Chitambaresh, J.

Is an agreement to release the rights in an unregistered partnership firm by a partner in favour of another partner specifically enforceable ? Is such a suit for specific performance hit by Section 69(1) of the Indian Partnership Act, 1932 ?

2. The plaintiff and the first defendant are brothers and the second defendant is the wife of the first defendant who were all engaged in a partnership business run under the name and style 'Central Stores'. Subsequently Ext.A1 agreement dated 20.1.1991 was entered into whereunder the first and second defendant agreed to release their rights in favour of the plaintiff for a consideration of Rs. 1,50,000/-. The right of the first defendant in the partnership firm and the right of the first and second defendant over the shop building was agreed to be released. Only the plaintiff and the first defendant were the partners of the partnership firm which was not registered under the Indian Partnership Act, 1932 ['the Act' for short]. The period fixed till 31.3.1992 for payment of consideration was extended till 31.3.1993 by Ext.A1(a) endorsement on the reverse of Ext.A1 agreement in view of the financial constraints of the plaintiff. The defendants thereafter issued Ext.A2 letter dated 22.6.1994 to the plaintiff purporting to rescind the contract for release. The plaintiff thereupon issued Ext.A3 letter dated 30.6.1994 reiterating that he is ready and willing to perform his part of the contract in the payment of consideration. The letter accused the defendants of demanding a higher amount as consideration and not executing the release deed after accepting the sum of Rs. 1,50,000/-. This was followed by the suit for specific performance of Ext.A1 agreement for release and also for damages to the tune of Rs. 20,000/- on account of delay.

3. The defendants contended that the amount offered as consideration for release is a pittance considering the volume of the business and the market value of the building. Ext.A1 agreement happened to be executed on the insistence of the plaintiff when the first defendant could not attend the shop on account of his ailment and hospitalisation. The defendants pointed out that Ext.A1 agreement has already been rescinded by Ext.A2 letter and that the same cannot be specifically enforced. Exts.B1 to B7 documents were relied on to show that the first defendant was in and out of the medical college hospital for quite a long time disabling participation in business. The claim for damages put forth by the plaintiff for the delay in the execution of the release deed was refuted asserting that the suit is misconceived. The trial court though negatived the claim for damages of Rs. 20,000/- has decreed the suit for specific performance of Ext.A1 agreement for release. The defendants have been directed to execute the release deed on the plaintiff paying a sum of Rs. 1,50,000/- with interest at the rate of 12% per annum till payment. It is reported that a sum of Rs. 1,92,500/- has since been deposited by the plaintiff on 15.1.1997 even before he received copy of the Appeal Suit on 4.9.1997.

4. The defendants challenge the judgment and decree of the court below mainly on the ground that the suit is hit by Section 69(1) of the Act for want of registration of the partnership firm. The plaintiff died pending Appeal Suit and his legal heirs are impleaded as respondents 2 to 7 who are eager to have the decree sustained. The defendants are quick to point out that the partnership firm is deemed to be dissolved by the death of the plaintiff as partner under Section 42(c) of the Act. The defendants contend that the dissolution of the partnership firm has rendered Ext.A1 agreement for release invalid and incapable of being enforced. The fact that the value of the building wherein the partnership business is conducted has escalated by efflux of time is also put forward as a ground of attack. The plea in short is that this is not a fit case where the discretion under S