Skip to content


Shah Velji Narsee Vs. Vasantrai Umiyashankar Pandya and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Civil
CourtMumbai High Court
Decided On
Case NumberSecond Appeal No. 115 of 1990
Judge
Reported in2003(4)ALLMR1054; 2004(2)BomCR352; 2003(3)MhLj979
ActsPartnership Act, 1932 - Sections 69(2); Code of Civil Procedure (CPC) - Order 30, Rule 1
AppellantShah Velji Narsee
RespondentVasantrai Umiyashankar Pandya and anr.
Appellant AdvocatePriya Sharma, Adv. holding for ;Anjan De, Adv.
Respondent AdvocateN.R. Saboo, Adv.
DispositionAppeal dismissed
Excerpt:
.....more partner - name of the new partner not shown in the register of firms - provision mandatory - suit by partnership firm not maintainable.;from perusal of the sub-section (2) of section 69 of the indian partnership act, it is clear that the said provision is mandatory in asmuchas it is mandate given by the said section that no suit to enforce a right arising from a contract shall be instituted in any court and it further states that not only the firm should be registered but the persons who are or have been shown in the register of firms as partners in the firm.;neither section 69 of the partnership act nor sub-section (4) of the said act lay down any exception to the said sub-section by stating therein that in case of an application being made to the register, the bar of sub-section..........returned to the plaintiff for presentation to the proper court. it was further contended that the suit firm was not registered under the provisions of indian partnership act and, therefore, the suit was not maintainable. they further denied that they had placed any order with the plaintiff on telephone in the month of october 1981. the trial court framed the issues which are as follows : (1) whether this court has jurisdiction to entertain this suit? (2) does the plaintiff prove that it is a registered partnership firm under the indian partnership act? (3) does the plaintiff further prove that defendant has placed the order on telephone in the month of october 1981 for supply of goods (4) does the plaintiff prove that the defendant committed breach of contract? (5) does plaintiff.....
Judgment:

V.M. Kanade, J.

1. This Second Appeal has been filed by the original plaintiff challenging the Judgment and Order passed by the 5th Additional District Judge, Amravati, who had confirmed the Judgment and Decree passed by the 4th Joint Civil Judge, Junior Division, Amravati, who had dismissed the suit with costs.

2. Brief facts are as follows :

The plaintiff is a registered partnership firm duly registered under the Partnership Act and was carrying on business of manufacturing Kumkum, Gulal, Lobhan etc. and was having its place of business at Amravati. In the month of October 1981, the defendants placed three orders on telephone with the plaintiff for supply of goods on credit. As per the said orders, the plaintiff dispatched the required goods to the defendant vide motor transport receipt Nos. 130012 dated 16th October, 1981, 130022 dated 21st October 1981 and 130029 dated 22nd October, 1981 through Ghatge and Patil Transport Private Limited, along with the motor receipts the credit bill dated 17th October 1981, 21st October 1981 and 22nd October 1981 were also transmitted to the defendant. It was the case of the plaintiff that though the goods had reached at Bombay, the defendants did not accept the delivery of the goods and also did not pay freight charges which were payable by them. As a result the goods were lying with the transport carrier and, thereafter, the plaintiff requested the defendant to take delivery of the goods. However, the defendants failed to comply with the plaintiffs request and, therefore, it was the contention of the plaintiff that the defendants had committed breach of contract. It is the case of the plaintiff that as a result they suffered a loss and, therefore, plaintiff filed a suit seeking to recover the damages plus interest and notice charges, in all totalling to Rs. 3,423.15 ps. and claimed future interest at the rate of 18 per cent per annum from the date of suit till recovery.

3. The defendants were served and they filed their written statement and they contended that the Amravati Court had no jurisdiction to decide and entertain the present suit as no cause of action had arisen within the jurisdiction of the Court and, therefore, requested the plaint may be returned to the plaintiff for presentation to the proper Court. It was further contended that the suit firm was not registered under the provisions of Indian Partnership Act and, therefore, the suit was not maintainable. They further denied that they had placed any order with the plaintiff on telephone in the month of October 1981. The Trial Court framed the issues which are as follows :

(1) Whether this Court has jurisdiction to entertain this suit?

(2) Does the plaintiff prove that it is a registered partnership firm under the Indian Partnership Act?

(3) Does the plaintiff further prove that defendant has placed the order on telephone in the month of October 1981 for supply of goods

(4) Does the plaintiff prove that the defendant committed breach of contract?

(5) Does plaintiff prove that he is entitled to claim Rs. 2,271.50 from the defendant along with interest at the rate of Rs. 18 per cent per annum on the said amount from 1st November, 1981?

(6) What order and decree?

4. The trial Court held that the Court did not have jurisdiction to entertain the suit and so far as the second issue regarding registration of partnership was concerned, it held that the firm was registered, however, the names of all the partners were not registered. The trial Court did not record any finding in respect of issue Nos. 3, 4 and 5.

5. The plaintiff being aggrieved by the said Judgment and order, preferred an appeal, before the District Court being Regular Civil Appeal No. 469 of 1985. The appellate Court confirmed the Judgment and Order of the trial Court and had recorded the finding that the suit was not maintainable. The appellate Court also further held that the Court of Amravati did not have jurisdiction to entertain the plaintiffs suit. After taking into consideration the legal submissions made by the respondents and also after examining the evidence on record the said finding was given.

6. Being aggrieved by the said concurrent finding given by both the Courts below, the appellant has preferred the Second Appeal. The Second Appeal was admitted on 4-4-1990 on ground in paras 6 and 7 of the appeal memo.

7. I have heard Miss Priya Sharma, the learned counsel holding for Shri Anjan De, learned counsel, appearing on behalf of the appellant at length. Miss. Priya Sharma, the learned counsel appearing on behalf of the appellant, has taken me through the Judgment and Order of the appellate Court as well as the trial Court. The first contention raised by the learned counsel appearing on behalf of the appellant is that both the Courts below have committed an error of law in not giving finding on merits of the matter. She submitted that the trial Court did not give any finding in respect of the other issues. She further submitted that the appellate Court though it had proceeded to dismiss the suit on the ground of want of jurisdiction, it had at the same time given finding on merits in respect of the transaction which had taken place at that time. She further submitted that both the Courts below had erred in coming to the conclusion that the suit was not maintainable, in view of the specific bar as provided in Section 69 Sub-clause (2) of the Indian Partnership Act. She further submitted that, in fact, the plea in respect of Section 69 was not specifically raised in the written statement and as such the trial Court had erred in framing a issue in respect of the said provision. She submitted that the court could not suo motu raise this contention and decide the same. She further submitted that since respondents had not filed any application under Order 30 of the Code of Civil Procedure, the suit could not be dismissed, under Section 69 of Partnership Act since the respondent had not sought the names of all the partners. She further submitted that since the suit was filed through one of the partner and that the plaintiff-firm was duly represented, the question of suit being not maintainable did not arise.

8. In support of her contention, she has relied on various judgments reported in : AIR1971AP63 , M. J. Velu Mudaliar and Anr. v. Sri Venkateshwara Finance Corporation and Ors., : [1976]3SCR1022 , Mohatla Brothers v. The Bharat Suryodaya Mills Co. Ltd., Ahmedabad, : AIR1984Mad47 , N.A. Munavar Hussain Sahib and Anr. v. E. R. Narayanan and Ors. on the point of jurisdiction. She has further relied on judgments reported in : AIR1981All112 , Kailash Chandra Agarwal v. Subhash Chand Satish Chand. Viyopari and Ors., and : AIR1984Cal412 , Trustees for Improvement of Calcutta v. Bahadur Khan and Ors.. She had further relied on provision of Section 23 of the Sale of Goods Act in order to submit that Amravati Court had jurisdiction to try and entertain the suit. She submitted that if the Court had come to the conclusion that the suit is not maintainable, the proper course of action was to return the plaint for presentation in the proper Court. She submitted that this fact was not taken for the consideration of both the courts below.

9. Heard Shri N.R. Saboo, the learned counsel appearing on behalf of the respondents. He has taken me through the findings which are recorded by both the Courts below and submitted that there was a concurrent finding given by both the Courts in respect of the jurisdiction of the Amravati Court, in respect of the maintainability of the suit at Amravati Court, as also the finding recorded by both the courts below in respect of the maintainability of the suit in view of the specific bar of Section 69(2) of the Partnership Act. He submitted that under these circumstances this Court should not interfere with the concurrent finding recorded by both the courts below.

10. The substantial questions of law which fall for my consideration in this case are four fold :

(1) whether non registration of the name of a minor would be hit by the bar of maintainability of suit, as laid down under Section 69(2) of the Partnership Act ,

(2) whether in the absence of any application by the respondents to seek the name of all the partners would entail in the suit being maintainable in spite of the specific bar under Section 69 of the Partnership Act.?

(3) where the issue of jurisdiction of maintainability of the suit at Amravati could be decided without taking into consideration the question of transfer of property in the goods under the Sale of Goods Act and lastly,

(4) whether the Trial Court could dismiss the suit on the ground that it had no territorial jurisdiction to decide the suit though a specific provision is incorporated under the Code of Civil Procedure under Order 7, Rule 11, for return of the plaint for presentation to the proper Court.

11. In the present case, the plaintiff has come out with the specific case that the defendants had placed three orders on telephone with the plaintiff-firm for supply of goods on credit to them and according to the plaintiff, the goods were sent through Ghatge and Patil Transport Private Limited on three dates. However, the delivery was not accepted and the freight charges were not paid by them. The defendants have specifically denied that they had placed the orders on telephone. Their case is that they had placed orders with the plaintiffs local agent at Bombay for supply of goods prior to Deepavali. However, the defendants did not send the goods within time. However, they had refused to accept the delivery. In the trial Court, the plaintiff examined only one witness in support of his case and the defendants also examined one witness in support of their defence. The plaintiff in support of its case placed reliance on Exh. 17, 18 and 19 and pointed out on the basis of these documents that the goods were delivered to the Transport Carrier at Amravati and, therefore, in taw the goods were delivered to the respondents-defendants at Amravati.

12. So far as question regarding expressed bar as provided by Section 69(2) of the Partnership Act is concerned, the Trial Court framed the following issue : Does the plaintiff prove that it is a registered partnership firm under the Indian Partnership Act?

The trial Court has recorded the finding that the firm is registered but the names of all the partners have not been registered. It is an admitted position that Ku. Shaila was admitted as a partner of the suit firm on 22nd September 1979, however, her name was registered as a partner of the suit firm on 15th July 1985. Thus, it is an admitted position that on the date of filing of the suit which was filed on 17th August, 1983, the name of Ku. Shaila Bhavanji Shah was not registered as a partner of the suit firm. Section 69 of the Indian Partnership Act, 1932 along with Maharashtra amendment reads as follows :

'Section 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 a 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. Provided that the requirement of registration of firm under this sub-section shall not apply to the suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts of the firm or to realise the property of 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.

(2A) No suit to enforce any right for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm 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 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 :

Provided that the requirement of registration of firm under this subsection shall not apply to the suits or proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts of a dissolved firm or to realise the property of a dissolved firm. (3) The provisions of Sub-sections (1) (2) and (2A) shall apply also to a claim of set-off or other proceedings to enforce a right arising from a contract, but shall not affect, --

(a) the firms constituted for a duration upto six months or with a capital upto two thousand rupees; or

(b) the powers of an official assigned, receiver or Court under the Presidency Towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner.

(4) This section shall not apply,--

(a) to firms or partners in firms which have no place of business in (the territories to which this Act extends), or whose places of business in (the said territories) 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 one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in Section 19 of the Presidency Small Cause Courts Act, 1882, or outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim.'

13. From perusal of the Sub-section (2) of Section 69 of the Indian Partnership Act, it is clear that the said provision is mandatory inasmuch as it is mandate given by the said section that no suit to enforce a right arising from a contract shall be instituted in any court and it further states that not only the firm should be registered but the persons who are or have been shown in the Register of Firms as partners in the firm.

14. In the present case, it is an admitted position that one of the partner has not been shown in the Register of Firms as partners. Sub-clause (4) of Section 69 of the Indian Partnership Act lay down two exceptions to said rule. The Sub-clause (4), therefore, clearly stipulates that the provision of the said section would not be applicable in respect of certain territories or the suit or claim of set off is not of a kind specified in Section 19 of the Presidency Small Cause Courts Act, or, outside the Presidency-towns or specified in the Second Schedule to the Provincial Small Cause Courts Act. None of these exemptions are applicable to the facts of the present case.

15. The trial Court has relied on two judgments reported in AIR 1978 Raj 35 as well as the judgment reported in the case of Bharat Suryodaya Mills Co. Ltd., Ahmedabad v. Mohatla Brothers, a Firm, : AIR1969Guj178 . The appellate Court relied on judgment of the Apex Court reported in the case of Shreeram Finance Corporation v. Yasin Khan and Ors., reported in 1959 Mh.L.J 849. It was strenuously urged by the learned counsel appearing on behalf of the appellant that in the present case both the Courts below have not taken into consideration an important factor and that the necessary application and intimation of admission of Ku. Shaila was given to the Register (sic: Registrar) of Firms on 22nd September, 1979 for making necessary changes but the register of firms did not show the name of Ku. Shaila in the register of firms up to July 1985. She, therefore, pointed out that it was not the fault of the plaintiff. The Apex Court in the case of Shreeram Finance Corporation v. Yasin Khan and Ors., reported in 1989 Mh.LJ. 849 held that the persons, namely, the current partners as on the date of the suit were not shown as partners in the Register of Firms and, therefore, the suit was not maintainable in view of the provisions of Sub-section (2) of Section 69 of the Partnership Act. In the said case, the Apex Court held that although the plaint was amended on a later date that could not save the suit. In the said case, on 1st July, 1967 there was a change in the constitution of the firm and existing partners retired and one new partner Smt. Sarita Agrawal joined as a partner of the said firm and two minors were admitted to the benefits of the said partnership firm. The notice regarding the change in the Constitution of the said firm was given to the Register (sic: Registrar) of Firms on August 28, 1968 and no notice had been given to the Register (sic: Registrar) of Firms in respect of these changes was made and the notice was subsequently given and the change was noted on November 19, 1968. The Apex Court, however, held that the suit was hit by the bar of Sub-section (2) of Section 69 of the Partnership Act.

16. Miss Priya Sharma, learned counsel appearing on behalf of the appellant, tried to distinguish the said judgment by pointing out that in the instant case the plaintiff had given notice on the same date to the Register (sic: Registrar). However, the Register had not effected the change and, therefore, no fault could be attributed to the plaintiff. I am unable to accept the submission made by the learned counsel appearing on behalf of the appellant. Neither Section 69 of the Partnership Act nor Sub-section (4) of the said Act lay down any exception to the said sub-section by stating therein that in case of an application being made to the Register (sic: Registrar), the bar of Sub-section (2) is diluted.

17. It will be profitable to examine the observations made in the case of Bharat Suryodaya Mills Co. Ltd., Ahmedabad v. Mohatla Brothers a Firm, : AIR1969Guj178 . In the said judgment, the scope of Order 30 vis-a-vis Section 69(2) of the Partnership Act is also discussed. In para 6, after considering various rules under Order 30 of the Code of Civil Procedure, the Court has held as follows :

'...... From these provisions of Order 30, it is clear that it enables the suit to be brought by the partners or against the partners in the name of their firm. A suit brought in the firm name is really one by persons who were partners at the time of accrual of the cause of action......'

Further it has been held in para 7 as follows :

'.......Therefore, there would be no rhyme or reason for the Legislature to provide two different conditions when the suit is by a firm or when the suit is by individual partners merely, because for the sake of convenience in filing a suit a different procedure was laid down in Order 30 to enable a firm to bring a suit in the Firm name. Therefore, on a plain literal construction we must hold that in both the cases where the suit is by a firm or on behalf of the firm both of these mandatory conditions must be cumulative conditions....'

18. In view of the said discussion, I am of the view that the second mandatory condition under Section 69(2) of the Partnership Act is not fulfilled in the present case and the name of Ku. Shaila who was a partner of the reconstituted firm and in whose favour the cause of action accrued was not shown in the register of firms. This defect, according to me, is fatal and therefore, both the Courts have rightly held that the said mandatory requirement has not been fulfilled and, therefore, the suit is not maintainable.

19. The submission made by the learned counsel appearing on behalf of the appellant that by virtue of provisions of Order 30, Civil Procedure Code such a suit could be proceeded further also cannot be accepted. Order 30 of the Civil Procedure Code prescribes the procedure for the purpose of filing a suit in the name of the firm. However, the said procedure and requirement cannot alter the mandatory substantive requirement as laid down under Section 69(2) of the Partnership Act.

20. In the written statement in para 2, it has been stated that the defendants are not aware as to whether the plaintiff being a partnership concerned is duly registered under the Indian Partnership Act or not. The defendants have categorically taken a defence that the suit is not maintainable as the plaintiffs-firm is not registered under the provisions of Indian Partnership Act. In view of this categorical averment, it was the duty of the plaintiff to supply the names of all the partners which admittedly has not been done. In this view of the matter, the provision of Order 30, Civil Procedure Code also have not been complied and, therefore, the plaintiffs cannot take benefit of the said provision.

21. So far as the question of territorial jurisdiction is concerned, it is the case of the defendants that Amravati Court did not have jurisdiction. The appellate court has given a finding that the plaintiff has not proved that a telephonic order was placed by the defendants. The appellate court has further observed that the plaintiff has not examined the person who had actually received telephonic message from the respondents. The trial Court has held that the suit goods were booked by the defendants through the plaintiffs local salesman at Bombay. Thus, there is a concurrent finding of fact that the cause of action had arisen at Bombay and not at Amravati.

22. Miss Priya Sharma, learned counsel appearing on behalf of the appellant, relied on judgment reported in the case of Kailash Chandra Agarwal, Appellant v. Subhash Chand Satish Chand Viyopari and Ors., Respondents, : AIR1981All112 and submitted that on giving a finding that the court did not have territorial jurisdiction, the Court ought to have returned the plaint for presentation to the proper Court.

23. I am of the view that the ratio of the said judgment would not be applicable to the facts and circumstances of the case. Both the Courts below have apart from holding that the Court did not have jurisdiction to decide the suit, have further held that the suit was not maintainable on account of the specific bar as laid down in Section 69 Sub-clause (2) of the Indian Partnership Act. Once having held that the suit is not maintainable, the question of returning the plaint for presentation to the proper court, therefore, did not arise.

24. Miss Priya Sharma, learned counsel appearing on behalf of the appellant, further relied on judgment in the case of Trustees for Improvement of Calcutta v. Bahadur Khan and Ors., : AIR1984Cal412 . In the said judgment, the Court observed that after a finding was recorded that the Court had no territorial jurisdiction, the course open to the court would be not to dispose of the suit but to deal with it in terms of Order 7, Rule 10A of the Code of Civil Procedure. In my view, the ratio of the said judgment would not be applicable to the facts and circumstances of the present case.

25. Learned counsel appearing on behalf of the appellant relied on judgment of the Apex Court in the case of Mohatla Brothers v. The Bharat Suryodaya Mills Co. Ltd., Admedabad, : [1976]3SCR1022 , wherein it was held that objection as to non-compliance of Section 69(2) of the Partnership Act if it is taken but not pressed, then in that case, the suit was maintainable. The ratio of the said judgment will not be applicable to the facts of the present case though a specific objection was not raised in written statement, it was contended that the defendants were not aware whether the suit firm was registered. The said point was decided by the trial Court and the specific finding was given that by virtue of the bar of Section 69(2) of the Partnership Act, the suit was not maintainable. Further, before the appellate Court, plaintiff did not raise this specific plea either in the grounds of appeal or during the course of argument and the appellate court also has discussed provision of Section 69(2) of the Partnership Act and given a finding on that point hence the decision relied upon by appellant, will not be applicable to the facts and circumstances of the present case.

26. Learned counsel appearing on behalf of the appellant further relied on judgment of the Apex Court in the case of M/s Mohatla brothers (supra). After examining the facts of the said case, I am of the view that the ratio as laid down in the said judgment would not be applicable to the facts and circumstances of the present case.

27. The question of territorial jurisdiction is a mixed question of fact and law and, therefore, as per the provision of Order 14, Rule 2 of the Code of Civil Procedure, it was open for the Court to deal with the other issues. Order 14, Rule 2, Civil Procedure Code reads as follows :

1. Framing of issues.--(1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other.

(2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence.

(3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue.

(4) Issues are of two kinds :

(a) issues of fact,

(b) issues of law.

(5) At the first hearing of the suit the Court shall, after reading the plaint and the written statements, if any, and (after examination under Rule 2 of Order X and after hearing the parties or their pleaders), ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend.

(6) Nothing in this rule requires the Court to frame and record issues where the defendant at the first hearing of the suit makes no defence.

2. Court to pronounce judgment on all issues. -- (1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provision of Sub-rule (2), pronounce judgment on all issues.

(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to -

(a) the jurisdiction of the Court,

(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.

28. In the present case, the Court had proceeded to decide the issue of jurisdiction as also the issue regarding the bar to the suit created by any law. In this view of the matter, the Court was perfectly justified in deciding both these issues and, therefore, no error of law has been committed by the lower Courts.

29. Under the facts and circumstances of the case, there is no merit in the Second Appeal and the same is, therefore, dismissed. Under the circumstances, there shall be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //