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Revappa Nandappa Hattarki Vs. Babu Sidappa Erandole - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberFirst Appeal No. 111 of 1936
Judge
Reported inAIR1939Bom61; (1938)40BOMLR1275
AppellantRevappa Nandappa Hattarki
RespondentBabu Sidappa Erandole
DispositionAppeal allowed
Excerpt:
indian partnership act (ix of 1932), sections 69, 74-suit by unregistered firm-suit to enforce right accruing before, but filed after, operation of section 69-whether suit maintainable without registration certificate-interpretation of statutes.;section 74 of the indian partnership act, 1932, takes out of the operation of section 69 of the act a suit to enforce a right which had accrued before section 69 came into operation, although the suit was filed after the section came into operation.;therefore, where an unregistered firm sued, after section 69 of the indian partnership act came into operation, to enforce a right which had accrued to them before the date on which that section came into force :-;that section 74 of the act saved the bar provided by section 69 and the suit could lie..........1933, that is two days before this suit was filed. section 69, sub-section (2), provides that :-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.4. now the plaintiffs at the time when the suit was filed were an unregistered firm. they have been registered since, but if section 69 stood alone, there can be no doubt that the plaintiffs were not entitled to institute the suit. there are in section 69 provisions excluding its operation in certain cases, but the present case does not fall within any of those exceptions.5. the argument, however, of the appellants is that the bar imposed.....
Judgment:

John Beaumont, Kt., C.J.

1. This appeal raises a question of law which has given rise to some difference of opinion amongst the High Courts in India.

2. The plaintiffs were entitled to a simple mortgage made in the year 1926, and in this suit, which was filed on October 3, 1933, they sought to enforce that mortgage by an order for sale of the property and for repayment of any deficiency arising on the sale.

3. The trial Court held that the suit was not maintainable, having regard to Section 69 of the Indian Partnership Act. The Indian Partnership Act came into operation on October 1, 1932, but by virtue of Section 1, Sub-section (3), Section 69 of the Act: only came into force on October 1, 1933, that is two days before this suit was filed. Section 69, Sub-section (2), provides that :-

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.

4. Now the plaintiffs at the time when the suit was filed were an unregistered firm. They have been registered since, but if Section 69 stood alone, there can be no doubt that the plaintiffs were not entitled to institute the suit. There are in Section 69 provisions excluding its operation in certain cases, but the present case does not fall within any of those exceptions.

5. The argument, however, of the appellants is that the bar imposed by Section 69 does not apply to a suit to enforce a right accrued before the Act came into operation, by virtue of Section 74 of the Act. Section 74 provides, so far as is relevant, that :-

Nothing in this Act or any repeal effected thereby shall affect or be deemed to affect-

(a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or

(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or anything done or suffered before the commencement of this Act, or

(c) anything done or suffered before the commencement of this Act.

6. Now to my mind the language of Section 74, which operates upon the whole Act and not merely upon Section 69, admits of no doubt. The Act is not to affect any right already acquired before the commencement of the Act. That is the effect of Sub-clause (a), and it saves from the operation of the Act the right which the plaintiffs had to enforce their mortgage, such right having accrued before the Act came into operation. Then Sub-clause (b) saves any legal proceeding or remedy in respect of any such right; which must mean any right already acquired, and falling within Sub-clause (a). The words 'or anything done or suffered before the commencement of the Act' in Sub-clause (b) seem to me to be governed by the previous words ' any legal proceeding or remedy in respect of any such right ', and I think those words apply to legal proceedings to enforce any subsisting rights which are saved by Sub-clause (c) of the section. Section 74, Sub-clauses (a) and (c), save existing rights, and Sub-clause (b) saves any legal proceeding or remedy in respect of any such rights. That seems to me to be the plain meaning of the section. However, that view has not prevailed with some of the High Courts.

7. In Surendranath De v. Manohar De I.L.R. (1934) Cal. 213, which the learned Judge in the lower Court followed, a division bench of the Calcutta High Court held that Section 74 did not take out of the operation of Section 69 a suit to enforce a right accrued before Section 69 came into operation. The Court took the view that inasmuch as the legislature had postponed the operation of Section 69 for a year they must have intended the section to have retrospective effect when it came into operation. I agree that one may feel a doubt as to whether the legislature really intended Section 74 to operate to save a suit which was barred by Section 69. It certainly looks as if the legislature had intended to give unregistered firms one year in which to effect registration, and one would have expected that if they did not avail themselves of the opportunity given to them they would have to suffer the consequences. But in my opinion where the words of a section in a statute are plain, the Court must give effect to them, and is not justified in; depriving the words of their only proper meaning in order to give effect to some intention which the Court imputes to the legislature from other provisions of the Act. Such a course can only be justified where a literal construction of the section is inconsistent with the meaning of the statute as a whole, and in my opinion no such case exists here.

8. The matter then came before Sir Shah Sulaiman C.J. and Mr. Justice Bennet in the Allahabad High Court-[Danmal Parshotamdas v. Baburam Chhotelal I.L.R. (1935) All. 495] in a revision application, and the Court refused to interfere in revision with the order of the lower Court, holding that the suit was barred under Section 69. But the learned Judges took different views as to the true construction of Section 74. The learned Chief Justice took the same view of the section as I do, namely, that the language of Section 74 is plain and saves a suit which would otherwise be barred by Section 69. Mr. Justice Bennet took the contrary view and followed the Calcutta case to which I have referred. I must confess that I have very great difficulty in appreciating the view of Mr. Justice Bennet that the whole of Section 74 deals only with subsisting rights and not with procedure. It seems to me that Section 74, Clause (b), deals with procedure and nothing else, that is to say, it deals with methods of enforcing rights and not with the rights themselves.

9. The matter then came before a full bench of the Rangoon High Court, Soonoiram v. Junjilal AIR [1938] Ran. 273.. The full bench in that case took the same view of Section 74 as I do. They held that the language was perfectly plain and that the Court was not justified in departing from the natural meaning of the words which the legislature had used, and they differed from the case of Surendranath De v. Manohar De and agreed with the reasoning of Sir Shah Sulaiman C.J. in the Allahabad case. I see no answer to the judgment of the learned Judges of the High Court of Rangoon in that case.

10. In Krishan Lal-Ram Lal v. Abdul Ghafur Khan I.L.R. (1935) Lah. 275 a division bench followed Surendranath De v. Manohar De but the case is really distinguishable on the facts because the cause of action arose after Section 69 came into operation, so that there was no question of saving an existing right.

11. The matter has also been considered in the Madras High Court. The most recent ruling is S. Girdharilal Son & Co. v. K. Gowder AIR [1938] Mad. 688, when the question came before a division bench and the learned Judges differed and referred the matter to a third Judge. He took the view that Section 74 saved a suit which would otherwise have been barred by Section 69. So that two Judges out of three took the same view of Section 74 as I do, and the actual decision is in that sense.

12. For the reasons which I have given, I am of opinion that this suit is not barred by Section 69 of the Indian Partnership Act. We must, therefore, allow the appeal with costs, and remand the case to the lower Court to be tried on merits.

Sen, J.

13. I agree.


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