Popular Films v. Nalini Saigal — 1980 DIGILAW 204 (CAL)

JUDGMENT (1.) THIS suit has been filed under order 37 of the Civil Procedure Code by Popular Film, a partnership firm carrying on business at, Madan Street; Calcutta against the eight defendants for recovery of a sum of Rs. 1,92,713.04 several promissory notes. The promissory notes were executed by one Shantilal Sigel. The defendants are the legal heirs and representatives of the said Shantilal Sigel who died on 15th September, 1975. The defendants have filed written statement and one preliminary point has been taken that the plaintiff firm is not a registered partnership firm ; hence the plaintiff is not entitled to institute this suit against the defendants. Over and above the said preliminary point, various other points have been taken in the written statement denying and disputing the liability of the defendants or the said deceased Shantilal Saigal to the plaintiff in respect of the said promissory notes. The parties agreed that a preliminary issue be raised and the suit be tried on the preliminary issue first hence the question arises for determination as to whether the suit is maintainable in view of the fact that, according to the defendants, the plaintiff is not a registered partnership firm. (2.) MR. Ajit Panja appeared on behalf of the plaintiff and submitted that from the certificate of the registration it would appeal that the firm was established on 1st July, 1974 and thereafter on the 10th March, 1976 the plaintiff applied for registration with the Registrar of Firms From the certificate given by the Registrar of Firms it would appear that under the column date of filing on registration' there is an endorsement 10. 3. 76, 17. 10. 78; hence from the extract of the register it would show that the firm has been duly registered; so the suit is maintainable by the plaintiff against the defendants, the suit was filed on 14th September, 1976. Mr. Ajit Panja, first of all, submitted that his client has done whatever it could do under the Partnership Act, that is, by applying to the Registrar of Firms arid by handing it over the Registrar of Firms, the particulars. Save and except doing the same the plaintiff is under no obligation to do anything further. The Act of registration of the firm and/or posting of the name of the firms in the register is the ministerial act of the Registrar. Save and except doing the same the plaintiff is under no obligation to do anything further. The Act of registration of the firm and/or posting of the name of the firms in the register is the ministerial act of the Registrar. Hence if there has been any delaying in doing same the plaintiff cannot be penalised for the wrongful act on the part of the Registrar. (3.) SECONDLY, Mr. Ajit Panja submitted that the defendants took out an application for leave to defend and in the application the defendant did hot take the point that the plaintiff is not a registered Partnership Firm ; as such, the plaintiff could not institute the suit. It is only at the time of hearing of the suit this point has been taken by making it impossible for the plaintiff to withdraw the suit and file a fresh suit within the period of limitation. As, admittedly from the extract of the register it would appear that there is an endorsement of 10th October, 1978, that is, the day when the firm was registered, by taking the point at this late stage the defendants have made it impossible for the plaintiff to save the period of limitation. Hence this court should hot hold that the plaintiff is incapable of instituting the suit on the 14th September, 1976 as before that the plaintiff's application for registration was handed over to the Registrar of Firms. (4.) THIRDLY, Mr. Ajit Panja submitted that in the application for leave to defendant the defendant did not take the point that the plaintiff is not a registered partnership firm. So by not taking the point the defendants have given a go-bye to their rights to agitate this point and it will be hit by the principles of Resjudicata and the locus analogous thereto. According to Mr. Panja, the suit filed by the partnership firm not being duly registered under the said Partnership act would not make the suit filed by the plaintiff a nullity. In that respect he craved reference to Jaylaxmi Rice etc. Co. v. Commr. of I. I., A. I. R. " 1967 Andhra Pradesh 99 and Lindley on Partnership, 12th edition, 812. According to Mr. In that respect he craved reference to Jaylaxmi Rice etc. Co. v. Commr. of I. I., A. I. R. " 1967 Andhra Pradesh 99 and Lindley on Partnership, 12th edition, 812. According to Mr. Panja, as soon as the prescribed statement reaches the Registrar that is sufficient for the purpose of registration and the plaintiff need hot wait for issue Of the certificate of registration which is only the ministerial at and any omission on the part of the Registrar not to do the same could not deprive the plaintiff the right to file the suit. Mr. Panja also crave reference to the cases. reported in A.I.R. 1942 Lahore 289, Nazir Ahmad v. People's Bank at 295 A.I.R. 1942 madras 632,gobaro'hano'as v. Abdul Rahiman A.I.R. 1372 Madrs 86, Jalal Mohammed v. Kakka Mohammed. Section 69 of the Indian Partnership act provides that no suit to enforce the right arising from a contract shall be instituted in any court by or on behalf of firm against any third party unless the firm is registered and the person suing are or have been shown in the Registrar of Firms as partners of the firm. This section is mandatory for the purpose of filing suit. The court has no discretion in the matter in the sense that the provisions, cannot be dispensed with by Court. Whether the members of any registered partnership firm can sue a third party is a question which goes to the root of the matter and can be raised at any stage of the suit. The Court must take cognizance of the same when it is brought to the notice of the Court. The precipitation as laid down in the section is the institution and it is always desirable to dispose of suit on such preliminary point, more so in view of the amendment effected by the Act of 1976 of the Civil Procedure code. The language of the section is clear which debars the court from entertaining the suit where there has been a breach of the compliance of the provisions of section 69 of the partnership Act. Although Mr. The language of the section is clear which debars the court from entertaining the suit where there has been a breach of the compliance of the provisions of section 69 of the partnership Act. Although Mr. Panja very strongly argued that court should take a lenient view in cases where although the suit was filed without registration but subsequent to the filling of the suit such registration has been effected more so as in this case when the suit was filed there was an application filed before the Register for registration and such registration has been effected two years thereafter, the plaintiff should not be penalised for the same. (5.) THE Supreme Court of India in the case reported in A.I.R. 1971 S. C. 1015 (Commr. of Income Tax v. Jaylaxmi etc. Co.) has gone into the point as to when the firm is registered under the Partnership act. It also duly considered whether the registration takes place on the day when the application for registration is made in accordance with section 58 or when the registrar is satisfied that the provisions of section 58 have been duly complied with and he records an entry of the statement in a register called 'register of Firms' and files the statement. (6.) IN an Allahabad case it was decided that registration takes place only when the necessary entry is made in the register of firms. Hence any registration subsequent to the filing of the suit would not cure the defect and the Supreme Court in that case observed that under the Partnership Law it is considered to be a settled decision by different High Courts for a long time' that registration of firms takes place only when the necessary entries are made in the register of firms under Section 59 of the Partnership Act. Although the language of Section 58, indicates that making of an application is sufficient and registration would be effective from the date when the application is made but section 58 cannot be read in isolation and has to be considered with the entire scheme of the Partnership Act. Although the language of Section 58, indicates that making of an application is sufficient and registration would be effective from the date when the application is made but section 58 cannot be read in isolation and has to be considered with the entire scheme of the Partnership Act. Hence simply making an application along with requisition fees under Section 58 is not enough but registration is effective only when the entry of the statement is recorded in the, register of firms and the statement is filed by the Registrar under section 59 and the Supreme Court was unable to accept that partnership should be deemed to have been registered on the day when the application was presented or that sub-rule 2 should have specified for that. In view of what has been held by the Supreme Court of India' I am unable to accept the contention of Ajit Panja that making of an application is sufficient for the purpose of section 69. From the extract of register it would appear that application was made on 10th March, 1976 which is also supported by the receipt granted by the register of Firms in favour of plaintiff and it is only on 17th October, 1978 the firm has been registered. As the suit has been filed on 14th September, 1976 it would be abundantly clear that when the suit was filed by the plaintiff on 14th September, 1976 the plaintiff firm was not a registered partnership firm. (7.) SIMILAR view was expressed in the case reported in A.I.R, 1977 S.C., 336 Loonkason v. Ivan John. In view of what has been stated above I am of the view that the plaintiff is not entitled to proceed with this suit, in view of the fact no suit can be proceeded with unless the partnership firm is registered. Whether the said point has been taken by the defendant at the earliest opportunity becomes irrelevant more so in view of the fact that the said point has been taken by the defendant in the Written statement filed by them. Whether the said point has been taken by the defendant at the earliest opportunity becomes irrelevant more so in view of the fact that the said point has been taken by the defendant in the Written statement filed by them. By not agitating the point of registration in the application for a leave to defendant I am of the view that the defendants are not debarred from taking and/or agitating that at the time of hearing of the suit in view of the fact that they have already taken this point of no registration of the partnership firm in their written statement. Hence Mr. Panja's submission on the point of delay and/or constructive Resjudicata is of no avail in the present proceedings. (8.) IN view of the recent Supreme court decision as quoted above, the case reported in A. I. R. 1942 Lahore 289 (supra) is of no avail. Regarding the submission of Mr. Ajit Panja that a decree passed in favour of Partnership Firm which is not registered is not a nullity in the facts and circumstances of this case is not relevant as no decree has yet been filed in favour of the plaintiff. Hence on this preliminary ground dismiss the plaintiff's suit with costs. Suit dismissed with costs.