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2010 DIGILAW 454 (JK)

Rajinder Kumar Sehgal v. Swarna Devi

2010-08-18

J.P.Singh

body2010
1. This Appeal under Section 39 of the Jammu and Kashmir Arbitration Act, Svt. 2002 is directed against District Judge, Udhampur’s Order dated 31.03.1997 whereby allowing respondents’ predecessor-in-interest Radhey Sham’s Petition under Section 20 of the Jammu and Kashmir Arbitration Act, the disputes raised in the Petition were referred to the Arbitration of Sh. Romesh Chander Dogra, retired Junior Engineer (Civil). 2. The disputes raised in the Petition pertained to the affairs of M/s Sehgal Goods Carrier & Radhey Sham, a Partnership Firm constituted vide Partnership Deed dated 14.10.1991, inter alia, in respect of Contract CA No. CDR 35-TF/10/91-92 which had to be carried out for 35 Border Road Task Force. 3. The Arbitration Petition, when resisted by the appellants, on various grounds, was taken up for determination by the learned District Judge on the following issues:- 1) Whether partnership concern M/s Sehgal Goods Carrier and Radhey Sham has not been registered under law, if so, what is its effect? OPR 2) Whether the partnership styled as M/s Sehgal Goods Carrier and Radhey Sham was not acted upon by the parties, if so, what is its effect? OPR 4. Deciding both the issues against the appellants, Radhey Sham’s Petition was allowed, as indicated at the threshold, aggrieved whereby the appellants have filed this Appeal seeking setting aside of the learned District Judge’s Order. 5. I have heard learned counsel for the parties and perused the records. 6. While dealing with Issue No.1, learned District Judge has relied upon Prem Lata & Anr. v. Ishar Dass Chaman Lal & Ors., reported as AIR 1995 SC, 714 to hold that the bar enacted by Section 69 of the Partnership Act would not affect the proceedings filed by a partner of an Unregistered Firm against another partner and that the bar would get attracted only when an unregistered partnership sues a third party. 7. The distinction referred to by the learned District Judge restricting the application of Section 69 of the Jammu and Kashmir Partnership Act only to the cases where the suit or other proceedings were taken against the third party, ex-facie appears erroneous, in that, a plain reading of the provisions of Section 69 of the Partnership Act, does not indicate any such intention of the legislature as projected by the learned District Judge. 8. 8. The expression "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" appearing in Section 69(1), leaves no manner of doubt that a Suit filed by a partner of Unregistered Firm against the firm or any person alleged to be or to have been a partner, too was barred. 9. Finding that an Unregistered Firm was debarred from moving the Court even against its partner, the respondents’ learned counsel submitted that the bar contemplated by Section 69 would not be attracted to Petitions under the Arbitration Act and regardless of the Non-registration of the firm with Registrar of Firms, the respondents’ Petition under Section 20 was maintainable. 10. I do not find merit in this submission of the respondents’ learned counsel too, for an application filed by an Unregistered Firm or its partner under Section 20 of the Arbitration Act, would also be treated as a Suit and would thus be hit by Section 69(2), if the firm was not registered with the Registrar of Firms and the partner suing is shown as such in the Register of the Registrar of Firms. The fact that a Petition under Section 20 is to be registered and numbered as a Suit would not make any difference for the obvious reason that though Sub-Sections 1 & 2 of Section 69 of the Partnership Act refer to a Suit, Sub-Section (3) thereof makes those sub-sections applicable even to other proceedings which would include a Petition registered and numbered as a Suit under Section 20 of the Arbitration Act. 11. Learned District Judge, therefore, appears to have misconstrued the law laid-down in Prem Lata’s case Supra, in that, the distinction relied upon by the learned District Judge to allow the respondents’ application had no play in the facts and circumstances of the present case where the dispute sought to be referred to the Arbitration was not regarding the dissolution of an Unregistered Partnership Firm, to which the exceptions contemplated by Section 69 (3) of the Partnership Act may apply. 12. Such being the case, the Petition filed by Radhey Sham under Section 20 of the Jammu and Kashmir Arbitration Act was not maintainable, being hit by the provisions of Section 69 (2) of the Partnership Act. 13. 12. Such being the case, the Petition filed by Radhey Sham under Section 20 of the Jammu and Kashmir Arbitration Act was not maintainable, being hit by the provisions of Section 69 (2) of the Partnership Act. 13. Findings of the learned District Judge on Issue No.1, is thus found to be erroneous. It is, accordingly, reversed holding that the Petition filed by Radhey Sham, a partner of M/s Sehgal Goods Carrier & Radhey Sham, a firm not registered with the Registrar of Firms, was non-maintainable. Issue No.1 is, accordingly, decided against the respondents and in favour of the appellants. 14. In view of the above finding on Issue No.1, holding the respondents’ Petition under Section 20 of the Arbitration Act non-maintainable, Issue No.2 does not need any determination. 15. In view of the findings on Issue No.1, this Appeal, therefore, succeeds and is, accordingly, allowed, setting aside learned District Judge, Udhampur’s Order dated 31.03.1997. The Petition filed by Radhey Sham-respondent under Section 20 shall, therefore, stand dismissed as non-maintainable. No order as to costs.