The main legal point established in the judgment is that a suit filed by an unregistered partnership firm under the Indian Partnership Act, 1932 is not maintainable and is inherently defective and non est in the eyes of the law.

JUDGMENT :

(Prayer: Second Appeal has been filed under Section 100 of CPC against the Judgment and Decree dated 29.02.2008 passed in A.S.No.72 of 2006 on the file of the Principal District Court, Kancheepuram, confirming the Judgment and Decree dated 07.02.2006 passed in O.S.No.73 of 2000 on the file of the Principal Subordinate Court, Chengalpattu).

1. Challenge in this second appeal is made to the Judgment and Decree dated 29.02.2008 passed in A.S.No.72 of 2006 on the file of the Principal District Court, Kancheepuram, confirming the Judgment and Decree dated 07.02.2006 passed in O.S.No.73 of 2000 on the file of the Principal Subordinate Court, Chengalpattu.

2. For the sake of convenience, the parties are referred to as per their rankings in the trial Court.

3. The defendant in O.S.No.73 of 2000 is the appellant in the second appeal.

4. Suit for recovery of money.

5. Briefly stated, the case of the plaintiff is that the plaintiff is a Partnership Firm consisting of partners viz., S. Paulraj and M.A. Arivazhaghan (defendant) and carrying on business in financing on interest, hire purchase, leasing, investments, acceptance of deposits and such other business, the partners may agree and the abovesaid partnership, among the two partners was entered into on 23.12.1998. Earlier, the first partner's wife Dhanalakshmi ammal was a partner along with the second partner M.A. Arivazhaghan and the said partnership was entered into among them on 01.07.1994 and the same was registered. After the death of Dhanalakshmi ammal, the first partner viz., S. Paulraj was admitted into the Partnership Firm on 23.12.1998. The defendant borrowed a sum of Rs. 2,00,000/- from the Partnership Firm on 22.05.1997 and a cheque was issued to the defendant by Dhanalakshmi ammal evidencing the transaction and the defendant received the cheque and secured the amount for the purpose of purchasing and reconstruction of the house property bearing D.No.75, Rajaji Street, Chengalpattu. Excepting the payment made by the defendant towards the loan borrowed by him as detailed in the memo of valuation, no other amount has been paid by the defendant and hence, a notice was sent to him on 14.08.1999 calling upon him to return the amount borrowed by him with interest from the plaintiff's Firm. Despite the receipt of the notice, the defendant neither responded to the same nor complied with the demand made by the plaintiff's Firm. As per the ledger maintained by the plaintiff, the defendant is liable to pay a sum of Rs.3,71,628/-. The defendant, after the purchase and reconstruction of the property as above stated with the aid of the loan secured from the plaintiff, had transferred the property in the name of his daughter with a view to defeat the claim of the plaintiff. Hence, according to the plaintiff, it has been necessitated to institute the suit against the defendant for recovery of money due to it.

6. The defendant resisted the plaintiff's suit contending that the plaintiff's suit is not maintainable either in law or on facts and according to the defendant, he did not borrow any amount from the plaintiff and his father Arunagiri's money amounting to Rs.2,00,000/- was brought into the partnership accounts at the plaintiff's suggestion and fictitious deposits were created by the plaintiff, as if the third parties had deposited the money with the Partnership Firm and there was no borrowing by the defendant from the plaintiff and the allegation that the defendant borrowed a sum of Rs.2,00,000/- from the plaintiff and a cheque was issued to the defendant by the plaintiff towards the loan and the defendant, out of the loan received, purchased and reconstructed the property as detailed in the plaint are all false. The plaintiff has not been managing the partnership properly and not accounted for the income and expenditure. The defendant sent a suitable reply dated 14.10.2000 to the notice issued by the plaintiff setting forth the true facts. It is false to state that the defendant