instituted - notice under section 63(2) of the Act, was given on 24-3-1976 to get the name of that person entered in Register of Firm-in view of his name not appearing as a partner in the Register of Firm on the date of the institution of the suit, the suit is not maintainable in view of the provisions of section 69(2) of the Act. (1989) 3 SCC 426-Relied Upon; 1973 PLJR 156; AIR 1973 Pat 300, AIR 1971 J & K 109, AIR 1965 Pat 426, AIR 1962 Pat 25-Distinguished as being contrary to law laid down by the Supreme Court in (1989) 3 SCC 426. (Paras 8 & 9)

Judgment

Satyeshwar Roy, J.

Defendant no. 1 is the appellant.

2. The respondent-partnership firm filed the suit for recovery of the amount lent- to defendant nos. 1 and 2 who carryon business in the name of defendant no. 3. The trial court dismissed the suit holding that by exhibit 4 dated 20th October, 1960 the firm was - re-constituted and the old firm was disolved. As the new firm was not registered under the Indian Partnership Act, 1932 (the Act) the suit was not maintainable in the name of the firm. It also held that Kamla Prasad Sultania (Kamla for short) had not been shown as a partner in the Register of Firm. The lower appellate court held that by exhibit 4 the old firm was not dissolved and, therefore there was no necessity for getting it registered again after it was re-constituted. It further held that in 1960 after Kamla attained majority, exhibit 4 was drawn up and he became a partner of the firm. Non-entry of his name in the Register of Firm was not fatal to the suit.

3. On 13.7.1982 at the time of admission of this appeal substantial questions of law were formulated. During the course of hearing it appeared that the following substantial question of law arises in this appeal:

When admittedly by exhibit 4 Kamla became a partner of the firm and when admittedly again his name did not appear in the Register of Firm as one of the partners on the date when the suit was instituted, whether the suit was maintainable.

4. Certain facts now are not in dispute. The plaintiff-firm was registered in 1956 under the Act. Kamla was not a partner then. In 1960 when he attained majority, a new agreement was executed which was marked as exhibit 4 and by this deed Kamla became a partner of the firm. No notice under section 63 (2) of the Act, was given to, the Registrar. There was serious controversy at the Bar as to whether section 69 (2) requires that not only the firm must be a registered firm on the date of the filing of the suit, but also the persons suing are or have been shown in the Register of Firm as partners in the firm. According to the appellant, the respondent firm was not only required to show that it was a registered firm, but also that the names of all the partners have been shown in Register of Firm on the date the suit was instituted. In support of this proposition reliance was placed by Mrs. Roy, learned counsel for the appellant on M/s. Badrimal Ramcharan Vrs. M/s. Gana Kaul and Sons; A.I.R. 1971 J & K. 109. According to the respondent-firm only requirement of sub-section is that the firm must be registered and whether all the persons have been shown as partners in Register of Firm on the date the suit is filed is of no consequence. In support of this proposition reliance was placed by Mr. Shivnath; learned counsel for the respondents, in M/s. J. Purshuttam Das and Company Vrs. M/s R.R. Brothers and others: 1973 P.L.J.R. 156-AIR 1973 Pat 300.

5. There are number of decisions of different High Courts, some of which have laid down that it is not incumbent on the plaintiff-firm to prove that the names of all the persons of the firm were shown in the Register of Firm on the date the suit is filed, and some High Courts have held that it is a must.

6. Section 69 (2) of the Act, with which we are concerned reads as follows:

“69. Effect of non-registration – (1)

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is' registered and the persons suing are or have been shown in the Register of Firms as partners in the firm." .

From the plain reading, it will be noticed that it bars a suit by and on behalf of the firm unless the firm is registered and the persons suing are or have been shown in the Register of Firm as partners of the firm. Let us examine whether if the first condition is fulfilled and the second not, the suit will be maintainable.

7. There is mother decision of this Court on the point in Chaiman Lal and anr. Vrs. Firm N








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