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HIGH COURT OF KERALA
Sathish Ninan, JOHNSON JOHN, JJ
CAPITHAN EXPORTING CO. – Appellant
Versus
THE NEW INDIA ASSURANCE CO.LTD – Respondent
RFA 115/2005
[Insurance] - [Partnership Act] - [Section 69(2)] - [The court held that a suit by an unregistered partnership firm is barred under Section 69(2) of the Indian Partnership Act unless the names of the partners are recorded in the Register of Firms as of the date of filing the suit. The court emphasized the mandatory nature of this provision, interpreting it to mean that only those partners whose names are registered can maintain a suit, thereby upholding the trial court's dismissal of the plaintiffs' claims.]
Fact of the Case:
The plaintiffs, two partnership firms engaged in seafood processing, filed a suit against an insurance company after a fire damaged their storage facility. The insurance company repudiated the claim, arguing the firms were unregistered and the fire was self-inflicted.
Finding of the Court:
The court found that while the firms were registered, the names of the partners at the time of filing were not in the Register of Firms, thus upholding the trial court's decision that the suit was barred under Section 69(2) of the Indian Partnership Act.
Issues: Whether the trial court's finding that the suit is barred under Section 69(2) of the Indian Partnership Act is correct, and whether the trial court was right in its findings regarding mis-joinder of parties and the plaintiffs' entitlement to the insurance claim.
Ratio Decidendi: The court concluded that Section 69(2) mandates that the names of the partners as of the date of filing must be recorded in the Register of Firms for a suit to be maintainable, and this requirement is mandatory and jurisdictional.
Final Decision: The appeal is dismissed.
Sathish Ninan, J.
The suit for money under a contract of insurance, was dismissed by the trial court. The plaintiffs are in appeal.
2. The plaintiffs are two partnership firms. The second plaintiff is stated to be a sister concern of the first plaintiff. The plaintiffs are represented by its common Managing Partner. The firms are engaged in seafood processing business. Plaintiffs 1 and 2 had entered into contracts of insurance with the first defendant Insurance Company for ₹ 1.20 Crores and Rs.70 lakhs respectively. The second defendant is the Bank from which the plaintiffs had availed credit facilities on hypothecation of the stock in trade. The plaintiffs had a common storage facility. On 22.07.1994, there C. R. occurred a major fire in the storage room, resulting in huge damage. Immediately, the incident was intimated to the defendants. The first defendant, through its surveyor, estimated the loss of the first plaintiff at Rs. 51,62,498/-, and of the second plaintiff at Rs. 36,72,091. Though the claim of the plaintiffs were for a higher amount, they acceded to the assessment. However, the Insurance Company repudiated the entire claim. Hence the suit was filed for realisation of the damages, with interest at 13%, it being the rate payable to the second defendant Bank by the plaintiffs under the credit facilities.
3. The first defendant contended that the plaintiffs firms are unregistered and hence the suit is barred under Section 69 (2) of the Indian Partnership Act, 1932 (for short, “the Act”). It was contended that the suit is bad for mis-joinder of parties. The repudiation of the claim was justified contending that the fire incident was not an accident but was caused by the plaintiffs themselves though their deliberate and fraudulent action, to secure insurance claim.
4. Before the trial court, the plaintiffs examined PWs.1 to 16 and marked Exts.A1 to A46. On the side of the first defendant, DWs.1 to 4 were examined and Exts.B1 to B19(f) were marked. The trial court negatived the defence plea that the plaintiffs had deliberately caused the fire incident. However, the suit was held to be barred under Section 69 (2) of the Act and dismissed the same.
5. We have heard Sri.P.B.Krishnan, the learned Senior Counsel for the appellants and Sri.George Cherian, the learned Senior Counsel on behalf of the first respondent.
6. The points that arise for determination are :- (i) Is the finding of the trial court that the suit is barred under Section 69 (2) of the Act, correct in law? (ii) Was the trial court right in negativing the plea of mis-joinder of parties? (iii) Does the finding of the trial court with regard to the entitlement of the plaintiffs for the insurance claim warrant any interference?
7. The trial court found that the plaintiffs firms were registered as early as in the year 1978 and 1990 respectively. The registration is evidenced by Exts.A31 and A32. However, finding that the names of the persons who were partners of the firms as on the date of filing of the suit were not shown in the Register of Firms as partners, held the suit to be barred under Section 69 (2) of the Act. The finding that the names of the partners as on the date of suit, did not find a place in the Register of Firms, is not disputed.
8. Since the arguments are centered around the understanding of Section 69 (2), it is extracted hereunder:-
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