A suit by partners of an unregistered partnership is void under Section 69 of the Partnership Act, preventing enforcement of claims.

JUDGMENT

1) The appellants have challenged judgment and decree dated 19.05.2022 passed by the learned Principal District Judge, Anantnag, in a suit filed by respondent against them under Order 37 of the Code of Civil Procedure seeking recovery of an amount of Rs.22,70,896/ along with interest.

2) It appears that the respondent/plaintiff filed a suit under Order 37 of the CPC against appellant No.1 and his father, Shri Abdul Gani Tramboo, who happens to be the predecessor-in-interest of the appellants, seeking recovery of a sum of ₹22,70,896 along with interest. It was pleaded by the respondent/plaintiff that he entered into a partnership with Shri Abdul Ganai Tramboo, who happened to be defendant No.2 in the suit, in terms of partnership deed dated 21.12.2006. As per the terms of the partnership deed, the parties had agreed to invest capital in the business of execution of construction work of RCC foundations required for erection of mobile towers etc. and had agreed to invest capital and share profits in equal proportions.

3) In the plaint it was further averred that defendant No.2, who was an elderly person, in order to execute the works allotted to him, entered into a further partnership with his son, defendant No.1 (appellant No.1 herein), and the two agreed to share profits/losses of the partnership business in the ratio of 95% to defendant No.1 and 5% to defendant No.2. The defendant No.2 was empowered to operate the bank account under his own signatures and they had a joint account in J&K Bank, Branch Qazigund. It has been pleaded that defendant No.2 executed a Power of Attorney in favour of the plaintiff whereby he was empowered to do all acts and deeds for execution of the contract allotted in favour of defendant No.2, who was a registered contractor. It was further pleaded that during the course of execution of the contract, the plaintiff and defendants executed works worth crores of rupees and after settlement of accounts in presence of several persons, the plaintiff was held entitled to an amount of ₹22,70,896. It was also pleaded that defendant No.1, who was holding joint account in the bank, issued a cheque for the aforesaid amount in favour of the plaintiff but the same, on its presentation for encashment, was dishonoured. It has been further pleaded that when the defendants were informed about dishonour of the cheque and a request was made by the plaintiff for payment of the cheque amount, they did not take any action, as a consequence whereof, the plaintiff had to serve a legal notice of demand dated 05.01.2012 upon the defendants. This resulted in filing of a complaint under Section 138 of Negotiable Instruments Act before the Chief Judicial Magistrate, Anantnag, by the plaintiff against defendant No.1. The plaintiff also filed the suit against the defendants seeking recovery of the cheque amount.

4) It seems that pursuant to the service of summons in the prescribed proforma upon the defendants, they filed an application seeking leave to defend the suit before the learned trial court. In their application, the defendants took a stand that the partnership firm between plaintiff and defendant No.2 has not been dissolved and that there has never been a settlement of accounts between the parties. It was further pleaded that in case the defendants are granted leave to defend the suit, they would be filing a counter claim in the suit for seeking dissolution of partnership firm and settlement of accounts. The defendants further pleaded that the cheque, on the basis of which the suit has been filed by the plaintiff, does not bear the signatures of defendant No.1 and that the same have been forged. It was further pleaded by the defendants that because the plaintiff is alleging a partnership with defendant No.2 only, as such, he has no concern with the firm of defendants No.1 and 2 inter se .

5) It was further pleaded that in the complaint under Section 138 of Negotiable Instruments Act , the plaintiff had set up a ca