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Firm Alwar Iron Syndicate Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 237 of 1962
Judge
Reported inAIR1970Raj86; 1969()WLN102
ActsPartnership Act, 1932 - Sections 69(2) and 69(4); Code of Civil Procedure (CPC) , 1908 - Order 30, Rule 3
AppellantFirm Alwar Iron Syndicate
RespondentUnion of India (Uoi)
Appellant Advocate J.P. Jain, Adv.
Respondent Advocate H.C. Jain, Adv.
DispositionAppeal dismissed
Cases ReferredHansraj Manot v. Gorak Natb Champalal Pandey
Excerpt:
.....last paragraph of his judgment where he has observed that if additional partners had come into the firm as partners since the date of registration and there names had not been entered in the register in accordance with notice-of a change in the constitution of the firm given to the registrar, it may well be that the firm as then constituted could not sue because although it was a registered firm some of the persons then suing would not be shown in the register of firms as partners in the firm at the date of the suit,'that judgment cannot therefore be of any avail to the plaintiff-appellant in the present case. i accept as the correct one, it must be held that in the present case the requirements of section 69(2) were fully satisfied inasmuch as the firm was registered and the name of the..........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.'the question is whether the requirements of sub-section (2) could be said to be fulfilled. on this point also, there is no dispute as regards the facts. it is the admitted case of the plaintiff that, at any rate, the names of kunj behari lal and shyam behari lal were not shown in the register of firms as partners. as such there was no compliance with the provisions of sub-section (2) of section 69 of the partnership act and the defendant is quite justified in raising its bar against the maintainability of the suit.4. there has, however, been a controversy before me on the.....
Judgment:

P.N. Shinghal, J.

1. It is not disputed that the plaintiff was a partnership firm. A consignment which is said to have been purchased by it and was deliverable at Alwar, was lost in transit, Pleading that the Western Railway was responsible for the loss, the plaintiff raised the suit against the Union of India on December 3, 1955 through Mohanlal Lohia who signed the plaint as a partner and manager of the firm. The claim was denied by the defendant and a number of issues were framed for trial. It will be sufficient to say that the trial court took the view that the names of three partners Kunj Bihari Lal, Shyam Bihari Lal and Mansingh were not included in the Register of Firms and the suit was not maintainable under Section 69(2) of the Partnership Act. On appeal, the learned District Judge took a similar view in his judgment dated December 19, 1961 and this is why the plaintiff has preferred the present second appeal.

2. The names of the partners of the plaintiff firm were not disclosed in the plaint or until the framing of the issues. An application was therefore made by the defendant under Order 30 Rule 2 C. P. C. on March 24, 1958, before the closure of the plaintiff's evidence, praying that the plaintiff may be asked to declare in writing the names and places of residence of all the persons constituting the plaintiff firm. Thereupon a detailed reply was made on April 17, 1958 stating that the firm was constituted inNovember, 1944 and was registered in April, 1950 as a partnership firm having the following partners :--

(1) Narayan Das Lohia,

(2) Ram Nath Lohia,

(3) Mohan Lal Lohia,

(4) Kanhaiya Lal Lohia,

(5) Radri Prasad and Ram Jiwan Lohia,

(6) Sampat Ram Lohia,

(7) Madan Lal Vaishya.

It was clarified that Badri Prashad withdrew before the suit transaction, while Ram Jiwan withdrew thereafter, and that while Kanhaiya Lal died before the suit transaction, Narayan Das died in September, 1955. All the same, it was further stated that 'the partnership continues with the consent of! Shri Kunj Bihari Lal and Shri Sham Bihari Lal, the sons and legal representatives of Narayan Das and Shri Mansingh son and legal representative of Kanhaiyalal'. It was declared that the 'existing' partners of the plaintiff firm were as follows:

1. Kunj Behari Lal, Shyam Behari Lal sons of Narain Dass Lohiya of Toli Ka Kua, Al-war.

2. Ram Nath Lohiya of Lohiyapari, Alwar.

3. Mohan Lal Lohiya near Town Hall, Alwar.

4. Man Singh Lohiya of Mohalla Shivpura, Alwar.

5. Madan Lal Vaishya of Lohiyapari, Alwar.

It was thus admitted that the above mentioned persons constituted the partnership 'in their personal and individual capacity . This reply of the plaintiff was important because it had a correlation with the provisions of Order 30, Rule 1 C. P. C. That rule provides that any two or more persons claiming or being liable as partners may sue or be sued in the name of the firm of which they were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, partners of such firm. It would thus appear that the disclosure having been made under Order 30 Rule 2 C. P. C. had the purpose and effect of showing the names and the places of! residence of the partners of the plaintiff firm on whose behalf the suit had been instituted, for Sub-rule (3) of Rule 2 of Order 30 C. P. C. makes it clear that where the names of the partners are declared under Sub-rule (1), the suit shall proceed in the same manner, and the same consequence in all respects shall follow, as if they had been named as plaintiffs in the plaint.

3. When such is the position as regards the names of the persons who raised the present suit, all that remains to consider is whether the defendant was entitled to raise the bar of Section 69(2) of the Partnership Act, That sub-section provides as follows:

'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.'

The question is whether the requirements of Sub-section (2) could be said to be fulfilled. On this point also, there is no dispute as regards the facts. It is the admitted case of the plaintiff that, at any rate, the names of Kunj Behari Lal and Shyam Behari Lal were not shown in the Register of Firms as partners. As such there was no compliance with the provisions of Sub-section (2) of Section 69 of the Partnership Act and the defendant is quite justified in raising its bar against the maintainability of the suit.

4. There has, however, been a controversy before me on the question whether it is the correct meaning of Sub-section (2) of Section 69 of the Partnership Act that all the partners of a firm should be shown in the Register of Firms as its partners at the time of the institution of the suit, or whether it would be sufficient if the person or persons actually signing the plaint on behalf of the firm are shown as partners in that register. I shall therefore deal with this point of controversy.

5. It has been argued by Mr. J. P. Jain on the basis of Pratapchand Ramchand and Co. v. Johangirji Bomanji, AIR 1940 Bom 257; Sardar Singar Singh and Son v. Sikri Brothers, AIR 1944 Oudh 37; M. Sudarsa-nam v. Bogoru Vishwanadham Brothers, AIR 1955 Audhra 12 and Durga Das Janak Raj v. Preete Shah Sant Ram, AIR 1959 Punj 530 that it is enough compliance of the provisions of Sub-section (2) of Section 69 of the Partnership Act to show that the person or persons signing the plaint is or are shown in the Register of Firms as partners in the firm.

6. It appears to me, however, that there is really no room for any controversy in regard to the correct meaning and purpose of Sub-section (2) of Section 69. It is well settled that a firm as such is not an entity in aw and is not a 'person' within the mean-ng of Section 4 of the Partnership Act. Its name is therefore a mere abbreviated name of all its partners: Dulichand Laxminarayan v. Commr. of Income-tax, Nagpur, AIR 1956 SC 354. It is for this reason that special provisions have been made in Order 30,P. C. regarding suits by or against firms and persons carrying on business in names other than their own. So it is beyond doubt that even if a suit is brought in the name of a firm, it is really a suit by all its partners under the firm name. In other words, the persons suing are all the partners of the firm at the relevant date and none of them can, or obvious reasons, be left out for purposes of the suit. So it is incorrect to say that subsection (2) of Section 69 merely requiresthat only the person or persons actually sign-ing the plaint on behalf of the firm should be shown in the Register of Firms as its partners. The word 'persons' in the subsection has been used in the plural by design and serves an important purpose for it brings, out the real nature of a partnership firm which cannot consist of a single person. This is the view taken in Kapur Chand Bhagaji, Firm v. Laxrnan Trimbak, AIR 1952 Nag 57 and Dr. V. S. Bahal v. S. L. Kapur and Co., AIR 1956 Punj 24. The decision in Dr. V. S. Bahal's case, AIR 1956 Punj 24 does not appear to have been noticed in AIR 1959 Punj 530 on which reliance has been placed by Mr. J. P. Jain, but it has been followed in AIR 1964 Punj 270. It has also been followed in Hansraj Manot v. Gorak Natb Champalal Pandey, (1962) 66 Cal WN 262 and, if I may say so with respect, these judgments lay down the correct law on the point.

7. In AIR 1940 Bom 257 cited by Mr. Jain, there were three partners at the date of the registration of the firm. One partner Pratapchand Ramchand died before the date of the suit transaction and it was held that notwithstanding his death, the firm should be deemed to have continued as a registered firm. As on that date the firm consisted of the two partners who alone raised the suit, it was rightly held that there was; sufficient compliance with the provisions of Section 69(2) of the Partnership Act. The real opinion of the learned Judge who decided the case is to be found in the last paragraph of his judgment where he has observed that if additional partners had come into the firm as partners since the date of registration and there names had not been entered in the register in accordance with notice-of a change in the constitution of the firm given to the Registrar, 'it may well be that the firm as then constituted could not sue because although it was a registered firm some of the persons then suing would not be shown in the register of firms as partners in the firm at the date of the suit,' That judgment cannot therefore be of any avail to the plaintiff-appellant in the present case.

7A. AIR 1959 Punj 530 is a case in which reliance has been placed on AIR 1940 Bom 257 but it appears to me that the important portion of the judgment of the Bombay High Court referred to above was not properly noticed bv their Lordships. This is why they held as follows,--

'Applying the same test here which with respect. I accept as the correct one, it must be held that in the present case the requirements of Section 69(2) were fully satisfied inasmuch as the firm was registered and the name of the person through whom it sued appeared on the register as a partner at the relevant time which was the date of the institution of the suit.'

Their Lordships used the word 'person' in the singular, and brought into consideration the words 'through whom' the firm suedeven though they did not appear in Section 69(2) of the Partnership Act. It is of theessence of the sub-section that it has used word 'persons' in the plural and has not used any words to suggest that the person suing can be one of its partners. On the other hand, as has been stated, it provides that 'the persons suing' should be shown in the Register of Firms as partners in the firm. With all respect to the learned Judges who decided the case of M/s. Durga Das Janak Ram, AIR 1959 Punj 530, I am unable to subscribe to the reasoning or the view taken by them.

8. So far as AIR 1944 Oudh 37 is concerned, it will be enough to say that it has been considered in Dr. V. S. Bahal's case, AIR 1956 Punj 24 and I need not refer to it separately. AIR 1955 Andhra 12 was quite a different case in which the names of the existing partners were shown in the Register of Firms, though the Register showed two other persons as partners, one of whom had died and the other had retired. That case cannot therefore be said to support the argument of the learned counsel for the plaintiff-appellant. It would thus appear the cases cited by Mr. Jain cannot avail the plaintiff-appellant.

9. Faced with such a situation, the learned counsel for the plaintiff-appellant tried to argue that the plaintiff was entitled to the benefit of Sub-section (3) of Section 69 of the Partnership Act because the plaintiff firm was dissolved at the expiry of the period of 5 1/2 years for which it was constituted or, at any rate, at the death of Kan-haiyalal and Naraindas who were its two partners. I do not however think this point requires any serious consideration because, as has been stated, the plaintiff clearly took the plea in its reply dated April 17, 1958 under the provisions of Order 30, Rule 2 C. P. C. that the partnership continues and that the six persons mentioned in the petition were the 'present partners of the plaintiff firm'. I have extracted the relevant portion of the reply already. In fact a similar plea was taken in the plaint where it was averred that the plaintiff firm was a firm which had continued in existence up to the date of the suit. Mohanlal P. W. 7, who raised the present suit, has also stated in the trial court that the firm has continued to be in existence in spite of the death and retirement of some of the partners. It is therefore quite futile to contend that the suit was raised by a dissolved firm so as to attract the application of Section 69(3) of the Partnership Act.

10. There is thus no force in any of the arguments advanced by the learned counsel for the plaintiff-appellant and the appeal is dismissed. There will however be no order as to the costs. Leave to appeal is prayed for, but is refused.


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