1958 Supreme(P&H) 178
PUNJAB & HARYANA HIGH COURT
K.L.Gosain and A.N.Grover JJ.
Durga Das Janak Raj
Versus
Preete Shah Sant Ram
Second Appeal No. 644 of 1951,
Decided On : DECEMBER 10, 1958
The dissolution of a firm by the death of one of its partners does not affect its registration for the purposes of Section 69(2) of the Indian Partnership Act, 1932.
Headnote:
PARTNERSHIP ACT - REGISTRATION - DISSOLUTION OF FIRM - EFFECT ON REGISTRATION - SECTION 69(2) - INTERPRETATION - SUIT BY FIRM - MAINTAINABILITY.
Fact of the Case:
A suit was filed by a firm, Prite Shah-Sant Ram, against the defendant for recovery of a debt. The defendant contended that the plaintiff-firm was not a registered firm and, therefore, the suit was not maintainable under Section 69(2) of the Indian Partnership Act, 1932.
Finding of the Court:
The court held that the plaintiff-firm was duly registered and was competent to bring the suit. The court further held that the dissolution of the firm by the death of one of its partners did not affect its registration for the purposes of Section 69(2) of the Act.
Issues: 1. Whether the plaintiff-firm was a registered firm? 2. Whether the dissolution of the firm by the death of one of its partners affected its registration for the purposes of Section 69(2) of the Indian Partnership Act, 1932?
Ratio Decidendi: 1. Section 69(2) of the Indian Partnership Act, 1932, creates a bar to the institution of a suit by or on behalf of a firm against a third party, but the only conditions which are provided and which have to be fulfilled for institution and trial of the suit are -- (a) that the firm should be registered, and (b) the persons suing should be shown in the Register of Firms as partners in the firm. 2. The provisions of Sections 58 to 63 of the Indian Partnership Act, 1932, dealing with registration of firms, are permissive and enabling provisions. 3. Section 63(1) of the Indian Partnership Act, 1932, provides that when a registered firm is dissolved, any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorised in this behalf, may give notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Register of Firms, and shall file the notice along with the statement relating to the firm filed under Section 59. 4. The dissolution of a firm by the death of one of its partners does not affect its registration for the purposes of Section 69(2) of the Indian Partnership Act, 1932.
Final Decision: The appeal was dismissed.
1. This appeal has been placed before us because the learned Single Judge was of the opinion that it should be decided by a larger Bench.
2. In order to appreciate the point involved the facts may be shortly stated. A sum of Rs. 1850/- was due from the appellant firm to firm known as Sukhi Ram Goverdhan Das. On 27-6-1949 the aforesaid firm transferred the debt in favour of the plaintiff-firm Prite Shah-Sant Ram. On 28-6-1949 Prite Shah Sant Ram filed a suit for recovery of Rs. 1,062/12/- as principal and Rs. 215/-as interest after adjusting a sum of Rs. 787/4/-which was said to be due from the plaintiff-firm to the defendant-firm. The suit was resisted on various grounds and out of the issues that were framed issue No. 1 alone is material for the purposes of deciding the appeal. It is as follows:
Is the plaintiff-firm a registered one? If not, what is its effect?
It may be mentioned that the learned Single Judge has decided after treating certain findings given on other issues as binding that if the suit is to be decreed it will have to be decreed in the sum of Hs. 1.277/12/- and the only question, therefore, is whether the decision of the court below on issue No. I was correct or erroneous. The trial Court while-deciding that issue relied on Exhibit P. 3 which was a copy of the entries in the Register of Firms: showing that Messrs. Prite Shah-Sant Ram was a registered firm. That Court was of the view that although the plaintiff had stated as P. W. 4 that the firm had been dissolved in 1946, but for the purposes of the provisions contained in Section 69 of the Indian Partnership Act the registration would continue and so the suit was maintainable. Before the learned Additional District Judge in appeal it was contended on behalf of the defendants that the firm Prite Shat-Sant Ram had been registered in 1933 and it was subsequently dissolved on the death of one of its partners Sant Ram in June 1946; the transfer of the debt was made after the dissolution of the firm and that when the firm had been originally registered in 1933 Madan Mohan was not one of its-partners. The learned Additional District Judge came to the conclusion that Madan Mohan had become a partner before the dissolution of the firm. It was also contended that the constitution of the firm as it existed at the time of dissolution was not the same as it was at the time of its registration. The learned Additional District Judge was of the view that these objections were never raised in the pleadings and he allowed additional evidence to be ad-duced on the point. Exhibit G. 1, which was a certified copy of the form in which the names of the partners of the firm Prite Shah-Sant Ram were given, was allowed to be produced as additional evidence. After examining Exhibit C. 1 and Exhibit P. 3 he came to the conclusion that the partners at the time of dissolution were Sant Ram, Khushi Ram, Sukhi Ram, Goverdhan Das and Madan Mohan, and, therefore, the conclusion of the trial Court that the firm was duly registered and was competent to bring the suit was correct. As regards the objection that the plaintiff-firm had purchased the debt after its dissolution, it was observed by the learned Additional District Judge that no objection had been raised on that point at any previous stage. He held that the firm at the time of assignment of the debt still remained a registered firm for the purposes of the Partnership Act. When the matter came up before the learned Single Judge on second appeal he was of the view that it had not been satisfactorily dealt with by the learned Additional District Judge and that the point involved was difficult and he was doubtful how far the decision in Pratapchand Ramchand and Co. v. Jahangirji Bomanji, AIR 1940 Bom 257, which was followed in Tapendra Chunder v. Jogendra Chun-der, AIR 1942 Cal 76, would apply to the present case.
3. Mr. Nand Lal Salooja, who appears on behalf of the appellant, has invited our attention to the pleadings of the pa