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2015 DIGILAW 263 (JK)

Ab. Salam Bhat v. Farida Begum

2015-05-25

ALI MOHAMMAD MAGREY

body2015
JUDGMENT : Ali Mohd. Magrey, J. 1. This Civil Revision has been preferred against the order dated 26.06.2014 passed by the learned trial court, 2nd Additional Munsiff, Srinagar, dismissing the application filed before it in terms of O. VII, R. 11 CPC by defendants 1, 2 and 6 in a suit for partition by metes and bounds titled Farida Begun & Ors. v. Abdul Salam Bhat & Ors. The respondents herein filed a suit for partition by metes and bounds of the suit property comprising land measuring 5 Kanals, 3 Marlas and 206 sft and three residential houses standing thereon jointly owned and possessed by the parties, and the partnership business of timber sale depot and saw mill stated to be carried on between the parties on the ratio of 80:20% respectively between them. 2. The petitioners herein, namely, defendants 1, 2 and 6 in the suit, filed an application under O. VII, R. 11 CPC before the trial court stating therein that since the plaintiffs, besides seeking a decree for partition of alleged ancestral immoveable property, have prayed for a decree of partition of partnership business alleged to be carried on pursuant to partnership deed 12.09.2006, the suit was barred in terms of Section 69 of the Partnership Act since the partnership deed was not registered. 3. The learned trial court in the order impugned has held that since the suit is for partition of ancestral properties, including the business establishments, Section 69 of the Partnership Act is not applicable to the case. 4. I have heard learned counsel for the parties, perused the record and considered the matter. 5. Learned counsel for the petitioner-defendants invited the attention of this Court to Order VII, Rule 11 and submitted that in terms of Sub-Rule (d) of Rule 11, it is mandatory for a Court to reject a plaint where the suit appears from the statement in the plaint to be barred by any law. Learned counsel submitted that it is the admitted case that the partnership deed dated 12.09.2006 on the basis of which the parties have been carrying on the business of timber sale depot and saw mill has not been registered. Inviting the attention of this Court to Section 69 of the Jammu and Kashmir State Partnership Act, 1996 Svt. Learned counsel submitted that it is the admitted case that the partnership deed dated 12.09.2006 on the basis of which the parties have been carrying on the business of timber sale depot and saw mill has not been registered. Inviting the attention of this Court to Section 69 of the Jammu and Kashmir State Partnership Act, 1996 Svt. (1939 AD), the learned counsel submitted that the effect of non-registration is that no suit to enforce a right arising from a contract or conferred by the Act can be instituted in any Court by or on behalf of any person suing as a partner. Learned counsel in support of his arguments has placed reliance on a judgment of the Supreme Court in Loonkaran Sethia v. Ivan E. John, AIR 1977 SC 336 , and submitted that the learned trial court has committed a grave error of law in dismissing the application filed by the petitioners-defendants. 6. Learned counsel for the respondents on the other hand submitted that Section 69 of the Partnership Act does not deprive the Court of its jurisdiction to try a suit instituted on behalf of an unregistered firm. He submitted that Section 69 bars a party from filing a suit brought in the name of an unregistered firm. In this connection, the learned counsel cited and relied upon a judgment of a Coordinate Bench of this Court in Ajay Kumar Kohli v. Karanvir, JKJ Soft JKJ/12370: SLJ 1994 368: KLJ 1992 700. The learned counsel also submitted that the plaintiff-respondent has filed the suit seeking partition of the ancestral properties, the bar contained in Section 69 of Partnership Act would not be attracted. In this connection, he also relied upon a judgment of the Supreme Court in Haldiram Bhujiawala v. Anand Kumar Deepak Kumar, 2000 Legal Eagle (SC) 430 : 2000 (3) SCC 250 . 7. The sole point that arises for consideration is whether the suit for partition is barred by Section 69 of the Partnership Act? 8. With a view to finding an answer to the aforesaid question, one would need to go to the relevant statement made in the plaint. 7. The sole point that arises for consideration is whether the suit for partition is barred by Section 69 of the Partnership Act? 8. With a view to finding an answer to the aforesaid question, one would need to go to the relevant statement made in the plaint. In this connection, paragraphs 6 and 7 of the plaint are relevant which are quoted hereunder: "6) That the subject matter of the suit comprising of the land measuring 5 Kanal, 3 Marlas and 206 sft and three residential houses which is in joint possession of the parties. It is further submitted that plaintiff No. 3 and deceased Ghulam Rasool Joo Baghwan had jointly installed a timber sale depot along with its allied saw mill in the suit property jointly on the basis of partnership on the ratio of 80% and 20% respectively, i.e., the plaintiff No. 3 has invested 80% share including saw mill in the business of timber sale depot Rest of the 20% of the share had been invested by the deceased Gh. Rasool Joo Baghwan, along with timber sale depot license. After the death of Ghulam Rasool Joo Baghwan, his 20% share in the business as per the partnership deed dated 12th day of Sept. 2006, devolved amongst his legal heirs i.e., Abdul Salam, Abdul Jabbar, Mst. Farida and Mst. Hajra. 7. That the legal heirs of deceased Ghulam Rasool Baghwan aforenamed are entitled to 1 Kanal, 2 Marlas and 238 sft out of 5 Kanal, 3 Marlas and 206 sft, likewise the legal heirs of Ali Mohammad Baghwan are also entitled for 1 Kanal, 11 Marlas and 238 sft as per their entitlement. 8. Mohammad Ismail defendant No. 6 is entitled of 2 Kanals and 9 Marlas of land as the share of deceased Mohammad Sidique Baghwan. Besides the aforesaid entitlements of the parties, Mohammad Yousuf is also entitled of 80% share out of the business i.e., the business of timber sale depot alongwith the saw mill installed jointly by Ghulam Rasool (deceased) and plaintiff No. 3 over the suit land. 9. Besides the aforesaid entitlements of the parties, Mohammad Yousuf is also entitled of 80% share out of the business i.e., the business of timber sale depot alongwith the saw mill installed jointly by Ghulam Rasool (deceased) and plaintiff No. 3 over the suit land. 9. The plaintiffs after the death of Ghulam Rasool requested the contesting defendants to effect the partition of the joint property alongwith the business enterprise including the saw mill and timber sale depot but the contesting defendants have shown their reluctance to effect the partition of the suit property by meets and bounds as per their entitlements as stated hereinabove. It is further submitted that the saw mill land timber sale depot is one business enterprise and is not segregated to each other. The plaintiff No. 1 and 2 and defendants 1 and 2 are collectively entitled of 20% of shares out of the business enterprise i.e., saw mill alongwith timber sale depot and license. The plaintiff No. 3 is individually entitled of 80% share out of the business enterprise to the exclusion of others as stated hereinabove. It is further submitted that plaintiff No. 3 had been and is the managing partner of the business enterprise whereas the deceased Ghulam Rasool Baghwan was the sleeping partner of the business enterprise. It is further submitted that plaintiff No. 3 is running the business partnership being its managing partner. After the death of Ghulam Rasool Joo Baghwan, the plaintiff No. 3 requested the defendant No. 1 and 2 to take the steps for distribution of the shares out of the business enterprise and even plaintiff No. 1, 2 and 3 also requested defendant 1 and 2 to have settlement of accounts of the business enterprise but the defendants No. 1 & 2 refused to settle the accounts of business enterprise with the plaintiff No. 3. It is further submitted that it is the plaintiff No. 3 who is running the saw mill along with timber sale depot being its managing partner but the reluctance shown by the defendants 1 and 2 have given a cause to the plaintiffs to file the instant suit for effecting the partition of the joint property and settlement of the accounts of the business enterprise in between the plaintiffs and defendant No. 1 and 2 as per the share as drawn in the partnership deed dated 12th day of September 2006, executed in between deceased Ghulam Rasool Baghwan and plaintiff No. 3 registered before Sub Registrar, Srinagar on 29th day of September, 2006." 9. From the pleadings made in the plaint, as quoted hereinabove, it is seen that the plaintiffs are seeking partition of, inter alia, the partnership business of the saw mill and timber sale depot and their respective shares therein governed by the partnership deed dated 12.09.2006. Though an ancillary question that arises in the case is whether the court can grant such a relief, but keeping in view that such a point was neither taken up before the learned trial court nor before this Court, it would be unnecessary to delve into that aspect of the matter. Restricting to the question raised herein, let the provision of Section 69 of the Partnership Act be noticed. It reads thus: "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. (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 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 dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee, or receiver or Court under the law of insolvency 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 State or whose places of business in the State 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 Rs. 200 in value which is not of a kind specified in the Second Schedule to the Small Causes Courts Act of 1968, or of any proceeding in execution or other proceeding incidental to or arising from any such suit or claim." Sub-Section (1) of Section 69, inter alia, provides that no suit to enforce a right arising from a contract 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. It, therefore, follows that the effect of non-registration of a firm is that none of its partners can file a suit for enforcement of any right arising from a contract or conferred by the said Act against the firm or against any third person alleged to be, or have been, a partner of the firm. 10. It, therefore, follows that the effect of non-registration of a firm is that none of its partners can file a suit for enforcement of any right arising from a contract or conferred by the said Act against the firm or against any third person alleged to be, or have been, a partner of the firm. 10. Definition Clause (e) of Section 2 of the Partnership Act provides that the expressions used but not defined in this Act and defined in the Contract Act, 1977, shall have the meaning assigned to them in that Act. There is no dispute that the partnership deed executed and subsisting in between the parties constitutes an agreement enforceable by law and, therefore, within the meaning of Section 2(g) of the Contract Act, 1977 is a contract between the parties. 11. Now, it is admitted by the plaintiff-respondents that they are partners of the firm and so are the defendants. It is not their case that their names are shown in the Register of Firms as partners of the firm. It is rather the admitted case that the firm is not registered. From the pleadings as quoted hereinabove, it also becomes axiomatic that, apart from seeking partition of their immovable properties by metes and bounds, they are seeking their share in the partnership business in terms of the partnership deed dated 22.09.2006 which, as said above, is a contract existing between them. Essentially, therefore, they, as partners of the firm, are seeking to enforce a right arising from the contract against the defendants who are also partners of the firm. 12. The effect of non-registration of the firm in terms of Sub-section 1 of Section 69 of the Partnership Act, as quoted above, is that no suit to enforce a right arising from a contract 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. The provision of Section 69 of the Partnership Act thus creates a bar against institution of a suit. That means institution of the suit in the aforesaid circumstances is barred. 13. The provision of Section 69 of the Partnership Act thus creates a bar against institution of a suit. That means institution of the suit in the aforesaid circumstances is barred. 13. O. VII, R. 11(d) of CPC mandates that where the suit appears from the statement in the plaint to be barred by any law, the plaint shall be rejected. It is settled law that the provision is mandatory in nature. As seen above, the pleadings made in the suit make it ex-facie that the suit, seeking enforcement of the rights arising from the contract of partnership is barred by Section 69 of the Partnership Act, in terms of the mandate of O. VII, R. 11(d) of CPC, the plaint had to be rejected. Reference in this connection may be made to the judgment of the Supreme court in Loonkaran Sethia v. Ivan E. John (supra) cited by Mr. Haqani, learned counsel for the petitioners where, in paragraph 21 of the judgement, it was held that a bare glance at the section 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. And thus the suit was clearly hit by Section 69 of the Partnership Act and was not maintainable. 14. The learned trial court in the instant case has rejected the application filed by the petitioners under O. VII, R. 11(d) of CPC on the ground that since the suit is for partition of ancestral properties, Section 69 of the Partnership Act is not attracted. However, the trial court has not considered the fact that plaintiffs have also sought partition of the partnership business and have made specific prayer in that regard, which is quoted hereunder: "Further a decree be passed for partition of 3 residential houses shown at mark A, B and C in site plan amongst the plaintiffs and defendant 1 to 5 as per the Shariat applicable to the parties. 80% share out of the business enterprises comprising of saw mill and timber sale depot to the plaintiff No. 3. 80% share out of the business enterprises comprising of saw mill and timber sale depot to the plaintiff No. 3. 20% of remaining share out of the business enterprises as stated hereinabove to plaintiff No. 1 & 2 and defendant No. 1 and 2 as per the law of Shariat applicable to the parties which share is already drawn in the Deed of Partnership dated 12th of September, 2006." 15. The judgment in Haldiran Bhujiawala v. Anand Kumar Deepak Kumar (supra), cited and relied upon by the learned counsel for the respondent-plaintiffs, is not applicable to the facts of the present case, since in that case the Supreme Court was considering the meaning of the words "arising from a contract" occurring in Section 69(2) of the Indian Partnership Act in relation to the suit instituted against any third party. It was held there that the purpose behind Section 69(2) was to impose a disability on the unregistered firm or its partner to enforce rights arising out of contracts entered into by the plaintiff firm with third party defendant in the course of the firm's business transactions. The Supreme Court further held as under: "The real crux of the question is that the legislature when it used the words 'arising out of a contract' in Section 69(2), it is referring to a contract entered into in course of business transactions by the unregistered plaintiff firm with its customers defendants and the idea is to protect those in commerce who deal with such a partnership firm in business. Such third parties who deal with the partners ought to be enabled to know what the names of the partners of the firm are before they deal with them in business." Additionally, therein, it was held that the suit is not barred by Section 69(2) if a statutory right or a common law right is being enforced. 16. In the instant case, it is reiterated that the plaintiffs are seeking partition of partnership business by metes and bounds and decree for their shares in the business enterprise as per the contract of partnership deed subsisting between the parties. Strictly speaking, a partnership business cannot be partitioned by metes and bounds. 17. 16. In the instant case, it is reiterated that the plaintiffs are seeking partition of partnership business by metes and bounds and decree for their shares in the business enterprise as per the contract of partnership deed subsisting between the parties. Strictly speaking, a partnership business cannot be partitioned by metes and bounds. 17. In light of the above, I am of the considered view that in the instant case the suit filed by the plaintiff-respondents is hit by the provision of Section 69 of the Partnership Act. Consequently, the trial court has erred in rejecting the application filed by the petitioner-defendants under O. VII, R. 11 CPC. 18. This revision petition is, accordingly, allowed. The order impugned dated 26.06.2014 passed by the learned trial court is set aside. Since this court has already held that the suit is hit by the Section 69 of the Partnership Act, it would be futile to ask the learned trial court to pass fresh orders on the application; instead the application shall be deemed to be governed by this decision. However, the learned trial court would pass the necessary follow up orders in the suit pending before it keeping in view what has been observed and held hereinabove. 19. The trial court records shall be sent down forthwith. The parties are directed to appear before the trial court on 30.05.2015. In the facts and circumstances of the case, the parties shall bear their respective costs.