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T. Varadarajulu Naidu and Kuppuswami Naidu and Co. by Its Partners Vs. R. Rajamanika Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1937Mad4767; (1937)2MLJ273
AppellantT. Varadarajulu Naidu and Kuppuswami Naidu and Co. by Its Partners
RespondentR. Rajamanika Mudaliar and ors.
Cases ReferredSubramania Mudaliar v. The East Asiatic Co.
Excerpt:
.....nature by him in respect of the same right to sue; the duty of the court is to administer, justice according to the principles of equity and good conscience and it cannot be said to do this when it dismisses a suit because the formality of withdrawing a plaint and filing a fresh one in the same terms was not complied with. i am satisfied therefore that the interests of justice require that this petition should be allowed and the suit remanded for fresh disposal......the principles of the partnership act, cannot deem the suit to have been instituted on the date of registration. it is well-established principle that the court can take notice of events that happen subsequent to the filing of the suit and that any irregularities or deficiencies in the cause of action that may exist on the date of the filing of the plaint can be overlooked if on some date subsequent to the filing of the plaint and before the suit comes up for trial those irregularities or deficiencies are rectified by the plaintiff or by process of law. in doraisami pillai v. chinnia goundan (1917) 34 m.l.j. 258 the plaintiff, when he saw the written statement, became aware of the deficiencies in his title and perfected it by obtaining a conveyance from the next reversioner; and.....
Judgment:

Horwill, J.

1. The petitioners (partners in a firm) brought S.C.S. No. 719 of 1933 in the Court of the Subordinate Judge of Chingleput for the sum of Rs. 509-12-4, due to them by the respondents debtors. They brought their suit on 30th October, 1933, when the firm was unregistered. This apparently escaped the notice of the office of the Subordinate Judge and also of the defendants. This deficiency was however rectified by the plaintiffs in July, 1934. The defendants filed their written statement on 15th December, 1933, making no reference to the fact that the suit had been instituted without registration of the partnership. The suit was posted for hearing on 20th December, 1934, more than a year after the filing of the written statement; and on the previous day, that is, on the 19th December, 1934, the defendants applied to be allowed to raise a preliminary objection to the maintainability of the suit. They contended that the suit having been filed before the partnership was registered under Section 69(2) of the Partnership Act, no suit could be instituted and that the suit not having been properly instituted should be dismissed. The learned Subordinate Judge upheld this objection and dismissed the suit. The petitioners have brought this petition, contending not that the suit was properly instituted, but that it should be deemed to have been properly instituted on the date that the partnership was registered.

2. Section 69(2) of the Partnership Act runs thus:

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.

3. This means, as rightly contended by Mr. T.M. Krishnaswami Aiyar for the respondent, that on the 30th October, 1933, the plaint filed in Court was not a plaint at all and no valid suit was pending before the Subordinate Judge; and that even after the registration in July, 1934, nothing was done to the plaint by the plaintiffs to transform it from an invalid plaint into a valid one. His argument therefore is that the plaint continued as before to be an invalid one and that the mere fact of registration did not amount to an institution of the suit; so that at no time was there any valid institution of the suit. One cannot deny that this argument is logically correct; but the question is rather whether the Court, in order to do substantial justice to the parties without violating the principles of the Partnership Act, cannot deem the suit to have been instituted on the date of registration. It is well-established principle that the Court can take notice of events that happen subsequent to the filing of the suit and that any irregularities or deficiencies in the cause of action that may exist on the date of the filing of the plaint can be overlooked if on some date subsequent to the filing of the plaint and before the suit comes up for trial those irregularities or deficiencies are rectified by the plaintiff or by process of law. In Doraisami Pillai v. Chinnia Goundan (1917) 34 M.L.J. 258 the plaintiff, when he saw the written statement, became aware of the deficiencies in his title and perfected it by obtaining a conveyance from the next reversioner; and this act of the plaintiff was recognised by the Court. In Subbaraya Chetty v. Nachiar Ammal (1917.) 7 L.W. 403 a mortgage suit was premature, because on a proper interpretation of the bond it was seen that the money was not due. The date of maturity was some date after the filing of the suit and that date was prior to the hearing of the suit. It was held that the suit should not have been dismissed because when the suit came on for trial the cause of action came into being. In C.R.P. No. 1489 of 1935, an illegal transfer by an insolvent was recognised by the Court, because of the fact that the adjudication was subsequently annulled. In Appalasuri v. Kannamma Nayuralu : AIR1926Mad6 a certain event happened after the filing of the suit which strengthened the plaintiff's title. He was allowed to amend the plaint, setting forth the additional cause of action. There, the principle governing the action of Courts in these matters was said to be that multiplicity of proceedings should be avoided. In all these cases, as in the present case, if the Courts had applied the wording of the statutes literally they would have dealt with the plaints as they existed when the suits were filed and proceeded to dispose of the suits on the pleadings raised. The plaintiff would then have been entitled immediately to have brought a fresh suit on the new cause of action. Courts are naturally reluctant to dismiss a suit and cause loss to the plaintiff when the plaintiff has a cause of action for a similar suit which he could file at once.

4. I agree with Mr. Krishnaswami Aiyar that the case of the plaintiffs is not as strong as in the cases just quoted; for Section 69(2) of the Partnership Act embodies a principle of public policy intended to penalise partnerships which do not register. However, when the registration has been carried out the requirements of the legislature are fulfilled and there is no reason in equity why from the moment of registration a suit previously filed should not be allowed to go on. This suit is not of course one in which the subsequent act of registration validates the plaint from the date of its being filed; for no suit was maintainable before the date of registration. The most that, the plaintiff can ask for is that his plaint should be treated as a valid one from the date of registration. A very similar case was considered by a Bench of this Court in Ramakrishna Nadar v. Ponnayya Thirumalai Vandaya Thevar : AIR1936Mad24 . There a person applied for leave to sue in forma pauperis, and his petition was dismissed. Under Order 33, Rule 15, Civil Procedure Code, a pauper is allowed to file a suit if he has paid the costs of the Government and of the respondents awarded in his application to sue in forma pauperis. The actual wording of the section is:

An order refusing to allow the applicant to sue as a pauper shall be a bar to any subsequent application of the like nature by him in respect of the same right to sue; but the applicant shall be at liberty to institute a suit in the ordinary manner in respect of such right, provided that he first pays the costs (if any) incurred by the Government and by the opposite party in opposing his application for leave to sue as a pauper.

5. The wording of this section makes it quite clear that the paying of costs of the Government and the opposite party is a condition precedent to the institution of the suit, just as it is in Section 69(2) of the Partnership Act. Varadachariar and Pandrang Row, JJ., in Ramakrishna Nadar v. Ponnayya Thirumalai Vandaya Thevar : AIR1936Mad24 distinguished certain Allahabad decisions as instances where the condition had never been fulfilled from the case before them where the condition was fulfilled after the institution of the suit. The learned Judges then say:

We do not think the Court below need have dismissed the suit altogether. It is unnecessary to go through the formality of a dismissal and a re-institution the next moment after payment of the costs ordered in O.P. No. 8 of 1931. We think it will be sufficient to say that the suit must be treated as one instituted on the 2nd of March, 1932 (the date of fulfilment of the condition) and dealt with on that basis.

6. The case that came before Menon, J., Subramania Mudaliar v. The East Asiatic Co., Ltd. : AIR1936Mad991 was very similar to the present one except that in that case the plaintiff had applied to the Court for an amendment of the plaint, which application was dismissed; and it was because of that difference from the present case and from Ramakrishna Nadar v. Ponnayya Thirumalai Vandaya Thevar : AIR1936Mad24 that the learned Judge refused to interfere in revision. It would therefore appear that Menon, J., was not inclined to interfere in a matter of this kind in revision. I do not think that he intended to go further and to hold that if the Court had allowed the suit to continue--if the cause of action was not barred by limitation on the date of registration--it would have been wrong. If he did, I would respectfully dissent. I see no difference in the effect of the words quoted above in Order 33, Rule 15 and the material words in Section 69(2) of the Partnership Act. The difference in the actual words used in the two sections was necessary because in Order 33, Rule 15, the legislature wished to point out that the dismissal of an application to sue in forma pauperis did not preclude the applicant from instituting a suit upon payment of court-fee. The section had therefore to be so framed as to bring out the fact that the applicant was at liberty to bring a suit provided that the condition of previously paying the costs of the Government and the other party was fulfilled. There was no need to frame Section 69(2) of the Partnership Act in that way. The right of a partnership to sue was assumed; but the legislature wished to deprive a partnership which had not been registered of that right. Hence the form of the words:

No suit to enforce a right shall be instituted.

7. I therefore hold, on the analogy of Ramakrishna Nadar v. Ponnayya Thirumalai Vandaya Thevar : AIR1936Mad24 that the Court should have permitted the plaintiffs to go on with their suit.

8. The question still remains whether this Court should interfere in revision or, as Menon, J., did in Subramania Mudaliar v. The East Asiatic Co., Ltd. : AIR1936Mad991 should refuse to interfere with the discretion of the Court. In deciding this point I have been influenced by the fact that if the office of the Subordinate Judge had done its duty properly this difficulty would never have arisen. When a suit is filed by a partnership, it is the duty of the office to see that the plaint is a proper one and that the suit is maintainable. It is for that reason that if the facts set out show that the suit is premature or that no suit lies, the plaintiff is called upon in the ordinary course to point out how the suit is maintainable. If the office had been alert, it certainly would have called upon the plaintiffs to state whether the partnership had been registered and if so when. If that had been done, the plaint would have been returned, the firm would have been registered, and a fresh plaint (which would have been the old plaint with the fact of registration and the date added) presented. The defendants did not raise any objection in their written statement or until a year had elapsed after the filing of the written statement. I therefore think it would be most inequitable for the plaintiffs to have their suit dismissed and be forced to file another after paying fresh court-fee. The duty of the Court is to administer, justice according to the principles of equity and good conscience and it cannot be said to do this when it dismisses a suit because the formality of withdrawing a plaint and filing a fresh one in the same terms was not complied with. I am satisfied therefore that the interests of justice require that this petition should be allowed and the suit remanded for fresh disposal. It is ordered accordingly. The suit will be deemed to have been instituted on the date of the registration. Under the circumstances of the case there will be no order as to costs in this Court. The costs in the lower Court will of course abide the result of the suit.


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