IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
S. Murtaza Fazl Ali,Janki Nath Bhat, JJ.
Badrimal Ramcharan & Co. - Appellant
Versus
Gana Kaul And Sons & Ors. - Respondent
CIA No. 64/1968
Decided On : 12 January, 1971
PARTNERSHIP ACT - REGISTRATION OF FIRMS - CHANGE IN CONSTITUTION OF FIRM - NOTICE TO REGISTRAR - SUIT BY FIRM - MAINTAINABILITY - SECTION 58, 59, 61, 62, 63, 69 - A suit by a firm is not maintainable unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm. Any change in the constitution of the firm must be intimated to the Registrar of Firms who has to make consequent changes in his register.
Fact of the Case:
The plaintiffs, a registered firm, sued the defendants for an outstanding balance of Rs. 7,167.8/-. The defendants pleaded that the suit was not maintainable as the plaintiffs' firm was not registered in accordance with law.
Finding of the Court:
The trial court dismissed the suit, holding that the suit should have been instituted by the firm with which the defendants had dealings, and not by the plaintiffs' firm.
Issues: Whether the suit was maintainable in the present form, given that the plaintiffs' firm was not registered in accordance with the Partnership Act.
Ratio Decidendi: Under Section 69(2) of the Partnership Act, no suit can be brought on behalf of a firm unless the persons suing have been shown in the Register of Firms as partners in the firm. In this case, one of the partners of the plaintiffs' firm had not been shown in the Register of Firms as a partner at the time of the institution of the suit. Therefore, the suit was not maintainable.
Final Decision: The appeal was dismissed, and the trial court's decree was upheld.
2. Many pleas were raised by the defendants in their written statement and among other pleas the plea that suit was not maintainable in the present form because the firm of the plaintiffs was not registered in accordance with law, was taken. The trial court framed as many as 12 issues in this case but ultimately decided issues 1 and 4 against the plaintiffs and came to the conclusion from the oral and documentary evidence adduced in the suit that "the defendants firm had dealing with Devicharan Omparkash and the latter had supplied atta to the former vide bills Ex. P. 2 to Ex. P. 5. The plaintiffs firm Badrimall Ramcharan had not supplied any goods to the defendants nor has the defendants firm purchased goods from the plaintiffs firm". The present suit has been instituted by Badrimall Ramcharan and Company. The suit should have been instituted by the firm M/S Devicharan Omparkash and Co. the present suit of the plaintiffs is misconceived and consequently is not maintainable in the present form." Hence the suit was dismissed.
3. In this appeal against this decree of the trial court, the only point that has to be decided is whether the suit has been instituted by a firm properly registered under the partnership Act. The learned counsel for the appellants has argued that the firm Badrimal Ramcharan is the real firm. It had its branches called Devicharan Omparkash and Sriram Silk and Cotton Mills. According to the learned counsel Devicharan Omparkash with whom the defendants had dealings is only a branch of the original firm. The suit has been brought in the name of the real firm and therefore the trial court was wrong in dismissing the suit, holding that the suit should have been by Devicharan Omparkash. In this appeal he has argued that the original firm Badrimall Ramcharan was started on 4th Poh 1992 (Bikrami) then a fresh partnership deed was executed on 1-3-1955. He has further argued that on 1-3-1961 another partnership deed was written and therein it was stated that the partnership will be carried on under the name and style of Badrimall Ramcharan with its branches styled as Messrs Devi Charan Om Parkash. The real firm being Badrimall Ramcharan, the dealings of the defendants with the firm Devicharan Om Parkash should be construed on behalf of the parent firm M/S Badrimall Ramcharan, This firm is registered according to the learned counsel for the appellants and therefore the trial court was wrong in dismissing the suit.
4. The matter is purely legal and has to be decided in terms of the provisions of the Partnership Act; but before we take up that discussion we shall briefly mention what the findings of the learned trial Judge are based on evidence produced in this case.
5. One of the witness P. W. Devidatta Mal has admitted that Badrimal Ramcharan & Co. and Messrs Devi Charan Om Parkash are two separate firms dealing in separate goods and maintaining different sets of account books. Badrimall Ramcharan & Co. carries on the business of sale of cloth and M/S Devicharan Om Parkash sell Ghee and sugar. The accounts of these two shops are different and the sign-borads also are different. P.W. Kundan Lal admits th
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