High Court Of Calcutta
Soumitra Sen
SOORAJMULL NAGARMULL - Appellant
Versus
DALHOUSIE PROPERTIES LTD. - Respondent
C. S. 544 Of 2001
Decided On : 01/13/2006
PARTNERSHIP ACT - SECTION 69(2) - SUIT FOR ENFORCEMENT OF CONTRACT - UNREGISTERED PARTNERSHIP FIRM - MAINTAINABILITY OF SUIT - COURT HELD THAT A SUIT FILED BY AN UNREGISTERED PARTNERSHIP FIRM FOR ENFORCEMENT OF A RIGHT ARISING FROM A CONTRACT IS NOT MAINTAINABLE UNDER SECTION 69(2) OF THE PARTNERSHIP ACT, 1932.
Fact of the Case:
The plaintiff, an unregistered partnership firm, filed a suit against the defendant for various reliefs, including a declaration that the plaintiff was the tenant under the defendant and that the defendant Nos. 2 to 14 were its sub-tenants, and for recovery of possession of portions of the suit premises wrongfully surrendered by the defendant Nos. 2 to 14.
Finding of the Court:
The court held that the suit was not maintainable as it was barred by section 69(2) of the Partnership Act, 1932, which provides that 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 Firm as partners in the firm.
Issues: Whether the suit filed by an unregistered partnership firm for enforcement of a right arising from a contract is maintainable under section 69(2) of the Partnership Act, 1932.
Ratio Decidendi: The court held that the language of section 69(2) of the Partnership Act is clear and mandatory, and that a suit filed by an unregistered partnership firm for enforcement of a right arising from a contract is not maintainable. The court further held that the subsequent registration of a partnership firm will not cure the initial defect, and that at the time of institution of the suit, the mandatory requirements of section 69(2) are required to be fulfilled.
Final Decision: The court allowed the application filed by the defendant and dismissed the suit filed by the plaintiff.
( 1 ) THIS instant application has been filed on behalf of the defendant No. 1 for dismissal of the suit.
( 2 ) THE application filed by the defendant/petitioner for the above relief is in the nature of an application under Order 7 Rule 11 of the code of Civil Procedure. It has been submitted on behalf of the defendant/petitioner that the plaintiff/respondent, being an unregistered partnership firm, is not entitled to file the suit in its own name by reason of the specific statutory bar contained in section 69 (2)of the Partnership Act. 1932. It is also submitted on behalf of the defendant/petitioner that the reliefs as claimed in the suit arise out of a contract and are necessarily for the enforcement of a right arising out of a contract, therefore, the bar of section 69 (2) of the Partnership act squarely applies in the instant case.
( 3 ) IN order to appreciate the respective contentions made on behalf of the parties, it would be proper at this stage to examine the reliefs as claimed in the suit. For the sake of convenience, the prayers claimed in the suit are set out as under:" (a) A decree for delivery up and cancellation of all documents on the strength whereof the Defendant Nos. 2 to 14 are holding themselves not to be occupants and/or Sub-tenants under the plaintiff but as direct tenants under the Defendant No. 1; (b) A decree for a declaration that the Plaintiff still continues to be the tenant in respect of the suit Premises described in the schedule written hereunder. under the Defendant No. 1; (c) A decree for a declaration that the Plaintiff is entitled to receive payment of the monthly rentals and compensations in respect of the suit Premises form the Defendant Nos. 2 to 14 as the immediate landlord of the said Defendants in respect of the suit premises; (d) A decree for a declaration that the surrender of portions of the suit premises by the Defendant Nos. 2 to 14 illegal and null and void; (e) A decree for recovery of possession by the Plaintiff from the defendant No. 1 of portions of the suit premises wrongfully surrendered by the Defendant Nos. 2 to 14. (f) A decree for a permanent injunction restraining the Defendant nos. 2 to 14 from holding themselves out as direct tenants and/ or taking and step or further steps as direct tenants in respect of the Suit Premises under the Defendant No. 1: (g) A decree for a mandatory injunction compelling the Defendant nos. 2 to 14 to make payments of all monthly rentals payable for the Suit Premises and/or portion thereof to the Plaintiff; (h) A decree for a permanent injunction restraining the Defendant nos. 2 to 14 from surrendering or handing over possession of any portion of the Suit Premises under their occupation to the defendant No. 1; (i) A decree for a sum of Rs. 47,28,636. 00 as pleaded in paragraph 43 hereinabove against the Defendant Nos. 2 to 14 jointly and/or severally: (j) A decree for a sum of Rs. 42,19,671. 76 towards interest as pleaded in paragraph 45 hereinabove against the Defendant Nos. 2 to 14 jointly and/or severally; (k) Interim interest and interest upon judgements; (l) A decree for a sum of Rs. 70,00,000/- towards damages as pleaded in paragraph 48 hereinabove jointly and/or severally against the defendants; (m) Attachments; (n) Receiver; (o) Injunction; (p) Costs; (q) Such further or other reliefs;"
( 4 ) IT is the case of the plaintiff/respondent that it is still the tenant under defendant No. 1 and defendant Nos. 2 to 14 are sub-tenants of the plaintiff. Therefore, the defendant Nos. 2 to 14 cannot claim any direct relationship of tenant under the defendant No. 1 and for that reason, various prayers have been prayed, which are mentioned as above.
( 5 ) ON behalf of the plaintiff/petitioner, it has been submitted that the reliefs as claimed do not arise out of a contract. The cause of action in this suit is for enforcement of a common law right. It is submitted that the defendant Nos. 2 to 14 being its sub-tenants, the pla
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