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IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
Hon'ble Judges: Surinder Sarup, J.
Naranjan Chauhan – Appellants
Vs.
State of Himachal Pradesh and Ors. – Respondent
Civil SuitNo. 58 of l996
Decided On: 02.03.2000
Partnership Firm - Recovery of Bid Amount - Indian Partnership Act, Section 69(2), Excise Announcement for 1993-94 - The court dismissed the suit for recovery of bid amount on the grounds that the partnership firm was not registered, and therefore, the suit was not maintainable under Section 69(2) of the Indian Partnership Act. The court referred to the provisions of Section 69(2) and cited the interpretation of this provision in the case of Vinod Kumar v. State of Himachal Pradesh, where a similar suit was dismissed due to the legal bar. The court held that the provisions of Section 69 of the Partnership Act are mandatory in character, leading to the dismissal of the suit.
Fact of the Case:
The Plaintiff, a partner in a partnership firm, filed a suit against the State of Himachal Pradesh and two other Defendants for the recovery of a bid amount for excise vends. The Defendants had conducted an auction for excise vends, and the Plaintiff's firm had given the highest bid, but faced opposition from local inhabitants in opening the vends, leading to the suit for recovery of the bid amount.
Finding of the Court:
The court found that the suit was not maintainable as the partnership firm was not registered, and therefore, the suit was barred under Section 69(2) of the Indian Partnership Act. The court dismissed the suit on this ground without delving into the merits of the case.
Issues: The issues framed by the court were: 1. To what amount the Plaintiff is entitled to? 2. Whether the suit is bad for non-joinder of necessary parties? 3. Relief.
Ratio Decidendi: The court's decision was based on the interpretation of Section 69(2) of the Indian Partnership Act, which mandates that no suit to enforce a right arising from a contract can be instituted 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.
Final Decision: The court dismissed the suit on the grounds that the partnership firm was not registered, rendering the suit not maintainable under Section 69(2) of the Indian Partnership Act. The parties were directed to bear their own costs.
Surinder Sarup, J.
1. This suit has been filed by Shri Naranjan Chauhan, Plaintiff, against the State of Himachal Pradesh and two other Defendants for the recovery of Rs. 8,50,105/- with interest at the rate of 18 per cent per annum with effect from 1.4.1993 till its payment.
2. The case set up by the Plaintiff is that he has been a partnership concern with Plaintiff being a partner alongwith three Ors. , namely, Lokinder Chauhan, Bhagwan Singh and Tarlok Singh as its partners. The firm was engaged in the business of retail sale of Indian Made Foreign Liquor boor and country made liquor as excise licencee.
3. It is further stated that on 16.3.1993 the Defendants conducted an auction in respect of excise vends falling in Jubbal and Kotkhai excise unit. The Plaintiff firm had given the highest bid in this auction amounting to Rs. 1,01,00,000/- and the same was accepted by the Defendants. Thereafter the partners of the firm mutually and interse decided as to how the vends falling in Jubbal unit should be run and similarly there was an internal arrangement regarding the excise vends falling in Kotkhai unit. An original agreement witnessing the above internal arrangement between the partners was drawn up in writing and was filed in the office of the Assistant Excise and Taxation Commissioner, Shimla. Necessary entries in this behalf were also made by the Defendants in their concerned record.
4. In para 3 of the plaint, it has been pleaded that when the excise vends at Koti Bani were started for the sale of liquor with effect from 1.4.1993, the local Panchayat and other inhabitants of the area had opposed the functioning of the same. The matter reached such a pass that one Sanjay Chauhan, who was a member of the Block Development Committee at the relevant time, had already given a resolution to this effect to the Governor of Himachal Pradesh and the District Collector before the auction. Apprehending trouble the Plaintiff had approached the authorities including the local police for help to open the liquor vends at Koti Bani on 1.4.1993. On that day the Excise Inspector alongwith four police officials were present at the spot. However, it was found that a big crowd of local inhabitants including the office holders of three Gram Panchayats, members of Mahila Mandal and certain non-official members of Grievance Committee. Theog Sub Division, did not allow the Plaintiff to open the auctioned excise vends of L-2 and L-14. Despite utmost persuation by the Excise Inspector the vends could not be opened at Koti Bani and remained closed. In these circumstances, the Excise Inspector reported the matter to his superior (Assistant Excise and Taxation Commissioner, Shimla) and clearly told the Plaintiff that he was helpless in the matter because of the vehement opposition of the local people.
5. It is further pleaded by the Plaintiff that all representations, protests and requests being made because of the immense recurring loss mainly due to the said vends remaining closed, the Excise and Taxation Officer also made efforts to persuade the local inhabitants including the members of the Gram Panchayat and Block Samiti etc. to permit the opening and functioning of the liquor vends, but to no avail.
6. In para 5 it has been stated that the Plaintiff had deposited an amount of Rs. 15,15,000/- as 15 per cent security on the bid amount immediately after the auction. He was also required to deposit the remaining balance bid amount in ten monthly instalments with a condition to adjust the entire balance amount in the last instalment. According to the Plaintiff, despite the two liquor vends of L-2 and L-14 in Koti Bani not being allowed to open and carry on sales of liquor, nor any quota of liquor against the said vends having ever been lifted, the Defendants kept on recovering the licence fee in respect of these two vends, despite the same being non-starters from the very beginning. This was to the knowledge of the Defendants. Not only that, the Defe
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