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2016 Supreme(MP) 701

IN THE HIGH COURT OF MADHYA PRADESH AT GWALIOR BENCH
Sheel Nagu, J.
Vijay Kumar and another - Petitioners
Versus
M/s Shriram Industries and others - Respondents
Civil Revision No. 50 of 2006
Decided on : 30-08-2016

Advocates:
Advocate Appeared:
For the Petitioners:Shri N.K.Gupta, Sr. Advocate with Shri S.D. Singh, Advocate
For the Respondents:Shri Sanjeev Jain, Advocate

The central legal point established in the judgment is that the mandatory provisions of Section 69(2) of the Indian Partnership Act require a partnership firm to be represented by at least two qualified partners in order to maintain a suit against a third party.

Headnote:

Indian Partnership Act - Suit Maintainability - Section 69(2) - Order 30, Rule 1 CPC

Fact of the Case:

The suit was filed by a registered partnership firm represented through two partners, seeking recovery of amount against another firm. The defendants sought dismissal of the suit under Section 69(2) of the Indian Partnership Act, contending that the plaintiff firm was not represented by two registered partners as required by the Act.

Finding of the Court:

The court held that the suit was not maintainable as it was filed by only one qualified partner, contrary to the mandatory provisions of Section 69(2) of the Act.

Issues: The main issue was the maintainability of the suit under Section 69(2) of the Indian Partnership Act, and the interpretation of Order 30, Rule 1 of CPC in relation to the representation of partnership firms in legal proceedings.

Ratio Decidendi: The court emphasized that Section 69(2) of the Act prohibits the institution of a suit by a partnership firm against a third party unless at least two qualified partners represent the plaintiff partnership firm. The provision of Order 30, Rule 1 of CPC furthered the intent and object of Section 69(2) of the Act.

Final Decision: The court allowed the revision, set aside the impugned order, and held the suit to be not maintainable, dismissing it accordingly.

ORDER :

Sheel Nagu, J.

1. The present revision filed under Section 115 of the Code of Civil Procedure, assails the interlocutory order dated 20/2/2006 in C.S. No. 15-A/99 passed by the District Judge, Morena (M.P.) by which an application seeking dismissal of the suit filed by the plaintiffs partnership firm represented by two partners against a third party on the ground of same being hit by the mandatory provision of Sections 69(2) of the Indian Partnership Act, 1932, (in short the Act) has been rejected.

2. Learned counsel for the rival parties are heard.

3. Brief facts giving rise to the present dispute are that the partnership firm in the name and style of M/s Shriram Industries represented through Mahila Krishnakumari and Daudayal, instituted a suit by filing a plaint praying for recovery of amount of Rs. 10,66740/- along with interest against another firm, namely, Shyamsunder & Company represented through its partners. During pendency of the suit, at preliminary stage, an application for dismissal of the suit was filed by the defendants contending that the suit being not maintainable under Section 69(2) of the Act inasmuch as that the same was though instituted by a registered partnership firm M/s Shriram Industries but was not represented through two partners both of whose names find place in the Register of partnership maintained by the Registrar of Partnership under the Act. It was though admitted that Mahila Krishnakumari was a partner of the plaintiffs-firm, who is a registered partner but objection was raised in regard to name of Daudayal s/o Shri Kanhaiyalal who was mentioned as one of the partners representing the plaintiffs/firm. It was submitted that Daudayal was inducted as partner in place of his deceased-father Kanhaiyalal. However, name of Daudayal was not mentioned in the registration certificate of plaintiff partnership firm. In this factual background, the defendants placing reliance on the provisions of Section 69(2) of the Partnership Act read with XXX of C.P.C. sought dismissal of the suit represented by only one registered partner, as not maintainable.

4. The trial court while holding the suit to be maintainable has held that provisions of Section 69(2) of the Act come into play only when a new partner is inducted without his name being mentioned in the registration certificate and not in the situation prevailing herein where the son of the erstwhile registered partner had merely replaced his deceased father who was a registered partner. In respect of the objection pertaining to provisions of Order 30, Rule 2 of C.P.C., the trial court held that the suit can survive even if one of the registered partners arrayed in the plaint, representing the plaintiff partnership firm signs and verifies the plaint.

5. The undisputed facts in the present case are that:-

(i) The suit in question was instituted by a registered partnership firm represented through two persons namely, Mahila Krishna kumari, who indisputably was a registered partner and Daudayal who was though admitted as a partner but his name did not figure in the Registration Certificate.

(ii) The plaint appears to have been singed and verified by both the said partners.

6. For resolving the controversy, the relevant statutory provisions deserve to be reproduced below:-

"69. Effect of non-registration.- (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.

Order 30, Rule 1 CPC

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