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Madhya Pradesh High Court · body

2007 DIGILAW 285 (MP)

Hirendra Bhola v. Gulati Marketing Company

2007-03-12

A.K.SHRIVASTAVA

body2007
JUDGMENT 1. A suit for realization of Rs. 2,63,000/- was filed by plaintiff M/s. Gulati Marketing Company against defendants. In para 1 of the plaint it has been pleaded that plaintiff M/s. Gulati Marketing Company is a partnership firm registered with Registrar of Firms and Societies. It has been further pleaded that Praveen Gulati and Vivek Gulati are its partners along with others. According to the plaint averments, defendants are required to pay a sum of Rs. 2,63,000/- to the plaintiff as the transaction took place between the defendants and plaintiff partnership firm. Since the amount has not been paid to the plaintiff firm the suit for its realization has been filed. 2. Defendants filed written statement and refuted the averments made in the plaint on several grounds. 3. Learned trial Court after framing issues and after recording the evidence of the parties decreed the suit against which the present appeal has been filed by defendant No. 1. 4. The only contention, but having substantial force, has been made by Shri Ashish Mishra, learned counsel appearing for the appellant that looking to the admission made by PW 1 Vivek Gulati, who is one of the partners of the firm, the suit is liable to be dismissed because there is clear admission of his that the partnership firm is not a registered partnership firm. By inviting my attention to section 69 of the Indian Partnership Act, 1932 (in short 'the Act') it has been argued that as per sub-section (2) of section 69 of the 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 suing are or have been shown in the Register of Firms as partners in the firm. According to the learned counsel for the appellant since there is clear admission of Vivek Gulati, who is a partner of the plaitniff firm that partnership firm is not a registered partnership firm, therefore, the instant suit which has been filed is clearly barred under section 69 (2) of the Act. According to the learned counsel for the appellant since there is clear admission of Vivek Gulati, who is a partner of the plaitniff firm that partnership firm is not a registered partnership firm, therefore, the instant suit which has been filed is clearly barred under section 69 (2) of the Act. In support of his contention, learned counsel has placed reliance on Loonkaran Sethia v. Ivan E. John [ AIR 1977 SC 336 ] wherein it has been held that section 69 is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void. 5. By inviting my attention to Order XII Rule 6 CPC it has been contended by learned counsel that where an admission of fact has been made either in the pleading or otherwise, whether orally or in writing, the Court may at any stage of the suit, either on the application of any party or of its own motion may decide the suit and pass the judgment. The contention of learned counsel is that since it has come in the evidence of plaintiff Vivek Gulati, who is a partner in the firm that the firm is not a registered partnership firm which amounts to admission and therefore the suit should have been dismissed at this stage only. In support of his contention, learned counsel has placed reliance on the decision of the Supreme Court Balraj Taneja v. Sunil Madan [ AIR 1999 SC 3381 ] (paras 21 and 24). 6. Having heard learned counsel for the appellant, I am of the view that this appeal deserves to be allowed. 7. On bare perusal of the plaint averments it is gathered that the suit has been filed by a partnership firm and it has been specifically pleaded in para 1 of the plaint in that regard. Nowhere it is gathered from the plaint that plaintiff firm is a registered partnership firm. Though it has been mentioned that it is registered with the Registrar of Firms and Societies, however, no document in that regard has been filed. Nowhere it is gathered from the plaint that plaintiff firm is a registered partnership firm. Though it has been mentioned that it is registered with the Registrar of Firms and Societies, however, no document in that regard has been filed. On the other hand, Vivek Gulati who appeared as PW 1 on behalf of the plaintiff firm has categorically and specifically admitted in para 1 of his deposition that plaintiff firm is not a registered partnership firm though he is one of the partner. In this view of the matter, since section 69 (2) of the Act is mandatory in character, the present suit is not maintainable. For ready reference it would be appropriate to quote sub-section (2) of section 69 of the Act, which reads thus : "(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." 8. On going through the abovesaid provision it is as clear like a noon day that the said provision is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a member of an unregistered firm, whether existing or dissolved, void. In other words a partner of an unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract falling within the purview of section 69 of the said Act. The conditions required by the section are mandatory and the bar of section applies both to suits by the firm as well as on behalf of the firm. It should be taken note of that no member of an unregistered firm can enforce his right under the partnership contract against either the firm or any person or past member of it, nor unregistered firm can sue its customers on their contracts. 9. It should be taken note of that no member of an unregistered firm can enforce his right under the partnership contract against either the firm or any person or past member of it, nor unregistered firm can sue its customers on their contracts. 9. The Supreme Court in the case of Loonkaran Sethia (supra) in para 21 has clearly held that on a bare glance at section 69 (2) is enough to show that it is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void. The Supreme Court has further held that a partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract falling within an ambit of section 69 of the Partnership Act. The Supreme Court in para 21 further came to hold that since plaintiff firm is not a registered partnership firm, the suit was hit by section 69 of the Act and was directed to be dismissed. The decision of Loonkaran Sethia (supra) is squarely applicable in the present case because in the instant suit also plaintiff himself admitted in examination-in-chief in para 1 that the partnership firm is not a registered partnership firm. 10. Since the present suit is hit by section 69 (2) of the said Act and is liable to be dismissed on that ground alone I am not dealing the second contention of learned counsel for the appellant in regard to the decision of a case on the basis of admission under Order XII Rule 6 CPC. 11. For the reasons stated here-in-above, I am of the view that since plaintiff's firm is not a registered partnership firm, therefore, the suit as filed by an unregistered firm against the defendant/appellant is barred under section 69 (2) of the Act and thus the impugned judgment decreeing the suit cannot be allowed to remain stand. 12. Resultantly, this appeal succeeds and is hereby allowed. The impugned judgment decreeing the suit of plaintiff is set aside. The suit of plaintiff is hereby dismissed. However, looking to the facts and circumstances, parties are directed to bear their own costs.