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2001 DIGILAW 1468 (AP)

A. S. Mehta and Co. v. Yogendranath Sachdev

2001-11-17

S.B.SINHA, Y.V.NARAYANA

body2001
P. S. NARAYANA, J. ( 1 ) THESE two C. R. Ps. are filed by a common landlord A. S. Mehta and Co. , represented by its partners Mr. Devendra Kumar Mehta and 5 others. The petitioners in both r. C. Nos. 288/82 and 289/82 on the file of principal Rent Controller, Secunderabad, filed eviction petitions against two different tenants, one Yogendranath Sachdev, the respondent in R. C. No. 288/82 and another optical Centre represented by its partner wajahat Hussain, the respondent in R. C. No. 289/82. In R. C. No. 288/82, P. W. 1 was examined and Exs. P-1 to P-21 were marked and likewise R. Ws. 1 and 2 were examined and Exs. R-l to R-16 were marked and ultimately, the R. C. was allowed and aggrieved by the same, the tenant filed r. A. No. 171/91 on the file of the Chief judge, City Small Causes Court, Hyderabad, and the appellate authority had reversed the matter, and aggrieved by the same, the petitioners in the said R. C. have filed c. R. P. NO. 5513 of 1998. In R. C. No. 289/82, p. W. 1 was examined and Exs. P-l to P-12 were marked and likewise R. W. 1 was examined and Exs. R-l to R-22 were marked and ultimately, the R. C. was allowed and aggrieved by the same the tenant filed r. A. No. 187/91 on the file of the Chief judge, City Small Causes Court, Hyderabad, and the same was allowed by the appellate authority and aggrieved by the same, the petitioners in the said R. C. filed C. R. P. No. 55124 of 1998. ( 2 ) AS it can be seen even from the orders of the learned Rent Controller, it was recorded at paragraph No. 3 that in view of the pleadings of the respective parties and the evidence adduced by them and the arguments advanced at the Bar, the following points arise for consideration and point No. 1 referred to in the said order is "whether the petition by unregistered firm is maintainable". The appellate Court also had discussed about this aspect at paragraph no. 6 of the order. The revision petitioner being an unregistered firm, had filed these eviction petitions against two different tenants. Section 69 of the Indian Partnership act, 1932 dealing with the effect of non- registration, reads as follows: 69. The appellate Court also had discussed about this aspect at paragraph no. 6 of the order. The revision petitioner being an unregistered firm, had filed these eviction petitions against two different tenants. Section 69 of the Indian Partnership act, 1932 dealing with the effect of non- registration, reads as follows: 69. Effect of non-registration:- (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 Register of Firms as a partner in the firm. (2) 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. (3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect, (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee, receiver or Court under the presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial insolvency Act, 1920 (5 of 1920) to realise the property of an insolvent partner. (4) This section shall not apply: (a) to firms or to partners in firms which have no place of business in (the territories to which this Act extends), or whose places of business in (the said territories), are situated in areas to which, by notification under (Section 56), this chapter does not apply, or (b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in section 19 of the Presidency Small cause Courts Act, 1882 (5 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second schedule to the Provincial Small cause Courts act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. In Saifuddin Hussainibhoy Siamwala and others v. The Burma Cycle Trading Co. , (AIR 1968 Madras 154) at page 156 the madras High Court was pleased to observe as follows: (7) The Supreme Court in J. Chandra gupta v. Kajaria Traders (India) Ltd. , 1965-1 SCJ 249 = ( AIR 1964 SC 1882 ) had to consider the import of the expression other proceeding in section 69 (3) of the Partnership Act and observed as follows: "in our judgment, the words other proceeding in sub-section (3) must receive their full meaning untrammeled by the words a claim of set-off. The latter words neither intend nor can be construed to cut down the generality of the words other proceeding . The subsection provides for the application of the provisions of sub-sections (1) and (2) to claims of set-off and also to other proceedings of any kind which can properly be said to be for enforcement of any right arising from contract except those expressly mentioned as exceptions in sub-section (3) and subsection (4)" incidentally the question arises whether other proceeding referred to in section 69 (3) in the instant case is one to. enforce a right arising from a contract. There cannot be any disputed that the right that is sought to be enforced by the petitioners in this case does arise under a contract between themselves as landlords and the respondent as the tenant. No doubt, the madras Buildings (Lease and Rent control) Act, 18 of 1960, intervenes and provides for certain special procedure for the enforcement of such rights. No doubt, the madras Buildings (Lease and Rent control) Act, 18 of 1960, intervenes and provides for certain special procedure for the enforcement of such rights. But that would not militate against my holding that the proceeding in question is one to enforce a right arising from a contract. (8) Thus, it is the accepted principle in law that no proceeding can be instituted by an unregistered partnership against any person. There is therefore a totality of ban on the institution of such proceedings. The words other proceeding in Section 69 (3) is elastic enough so as to include within its fold a petition under the Madras Buildings (Lease and Rent Control) Act 18 of 1960, by the partners of such an unregistered firm for the possession of the premises from the tenant for their own occupation. I have already held that the petitioners before me cannot dispute that they are not partners carrying on the business of Saleh Bros. It is no stated in paragraph 5 of the petition itself. The petitioners being members of an unregistered partnership firm, cannot therefore maintain this petition. I do not agree with the reasoning of the learned Chief Judge, court of Small Causes, that the proceeding in the instant case is not one in which the cause of action is based on any contract. I, therefore, hold that there is absence of jurisdiction on the part of the tribunals constituted under act 18 of 1960, to entertain the petition itself. As on this essential jurisdictional fact, the lower Court has come to an erroneous conclusion, the finding that the petition is maintainable in the above circumstances has to be set aside even though I am exercising revisional jurisdiction. In Padam Singh Jain v. M/s. Chandra brothers and others (AIR 1990 Patna 95) while dealing with the case under Bihar buildings (Lease, Rent and Eviction) control Act, 1983, it was held that an eviction petition can be filed by an unregistered firm since it is not a suit for enforcement of agreement and the right to sue for eviction is statutory right and hence the bar under Section 69 (2) of the partnership Act does not apply in such a case. In Atmuri Mahalakshmi and others v. Jagadeesh Traders ( 1990 (1) ALT 206 = air 1990 A. P. 288), this Court while dealing with an unregistered partnership firm filing a suit, held that the registration made during the pendency of the suit may cure such defect. The grounds for eviction raised by the revision petitioners were held to be proved and established by the learned Rent controller, which had been reversed by the appellate authority. But these questions may have to be decided only after arriving at a conclusion that the eviction petitions filed under A. P. Buildings (Lease, Rent and eviction) Control Act, 1960 even by an unregistered firm are maintainable. Hence, it is a question to be decided at the threshold. In the light of the conflict of judicial opinion expressed by the High Court of Madras and high Court of Patna, as referred to supra, and also in view of the general importance of this question, I am inclined to refer the following question to a Division Bench to have an authoritative pronouncement in this regard. "whether an un-registered firm, despite the bar under Section 69 of the Indian partnership Act, can maintain an eviction petition under the provisions of the A. P. Buildings (Lease, Rent and eviction) Control Act, 1960". ORDER of the Division Bench ( 3 ) NOTICING conflict between the decision of patna High Court in Padam Singh Jain v. M/ s. Chandra Brothers and others and the decision of the Madras High Court in saifuddin Hussainibhoy Siamwala and others v. The Burma Cycle Trading Co. a learned single Judge of this Court, referred the following question to a Division Bench for an authoritative pronouncement, and that is how, the reference is before us: whether an unregistered firm, despite the bar under Section 69 of the Indian partnership Act, 1932 can maintain an eviction petition under the provisions of the A. P. Buildings (Lease, Rent and eviction) Control Act, 1960? ( 4 ) SINCE the question raised and referred to us is a pure question of law, we do not intend to state the facts of the matter in great detail. ( 5 ) THE petitioner-firm is the landlord in both the C. R. Ps. The petitioner filed two different applications before the Principal rent Controller, Secunderabad, seeking eviction of the tenants, which was allowed. ( 5 ) THE petitioner-firm is the landlord in both the C. R. Ps. The petitioner filed two different applications before the Principal rent Controller, Secunderabad, seeking eviction of the tenants, which was allowed. Aggrieved thereby, the tenants filed appeals before the Chief Judge, City Small Causes court, Hyderabad, who reversed said order. Challenging the said order passed by the appellate Court, the petitioners filed the c. R. Ps. The question which arose for consideration before the Courts below was as to whether the petition for eviction by an unregistered firm is maintainable? ( 6 ) SECTION 69 of the Indian Partnership act, 1932 (for short the Partnership Act ) reads: effect of Non-registration: (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 Register of Firms as a partner in the firm. (2) 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. (3) The provisions of sub-sections (1) and (2) shall apply to a claim of set-off or other proceedings to enforce a right arising from a contract, but shall not affect (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realize the property of a dissolved firm, or (b) the powers of an official assignee, receiver or Court under the presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provisional insolvency Act, 1920 (5 of 1920) to realize the property of an insolvent partner. (4) This Section shall not apply (a) to firms or to partners in firms which have no place of business in (the territories to which this Act extends), or whose places of business in (the said territories), are situated in areas to which, by notification under (Section 56), this chapter does not apply, or (b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency- towns, is not of a kind specified in section 19 of the Presidency Small cause Courts Act, 1882 (5 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second schedule to the Provincial Small cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. ( 7 ) THE only question raised at the bar is as to whether a suit for eviction filed by an unregistered firm before a Rent Controller would come within the meaning of the expression "other proceedings", as found in sub-section (3) of Section 69 of the partnership Act. ( 8 ) ONE of us (S. B. Sinha, CJ) in Padam singh Jain (supra) held that an eviction petition can be filed by an unregistered firm since it is not a suit for enforcement of agreement, and that the right to sue for eviction is a statutory right, and as such, the bar under Section 69 (2) of the Partnership act does not apply. It was further held that the right to sue for eviction arose out of bihar Buildings (Lease, Rent and Eviction) control Act, 1983 governing the field, and not under a contract. However, the Madras high Court took a contra view in Saifuddin hussainibhoy Siamwala and others (supra ). ( 9 ) HOWEVER, the said question has since been determined by the apex Court. Having regard to the decisions of the apex Court, we are of the opinion, that the point at issue, is no longer res integra. Although there are numerous decisions of the Apex Court and other High Courts operating in the field, suffice it to note only a few. Having regard to the decisions of the apex Court, we are of the opinion, that the point at issue, is no longer res integra. Although there are numerous decisions of the Apex Court and other High Courts operating in the field, suffice it to note only a few. ( 10 ) IN M/s. Haldiram Bhujiawala v. M/s. Anand Kumar Deepak Kumar, (Jagannath Rao, J), upon considering a larger number of decisions operating in the field, held in para 26: further Section 69 (2) is not attracted to any and every contract referred to in the plaint as the source of title to an asses owned by the firm. If the plaint referred to such a contact, it could only be as a historical fact. For example, if the plaint filed by the unregistered firm refers to the source of the firm s title to a motor car and states that the plaintiff has purchased and received a motor car from a foreign buyer under a contract, and that the defendant has unauthorisedly removed it from the plaintiff firm s possession - it is clear that the relief for possession against defendant in the suit does not arise from any contract with defendant entered into in the course of plaintiff firm s business with defendant, but is based on the alleged unauthorized removal of the vehicle from the plaintiff firm s custody by the defendant. In such a situation, the fact that the unregistered firm has purchased the vehicle from somebody else under a contract has absolutely no bearing on the right of the firm to sue the defendant for possession of the vehicle. Such a suit would be maintainable and Section 69 (2) would not be a bar, even if the firm is unregistered on the date of suit. The position in the present case is not different. ( 11 ) THE apex Court in a recent judgment in Kamal Pushp Enterprises v. D. R. Construction Co. followed the decision in m/s. Haldiram Bhujiawala (supra), and held that the bar created under Section 69 of the Partnership Act does not apply to a proceeding before an Arbitrator. 10. The position in the present case is not different. ( 11 ) THE apex Court in a recent judgment in Kamal Pushp Enterprises v. D. R. Construction Co. followed the decision in m/s. Haldiram Bhujiawala (supra), and held that the bar created under Section 69 of the Partnership Act does not apply to a proceeding before an Arbitrator. 10. Having regard to the aforementioned authoritative pronouncements of the apex court, we are of the opinion, that there cannot be any doubt whatsoever that a suit for eviction filed by an unregistered firm for enforcement of his right under the A. P. Buildings (Lease, Rent and Eviction) control Act, 1960 against a tenant is maintainable. ( 12 ) THE reference is answered accordingly. ( 13 ) LET the C. R. Ps. be listed before the learned Single Judge, for disposal of the same on merits.