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2002 Supreme(Mad) 396

Madras High Court
A. KULASEKARAN
S.Prakashchand - Appellant
Versus
Sha Harakchand Misrimulland - Respondent
Decided On : 06/04/2002

Advocates:
S. Raghavan, for Appellant; G. Ashokapathy, for Respondents.

The main legal point established in the judgment is that the suit was not barred by Section 69(2) of the Partnership Act as it was not for enforcement of any right arising out of a contract entered into by or on behalf of the plaintiffs firm with the defendant in the course of business transaction.

Headnote:

Indian Partnership Act - Incorporation of Names in Register of Firms - Section 69(2) - Summary of Acts and Sections: Section 69(2) of the Indian Partnership Act, 1932 - The court discussed the legal provisions of Section 69(2) of the Indian Partnership Act, 1932 and its interpretation in relation to the incorporation of names in the Register of Firms. The court emphasized that the suit is not barred by Section 69(2) of the Partnership Act as it is not for enforcement of any right arising out of a contract entered into by or on behalf of the plaintiffs firm with the defendant in the course of business transaction. The court also highlighted the conditions under Section 69(2) and its applicability to the case at hand.

Fact of the Case:

The plaintiff filed a suit for recovery of amount, which was dismissed by the VII Asst. Judge, City Civil Court, Madras. The plaintiffs appealed, and the VIII Additional City Civil Judge, Madras allowed the appeal. The defendant filed a second appeal questioning the incorporation of names of partners in the Register of Firms after the institution of the suit.

Finding of the Court:

The court found that the suit was not barred by Section 69(2) of the Partnership Act as it was not for enforcement of any right arising out of a contract entered into by or on behalf of the plaintiffs firm with the defendant in the course of business transaction. The court also held that the incorporation of names pending suit could not invalidate the suit.

Issues: The issues revolved around the incorporation of names of partners in the Register of Firms after the institution of the suit, the applicability of unreported judgments, and the right of the lower appellate court to consider the surrender pleaded by the plaintiffs against the defendant.

Ratio Decidendi: The court's decision was based on the interpretation of Section 69(2) of the Indian Partnership Act, emphasizing that the suit was not barred by Section 69(2) as it was not for enforcement of any right arising out of a contract entered into by or on behalf of the plaintiffs firm with the defendant in the course of business transaction.

Final Decision: The second appeal failed and was dismissed, with costs awarded to the respondents/plaintiffs.

ORDER :- The defendant is the appellant. The plaintiff has filed a suit for recovery of amount in O. S. No. 7968 of 1986 before the VII Asst. Judge, City Civil Court, Madras, which was dismissed. As against the same the plaintiffs have filed an appeal in A.S. No. 155 of 1989 before the VIII Additional City Civil Judge, Madras which was allowed. Aggrieved by the judgment and decree passed by the first appellate Court this second appeal has been filed.

2. At the time of admission of this second appeal, the below mentioned substantial questions of law are framed :-

(i) Whether the incorporation of the names of some of the partners of the plaintiffs firm in the Register of Firms after the institution of the suit, when the names did not find a place at the time of institution of the suit, could cure the defect and save it from dismissal under Section 69 (2) of the Indian Partnership Act, 1952 as amended ?

(ii) Whether the Court below is not bound by the unreported judgment of this Honourable Court dated 27-9-1983 in C.S. Nos. 20 and 21 of 1982 and the decision of the Supreme Court in AIR 1989 SC 1769

(iii) Whether the Court below was right in applying the ratio reported in (1989) I Mad LW Weekly 405 to the present case ?

(iv) Whether the lower appellate Court is right in putting the case of surrender pleaded by the plaintiffs against the defendant ?

3. The trial Court, though dismissed the suit, unequivocally found that the defendant is liable to pay the suit amount of Rs.20,000/- to the plaintiff, as against the same, the defendant has n ot filed any appeal, hence the fourth substantial question of law does not arise and answered accordingly. The trial Court however dismissed the suit on the ground that the names of the plaintiffs 3 and 4, who are partners of the 1st plaintiff firm did not find place in the register of firms on the date of institution of the suit and the incorporation of the name of the said two partners in the register of firms pending suit would not cure the defect. The First Appellate Court, after scrutiny of Ex. A9 and other documentary and oral evidence allowed the appeal by holding that the said two partners joined the firm as early as 22-10-1979, pending suit, their names were incorporated in the Register of Firms which would not invalidate the suit.

4. Mr. Raghavan, learned counsel for the appellant argued that the subsequent incorporation of the names of the 3rd and 4th plaintiffs would not cure the defect as such the suit was not maintainable under Section 69(2) of the Indian Partnership Act.

5. Mr. Ashokapathy, learned counsel for the respondents argued that the plaintiffs 1 and 2 were already partners and their names were found in the register of Registrar of Firms, the plaintiffs 3 and 4 became partners as early as on 22-10-1979, whereas the suit was filed on 28-2-1986 and pending suit the names of plaintiffs 3 and 4 were duly intimated to the Registrar, who has also issued a certificate with retrospective effect, hence, the suit was maintainable.

6. The learned counsel for the appellant relied on the following decisions in support of his case :-

(I) AIR 1990 Madras 198 (T. Savariraj Pillai v. R.S.S. Vastrad and Company) where in para 6 it was held thus at page 199 :-

"6. In the matter of Abani Kanta Pal, AIR 1986 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 inviolation 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-sections (1) and (2) of S. 69 of the Partnership Act ..........."

A Division Bench of the same Court in an earlier decision in Ram Kumar Shew Chandrai, a Firm v. Dominion of India, AIR 1977 Cal 37 held that if the name of the one person who was a partner on date of suit is not shown in the Regis










































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