2021 Supreme(UK) 99
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Sharad Kumar Sharma, J.
Rajendra Prasad Khanduri - Appellant
Versus
Safique Ahmed & Ors. - Respondent
Second Appeal No. 40 of 2005
Decided On : 24-03-2021
Pankaj Purohit, Advocate
The central legal point established in the judgment is that a suit for recovery of money under the terms of an unregistered partnership deed is not maintainable due to the statutory bar created by Section 69 of the Indian Partnership Act, 1932.
Headnote:
partnership deed - recovery of money - Indian Partnership Act, 1932, Section 69
Fact of the Case:
The plaintiffs filed a suit for recovery of money based on an unregistered partnership deed. The defendant appealed the judgment of the trial court, arguing that the suit was not maintainable due to the bar created under Section 69 of the Indian Partnership Act, 1932.
Finding of the Court:
The court found in favor of the defendant, holding that the suit for recovery of money under the terms of an unregistered partnership deed was not sustainable due to the statutory bar created by Section 69 of the Partnership Act.
Issues: The issues involved the maintainability of a suit for recovery of money between partners of a firm based on an unregistered partnership deed and the applicability of Section 69 of the Indian Partnership Act, 1932.
Ratio Decidendi: The court relied on Section 69(1) of the Indian Partnership Act, which prohibits the institution of a suit for enforcement of rights arising from an unregistered partnership deed. The court held that the suit was not maintainable due to the statutory bar created by Section 69.
Final Decision: The Second Appeal was allowed, and the impugned judgments were quashed, ruling that the plaintiffs' suit for recovery of money under the terms of an unregistered partnership deed was not sustainable due to the statutory bar created by Section 69 of the Partnership Act. No costs were awarded.
JUDGMENT
Sharad Kumar Sharma, J. - The defendant (appellant herein), had preferred this Second Appeal, questioning the propriety of the judgement dated 12.04.2005, as was passed by the Court of District Judge, Chamoli, in Civil Appeal No. 6 of 2002, Rajendra Prashad Khanduri Vs. Safique Ahmed and others, whereby, the appeal, which was preferred by the defendant/appellant has been dismissed and as a consequence thereto, it has resulted into the affirmation of the judgment of the learned trial Court dated 31.10.2002, as was rendered in Original Suit No. 41 of 1999, Rafique Ahmed (through LRs) Vs. Rajendra Prasad Khanduri and another.
2. The suit in question was instituted by the plaintiffs (respondents herein) on 14.05.1999, praying for a grant of a decree for recovery of money, as mentioned in para 10 of the plaint, seeking decree to the effect that a total amount of Rs. 46,500/- may be directed to be recovered from the defendant/appellant. It was a money, which was allegedly said to be taken by the parties for the purposes of purchase of a Truck, the business in which they were engaged in terms of an agreement of the partnership deed dated 19.06.1995.
3. The factum of entering into a partnership deed itself has been admitted by the plaintiffs in the suit in para 1 of the plaint, and once taking of a financial assistance for the purposes of purchasing the Truck bearing No. USQ-0-864, for total amount of Rs. 2,00,000/- was under the terms of the partnership deed, and hence any financial implications, which will be flowing interse between the partners, would be from or governing inter se financial assistance between the partners of the firm, would be governed exclusively by the terms of the partnership deed itself and, in that eventuality, if the partnership deed, which was on record in evidence, is taken into consideration, its execution refers to the aforesaid directions of taking financial assistance on 19.06.1995, and the interse liabilities, which were governing between the plaintiffs and the appellant, who were admittedly the partners of firm in terms of the aforesaid partnership deed dated 19.06.1995. Hence, based on the fact on records, of existence of the partnership deed cannot be disputed as against the decree in question.
4. This Second Appeal was preferred by the defendant (appellant herein) on 11.07.2005, and the Second Appeal was admitted by the coordinate Bench of this Court, by an order dated 13.07.2005 on two substantial questions of law i.e. 'A' and 'B', which are referred to hereunder:-
"(a) Whether a suit simplicitor of recovery of money is maintainable at the behest of a partner against the other partner of a firm without the dissolution of the firm?
(b) Whether the suit of the plaintiff/respondents is not barred by the provisions of section 69 of the Indian Partnership Act, 1932?"
5. The present Second Appeal, earlier was taken up on number of occasions and the order sheet reflects that though the plaintiffs/respondents, had put in appearance, through their counsel, but later on, they themselves have chosen not to contest the proceedings of the Second Appeal and ultimately, the coordinate Bench of this Court, vide its order dated 01.12.2020, directed the Second Appeal to be proceeded ex parte against the respondents. Its not only that. When the matter was subsequently taken up on 03.03.2021, before me, the learned Senior Counsel for the plaintiffs/respondents, had sought a liberty to file an appropriate application for seeking recall of the order dated 01.12.2020, directing the Second Appeal to be proceeded ex parte against the respondents, but the same has not been filed.
6. There is an office report that in compliance thereto of the order dated 03.03.2021, no such application has been filed by the respondents and as such, the order to proceed ex parte was passed on 01.12.2020 stands as on date. Its not even that. Even after taking liberty to file an application for recall on 03.03.2021, thereafter when the matte