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Paras Ram Harnand Rai Vs. Om Parkash - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberRegular Second Appeal No. 148 of 1981
Judge
Reported in28(1985)DLT301
ActsPartnership Act, 1932 - Sections 69(2)
AppellantParas Ram Harnand Rai
RespondentOm Parkash
Advocates: N.R. Suri and; N.K. Jaggi, Advs
Cases ReferredG.K. Gelimath v. S.H. Vanechand and Co.
Excerpt:
property - possession - section 69 (2) of partnership act, 1932 - dismissal of suit brought by firm challenged - name of one partner not shown in register of firm on date of institution of suit - suit barred under section 69 (2) - held, dismissal of suit justified. - - the respondent failed to perform the puja in the temple honestly and faithfully......granted to a licensee under a license, thereforee, flows from the contract of license. thus the suit filed by the appellant was a suit filed by the partnership firm to enforce a right arising out of a contract. (18) such a suit. section 69(2) of the partnership act says, cannot be instituted unless the firm is registered and the persons suing are or have been shown in the register of firms as partners of the firm. (19) it is not disputed that the appellant firm was duly registered. the dispute is whether all the persons suing are or have been shown in the register of firm as partners in the plaintiff firm. (20) the firm is not a legal entity but is only a collective and compendious name of all the partners. suit filed by or on behalf of the firm, would in effect be a suit by or on.....
Judgment:

G.C. Jain, J.

(1) On December 12, 1967 the appellant, Firm M/s Paras Ram Harnand Rai, brought a suit seeking a decree for mandatory injunction directing the respondent 0m Prakash not to enter the temple and quarter, part of property No. 7796, Katra Dina Nath, Goenka Road, Subzimandi, Delhi, consisting of several residential quarters and a private temple and put the appellant in possession of the same. It was averred that the appellant was the owner of the property in suit. The respondent had been permitted to perform daily Puja in the temple as a licensee. For discharging the said duties he had been allowed to reside in quarter, private No. 11, as a licensee. The respondent failed to perform the Puja in the temple honestly and faithfully. His license was terminated and he was asked not to enter the said temple and the quarter, but he had refused to comply the said demand.

(2) The suit was contested by the respondent on various pleas. The main contentions raised were : (1) the appellant firm was not the owner of the property in suit ; (2) the temple is a debutter property ; (3) Mata Pershad, father of the respondent had been appointed she bait which office was heritable ; (4) the quarter in suit had been gifted to Mata Pershad and on his death the respondent became its owner ; (5) the suit was not properly valued for purposes of court fee and jurisdiction ; and (6) the appellant firm was not a duly registered firm under the Partnership Act and the suit had not been filed by the registered partner.

(3) By an order dated October 28, 1969 the learned Subordinate Judge while deciding the issue regarding valuation of the suit as a preliminary issue, came to the conclusion that in reality the appellant was seeking the possession of the property in suit and the suit was thereforee, not properly valued for purposes of court fee and jurisdiction. The appellant was directed to claim the relief for possession by amending the plaint. The appellant consequently amended the plaint and sought a decree for possession of the suit property.

(4) The parties thereafter produced evidence. Issue regarding valuation for purposes of court fee and jurisdiction was decided in favor of the appellant on September 24, 1976. On May 25, 1977 after hearing the arguments in the case. Learned Subordinate Judge directed that issue No. 2 ('Whether the plaintiff firm is a registered firm and the suit had been filed by one of its registered partners'?) would be decided first.

(5) The trial court held that the appellant firm was duly registered under the Partnership Act on May 29, 1946 with five partners-Sat Narain Goenka, Durga Prasad Goenka, Rajendra Kumar Goenka, Suraj Narain and Prem Narain. The last two were minors and had been admitted to the benefits of partnership only. A change in the constitution of the firm was entered on September 23, 1953. According to this entry Suraj Narain, who was minor in 1946, became major and elected to became a full fledged partner. There was another change in the constitution recorded on February 10, 1954. According to this entry the firm had only three partners,- Satnarain Goenka, Durga, Prasad Goenka and Suraj narain Goenka. It was further held that Sat Narain Goenka died on March 13, 1966 and on his death his son Gopal Narain was taken as a partner of the appellant firm. His name, however had not been shown in the register of the firm and consequently the suit was barred under Section 69(2) of the Partnership Act. With these findings the suit was dismissed on June 4, 1977.

(6) The appeal filed by the appellant against the said order was dismissed by the learned Addl. District Judge on April 20, 1981.

(7) Feeling aggrieved the appellant had filed this second appeal.

(8) Sub section (2) of Section 69 of the Partnership Act reads as under :

'69(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) To attract the bar under Section 69(2) two conditions must exist, namely (i)the suit must have been filed by or on behalf of the firm and (ii) the suit must be to enforce a right arising from a contract.

(10) That the suit had been filed by a partnership firm was not disputed. The plaintiff in the plaint has been described as 'the firm M/s Paras Ram Harnand Rai (registered under the Indian Partnership Act......' This description itself proves that the suit had been filed by the partnership firm.

(11) Mr. Suri, learned counsel appearing for the appellant, vehemently contended that the respondent was a licensee. On revocation of his license he became a trespasser and the suit was, thereforee, a suit for possession against a trespasser and not a suit to enforce a right arising out of a contract.

(12) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. When the person to whom the proposal is made signifies his assent thereto the proposal is said to be accepted. A proposal when accepted becomes a promise. Every promise and every set of promises, forming the consideration for each other is an agreement. The agreement enforceable by law is a contract. (See clauses (a), (b), (e) and (h) of Section 2 of the Indian Contract Act).

(13) The first requisite of a contract as per its definition given in clause (h) of Section 2 of the Indian Contract Act is that the party should have reached agreement. An agreement is made when one party accepts an offer made by the other. The second requisite is that the agreement must be enforceable by law.

(14) The case set out by the appellant in the plaint is that the respondent had been permitted by the appellant, the owner, to perform daily puja in the temple in dispute as a licensee and for that purpose he had been allowed to reside in the quarter in suit as a licensee. The possession of the respondent was that of a licensee. On revocation of his license his possession became unlawful and unauthorised. In other words the respondent on revocation of his license, was under an obligation to restore back the possession to the appellant. The appellant had correlative right to get back the possession.

(15) Whether such a right arises from a contract This question, in my view, depends on the nature of the right and obligation created by a license.

(16) Section 52 of the Indian Easements Act, 1882 defines license'. It reads :

'LICENSE' Defines-where one person grants to another, or to a definite number of other persons, a right to do, 'or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.'

(17) It is clear from this definition that every license is based on an agreement between two persons one who grants the right, that is the licensor, and the other, to whom the right is granted, that is the licensee. The right granted by a license can come into existence only when one party makes an offer which is accepted by the other. In other words the parties must make an agreement before a license can be granted. Sued an agreement would be lawful. During the existence of the license the right granted under the license is enforceable by law. The relationship of licensor and licensee is, thereforee, essentially one of contract. Such a contract imposes a liability on the grantor to allow the grantee to do or continue to do in or upon the immoveable property of the grantor, something which would in the absence of such right, be unlawful. It imposes a corresponding duty on the licensee to stop exercising that right or to deliver back the possession granted to him under the license on the revocation of the same. The right to get back the possession granted to a licensee under a license, thereforee, flows from the contract of license. Thus the suit filed by the appellant was a suit filed by the partnership firm to enforce a right arising out of a contract.

(18) Such a suit. Section 69(2) of the Partnership Act says, cannot be instituted unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners of the firm.

(19) It is not disputed that the appellant firm was duly registered. The dispute is whether all the persons suing are or have been shown in the Register of Firm as partners in the plaintiff firm.

(20) The firm is not a legal entity but is only a collective and compendious name of all the partners. Suit filed by or on behalf of the firm, would in effect be a suit by or on behalf of all the partners of the firm. This suit filed by all appellant, thereforee, was a suit filed by all the partners who were its partners on the date of the suit. All the partners of the plaintiff firm on the date of the filing of the suit, would be the 'persons suing'

(21) Mr. Suri contended that the expression 'persons suing' in Section 69(2) of the Partnership Act, means the persons who were partners of the firm on the date of the accrual of cause of action. He relied on a Division Bench decision of the Mysore High Court in G.K. Gelimath v. S.H. Vanechand and Co. AIR 1972 Mys 209

(22) The decision of the Mysore High Court, no doubt, supports the contention of the learned counsel for the appellant. This judgment, however, was considered by a Division Bench of this court in M/s. Shankar Housing Corporations. Smt. Mohan Devi and others : AIR1978Delhi255 and was dissented. Following the Division Bench decision of this Court, I hold that the expression 'persons suing' used in Section 69(2) means all the persons who were partners of the appellant firm on the date of the filing of the suit.

(23) It has not been disputed that on February 10, 1954 Sat Narain, Durga Prasad and Suraj Narain were the partners of the plaintiff firm. It is also clear from the entries in Ex. Public Witness 5/1. Gopal Narain as PW-7, admitted that on the death of his father Sat Narain he became a partner. Sat Narain, as admitted in para 3 of the plaint, died on March 13,1966. Thus on December 12, 1967, when the suit was filed, Durga Prasad Goenka, Suraj Narain Goenka and Gopal Narain Goenka, were its partners. The name of Gopal Narain, admittedly, has not been shown in the Register of Firm, as partner and, thereforee, the suit was barred under Section 69(2) of the Partnership Act.

(24) Mr. Suri referred me to clause (a) of sub-Section (3) of Section 69 of the Partnership Act. Those provisions do not help him at all. The exception contained in clause (a) Sub-section 3 applies to a suit for dissolution of a firm or for accounts of a dissolved firm or for any right or power to realise the property of the dissolved firm. The appellant firm is not a dissolved firm. The suit is not a suit for accounts or for dissolution and, thereforee these provisions are not attracted.

(25) Mr. Suri also urged that the learned Sub-ordinate Judge should have decided all the issues when he had recorded that entire evidence of the parties. However nothing turns on this contention so far as the decision of issue No. 2 is concerned.

(26) In conclusion I find no merit in this appeal and dismiss the same. Parties are, however, left to bear their own costs.


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