The main legal point established is that a suit by a partner of an unregistered firm may be maintainable under S.69(2) of the Indian Partnership Act if the right sought to be enforced does not arise from a contract, but from statutory provisions.

1. The question for decision here is quite an interesting one. Whether the suit by a partner of an unregistered firm for recovery of money claimed on the dishonour of a cheque endorsed in favour of the firm would be maintainable is the question in controversy. It was contended that the suit is barred by S.69 (2) of the Indian Partnership Act. The court below, while holding in favour of the plaintiff on the merits of the case, dismissed the suit accepting this contention. The plaintiff has, hence, come up to this court in appeal.

2. The plaintiff company claims to be a firm registered under the Indian Partnership Act. The plaintiff is said to be the managing partner. Admittedly the first defendant issued three cheques, one for Rs. 7500/-, another for Rs. 5000/- and yet another for Rs. 2500/-, all of the date 2141965 in favour of the second defendant firm and the second defendant firm receiving consideration endorsed these cheques to the plaintiff. These were sent for collection by the plaintiff to the Canara Bank Limited, but they were dishonoured and returned to the plaintiff, The plaintiff therefore claims the amount of the cheque together with the interest and also the amount collected by the Bank from the firm as discount.

3. The suit was contested by the first defendant firm. Its case was that the cheques were issued as security on a promise by the second defendant to supply pepper to the first defendant and the understanding was that the cheques were to be cashed only after such supply. The case is that the goods were not actually supplied, but nevertheless second defendant collusively endorsed the cheques in favour of the plaintiff. In short, the plea is that the cheques are not supported by consideration and the plaintiff is not a holder in due course. There was further contention that the plaintiff was not a registered firm and the person who has filed the suit as managing partner was not a partner at all.

4. On the evidence, the court found that the cheques must be found to be supported by consideration and the plaintiff was a holder in due course, but nevertheless the court below dismissed the suit since it found that the plaintiff firm: being unregistered, the suit instituted by one of the partners must be found to be barred by S.69(2) of the Indian Partnership Act.

5. The only plea the plaintiff urges in this appeal is one of challenge to the finding that the suit is unsustainable by reason of S.69 (2) of the Act. While seeking to support the judgment of the court below on this point counsel for the defendant challenges the rinding on the question of consideration for the cheques and also the finding that the plaintiff is a holder in due course. We will necessarily have to deal first with the plea of the appellant that the lower court ought to have found the suit was sustainable in law.

6. S.69 of the Indian Partnership Act reads:

"69. (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(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.

(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affects

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909, o