Bharath Trust v. Divakara Rao — 1992 DIGILAW 325 (KER)

Judgment :- The plaintiff in O.S. No. 957 of 1983, Munsiffs Court, Cherthala, is the revision petitioner. The suit was filed for recovery of money from the respondent-defendant. The plaintiff is a registered firm. The Managing Partner, Mr.Salim, filed the suit on behalf of the firm. The suit was for recovery ofthe balance amount of Rs.859.80 as on 8-3-1980. The defend am had obtained a loan of Rs.10,000/- on 30-3-1976, with an agreement to repay it with 18% interest. For the balance due as on 8-3-1980, the defendant agreed to pay 19% interest. The plaintiff alleged that the defendant gave two post-dated cheques on 28-4-1982. The cheques are dated 30-4-1982 and 16-5-1982. The cheques were dishonoured. The plaintiff initiated two criminal cases futilely. In spite of demand, the defendant did not pay the amount due. So, the suit was filed. 2. The defendant contested the suit. He pleaded that the suit is not maintainable. The loan from Bharath Trust, the firm, was admitted. It was pleaded that the plaintiff is not competent to represent the said firm. The balance, as on 8-3-1980, was denied. The amounts due as per the loan transaction were paid in full. The suit is barred by limitation. The defendant never agreed to pay 19% interest. No cheque was given on 28-4-1982. The cheques mentioned in the plaint were given as security on a different count. They are not supported by consideration. The plaintiff is not entitled to present those cheques to the bank. There is no cause of action for the plaintiff. The statement of accounts shown by the plaintiff is incorrect. The defendant is entitled to compensatory cost of Rs. 500/-. 3. As many as nine issues were raised by the trial court In the way the events have turned out, it is sufficient to concentrate on Issue Nos.1 and 8 for disposing of this revision. The arguments centred round only on the aspects covered by the said issues. The issues are as follows: (a) is the plaintiff not competent to represent and sue for Bharath Trust? and (b) Is the suit maintainable? 4. I heard counsel. 5. The Munsiff Court held that the suit is hit by S.69(2) of the Partnership Act and so, not maintainable. The appellate Court concurred with the said view. Counsel for the revision petitioner, Mr. and (b) Is the suit maintainable? 4. I heard counsel. 5. The Munsiff Court held that the suit is hit by S.69(2) of the Partnership Act and so, not maintainable. The appellate Court concurred with the said view. Counsel for the revision petitioner, Mr. V.N. Swaminathan, very vehemently contended that the courts below were in error in holding that the suit is hit by S.69(2) of the Partnership Act. On the other hand, counsel for the respondent, Mr. Brahmanandan, submitted that on the facts found by the courts below, the suit is plainly hit by S.69(2) of the Act. Subsections (1) and (2) of S.69 of the Partnership Act are as follows: "(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Registrar of Firms as a partner in the firm. (2) No suits 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". 6. The plaint proceeded on the basis that the claim is based on dishonoured cheques. The courts below, on an appraisal of the relevant averments in the plaint, held that the suit is for recovery of the balance amount due as per the accounts and agreements. The plaintiff did not rely upon the cheques for proving the plaint claim. According to the plaintiff, a sum of Rs.859.80 was due as on 8-3-1980. The cheques were given on 28-4-1982 and 30-4-1982. The considerations, as stated in the cheques, are not the exact dues as on 30-4-1982 or 16-5-1982. The recital in the instrument was, admittedly, incorrect. The plaintiff did not rely upon the cheques for proving the plaint claim. According to the plaintiff, a sum of Rs.859.80 was due as on 8-3-1980. The cheques were given on 28-4-1982 and 30-4-1982. The considerations, as stated in the cheques, are not the exact dues as on 30-4-1982 or 16-5-1982. The recital in the instrument was, admittedly, incorrect. Holding that in such circumstances, no presumption under the Negotiable Instruments Act is available and the plaintiff himself had adduced evidence to prove the balance of Rs.859.80 as on 8-3-19SO by producing the account books and examining P. Ws.1 to 3 and that the plaint averments unambiguously point out that the suit is for amounts due as per the accounts, the courts below found that the suit is not a simple suit on dishonoured cheques, but one for recovery of the balance amount as per the accounts and agreements. The said finding is a finding of fact, based on an appreciation of the relevant evidence in the case. Counsel for the revision petitioner was not able to point out that the said finding is, in any way, vitiated or infirm. 7.In a revision under S.115 of the Code of Civil Procedure, ordinarily, this Court is bound to accept the said finding of fact. I do so. In this view, the plea of the counsellor the revision petitioner, based on the decisions reported in Kerala Arecanut Stores v. Ramkishore & Sons (1974 KLT 828), Ramachandran v. Velayudhan and others (ILR 1986 (2) Kerala 498) and Manoj K. Seth v. R.J. Fernandez (ILR 1991 (3) Ker. 621), is not relevant for the purpose of resolving the controversy in this case. This Court has to proceed on the basis that the suit is for the balance amount due as per the accounts and agreements. The firm, Bharat Trust, was registered on 7-6-1960. The suit was filed on 22-12-1983. It was filed by the Managing Partner, Mr. Salim. Ext.A.26 certified copy of Register of Firms No. 287/80 shows that the name of 'Salim', the Managing Partner, was entered in the Register of Firms only on 9-9-1985, subsequent to the filing of the suit. This is not challenged by the counsel for the revision petitioner. 8. It was filed by the Managing Partner, Mr. Salim. Ext.A.26 certified copy of Register of Firms No. 287/80 shows that the name of 'Salim', the Managing Partner, was entered in the Register of Firms only on 9-9-1985, subsequent to the filing of the suit. This is not challenged by the counsel for the revision petitioner. 8. The court below held that since the name of the Managing Partner, who filed the suit, was entered in the Register of Firms only subsequent to the filing of the suit, the suit is hit byS.69(2) of the Partnership Act. Counsel for the revision petitioner, Mr. Swaminathan, brought to my notice the decisions reported in Balakrishna Trading Corporation v. Krishna Kurup (1969 KLT 855) and M.A. Hussain and another v. M1 s. Panchamal Vasudev Ganapath Kamath and Brothers (AIR 1970 My. 299) and contended that Mr. Salim is, admittedly, a partner on the date of the suit, as could be seen from the deed of partnership (Ext.A2) dated 14-6-1977, and so, the suit is maintainable. According to the counsel, the requirement of S.69(2) of the Partnership Act will be satisfied if the person suing is a partner of the firm on the date of the suit. It is not further necessary that all those persons who were partners at the time of institution of the suit must have been shown in the Register of Firms. The above two decisions support the plea advanced by the counsel for the revision petitioner. 9. On the other hand, counsel for the respondent, Mr. Brahmanandan, submitted that all those persons who were partners at the time of institution of the suit must have been shown as partners in the Register of Firms. It was contended that the Register of Firms (Ext. A26 ) did not show that the Managing Partner, Mr. Salim, was a current partner as on the date of the suit and so, the suit is not maintainable, under S.69(2) of the Partnership Act. To fortify the said submission, reliance was placed on the decisions reported in Bank of Koothattukulam v. Itten Thomas and another (AIR 1955 T.C. 155), Bharat Sarvodaya Mills Co. Ltd. v, Mohatta Brothers (AIR 1969 Guj.178), Ram Kumar Shew Chandrai v. Dominion of India (AIR 1977 Cal. 37), Mis. Shankat Housing Corporation v. Mohan Devi and others (AIR 1978 Del. 255) and Neldon Company v. Radhakrishnan (1990 (1) KLT S.N. 9). Ltd. v, Mohatta Brothers (AIR 1969 Guj.178), Ram Kumar Shew Chandrai v. Dominion of India (AIR 1977 Cal. 37), Mis. Shankat Housing Corporation v. Mohan Devi and others (AIR 1978 Del. 255) and Neldon Company v. Radhakrishnan (1990 (1) KLT S.N. 9). The preponderance of judicial opinion is in favour of the view that the names of those persons who were partners at the time of institution of the suit must be shown in the Register of Firms. The question that is posed for consideration is, which view should be adopted? Counsel for the revision petitioner submitted that the decision in Balakrishna Trading Corporation v. Krishna Kurup (1969 KLT 855) and Hussain and another v. Panchamal Vasudev Ganapath Kamath and Brothers (AIR 1970 My. 299) is in accord with the plaint tenor of the relevant statutory provision (S.69(2) of the Partnership act) and so, should be adopted. 10. In my opinion, the matter is concluded by a recent decision of the Supreme Court in Shreeram Finance Corporation v Yasin Khan and others (AIR 1989 SC 1769). In that case, the appellant before the Supreme Court was a firm, registered under the Partnership Act. The firm filed a suit against the respondents. One of the pleas taken by the respondents was that the suit was not maintainable, view of S.69(2) of the Partnership Act, 1932. The trial court as also the High Court accepted the said picas and dismissed the suit. The firm took up the matter in appeal before the Supreme Court. In If the said case, the firm was registered under the Partnership Act on 2-11-1960. On 1-7-1967, there was a change in the constitution of the firm. Two of the then partners retired. One new partner joined the firm and two minors were admitted to the benefits ofthe said partnership firm. The suit was instituted on 22;7-68. The notice regarding the change in the constitution of the firm was given to the Registrar of Firms on 28-8-1968 and the change was given effect to in the Register of Firms, by a note, on 19-11-1968. On the above facts, the Supreme Court held that the suit filed by the appellant firm is clearly hit by the provisions of S.69(2) ofthe Partnership Act. On the above facts, the Supreme Court held that the suit filed by the appellant firm is clearly hit by the provisions of S.69(2) ofthe Partnership Act. The Supreme Court, in paragraph 6 of the judgment, observed thus: "In the present case, the suit filed by the appellants is clearly hit by the provisions of subsection (2) of S.69 ofthe said Partnership Act, as on the date when the suit was filed, two of the partners shown as partners as per the relevant entries in the Register of Firms were not, in fact, partners, one new partner had come in and two minors had been admitted to the benefit of the partnership firm regarding which no notice was given to the Registrar of Firms. Thus, the persons suing, namely, the current partners as on the date of the suit were not shown as partners in the Register of Firms. The result is that the suit was not maintainable in view of the provisions of subsection (2) of S.69 of the said Partnership Act and the view taken by the trial court and confirmed by the High Court in this connection is correct...." 11. The above decision is an authority for the proposition that the persons suing, viz. the current partners as on the date of the suit, should be shown as partners in the Register of Firms and if it is not so, the suit will be hit by S.69(2) of the Partnership Act. In the light of the above decision of the Supreme Court, the concurrent judgments and decrees of the courts below, that the suit is not maintainable, are valid and justified in law. There is no merit in this revision. It is dismissed, with costs.