Premier Carriers a Proprietary concern rep. by its Proprietrix Smt. Nirmala M. Pai carrying on business at S. I. Building v. The Premier Service Station a registered Partnership firm rep. by its Senior Partners
2007-06-05
S.ASHOK KUMAR
body2007
DigiLaw.ai
Judgment :- The above revisions are filed against the orders dismissing the petitioners/defendants applications in I.A.Nos.3217 to 3220 of 2006 in O.S.Nos. 8320 to 8323 of 2005 on the file of the learned XVIII Assistant Judge, City Civil Court, Chennai, filed under Order VII Rule 11 CPC to reject the plaints in the respective suits as the plaintiff firm is not a registered firm as required under the Indian Partnership Act, 1932. .2. The brief facts of the case are as follows:- .Originally one late Shri P.Ramnath pai started the plaintiffs business as Proprietary concern and thereafter during his life time he made his four sons viz. Shri R.Manjunath Pai, Shri R.Haridranath Pai, Shri R.Umanath Pai as partners in his business and converted the business into one of partnership firm on 4. 1971. Thereafter the said firm came to be reconstituted on many occasions and lastly the firm had been duly reconstituted on 4. 1997. The plaintiff filed the suits for recovery of different sums in each suits being the credit facility of Diesel and Petrol availed by the defendants partners to their business concerns, which they failed to pay the dues inspite of repeated requests. .3. Pending the said suits, the defendant filed the Interlocutory Applications to the reject the Plaint in the suits on the sole ground that the plaintiff firm which is not a registered firm as required under Section 69(2) of the Indian Partnership Act, it cannot maintain the suits. The trial court after consideration of the pleadings and submissions made by the respective counsels, dismissed all the Interlocutory Applications. Aggrieved of the same, the present CRPs are filed by the revision petitioner/defendant. 4. Learned counsel appearing for the revision petitioner/defendant contended that as per Section 69(2) of the Indian Partnership Act, 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 suiting are or have been shown in the Register of Firms as Partners in the firm. According to the learned counsel, the Registrar of Firms, Chennai has categorically state that there is no registered form in the name of the plaintiff.
According to the learned counsel, the Registrar of Firms, Chennai has categorically state that there is no registered form in the name of the plaintiff. Though the first partnership alone was registered with the Registrar of Firms, the subsequent newly reconstituted firms are not registered, particularly the last partnership firm is not registered and hence the suits filed by the plaintiff are not maintainable. As per Section 62(2), all the partners of the firm have to be shown in the Register of Firms. The said requirement is different from the requirement contemplated under Order XXX, Rule 1 of CPC. The induction of new partners and resignation of some of the partners have not been intimated and changes have not been effected in the Register of Firms. Since it is obligatory that the body of persons as a whole viz., all the partners of the firm must be shown as partners in the records of the Registrar of Firms, the suit filed by a firm which was not legally registered, it has to be held that the suits filed by it are not maintainable. This principle is fortified in the decisions reported in 1989(3) SCC 476 ; AIR 1977 SC 336 and AIR 1990 Madras 198. 5. On the other hand, learned counsel for the respondent/plaintiff contended that the petitioners herein raised a false plea that the respondent/plaintiff firm is not a registered one and the present suits for recovery of money is a bar under Section 69(2) of the Partnership Act. Such a contention cannot be raised in view of the decision of the Honble Apex Court in Sharad Vasant Kotak V. Ramniklal Mohanlal Chawda, reported in AIR 1998 SC 877 . Further, the revision petitioner/defendant is not a third party, as she is a close relative to the family of the respondent/plaintiff and the suit is well maintainable. .6. A perusal of the order of the trial court and the typed set of papers would show that Ex.P.1 is the original partnership deed entered between Ramnath Pai and his four sons. Thereafter Ex.P.2, P.3 and P.4 Partnership Deeds were entered regarding the Premier Service Station Firm. It cannot be said that each and every time the new partnership deed is entered between the partners, the previous partnership automatically get extinguished and new partnership firm is created. In Ex.P.1, there are 5 partners.
Thereafter Ex.P.2, P.3 and P.4 Partnership Deeds were entered regarding the Premier Service Station Firm. It cannot be said that each and every time the new partnership deed is entered between the partners, the previous partnership automatically get extinguished and new partnership firm is created. In Ex.P.1, there are 5 partners. Out of five partners, 4 partners alone entered into the second partnership deed on 4. 1976 by executing Ex.P.2. But there is no such clause in the partnership deed that existing partnership deed is dissolved. On the other hand, it is clearly stated that their desire is to reconstitute the said partnership of Premier Service Station among themselves. Like wise in Ex.P.3 some of the partners found in Ex.P.2 were retired from the partnership firm and some other existing partners reconstituted the partnership firm along with some other new partners. In Ex.P.4, which is the last partnership deed, it is clearly stated that the partnership deed cannot be dissolved either by death or insolvency or for any other reason. Clause 4 of Ex.P.3 deed states that the partnership shall commence and shall be deemed to have commenced with effect from 1st April 1996. So reconstituted partnership firm started business on and from 4. 1996 and it does not mean dissolution of earlier firm. 7. In this respect it is useful to refer to the relevant portion of the judgement in Sharad Vasant Kotak V. Ramniklal Mohanlal Chawda, reported in AIR 1998 SC 877 wherein the Honble Apex Court has held as follows:- "25. The next question is whether the registration given to the firm under the first partnership deed ceases when a new partner was introduced into the firm. For this, we refer to Ss.58, 59 and 63, the relevant portions have already been extracted. Rules 3,4,6 and 17 have also been extracted. The forms prescribed in this connection have also been extracted. A close perusal of these provisions with Forms "A", "E", "G" and "H" will show that there is a definite distinction between the certificate of Registration given to the firm and any alterations to be entered in the Register of Firms. This will suggest in no uncertain terms that the changes in the constitution of the firm will not affect the registration once made.
This will suggest in no uncertain terms that the changes in the constitution of the firm will not affect the registration once made. In other words, it is not required that every time a new partner is inducted, fresh registration has to be applied and obtained. However, information about changes have to be given. Failure to comply attracts penalties under Section 69A of the Act. In this context, the judgment in Maddi Sudarsanam (AIR 1955 AP 12) can be usefully cited. It was held that:- "The second condition laid down in S.69(2) is also satisfied. The persons now suing i.e., the present partners are shown in the Register of Firms as partners of the firm, though the same Register shows two other partners, one of whom died and the other retired. It may be that the fact of retirement of one of the partners and the death of another should have been notified to the Registrar under section 63(1) as the said events effected a change in the constitution of the firm. But the default made by the firm is not, in not so notifying, of any relevance in considering the question of the maintainability of the suit under S.69(2). There is the essential distinction between the constitution of a firm and its dissolution. Non compliance with the provisions of S.63(1) may have other consequences, but u/s.69(2) only two conditions should be complied with by a firm to enforce a right arising from a contract and those two conditions are complied with in the present case. 26. The above view is supported by the decisions of this Court and various other High Courts. In Firm Girthar Mal Kapur Chand ( AIR 1963 SC 1587 ) this court held that once there was registration under the Indian partnership Act, that registration, in our opinion, continues to operate as registration under that Act and continues to be effective. In other words, valid registration in the eye of law as administered in India so long as the registration is not cancelled in accordance with law. Xx xx xx xx xx 33. Our conclusion is that on the induction of the second respondent, the existing firm was only reconstituted on the facts of this case and therefore, there is no necessity to get a fresh registration.
Xx xx xx xx xx 33. Our conclusion is that on the induction of the second respondent, the existing firm was only reconstituted on the facts of this case and therefore, there is no necessity to get a fresh registration. If by virtue of non compliance of certain mandatory provisions in not informing the Registrar of Firms about the change in the constitution of the firm, certain penalties provided in the Act alone are attracted and that will not lead to the conclusion that the registration of the firm ceased. This conclusion is based on a conjoint reading of Sections 58 to 63 and the Forms prescribed thereunder." 8. As per the said decision, once there was a registration under the Indian Partnership Act, that registration continues to operate as registration under that Act and continues to be an effective one. In other words, it s a valid registration in the eye of law as administered in India, so long as the registration is not cancelled in accordance with law. In the instant case, the registration of the firm dated 7. 1971 had not been cancelled at any point of time. Failure to intimate the changes in the constitution of the firm attracts only penalty under Section 69-A of the Act and in fact the plaintiff firm remitted more than Rs.18,000/= by way of penalty to the Registrar of Firms to update the entries. 9. All the more, the four suits have been filed by the firm, and they have been posted in the special list for trial on 3. 2007. P.W.1 was examined and documents have been marked. After 2 or 3 hearings, the petitioners herein took adjournment for cross examination of PW.1 and later on filed a petition under Order XIV R.2 CPC to try the proposition of law, i.e., the suit is barred under Section 69(2) of the Indian Partnership Act as the preliminary issue. The trial court after hearing the counsel for the defendant dismissed the petition as not maintainable by its order dated 14. 2007 and posted the matters for cross examination of PW.1 on 24. 2007. Thus the above Revision Petitions are nothing but a delaying tactics to avoid the payment and settlement of the dues to the plaintiff after having availed the credit facility for drawing fuel to their vehicles.
2007 and posted the matters for cross examination of PW.1 on 24. 2007. Thus the above Revision Petitions are nothing but a delaying tactics to avoid the payment and settlement of the dues to the plaintiff after having availed the credit facility for drawing fuel to their vehicles. The decision cited by the counsel for the revision petitioner/defendant in 1989 (3) SCC 476 is also not applicable to the present case since R.Harindranath Pai and R.Gopinath Pai filed the suit on behalf of the plaintiff firm, and they are the original partners from the year 1971 onwards as per Ex.P.1 and therefore they are competent persons to file the suits. 10. In the above circumstances, I do not find any reason to interfere with the findings of the learned Trial Judge in dismissing the Interlocutory Applications as there is no perversity or error of jurisdiction or material irregularity. In the result, all the Civil Revision Petitions are dismissed. Consequently, connected CMPs are also dismissed. No costs.