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Gappulal Gordhandas and ors. Vs. Chunilal Shyam Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Tenancy
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. Nos. 54 of 1957 and 267 of 1960
Judge
Reported inAIR1961Raj286
ActsPartnership Act, 1932 - Sections 69 and 69(3); Rajasthan Premises (Control of Rent and Eviction) Act, 1950 - Sections 6
AppellantGappulal Gordhandas and ors.
RespondentChunilal Shyam Lal and ors.
Appellant Advocate P.C. Bhandari, Adv.
Respondent Advocate P.N. Datt, Adv.
DispositionApplications allowed
Cases ReferredAbdul Jabbar v. Audhesh Singh
Excerpt:
- .....held that section 69 of the partnership act was not applicable as the suit was not to enforce a right arising out of any contract but was a suit for enforcing a right conferred by the rajasthan premises (control of rent and eviction) act. 1950.in the madras case a petition for adjudication of a debtor as an insolvent was moved by a creditor. it was resisted on the ground that the creditor being an unregistered firm the petition was not maintainable. the learned district judge dismissed the insolvency petition on this ground but the high court set aside the decision on the following reasoning:'the learned district judge has held that this insolvency petition is in reality a proceeding to enforce a right arising from a contract. we are unable to agree with the learned district judge.....
Judgment:
ORDER

Jagat Narayan, J.

1. These are connected revision applications arising out of a suit for fixation of standard rent filed by the respondent under Section 6 of theRajasthan Premises (Control of Rent and Eviction) Act 1950.

2. The plaintiff is an unregistered firm. The suit was resisted by the landlords inter alia on the ground that in view of the provisions of Section 69 of the Partnership Act the present suit is not maintainable. The trial court upheld this objection and dismissed the suit. On appeal the learned District Judge relying on Sreemannarayanamurthy v. Arjanadu, AIR 1939 Mad 145 held that Section 69 of the Partnership Act was not applicable as the suit was not to enforce a right arising out of any contract but was a suit for enforcing a right conferred by the Rajasthan Premises (Control of Rent and Eviction) Act. 1950.

In the Madras case a petition for adjudication of a debtor as an insolvent was moved by a creditor. It was resisted on the ground that the creditor being an unregistered firm the petition was not maintainable. The learned District Judge dismissed the insolvency petition on this ground but the High Court set aside the decision on the following reasoning:

'The learned District Judge has held that this insolvency petition is in reality a proceeding to enforce a right arising from a contract. We are unable to agree with the learned District Judge onthis point. A petition for the adjudication of a debtor as an insolvent is not in cur view a proceeding to enforce a right arising from a contract. It is no doubt the case that the creditors who apply for the adjudication of their debtors as insolvents hope to recover the whole or some portion of their debt in the distribution of the assets of the insolvent's estate, but it cannot be said, we think, that the proceedings in insolvency are proceedings to enforce the rights of the creditors arising from the contracts between them and their debtors. The right which the creditor who files the insolvency petition against his debtor is seeking to exercise is the right of a creditor who finds his debtor in insolvent circumstances to have the assets of the debtor administered in insolvency and distributed for the benefit of the creditors as a body. This is a right which is conferred upon the creditors by statute and is not a right arising out of a particular contract of loan between a petitioning creditor and a debtor'.

3. With all respect I am unable to agree with the above reasoning. Apart from the terms of a particular contract the parties who enter into it are also governed by other laws which create various rights and liabilities. The Insolvency Act gives a right to a creditor to move a petition for the adjudication of a debtor as an insolvent. It is not open to a stranger to move an application for the adjudication of a person as insolvent on the ground that he has committed acts of insolvency. Although this right is conferred by statute only a person who is a creditor can enforce it. In this view of the matter it is a right arising out of a contract.

4. To take another example, under Section 108 of the Transfer of Property Act if during the continuance of the lease any accession is made to the property such accession shall be deemed to be comprised in the lease. A suit to enforce this right which does not arise on the terms of the contract which the parties enter into with one another but arises under the Transfer of Property Act is a suit to enforce a right arising out of a contract.

5. The moment two persons enter into a contract of tenancy they become subject to certain rights and liabilities by virtue of the provisions of the Transfer of Property Act which are not actually part of the contract which is entered into between the parries. Additional rights and liabilities arising out of the Rajasthan Premises (Control of Rent and Eviction) Act 1950 are similarly superimposed on the terms of the contract. The right of a tenant to get his rent reduced to a reasonable amount is not conferred on him under the Transfer of Property Act, but it is conferred on him under the Rajasthan Premises (Control of Kent and Eviction) Act, 1950. A suit by a tenant to get the rent reduced is thus a suit to enforce a right arising out of a contract of tenancy. The suit therefore falls under Sub-section (3) of Section 69 of the Partnership Act.

6. In this connection the decision of the Allahabad High Court in Abdul Jabbar v. Audhesh Singh, AIR 1954 AH 310 may be referred to in which the following observation was made:

'The first point that we had to consider in connection with this appeal was whether the pro-ceedings under the Encumbered Estates Act for determination of a claim of a creditor were at all governed by the provisions of Section 69 of the Indian Partnership Act. This argument had to be considered in view of the language of Sub-sections (1) and (2) of Section 69 wherein a bar was placed against the institution of a suit only. Our attention has however, been drawn to Sub-section (3) of Section 69 which makes the provisions of Sub-sections (1) and (2) of that section applicable even to a claim of set-off or other proceedings to enforce a right, arising from a contract It is obvious that the claim by the appellants in these Encumbered Estates Act proceedings for determination of the liability of the landlord to them and for passing a decree in respect of the amount found due is a proceeding to enforce a right arising from the contract and in fully covered by the language used in Sub-section (1) of Section 69.'

7. I accordingly hold that the present suit by the plaintiff was not maintainable in view of Section 69 of the Partnership Act as it is an unregistered firm.

8. The revision applications are accordinglyallowed with costs and the suit of the plaintiff forfixation of rent is dismissed with costs. The applicants are entitled to recover costs of the appellatecourt also from the respondent.


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