1989 Supreme(MP) 722

IN THE HIGH COURT OF MADHYA PRADESH
P. C. PATHAK, J.
Mahavir Trading Co. - Appellant
Versus
M/s. Modi Oil Mills - Respondent
S. A. No. 371 of 1977 (I)
Decided on : 10-01-1989

Headnote:Partnership Act, 1932 – S. 69 – firm not registered on date of institution of suit – such suit is not maintainable – subsequent registration does not – cure the defect.

        Short Note

       1. The respondent/plaintiff firm filed a suit for recovering of Rs. 6,940.91 p. towards the balance of price of linseed oil and sigdana oil cakes sold to the defendants together with interest and sale – duty. The defendants denied the claim. Among others one of the objection was that plaintiff firm filed the suit on 27 – 7 – 1970 as an unregistered firm and therefore the suit was not maintainable in view of bar u/s. 69 of the Indian Partnership Act, 1932.

       2. During the pendency of the suit, the plaintiff firm was registered on 23 – 9 – 1970 vide Ex. P. 1. The learned trial Court held that since the cause of action arose on 25 – 1 – 1970 and the firm was registered on 23 – 9 – 1970 within the period of limitation, the filing of the suit is not bad. Reliance was placed on Nazir Ahmad and others v. Peoples Bank of Northern India Ltd. (AIR 1942 Lahore 289). It was held that the absence of registration at the filing of the suit could not operate as a bar u/s, 69 of the Act. On merits a decree for a sum of Rs. 6,940.91 p. together with future interest @ 6% per annum was decreed. The appeal filed by the defendants was also dismissed relying on Jakiuddin Badruddin and others. v. Vithoba Jagannath Gadali and another (AIR 1939 Nag. 301) & Iward Rajnullu Naidu v. R. Rajamanikamuralya (AIR 1937 Mad. 767). Hence this second appeal.

       3. Held: Learned counsel for the appellant argued that the Court below committed illegality in holding that the registration of the firm during the pendency of the suit will cure the defect and the bar of section 69 (2) of the Act will not come into play. He relied on Abdul Karim v. Ramdas Narayandas (AIR 1951 Nag. 159), Nandkishor v. Firm Maheshwari Mills. Morena (AIR 1953 M. B. 42), Govindmal Gianchand v. Kuni Biharilal and others (AIR 1954 Bombay 364 & M/s. Jammu Cold Storage and General Mills Ltd. v. M/s. Khairati Lal and Sons [AIR 1960 J & K 101 (FB)]. In reply the learned counsel for the respondent relied on Lahore's case cited above beside Jakiuddin's case (supra) and Naidu's case (supra).

       4. After giving my anxious consideration to the various decisions cited at the bar, I am of the opinion that this appeal must be decided in accordance with the law laid down in Abdul Karim case (supra). In that decision Justice Madholkar (as he then was) considered most of the earlier decisions including a single bench decision in Jakiuddin's case rendered by Gruer, J. In para 9 of the said decision Justice Madholkar observed that the view expressed by Gruer, J. in Jakiuddin's case was obiter. Further, he noticed that Gruer, J. himself abandoned that later in Kanchhedilal’s case Justice Deo also came to the same conclusion as Gruer, J. in his second decision. Thus the three pronouncements after Jakiuddin's case, take the view that the registration of a firm is a condition prec dent to its right to institute a suit. Registration of the firm subsequent to the date of institution of the suit cannot remedy the defect and the Court is bound to dismiss it. The contrary view taken by other High Courts and relied on by the learned counsel for the respondent cannot be preferred on the face of the three judgments of this Court itself.

       5. The Courts below committed an illegality in preferring the earlier decision and by sidetracking the later decisions pronounced by Madholkar, J. I am in respectful agreement with the view taken by him, Following that decision, I hold that since the plaintiff firm was not registered on the date it instituted the suit, the suit has to be dismissed on account of the bar u/s. 69 of the Act. The subsequent registration of the firm cannot remedy the defect. AIR 1942 Lah. 289 AIR 1939 Nag. 301 & AIR 1937 Mad. 767 dissented from. AIR 1951 Nag. 159, AIR 1953 M.B. 42, AIR 1954 Bom. 364 and AIR 1960 J & K 101 (FB) relied on. Appeal allowed.