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1989 Supreme(Mad) 516

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE SATHIADEV
T. Savariraj Pillai - Appellant
Versus
M/s. R. S. S. Vastrad and Company - Respondents
C.R.P. No.4519 of 1987
Decided On : 03 November 1989

Appearing Advocates:E. Padmanabhan, T.R. Rajagopalan, Advocates.

Non-compliance of the requirements of S.69(2) of Partnership Act is a mandatory requirement and a suit filed in this manner is a void suit.

Headnote:

PARTNERSHIP ACT - S.69(2) - SUIT BY UNREGISTERED FIRM - WITHDRAWAL OF SUIT WITH LIBERTY TO FILE FRESH SUIT - NOT PERMISSIBLE - S.69(2) IS MANDATORY - NON-COMPLIANCE RENDERS SUIT VOID - O.23, R.1(3), C.P.C. NOT APPLICABLE.

Fact of the Case:

Plaintiff filed a suit based on equitable mortgage and for other reliefs. At the stage when the defendant was examined as D.W. 1, he filed an application under O.23, R. 1(3) and S.151, Civil P.C. seeking permission to withdraw the suit with liberty to file a fresh suit in respect of the subject-matter of the present suit. The Court below granted the relief as prayed for and directed payment of Rs. 200/-.

Finding of the Court:

The Court held that the suit as filed is not void, and that it would be proper to grant the relief as prayed for and directed payment of Rs. 200/-.

Issues: Whether the non-compliance of the requirements of S.69(2) of Partnership Act is a formal defect or its requirement is mandatory, and in its absence, a suit filed in this manner is a void suit.

Ratio Decidendi: S.69(2) of the Partnership Act is mandatory in character and that a partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract within the ambit of S.69. If a Firm is not registered, excepting in a suit as contemplated under S.69(3) of the Act, the Court will have no jurisdiction to entertain a suit in violation of S.69(1). O.23, R. 1(3), C.P.C. would have no relevance when a mandatory requirement is not complied with, for the institution of a suit.

Final Decision: The revision petition is allowed. The Court below is directed to restore the suit on its file and dispose of, based on whatever other legal and factual contentions that may be raised by respective parties.

Judgment :-

Defendant in O.S. No.1293 of 1984 on the file of II Additional Subordinate Judge, Tiruchirapalli is the petitioner. Plaintiff is the sole respondent. Plaintiff filed the suit based on equitable mortgage and for other reliefs, and at the stage when defendant was examined as D. W. 1, he filed I. A. No.466 of 1987 under O.23, R. 1(3) and S.151, Civil P.C. seeking permission to withdraw the suit with liberty to file a fresh suit in respect of the subject-matter of the present suit. The suit was filed by M/s. R.S.S. Vashtrad an Company through one of its partners M.M. Nalavad. He had sworn to before Court that he had filed Exhibit A-2 partnership deed to show that he is a partner of the plaintiff firm even prior to 10-10-1983, but, however, this fact was not intimated to the Registrar of Firms by the Auditor of the Firm, and that entry had been made in the Register only during the pendency of the suit, and therefore, it being a formal defect, which would not go into the root of the matter, he had been advised to file a fresh suit, and therefore, he sought for permission to withdraw the suit with liberty to file a fresh suit.

2. This was opposed by defendant claiming that it is only after cross-examination of the plaintiff, application had been made to include the name of Mr. Nalavad as a partner on 22-5-1987 and accordingly registered by the Registrar of Firm, and that on the date of suit, he was not a partner, and therefore, had no right to file the suit, and hence it is non est in the eye of law.

3. The Court below held that the suit as filed is not void, and that it would be proper to grant the relief as prayed for and directed payment of Rs. 200/-. It is against the said order, this revision petition is filed.

4. The sole point which arises for consideration is, whether the non-compliance of the requirements of S.69(2) of Partnership Act is a formal defect or its requirement is mandatory, and in its absence, a suit filed in this manner is a void suit.

5. Learned Counsel Mr. E. Padmanabhan, would straightway rely upon the decision in Loonkaran Sethia v. Ivan E. John, 1977 AIR(SC) 336, 1977 (1) SCC 379, 1977 (1) SCR 853 in which dealing with the scope of S.69 of the Act, it was held that it is mandatory in character and that a partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract within the ambit of S.69.

6. In the matter of Abani Kanta Pal, 1986 AIR(Cal) 143 , a Division Bench in dealing with the scope of the section held that if a Firm is not registered, excepting in a suit as contemplated under S.69(3) of the Act, the Court will have no jurisdiction to entertain a suit in violation of S.69(1). It further added:

"......In other words, the plaint that has been filed by the plaintiff will be considered a void plaint, if it contravenes the provisions of sub-secs. (1) and (2) of S.69 of the Partnership Act ........" *

A Division Bench of the same Court in an earlier decisions in Ram Kumar Shew Chandrai, a Firm v. Dominion of India, 1977 AIR(Cal) 37 held that if the name of one person who was partner on date of suit is not shown in the Register then the suit as filed is not maintainable. A Division Bench in Bank of Koothattukulam v. Thomas, 1955 AIR(TCo) 155 held:

"It is necessary not only that the firm should be registered, but the person suing must be shown as a partner in the firm. And when it is found that on the date when the plaint is filed the second part of this condition has not been carried out when S.69(2) is not complied with...The registration after the institution of the suit cannot cure the defect of non-registration before the date of suit" *

7. A Division Bench of this Court in Buhari Trading Co. v. Star Metal Co., 1983 AIR(Mad) 150 in dealing with the dismissal of a suit which was sought to be withdrawn on the ground that the plaintiff therein was an unregistered firm, held that it would not be a bar to file a fresh suit on the same cause of acti





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