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2026 Supreme(MP) 92
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
DEEPAK KHOT, J.
Deen Mohammad - Appellant
Versus
Paradise Garh Nirman Shahkari Samiti And Others - Respondent
First Appeal No. 1458 of 2025
Decided On : 05-03-2026
Advocate Appeared:
For the Appellant : Shri Avinash Zargar with Shri Kedar Prasad Kuswaha and Shri Gouransh Bhurrak and Shri Arvind Soni Advs.
For the Respondent:Shri Ashok Kumar Gupta, Advocate Shri Anshuman Singh, with Shri Anuj Shrivastava, Shri Fuzail Usmani Advs.
The statutory bar under the Partnership Act applies only when an unregistered firm sues a third party to enforce rights specifically arising from business contracts, not for general claims or independent legal rights where no such business nexus is established in the pleadings.
Headnote:
¼1½ flfoy çfØ;k lafgrk] 1908 & vk- 7 fu- 11 & Òkxhnkjh vfèkfu;e] 1932 & èkkjk 69¼2½ & fofufnZ"V vuqr¨"k vfèkfu;e] 1963 & èkkjk 34 & okni= dh ukeatwjh & bl Ĩ"k.kk d¢ fy, fd oknh okn laifÙk dk lg&Lokeh gS] rFkk lg&Lokfe¨a@Òkxhnkj¨a ,oa çfroknh Ø- 1 d¨ ijO;fä fgr l`ftr djus rFkk okn laifÙk dk vU;laØe.k djus ls vo#) djus d¢ LFkk;h O;kns'k d¢ fy, okn & oknh] QeZ d¢ Òkxhnkj d¢ :i esa] ijO;fä d¢ lkFk lafonk ls mn~Òwr fdlh vfèkdkj dk nkok ugÈ dj jgk & oknh dk i{kdFku gS fd mlus Òwfe Ø; djus d¢ fy, çfroknhx.k d¢ lkFk] t¨ Òkxhnkjh QeZ esa Òkxhnkj gSa] èku dk fuos'k fd;k & ,d Òkxhnkj@çfroknh ml l¨lkbVh dk inèkkjh cu x;k ftlls Òwfe Ø; fd;k tkuk gS & vr%] ;g ijO;fä d¢ fo#) QeZ dk ekeyk ugÈ & okn Òkxhnkjh vfèkfu;e dh èkkjk 69¼2½ }kjk oftZr ugÈ & Òkxhnkjh vfèkfu;e dh èkkjk 69¼2½ d¢ ihNs ;g mís'; gS fd ijO;fä d¨ ml QeZ }kjk diV&oafpr ugÈ fd;k tkuk pkfg, t¨ jftLVªhÑr ugÈ] ftld¢ fo#) lafonkRed ckè;rk dk çorZu ugÈ fd;k tk ldrk & rFkkfi] oknh rFkk mu vU; O;fä;¨a ds i{k esa varj.k d¢ vÒko esa ftUg¨aus Òwfe Ø; djus d¢ fy, oknh d¢ lkFk fuos'k fd;k] ÃfIlr vuqr¨"k çR;{kr% fofèk dh n`f"V esa ekU; ugÈ & fupys U;k;ky; us okn gsrqd d¢ ;k fofufnZ"V vuqr¨"k vfèkfu;e dh èkkjk 34 d¢ vèkhu Ĩf"kr fd, tk ldus okys oknh d¢ vfèkdkj¨a d¢ vÒko d¢ vkèkkj ij vkosnu dk fofu'p;u ugÈ fd;k & vr%] okni= dh ukeatwjh fofèk d¢ vuqlkj ugÈ & vkf{kIr vkns'k vfÒ[kafMr & leLr i{kdkj¨a d¨ vfÒokd~ djus rFkk rdZ çLrqr djus dk volj nsdj miyCèk vkèkkj¨a ij vkosnu ij iqu% fopkj djus d¢ fy, ekeyk fopkj.k U;k;ky; d¨ çfrçsf"krA ¼2000½ 3 ,llhlh 250] ¼2007½ 15 ,llhlh 58] ,vkbvkj 2022 ,llh 772] ,vkbvkj 2020 ,llh 2721] ¼2020½ 6 ,llhlh 557] ¼2004½ 9 ,llhlh 512] ¼1999½ 3 ,llhlh 267 rFkk ¼2005½ 10 ,llhlh 51 vuqlfjrA çFke vihy Ø- 302 lu~ 2013 fu.kÊr fnukad 23-7-2024 voyafcrA ¼2024½ 14 ,llhlh 390] 2021 ,llhlh vkWuykbu ,eih 3995] ¼2006½ 3 ,llhlh 100] ¼2020½ 7 ,llhlh 366] ¼2024½ 15 ,llhlh 675] ¼1995½ 2 ,llhlh 665 rFkk lhvkjih ihMh Ø- 1304 lu~ 2019 ,oa lh,eih Ø- 8523 lu~ 2019 fu.kÊr fnukad 18-2-2022 ¼eækl½ fufnZ"VA ¼iSjk 20 ls 22
¼2½ flfoy çfØ;k lafgrk] 1908 & vk- 7 fu- 11 & okni= dh ukeatwjh & okni= Òkxhnkjh vfèkfu;e dh èkkjk 69¼2½ d¢ otZu d¢ vkèkkj ij ukeatwj fd;k x;k] okn gsrqd ;k vihykFkÊ d¢ vfèkdkj ugÈ g¨us d¢ vkèkkj ij ugÈ & ukeatwjh vkns'k fofèk d¢ vuqlkj ugÈ & vfÒ[kafMrA ¼1999½ 3 ,llhlh 267] ¼2004½ 9 ,llhlh 512] ¼2005½ 10 ,llhlh 51] ¼2006½ 3 ,llhlh 100] ¼2020½ 6 ,llhlh 557 rFkk ¼2020½ 7 ,llhlh 366 vuqlfjrA ¼iSjk 8 ,oa 22
(1) Civil P.C., 1908 -- O. 7 R. 11 -- Partnership Act, 1932 -- S. 69(2) -- suit for declaration that plaintiff is co-owner of suit property and for permanent injunction to restrain co-owners/partners and defendant No. 1 from creating third party interest and alienating suit property -- plaintiff, as partner of firm, is not claiming any right arising out of contract with a third party -- case of plaintiff is that he invested money with defendants, who are partners in partnership firm, to purchase land -- one partner/defendant became office bearer of society from which it is to be purchased -- therefore, it is not a case of firm against third party -- suit not barred by S. 69(2) of Partnership Act -- object behind S. 69(2) of Partnership Act is that a third party should not be defrauded by a firm which is not registered, against whom no contractual obligation can be enforced -- however, relief sought ex facie not tenable in eyes of law in absence of transfer in favour of plaintiff and other persons who invested with plaintiff to purchase land -- Court below has not decided application on ground of lack of cause of action or rights of plaintiff which can be declared u/s. 34 of Specific Relief Act -- thus, rejection of plaint not in accordance with law -- impugned order quashed -- matter remanded to trial Court to re-examine application on available grounds by giving opportunity to all parties to plead and submit arguments. (2000) 3 SCC 250, (2007) 15 SCC 58, AIR 2022 SC 772, AIR 2020 SC 2721, (2020) 6 SCC 557, (2004) 9 SCC 512, (1999) 3 SCC 267 and (2005) 10 SCC 51 followed. First Appeal No. 302 of 2013 decided on 23.7.2024 relied on. (2024) 14 SCC 390, 2021 SCC Online MP 3995, (2006) 3 SCC 100, (2020) 7 SCC 366, (2024)15 SCC 675, (1995) 2 SCC 665 and CRP PD No. 1304 of 2019 & CMP No. 8523 of 2019 decided on 18.2.2022 (Mad.) referred to. [Paras 20 to 22
(2) Civil P. C., 1908 -- O. 7 R. 11 -- rejection of plaint -- plaint rejected on ground of bar of S. 69(2) of Partnership Act, not on ground of lack of cause of action or rights of plaintiff -- rejection order not in accordance with law -- quashed. (1999) 3 SCC 267, (2004) 9 SCC 512, (2005) 10 SCC 51, (2006) 3 SCC 100, (2020) 6 SCC 557 and (2020) 7 SCC 366 followed. [Paras 8 & 22
| Table of Content |
|---|
| 1. factual basis and procedural history of the dispute. (Para 1 , 2 , 4) |
| 2. contentions regarding maintainability of suit under order 7 rule 11. (Para 3 , 5 , 6) |
| 3. legal criteria for rejection of plaint under order 7 rule 11. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 4. examination of partnership deeds and section 69 statutory bars. (Para 15 , 16 , 17) |
| 5. interpretation of section 69(2) and its limited scope. (Para 18 , 19 , 20 , 21) |
| 6. remanding the matter for proper adjudication on merits. (Para 22 , 23) |
ORDER :
DEEPAK KHOT, J.
The present appeal has been filed under section 96 of the CPC assailing the impugned order dated 9.5.2025 passed by 18th District Judge, Jabalpur, in R.C.S.A.No.15063/2024, whereby the suit filed by the appellant/plaintiff has been rejected under Order 7 Rule 11 CPC.
2. It is the case of the appellant/plaintiff that the appellant/plaintiff has filed a suit seeking declaration that he is co-owner of the suit property and also claimed permanent injunction to restrain the respondents from creating third party interest and alienating the suit property. It is averred in the plaint that plaintiff, defendant no.3 and one Farog Ahmed Ansari, who were partners, entered into an agreement dated 5.5.2016 with defendant no.1, which is a registered co-operative society, to purchase the lands mentioned in para 1 of the plaint. It is further averred that the aforesaid agreement to sell was made for sale consideration of Rs.1,35,00,000/- per acre, total amounting to Rs.15,18,75,000/-. All the partners have paid their respective shares in advance. It is averred that one partnership deed dated 18.7.2016 was also executed between plaintiff, defendant no.3 and Ahmad Ansari. It is further averred that since defendants are trying to sell the suit property in parts, therefore, plaintiff made paper publication on 13.1.2024 and has also sent a notice dated 18.9.2024 to the defendants, however, the defendants are continuously changing the nature of suit property, hence present suit seeking relief of permanent injunction has been filed.
3. Defendants no.2, 4 and 5 filed an application under Order VII Rule 11 CPC on the ground that the plaintiff was not party to the agreement dated 5.5.2016, hence the suit is liable to be dismissed. Secondly, the suit is barred under the provisions of Section 2(c)(vii)(xi) & (xv) of the Commercial Courts Act, 2015. Further, it is stated that the suit is hit by section 69 of the Indian Partnership Act because the partnership firm is an unregistered firm and the agreement to sell dated 5.5.2016 is also an unregistered document. It is further stated that defendant no.1 is a registered co-operative society and any disputed between the plaintiff and the defendant no.1 will lie before the Registrar, Co-operative Society as per the provisions of section 64(1)(c) and 64(2)(iv) of the M.P. Co-operative Societies Act.
4. The learned court below held that the plaintiff along with defendant no.3 and one Farog Ahmed Ansari have executed a partnership deed on 18.7.2016 and thereafter on expiry of Farog Ahmed Ansari, another partnership deed has been executed on 14.3.2018 showing one Santosh Usre the to be the partner of the said firm. The learned court below while considering the application of the defendants under Order 7 Rule 11 CPC, found that the above said partnership firm is an unregistered partnership firm and, therefore, as per the provisions of section 69(2) of the Indian Partnership Act, 1932, a suit arising from a contract by or on behalf of any person suing as a partner in a firm against any firm or person is not maintainable unless the said partnership firm is a registered firm and, accordingly, rejected the suit of the plaintiff. Thereafter, the plaintiff has preferred a review under Order XLVII Rule 1 CPC, which was also dismissed vide order dated 16.7.2025.
5. Learned counsel for the appellant submitted that the plaintiff has filed the suit for enforcement of legal rights and they were not
