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1990 Supreme(MP) 371
1991 JLJ 61
R.C. Lahati, J.
Ram Kumar Agarwal v. Shri Ramkishan Tayal and others
M.A. No. 11 of 1981; against the order of Shri M.P. Bojpai, 1st Additional District Judge, Gwalior, passed in Civil Suit No. 15-B/79;
Decided on 14.9.1990.
B.G. Apte for appellant; B.S. Agarwal for respondents.
Headnote:(1) Civil P.C., 1908 --- O. 6, R. 17 --- amendment sought at preliminary stage in the nature of an amplification of pleading already raised --- such amendment should be allowed. [Para 8
(2) Arbitration Act, 1940 --- Ss. 8 and 20 --- provisions under --- are different and have a contrasting distinction. AIR 1964 All. 477 relied on. [Para 14
(3) Arbitration Act, 1940 --- Ss. 8, 9 and 20 --- application for appointment of arbitrator under S. 8 or 9 0 --- is not for enforcement of any right to sue --- application under S. 20 may amount to any right to sue. AIR 1977 All. 352 dissented from. [Para 14
(4) Partnership Act, 1932 --- S. 69(1) and (3)(a) --- Arbitration Act, 1940 --- S. 20 --- application under S. 20 of Arbitration Act against dissolved firm --- not barred under S. 69(1) of Partnership Act but is saved under S. 69(3)(a). AIR 1940 Nag. 78 and AIR 1983 Delhi 139 relied on. AIR 1964 SC 1882 distinguished, AIR 1977 All. 352 dissented from. [Paras 14 & 15
¼1½ flfoy izfØ;k lafgrk] 1908 && vk- 6] fu- 17 && iwoZ ls fd, x, vfHkopuksa ds izo/kZu dh izd`fr dk la‘kks/ku izkjafHkd izØe ij pkgk x;k && ,slk la‘kks/ku vuqKkr fd;k tkuk pkfg,A ¿ iSjk 8
¼2½ ek/;LFke~ vf/kfu;e] 1940 && /kkjk 8 ,oa 20 && mica/k && fHkUu&fHkUu gSa] muesa fo"ke foHksn gSA , vkb vkj 1964 byk- 477 voyafcrA ¿ iSjk 14
¼3½ ek/;LFke vf/kfu;e] 1940 && /kkjk 8] 9 ,oa 20 && /kkjk 8 vFkok 9 ds v/khu e/;LFk dh fu;qfDr gsrq vkosnu && okn ykus ds fdlh vf/kdkj ds izorZu gsrq ugha gS && /kkjk 20 ds v/khu vkosnu okn ykus ds fdlh vf/kdkj dk izorZu djkus ds lerqY; gks ldrk gSA , vkb vkj 1977 byk- 352 folEerA ¿ iSjk 14
¼4½ Hkkxhnkjh vf/kfu;e] 1932 && /kkjk 69¼1½ ,oa ¼3½¼d½ && ek/;LFke~ vf/kfu;e] 1940 && /kkjk 20 && ek/;LFke~ vf/kfu;e dh /kkjk 20 ds v/khu fo?kfVr QeZ ds fo:) vkosnu && Hkkxhnkjh vf/kfu;e dh /kkjk 69¼1½ ds v/khu oftZr ugha gS vfirq /kjkk 69¼3½¼d½ ds v/khu O;ko`Ùk gSA , vkb vkj 1940 ukx- 78 ,oa , vkb vkj 1983 nsgyh 139 voyafcrA , vkb vkj 1964 ,l lh 1882 izHksfnrA , vkb vkj 1977 byk- 352 folEerA ¿ iSjk 14 ,oa 15
R.C. Lahoti, J. -- 1. The plaintiff has come up in appeal aggrieved by an order of the trial Court holding an application u/s 20 of the Arbitration Act, 1940 to be not maintainable on account of bar created by section 69(1) of Indian Partnership Act, 1932.
2. The plaintiff and defendants entered into a partnership on 15.12.1976. It appears that the defendant No. 1 received certain payments relating to partnership and misappropriated the amount to his own use without distributing the same in accordance with the terms of partnership. On 1.6.1979, an application u/s 20 of the Arbitration Act was filed seeking filing of the partnership agreement, incorporating the arbitration agreement, in the Court and, thereafter, taking an account through arbitration of the amount due and payable to the plaintiff and awarding the same to the plaintiff.
3. The plaintiff also moved an application seeking an interim injunction restraining the defendant No. 1 from realising any other payments due to the partnership.
4. The defendant No. 1 filed a reply to the application and took an objection therein that the partnership being not registered, the application was not maintainable. Therein, it was also stated that the partnership had stood dissolved.
5. Soon on the filing of the reply and having noticed the objection raised by the defendant No.1, the plaintiff filed an application (I.A. No. 4) on 27.6.1979 seeking an amendment in the main application that the partnership having been dissolved as per the stand taken by the defendant No.1, himself, the plaintiff was entitled to settlement of accounts consequent to the dissolution of partnership and to realisation of the amount due to him.
6. Admittedly, this application for amendment remained pending and the trial Court having framed preliminary issues as to the maintainability of the main application, heard the parties on it and directed the application to be dismissed as stated hereinabove.
7. The learned counsel for the appellant has submitted that the application u/s 20 of the Arbitration Act was saved by clause (a) of subsection (3) of section 69 of the Partnership Act inasmuch as the plaintiff was seeking enforcement of his right to sue for accounts of a dissolved firm and the trial Court should not have dismissed his application without permitting the amendment prayed for.
8. The trial Court definitely erred in overlooking I.A. No. 4 and adjudicating upon the maintainability of the main application. The amendment was prayed for at a preliminary stage of the proceedings and possibly there could have been no objection to permit the amendment because the plea was sought to be raised on the basis of a plea taken in the defence and further the basic structure of the main application remained the same. Really speaking, the amendment was an amplification of the pleadings already raised. The application deserved to be allowed and is hereby allowed.
9. The English Law of Partnership makes registration of firms compulsory and imposes a penalty for non-registration. That drastic approach has not been followed in the Indian statute. Still, a firm not registered has been attached with disability to enforce its claims either against third parties or against fellow partners. One exception to this disability recognised by the Indian Law is that any unregistered partner in any firm registered or unregistered may sue for dissolution of the firm. This exception is made on the principle that registration is designed primarily to protect third parties and the absence of registration need not prevent the disappearance of an unregistered or imperfectly registered firm. (See report of Special Committee). In Chhotelal v. Gopaldas (AIR 1940 Nagpur 78), the scheme underlying section 69 was summed up in the following words:-
"It is impossible to legislate entirely against unregistered partnerships, but the intention of the Legislature was to discourage non-registration as far as possible; to prohibit the enforcement
