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1984 Supreme(Raj) 525

RAJASTHAN HIGH COURT
S.K.Mal Lodha, S.S.Byas, JJ.
M/s Chandra Bhan Banshi Lal Ram Ratan Daga - Appellant
Versus
Municipal Council - Respondent
D.B. Civil Special Appeal No. 74 of 1974.
Decided On : 3-12-1984

A suit for the enforcement of a right arising out of a contract cannot be instituted on behalf of an unregistered firm against a 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.

Headnote:

PARTNERSHIP ACT - SECTION 69(2) - REGISTRATION OF FIRM - SUIT BY UNREGISTERED FIRM - BAR - MANDATORY PROVISION.

Fact of the Case:

A partnership firm, M/s Chandra Bhan Banshilal Ram Ratan Daga, Bikaner, instituted a suit for recovery of a sum deposited with the Municipal Council, Bikaner, for a specific purpose. The suit was contested by the Municipal Council on various grounds, including the maintainability of the suit by an unregistered firm.

Finding of the Court:

The court held that the suit was barred under Section 69(2) of the Indian Partnership Act, 1932, as the firm was not registered and the names of all the partners were not shown in the Register of Firms.

Issues: Whether the suit was maintainable by an unregistered firm.

Ratio Decidendi: Section 69(2) of the Indian Partnership Act, 1932, is mandatory and prohibits the institution of a suit on behalf of an unregistered firm against a 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.

Final Decision: The court dismissed the appeal, holding that the suit was rightly held to be barred under Section 69(2) of the Indian Partnership Act, 1932.

JUDGMENT

1. - The plaintiff whose suit was dismissed by the learned Civil Judge, Bikaner by judgment dated October 10, 1971 and the same having been confirmed by the learned single Judge of this Court vide his judgment dated February 15, 1974 has filed this appeal under s. 18 of the Rajasthan High Court Ordinance, 1949. After hearing the learned counsel for the parties, we have come to the conclusion that the suit was rightly held to be barred under s. 69 (2) of the India Partnership Act (No. IX of 1932) (for short "the Act" hereinafter.)

2. It is not necessary to recount the fact in detail. Suffice it to, mention, that M/s Chandra Bhan Banshilal Ram Ratan Daga, Bikaner a partnership firm instituted a suit for Rs. 17,600/-on March, 3, 1966 consisting of Rs. 8779/- as principal, Rs. 8799/- by way of interest plus Rs. 2/- as notice expenses. The case of the plaintiff was that a sum of Rs. 8799/- was deposited by it with Municipal Council, Biknear for a specific purpose, namely for the construction of septic tank and soak pit outside the building owned by it and since the Municipal Council, Bikaner (defendant-respondent) failed to spend the amount for carrying out the aforesaid work and did not make refund of the amount, the suit was tiled for the recovery of the same together with interest and notice expenses. The plaintiff brought this suit through its Am Mukhtiar Tolarem. The plaint was signed and verified by Tolaram. He submitted an affidavit dated March, 13, 1968 that the suit is being instituted on behalf of the partnership firm and the names of all the partners were mentioned in the Mukhtiarnama dated March, 19, 1965.

3. The suit was contested by the defendants on various grounds. The trial court framed the necessary issues. The material issues for the present purpose are issues Nos. 3 and 8 which when translated into English read as under:-

(3) Whether the plaintiff is entitled to file this suit ?

(8) Whether the plaintiff's firm is registered and, therefore, the suit is maintainable ?
The learned Civil Judge dealt with issues Nos. 3, 4 and 8 together. In connection with issues No. 8 he came to the conclusion that in the absence of the proofs, the suit is not maintainable and could not have been filed by the plaintiff. While doing so, the learned Civil Judge examined the statements of R.P.W. 2. Tolarem and P.W. 4 Shri Gopal and also considered the certificate of registration (Ex. 2) dated November 5, 1964 and Entry of Register under s. 67 of the Act in which five reasons are mentioned as partners of the plaintiff-firm. He was of the opinion that the names of the three daughters Kusum, Kumud and Kulakumari do not appear in the aforesaid entry, the copy of which was issued by the Registrar of firms, Rajasthan, Jaipur. As the names of three daughters were not mentioned in the Entry of Register, the learned Civil Judge opined that the suit was barred under s. 69 (2) of the Act. On appeal, the learned single Judge considered the statements of P.W. 2 Tolaram and P.W. 4 Shri Gopal and the documents referred by the learned Civil Judge and summed up his conclusion in the following words:-

"As already pointed out the evidence produced on behalf of the plaintiff goes to show that the names of some of the partners of the plaintiff firm had not been shown in the Register of firms as partners and as such the suit was therefore, clearly barred under s. 69 of the Partnership Act."
The learned single Judge dismissed the appeal.

4. The plaintiff has filed this special appeal as aforesaid.We have heard Mr. G.N. Sharma learned counsel for the appellant and Mr. Sudesh Gupta for Mr. C.D. Mondra for the respondent (Municipal Council, Bikaner).It has rightly not been disputed that s. 69 (2) of the Act is mandatory and in the absence of the fulfilment of the conditions laid therein, the suit cannot be-instituted on behalf of the firm. Learned counsel for the appellant has assailed the finding of the learned single-Judge that the three daughters Kusum, K



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