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2001 Supreme(Cal) 699

High Court Of Calcutta
A. K. GANGULY
DEB PAINTS PVT LTD - Appellant
Versus
UNIVERSAL LIME INDUSTRIES - Respondent
C. P.  435  Of  2000
Decided On : 11/20/2001

Advocates Appeared:
D.MITRA, M.C.GHOSH, S.Ghosh

Section 69 (3) of the Indian Partnership Act, 1932 bars an unregistered partnership firm from filing a suit or other proceedings to enforce a right arising from a contract, and this includes winding up proceedings under the Companies Act, 1956.

Headnote:

WINDING UP PETITION - MAINTAINABILITY - UNREGISTERED PARTNERSHIP FIRM - SECTION 69 OF INDIAN PARTNERSHIP ACT, 1932 - INTERPRETATION AND APPLICABILITY TO WINDING UP PROCEEDINGS UNDER COMPANIES ACT, 1956.

Fact of the Case:

An unregistered partnership firm filed a winding up petition against a company for recovery of debt arising from the sale and delivery of goods. The company raised a preliminary objection challenging the maintainability of the petition on the ground that an unregistered partnership firm cannot file a proceeding for realization of its dues and even a suit is barred by such an unregistered partnership firm.

Finding of the Court:

The court held that the winding up petition filed by an unregistered partnership firm is not maintainable in view of the provisions of section 69 (3) of the Indian Partnership Act, 1932. The court observed that the expression 'other proceedings' occurring in section 69 (3) of the Act must be given its full meaning and includes winding up proceedings under the Companies Act, 1956. The court further held that the right which the petitioner is seeking to enforce in this case is a right arising from a contract and hence, section 69 (3) of the Act is applicable.

Issues: 1. Whether an unregistered partnership firm can file a winding up petition against a company for recovery of debt arising from the sale and delivery of goods? 2. Whether section 69 (3) of the Indian Partnership Act, 1932 is applicable to winding up proceedings under the Companies Act, 1956?

Ratio Decidendi: 1. Section 69 (3) of the Indian Partnership Act, 1932 bars an unregistered partnership firm from filing a suit or other proceedings to enforce a right arising from a contract. 2. The expression 'other proceedings' occurring in section 69 (3) of the Act must be given its full meaning and includes winding up proceedings under the Companies Act, 1956. 3. The right which the petitioner is seeking to enforce in this case is a right arising from a contract and hence, section 69 (3) of the Act is applicable.

Final Decision: The winding up petition filed by the unregistered partnership firm was dismissed.

A. K. GANGULY, J.

( 1 ) THIS winding up petition has been filed by the petitioning creditor, a partnership firm, against M/s. Deb Paints Pvt. Ltd. (hereinafter called the said company) for recovery of its debt arising out of price of goods sold and delivered to the said Company from time to time.

( 2 ) THE said company was incorporated under the Companies Act 1913 and the authorized share capital of the company is Rs. 5,00,000/- divided into 50,000 equity share of Rs. 100/- each. The principal amount claimed by the petitioner is Rs. 77,299/- along with interest @ 21% from the date of payment till the payment thereof. Thus the total claim was for Rs. 1,05,292. 27p.

( 3 ) ON such petition being filed, the learned company judge on 6th November 2000 gave directions for affidavits. It is stated on behalf of the said company that the affidavit was affirmed on behalf of the said company. But the affidavit was not accepted by the learned counsel for the petitioner on the ground of delay. The matter appeared before the learned Company judge on 22nd May 2001 and on that date no one represented the company and the affidavit of the said company was not on record and the learned company passed an order admitting the company petition and also passed an order for insertion of advertisement. The said order was served on the company by the petitioner. Thereafter a further affidavit was filed by the said company praying for recalling of the order dated 22nd May 2001 passed in this proceeding.

( 4 ) AT the hearing of that prayer for recalling, the learned counsel for the company, apart from pointing out its defence to the claim of the petitioning creditor, also raised a preliminary objection on the maintainability of the company petition. Since the question of maintainability is a fundamental one, this Court heard both the company petition and the company application together.

( 5 ) THE preliminary objection is that the winding up petition has been filed by M/s. Universal Lime Industries which is an unregistered partnership firm and cannot, in the absence of its partners, file a proceeding for realization of its dues and even the filing of a suit is barred by such an unregistered partnership firm.

( 6 ) THE learned counsel for the petitioner did not dispute that the petitioner is an unregistered partnership firm nor did it seek any liberty from the Court to implead the partners of the firm to the proceeding. On the other hand, the learned counsel maintained that the instant company petition, at the instance of an unregistered partnership firm alone and without its partners being impleaded, is maintainable and the learned counsel cited a few decisions to that effect.

( 7 ) THEREFORE, the Court has to consider this aspect of the matter as a preliminary point as a decision on this point is vital on the outcome of this proceeding.

( 8 ) IN support of his contention the learned counsel for the petitioner relied very much on the judgment of a learned single judge of a Delhi High Court in the case of Kalra Iron Stores v. Faridabad Fabricators Pvt. Ltd. , reported in 73 Company Cases 330.

( 9 ) IN that case it appears that after the filing of a petition for winding up a preliminary objection was taken by the company that the constitution of the petitioner firm had not been stated in the petition and that the verification of the petition was not acceptable. Then the firm sought for amendment of the petition. The said prayer for amendment was opposed by the company mainly on two grounds and of which one of the ground was based on section 69 of the Indian Partnership Act (hereinafter called IPA ). The learned judge allowed the amendment inter alia holding that too narrow and hyper technical approach about verification should not be encouraged. So far as the ground taken under section 69 was concerned, the learned judge held that the proceeding of winding up was not a suit and while filing a proceeding of winding up the petitioner is exercising a s





































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