Research › Search › Judgment

Calcutta High Court · body

2008 DIGILAW 1086 (CAL)

Velji Narayan Patel v. Jayanti Lal Patel

2008-12-23

PARTHA SAKHA DATTA

body2008
ORDER The order dated 14th August, 2008 passed by learned Civil Judge, Junior Division, 1st Court. Howrah in T.S. No. 90 of 2007 is under challenge at the instance of the defendant-petitioner. 2. The facts of this case are these :- Velji Narayan Patel, Jayanti Lal Patel, Bhimjee Patel and Khimji Patel were four brothers. Their wives purchased Plot No. 15845, 15846 and 15847 comprised in Khatian No. 3647 and 5136 of Mouza-Bally by separate four deeds of sale sometime in the year of 1989. Then their husbands obtained tenancy from their wives in respect of the lands comprised on the said plots of land and the four brothers commenced a partnership business in the name and style of M/s. Bhagat & Company. Sometime after running of the partnership business brothers i.e. Bhimjee and Khimjee retired from the partnership business. The two other brothers i.e. the plaintiff and the defendant Jayanti and Velji formed a partnership firm in the name and style of M/s. Bhagat and Company by a partnership deed dated 15th of April, 2000 but the business was effective from 1st April, 2000. Terms and conditions of partnership business were embodied in the document. The two brothers fell out. The plaintiff Velji was allegedly debarred from participating in the partnership business. He was allegedly not allowed to enter the office and thus the plaintiff instituted the Title Suit being No. 96 of 2007 before the learned Civil Judge, Junior Division, 1st Court, Howrah praying for following relief's a. Decree for declaration that the plaintiff is the owner of 50% share of the said partnership business under the name and style of M/s. Bhagat & Co. at premises No. 5/7, Mahendra Bagchi Road, P.O. & P. S. Bally, District Howrah. b. Decree for declaration that the plaintiff is entitled to have and enjoy the 50% share of the said partnership business, under the name and style of M/s. Bhagat & Co. at premises No. 5/7, Mahendra Bagchi Road, P.O. & P.S. Bally, District. c. Decree that the defendant is permanently restrained from preventing the plaintiff from entering into the business in any manner of the said partnership business. d. Decree for declaration that the defendant is liable to submit and produce all the books of accounts, Statement of Accounts, Balance Sheet and, Relevant Papers and Documents of the said partnership business. c. Decree that the defendant is permanently restrained from preventing the plaintiff from entering into the business in any manner of the said partnership business. d. Decree for declaration that the defendant is liable to submit and produce all the books of accounts, Statement of Accounts, Balance Sheet and, Relevant Papers and Documents of the said partnership business. e. Decree for declaration that the defendant is liable to disburse and pay the share of profit of the plaintiff in respect of the said business since 1-4-2000 till date to the plaintiff. f. Permanent injunction restraining the defendant from obstructing and/or interfering with the right of the said partnership business of the plaintiff and/or entering and/or enjoying with peaceful possession of the said partnership business under the name and style of M/s. Bhagat & Co. at premises No. 5/7 Mahendra Bagchi Road, P.O. & P. S. Bally, District Howrah. 3. The defendant appeared and filed a petition under Order 7, Rule II(d) of the Civil Procedure Code praying for rejection of the plaint on the ground that the suit is not maintainable in view of the provision ofSection 69 of the Partnership Act. 4. The learned trial Court was not inclined to accept the contention of the defendant holding that Section 69 of the Partnership Act does not clearly bar the jurisdiction of the civil Court as it only provides the right to sue of partners in the case of registered or unregistered business. Accordingly, the application under Order 7, Rule II(d) of the Civil Procedure Code which was filed by the defendant was rejected and being aggrieved with the order of rejection this application under Article 227 of the Constitution of India has been filed by the defendant to challenge the order to be illegal and without jurisdiction. 5. I have heard Mr. N. Bhattacharya, learned advocate appearing for the petitioner and Mr. S. K. Mukherjee along with Mr. S. K. Sarkar, learned advocates for the opposite party. 6. 5. I have heard Mr. N. Bhattacharya, learned advocate appearing for the petitioner and Mr. S. K. Mukherjee along with Mr. S. K. Sarkar, learned advocates for the opposite party. 6. It is the submission of the learned advocate for the petitioner that there could be no two different interpretations of the provision of Section 69 of the Partnership Act in view of the fact that sub-section (I) of Section 69 clearly provides that no suit can be instituted by a partner or by a person on behalf of the partner against the firm to enforce a right arising from a contract or conferred by the Partnership Act unless the firm is registered. It is submitted that as in the instant suit one partner seeks to enforce his right arising out of the contract against copartner registration of the firm was a prerequisite for entertainability of the suit by the Civil Court.. It is submitted that the observation of the learned trial Court that Section 69 of the Partnership Act only bars partner to' institute a suit in case of unregistered partnership firm but does not oust the jurisdiction of the civil Court is a confusing one and the learned trial Court fails to appreciate the position. My attention has been drawn to the decision of this Court in Sunderlal and Sons v. Jyogendra Nath Singh. AIR 1976 Cal 471 and the decision of the Supreme Court in Raptakos Brett & Co. Ltd. v. Ganesh Property. (1998) 7 SCC 184 : ( AIR 1998 SC 3085 ). 7. Mr. Mukherjee learned advocate appearing for the opposite party-plaintiff submitted in reply that provision of Section 69 of the Partnership Act does not constitute any total bar to the presentation of the plaint and in support of his submission the decision of this Court in M/s. Hindustan Cable Ltd. v. Smt. Niharkana Saha. 1996 WBLR (Cal) 234 has been cited. 8. I have heard the learned advocates for the parties. Provision of Section 69 of the Partnership Act is reproduced below :- "69. 1996 WBLR (Cal) 234 has been cited. 8. I have heard the learned advocates for the parties. Provision of Section 69 of the Partnership Act is reproduced below :- "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". 9. Sub-section (1) of Section 69 disentitles a partner or a person on behalf of a partner to sue as a partner against the firm of a person allegedly to be a partner unless the firm is registered with the registrar of firms. Sub-section (2) similarly disentitles the firm to institute a suit against a third party unless the firm is registered. The common feature between sub-section (1) and sub-section (2) is that such suit must relate to enforcement of right arising out of a contract of conferred by the Act. If a suit by a partner against a partner or firm does not relate to enforcement of a right arising out of a contract then there is no legal prohibition because the spirit of Section 69 either of sub-section (1) or of sub-section (2) is that such suit must be related to enforcement of the right arising from a contract. Having gone through the plaint of the suit it clearly appears that the plaintiff instituted the suit as a partner for enforcement of his right arising out of the contract. Having gone through the plaint of the suit it clearly appears that the plaintiff instituted the suit as a partner for enforcement of his right arising out of the contract. The entire narrative of the plaint is for declaration that the plaintiff is the owner of 50 per cent of the share of the partnership business and for declaration that he is entitled to enjoy 50 per cent of the said business under the name and style of M/s. Bhagat & Company, for production of books of accounts, statement of accounts, balance-sheet and other documents and for declaration that the defendant is liable to disburse and pay plaintiffs share of profit in the business. Plaintiff does not sue in his individual capacity. The prayers in the plaint are basically for enforcement of his right as embodied in the partnership deed which was executed by and between the parties on 15th of April, 2000. In such circumstances, the provision of sub-section (1) of Section 69 appears to have hit the plaint. Order 7, Rule 11 (d) contains "where the suit appears from the statement in the plaint to be barred by any law". It is not the case in the plaint that the firm was registered with the Registrar of Firms. 10. Presentation of the plaint by a partner against an unregistered firm cannot be said to be a plaint worth the name. In the decision in Sunderlal ( AIR 1976 Cal 471 ) (supra) this Court held as follows :- "Jurisdiction as observed by Lord Reid in the case of Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147, at p. 171 of the report is the entitlement of the tribunal to enter upon the inquiry in question. That entitlement in my opinion can only arise from a competent plaint instituted by a plaintiff. If the plaint was incompetent, there was no plaint. There was no suit. Ex facie and without any dispute there was no valid suit. A decree based on such a patent and indisputable error would be an error of jurisdiction and decree passed on such error would be nullity. If, however, the error depends upon adjudication of disputes, either of fact or law different considerations would apply. There was no suit. Ex facie and without any dispute there was no valid suit. A decree based on such a patent and indisputable error would be an error of jurisdiction and decree passed on such error would be nullity. If, however, the error depends upon adjudication of disputes, either of fact or law different considerations would apply. After all as the Supreme Court has observed that the question whether there was an error within the jurisdiction or an error of jurisdiction depends upon the nature of the error. In view of the express provision and public policy indicated in Section 69 of the Partnership Act in my opinion entertaining a suit in derogation of that mandatory provision would defeat the purpose of the statute and such an error would' amount to an error of jurisdiction and :l decree passed on such an error would be a nullity." 11. The same principle was reaffirmed by the Supreme Court in Raptakos ( AIR 1998 SC 3085 ) (supra) where distinction has been made between enforcement of the right under Section 108(q) read with Section III (a) of the Transfer of Property Act and Section 69 of the Partnership Act. Their Lordships observed at para 21 of the decision as follows : "So far as the applicability of the bar of Section 69 sub-section (2) of the Partnership Act is concerned, it is true that it is a penal provision which deprives the plaintiff of its right to get its case examined on merits by the Court and simultaneously deprives the Court of its jurisdiction to adjudicate on the merits of the controversy between the parties. It will, therefore, have to be strictly construed. It is also true that once on such construction of this provision, the bar under Section 69(2) of the Act gets attracted, then the logical corollary will be that the said provision being mandatory in nature would make the suit incompetent on the very threshold." 12. The decision in M/s. Hindusthan Cable (supra) as has been cited by the learned Advocates for the opposite party is in a different fact situation. Reading between the lines of the plaint it was observed by this Court in the decision that the suit was in individual capacity and it did not hit Section 69(2) of the Partnership Act. The decision in M/s. Hindusthan Cable (supra) as has been cited by the learned Advocates for the opposite party is in a different fact situation. Reading between the lines of the plaint it was observed by this Court in the decision that the suit was in individual capacity and it did not hit Section 69(2) of the Partnership Act. This decision does not appear to be applicable to the facts of our case. 13. This being the legal position it has to be held that the, suit at the threshold is not maintainable and the provision of Order 7, Rule 11(d) of the CPC is applicable. 14. The application is allowed. The order of the learned trial Court is set aside. 15. A copy of this judgment shall be sent to the learned Civil Judge, Junior Division, 1st Court, Howrah for information and necessary action. Application allowed.