MILAP CUT PIECE CENTRE v. SARVADE CUT PIECE CLOTH STORES
1988-08-26
K.B.NAVADGI, S.G.DODDAKALE GOWDA
body1988
DigiLaw.ai
DODDAKALE GOWDA, J. ( 1 ) THIS is a plaintiffs Second Appeal as against the judgment and decree, dated 21-3- 1977 passed in O. S. No. 880 of 1974 by the fifth Additional First Munsiff, Bangalore, dismissing the suit field for recovery of a sum of Rs. 2,466-70ps. as principal; Rs. 991/- towards interest and costs as the value of the goods supplied to plaintiff. ( 2 ) THOUGH both the Courts have recorded a finding in favour of the plaintiff on all issues, dismissed the suit solely on the ground of non-compliance of section 69 (2) of the partnership, Act. On 1-9-1978, Malimath, j. , as he then was, after noticing the points that arise for consideration thus :"1. Whether the court below was right in holding that Sri Pukhraj was not competent to file and maintain the suit on behalf of the plaintiff-partnership firm?" and 2. Whether the Court below committed an error of law in rejecting the appellant's application for production of additional evidence?' has referred the appeal for final disposal by a Division Bench. ( 3 ) ONE of the grounds amongst others on which the defendant resisted the relief was that the suit was not maintainable for non- compliance of sub-section (2) of Section 69 of the Partnership Act. P. W. I, the Manager of the firm has been examined on behalf of the plaintiff. But, he pleaded his ignorance regarding Ex. P-1, the partnership deed and as to who were all the partners of the firm. As per Ex. P-l, Pukhraj son of Himmatlal and another Pukhraj son of Sambhumalji are partners of the plaintiff firm. In order to ob- tain a decree, the plaintiff is required to establish that the partnership firm is registered and a suit filed by Pukhraj representing the firm is a partner. Ex. P-2 is an endorsement, issued by the Registrar of Firms to the effect that the petitioner-firm is registered on his file. The defendant in his written statement contended that Pukhraj son of Himmatlal is not a partner of the firm. ( 4 ) THUS, the issues that require consideration are- (1) Whether Pukhraj who purports to represent the firm is a partner of the firm and (ii) the manner/mode of establishing that fact?
The defendant in his written statement contended that Pukhraj son of Himmatlal is not a partner of the firm. ( 4 ) THUS, the issues that require consideration are- (1) Whether Pukhraj who purports to represent the firm is a partner of the firm and (ii) the manner/mode of establishing that fact? ( 5 ) AS per sub-section (2) of Section 69 of the Partnership Act, which reads thus : "no suit to enforce a right arising from a contract shall be instituted in any Court 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. " no suit is maintainable unless the partnership firm is registered and person suing is or has been shown in the Register of firms as partner of the Firm. ( 6 ) THE persons who are individually called 'partners' are collectively called as 'firm' and the name under which their business is carried on is called the 'firm name'. Order 30 rule 1 of C. P. C. enables two or more persons claiming or being liable as partners and carrying on business to sue or be sued in the name of the firm of which they are the partners at the time of accrual of cause of action. Rule 1 enables an individual partner to sue or sued in their collective firm name. Rule 2 provides that on disclosure of the names of the partners of the plaintiffs firm, the suit proceeds as if they are names as plaintiffs in the plaint. Thus, the suit by the firm is in the name of all partners. It is held by Their Lordship in WESTERN NATIONAL BANK OF CITY OF NEW york v PEREZ, TRISANNA AND CO. , (1891-1 QB 304) thus :"when a firm's name is used, it is only a convenient method of denoting those persons who compose the firm at the time, when that name is used, and a plaintiff who sues partners in the name of their firm in truth sues them individually, just as much as if he had set out all their names.
"this, in substance is the purport of subsection (2) of section 69 of the partnership act and order 30 of the C. P. C. ( 7 ) TWO mandatory requirements which are required to be fulfilled before enforcement of contractual right by the firm or on behalf of the firm are- (i) that the firm must be a registered firm; and (ii) that the per- son/s suing is/are or has/have been shown in the Register of Firms as partner/s of the firm. ( 8 ) THE controversy now is as regards the mode of proof of the second ingredient viz. , whether the person suing or representing the firm is or shown to have entered his name in the Register of Firms. In M. A. Hussain v PANCHAMAL vasudev [1970 (2) Kar. L. J. 27] this Court held that the first alternative in the second part of this ingredient can be established by means of oral evidence, though the alternative part of the second ingredient cannot be established by means of oral evidence. The relevant portion reads thus :"the person suing may establish either that they are partners on the date of suit or that they are persons whose names are shown in the register of firms as partners in the firm. As already observed, the second alternative, namely, the fact that the names of the persons suing have been shown in the Register of Firms as partners of the firm can be established either by producing relevant register of firm or a certified copy of the same and not by adducing oral evidence. But there is no legal bar to prove the first alternative, namely that the persons suing are partners of the firm by adducing evidence other than the register of firms or its certified copy. "in P. RAGHURAMA SHETTY v b. C. SAVAD1 and SONS [1975 (1) Kar. LJ. 461] different view is taken and the relevant portion reads thus: "oral evidence is not admissible as secondary evidence to prove the fact of registration of plaintiffs firm. The fact of registration and that the person suing are or have been shown in the Register of firms as partners could be proved only by producing a copy of the entry from the register of firms. " It is having regard to these conflicting views, this matter has been referred to a decision by the Division bench.
The fact of registration and that the person suing are or have been shown in the Register of firms as partners could be proved only by producing a copy of the entry from the register of firms. " It is having regard to these conflicting views, this matter has been referred to a decision by the Division bench. ( 9 ) RELEVANT Sections preceding to section 69 in Chapter VII of the indian Partnership Act, 1932, captioned as 'registration OF FIRMS' are sections 58 to 68. Under section 58 an application for registration of firm is required to be made to the Registrar of Firms furnishing particulars such as name of the firm, principal place of its business, names in full and permanent address of partners, the date/s on which each partner joined the firm etc. , signed by all partners or by their agents and duly verified. Section 59 enjoins the Registrar to make an entry of the statement in the Register of firms on being satisfied. Alteration in the name of the firm or location of the place of business is required to be conveyed to the registrar so as to make necessary entries in the Register of Firms - vide Section 60. Under section 61, shifting of place of business, if any, or discontinuance of business is required to be informed to the Registrar of firms. Likewise, alteration in the name of the partner or his or their address is required to be intimated to the Registrar - vide Section 62. Section 63 enjoins the Registrar of Firms whenever there is change in the constitution of registered firm by reason of including/outgoing partner/s or when there is a dissolution of the firm or when a minor admitted to the benefits of partnership becomes a major and elects to continue or refuse to continue as partner, to note the change in the constitution or about the fact of dissolution of the firm. Sections 64 and 65 provide for rectification of the mistakes suo motu by the registrar and/or to carry out necessary amendments if court so directs. Section 66 provides for inspection by any person on payment of prescribed fee. Section 67 provides for grant of certified copy of an entry or portion thereof in the Register of firms on payment of prescribed fee.
Section 66 provides for inspection by any person on payment of prescribed fee. Section 67 provides for grant of certified copy of an entry or portion thereof in the Register of firms on payment of prescribed fee. Section 68, which declares the probative value of entry in the Register of Firms, reads thus :-"68. (1) Any statement, intimation or notice recorded or noted in the Register of Firms shall, as against any person by whom or on whose behalf such statement, intimation or notice was signed, be conclusive proof of any fact therein stated. (2) A certified copy of an entry relating to a firm in the Register of Firms may be produced in proof of the fact of the registration of such firm and of the contents of any statement, intimation or notice recorded or noted therein. "state Government has framed rules under this Chapter known as 'karnataka partnership (Registration of Firms) Rules, 1954. Rule 4 which reads thus :- "4. Forms of intimation and notices under Sections 61, 62 and 63 (1) Intimation and notices under section 61, 62 and 63 (1) and 63 (2) of the act, shall respectively be in forms III, IV, v and VI annexed to these rules with such variations as circumstances may require. (2) Every statement, intimation or notice relating to a firm, under Sections 60, 61, 62, 63 (1) or 63 (2) of the Act, shall be sent or given to the Registrar together with the prescribed fee within fifteen days from the date of occurrence of the event referred to in such statement, intimation or notice. " enjoins the firm/partners to inform the Registrar of Firms in prescribed form the variation of particulars, if any, as set out in Sections 61 to 63 of the Partnership Act. The entry in the register of firms regarding the partners would be a conclusive proof of fact as entered therein. 'conclusive proof means when one fact is declared by the Act to be conclusive proof of another, the Court shall, on proof of the one fact, regard the other as proved, and shall not allow evidence to be given for the purpose of disproving it.
'conclusive proof means when one fact is declared by the Act to be conclusive proof of another, the Court shall, on proof of the one fact, regard the other as proved, and shall not allow evidence to be given for the purpose of disproving it. Undisputedly, the Register of Firms is a public document and the second ingredient required under sub-section (2) of section 69 of the Partnership Act can be established by producing certified copy of an entry from the Register of Firms. Under Section 65 (e) of the evidence Act, certified copy of a public document is admissible and the contents of those entries cannot be permitted to be proved by means of oral evidence. Subsection (2) of Section 68 provides for production of certified copy of an entry relating to a firm in the Register of Firms. Supreme Court in SOMAWANTI -v- state OF PUNJAB (A. I. R. 1963 S. C 151) has held thus :-". . . . WHEN the law says that a particular kind of evidence would be conclusive as to the existence of a particular fact it implies that that fact can be proved either by that evidence or by some other evidence which the Court permits or requires to be advanced. Where such other evidence is adduced it would be open to the Court to consider whether, upon that evidence, the fact exists or not. Where, on the other hand, evidence which is made conclusive is adduced, the Court has no option but to hold that the fact exists. If that were not so, it would be meaningless to call a particular piece of evidence as conclusive evidence. Once the law says that certain evidence is conclusive it shuts out any other evidence which would detract from the conclusiveness of that evidence. " (emphasis supplied) ( 10 ) POSSIBILITY of adducing inconsistent oral evidence with the entry in the Register of firms is excluded. Further, the contents of the entry in the Register of Firms can only be proved by production of the document alone, as required, and not by oral evidence. An artificial probative effect is given by the law to a certain facts and no evidence is allowed to be introduced with a view to combat its effect.
Further, the contents of the entry in the Register of Firms can only be proved by production of the document alone, as required, and not by oral evidence. An artificial probative effect is given by the law to a certain facts and no evidence is allowed to be introduced with a view to combat its effect. The Scheme of Chapter VII which has prescribed the mode or method of registration including the mode of proof of an entry in the Register excludes parole evidence. In case, the Courts were to permit to establish a fact whether a person representing the Firm is a partner of the firm or not by parole evidence, it is as good as allowing proof of a fact of an entry in the Register of Firms which would be impermissible. Two fold objects of Legislature to insist for proof of a person suing or has been shown in the register of Firms as partner are (i) firstly, if a firm is registered and the name of a person acting on behalf of the firm (because of order 30 Rule 1 of C. P. C) finds a place in the Register of Firms as partner, then the third party will have complete protection and (ii) secondly, to obviate conflicting or varying interests of additional or incoming partners vis-a-vis the third party. ( 11 ) UNFORTUNATELY, there is no reference to the scheme of Chapter VII of the Partnership Act in Hussain's case or to the object of sub-section (2) of Section 69 of the Partnership Act. If parole evidence is inadmissible to prove the fact of an entry in the Register of Firms, the same fact cannot be allowed to be established by oral evidence as a first alternative of sub- section (2) of Section 69 as it results in incongruity. If the controversy relates to identity of a person as contended by the respondent, oral evidence may be admissible. Probably, having regard to all these aspects, Calcutta High Court in RAM kumar SHEW CHANDRAI, A FIRM v dominion OF INDIA (A. I. R. 1977 Cal. 37) has declined to follow the ratio in hussain's case.
If the controversy relates to identity of a person as contended by the respondent, oral evidence may be admissible. Probably, having regard to all these aspects, Calcutta High Court in RAM kumar SHEW CHANDRAI, A FIRM v dominion OF INDIA (A. I. R. 1977 Cal. 37) has declined to follow the ratio in hussain's case. The relevant portion in Ram kumar Shew Chandrai's case reads thus :-"it follows from the said observation that the second condition will be fulfilled if it is proved that he is a partner in the firm notwithstanding anything that his name does not appear in the Register of firms. With respect, we are unable to agree with this view as expressed by the learned Judge. "in our considered view, the decision in hussain's case, does not lay down the correct legal proposion. ( 12 ) ). The Court below has declined to receive certified copy of extract of an entry of the Register of Firms produced as additional evidence and dismissed an application filed under Order 41 Rule 27 of the C. P. C. The relevant portion reads thus :- "suffice it to say that the appellant has not made out sufficient grounds for allowing additional evidence as provided under O. 41 R. 27 C. P. C. " contention if the appellant is that in view of the conflicting views referred to in cases cited above, he was under the impression that production of Partnership Deed, ex. P-1, would meet the requirement of Law and in case, the view expressed in Hussain's case is held to be not a good Law, then he is entitled to production of additional evidence, falling which it would cause irreparable injustice and hardship. Placed in the piquant situation, petitioner is right in submitting that he should be permitted to produce the extract as additional evidence, The certified copy of the extract establish beyond doubt that Pukhraj is a partner. ( 13 ) FOR the reasons stated above, we allow this appeal. Judgment and decree, dated 19-12-1977 made in R. A. No. 203 of 1977 by the Principal Civil Judge, Bangalore, confirming the judgement and decree, dated 21-3-1977 made in O. S. No. 880 of 1974 by the fifth Additional First Munsiff, Bangalore, is hereby set aside. The suit is decreed as prayed for.
Judgment and decree, dated 19-12-1977 made in R. A. No. 203 of 1977 by the Principal Civil Judge, Bangalore, confirming the judgement and decree, dated 21-3-1977 made in O. S. No. 880 of 1974 by the fifth Additional First Munsiff, Bangalore, is hereby set aside. The suit is decreed as prayed for. Defendant-respondent shall pay suit claim with interest as 6% per annum from the date of suit till the date of realisation. The appellant is entitled to costs in this court. --- *** --- .