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S. Ashok Kumar Vs. Mrs. Jasoda Bai and Another - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberC.R.P.No. 3961 of 1999
Judge
Reported in2000(4)CTC24
ActsCode of Civil Procedure (CPC), 1908 -- Order 7, Rule 11; Indian Partnership Act, 1932 -- Sections 69; Code of Civil Procedure (CPC), 1908 -- Order 4 Rule 5(2) -- Order 30, Rules 1 and 2
AppellantS. Ashok Kumar
RespondentMrs. Jasoda Bai and Another
Appellant AdvocateMr. S.V. Jayaraman, Adv.
Respondent Advocate Mr. N. Sundaramurthy, Adv.
Cases ReferredRaptakos Brett & Co. Ltd. v. Ganesh Property
Excerpt:
.....or only with four individuals who later became partners - reading of plaint does not show that suit filed by or on behalf of firm - plaint failed to show whether contract re-entered into by firm with petitioner in course of business dealing of firm with petitioner - requirements of section 69 (2) not complied with - revision petition dismissed. - - ' 5. according to the learned senior counsel, a mere reading of the plaint shows that the respondents and defendants 2 and 3 are partners having executed a partnership agreement dated 12.1.1996. the cause of action for the suit has arisen where the partnership firm premises is situated and amongst other dates on 18.11.1998 when the petitioned interfered with the partnership business and when he, in collusion with defendants 2 and 3..........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 firms.'5. according to the learned senior counsel, a mere reading of the plaint shows that the respondents and defendants 2 and 3 are partners having executed a partnership agreement dated 12.1.1996. the cause of action for the suit has arisen where the partnership firm premises is situated and amongst other dates on 18.11.1998 when the petitioned interfered with the partnership business and when he, in collusion with defendants 2 and 3 failed to issue receipt of rents and advances in the name of the partnership firm. therefore, according to the senior counsel, this is a suit that has.....
Judgment:
ORDER

1.This revision arises against the dismissal of an application under O.7, Rule 11 (d) of C.P.C. for rejection of the plaint.

2. The respondents herein filed-O.S.No.8120 of 1980 before the XII Assistant City Civil Judge, Madras against the petitioner herein for an injunction restraining the petitioner from interfering with the peaceful possession and enjoyment of the partnership firms, business and premises and for direction to the petitioner to issue receipts for advance and rents in the name of the partnership firm and for other relief.

3. Pending the suit, interim injunction was also granted in I.A.No. 19575 of 1998. Thereafter, the petitioner filed I.A.No.5274 of 1999 under O.7, Rule 11 (d) of C.P.C. for rejecting the plaint as it was barred by law in view of the provisions of Sec.69 of the Indian Partnership Act (herein after referred to as 'the Act'). In the affidavit filed in support of this application, the petitioner stated that there is no whisper in the plaint as to whether the partnership had been registered or not and therefore, the suit ought to be dismissed as not maintainable. The respondents in their counter would state that they had filed it in their individual capacity and the question whether the partnership is registered or not is not germane to the issue that arises for consideration in the suit. The learned Judge dismissed the application on the ground that though there are references to the partnership business the plaint appears to have been filed by the respondents in their individual capacity and the lower court held that the application itself was premature and that the proper course would be for that the petitioner to file the written statement without any further delay and raise the issue of non-registration of the partnership and maintainability of the suit as a preliminary issue.

4. Mr. S. V. Jayaraman, learned Senior Counsel appearing for the petitioner submitted that Sec.69(2) of the Act imposes a prohibition on suits to enforce certain rights by or on behalf of unregistered firms. Sec.69(2) of the Act is extracted herein:

'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 firms.'

5. According to the learned Senior Counsel, a mere reading of the plaint shows that the respondents and defendants 2 and 3 are partners having executed a partnership agreement dated 12.1.1996. the cause of action for the suit has arisen where the partnership firm premises is situated and amongst other dates on 18.11.1998 when the petitioned interfered with the partnership business and when he, in collusion with defendants 2 and 3 failed to issue receipt of rents and advances in the name of the partnership firm. Therefore, according to the Senior Counsel, this is a suit that has arisen from the contract of tenancy between the firm and the petitioner/landlord and therefore, unless the partnership is registered the suit itself cannot lie. He relied on the following decisions:

(a) I.T.C. Limited v. Debts Recovery Appellate Tribunal and others, : AIR1998SC634 . (b) Seth Loonkaran Sethiya and others v. Mr.Ivan E.John and others 1997 (1) S.C.C. 379. (c) Gandhi & Co. v. Krishna Glass Pvt.Ltd. A.I.R. 1987 Bom 348. (d) K.R.M. Money Lenders rep. by its Power Agent Karuppiah v. Mr.A.Manoharan @ Doss : (1999)3MLJ51 .

to show that the defect in filing the suit which is barred by Sec.69(2) of the Act goes to the root of the matter and the Court has to reject the plaint under O.7, Rule 11 (d) of C.P.C. He would submit that this a defect which cannot be cured even by subsequent registration. The learned Senior Counsel submitted that a plain reading of the plaint itself revealed that the firm was not registered, and, combined with the fact that the partnership agreement which is the document filed along with the plaint also shows that the partnership agreement was not registered, the plaint had to be rejected.

6. In reply, the learned Counsel for the respondents submitted that the petitioner could not raise such an objection without filing the written statement. He referred to various provisions of the Code of Civil Procedure to support his case. In particular, he referred to O.4, Rule 5 (2) of C.P.C. and submitted that the petitioner had not complied with it and filed the written statement. According to him, though reference is made to the partnership firm, the right claimed by the respondents are in respect of their individual and separate rights as tenants in the premises belonging to the petitioner. Therefore, the mere fact that the word used is partnership premises should not be taken into account while exercising the power under O.7, Rule 11 (d) of C.P.C. According to the learned counsel, the suit was a validly instituted one. Therefore, it cannot be rejected but only dismissed and there was nothing to show from a mere reading of the plaint that the suit is barred. The question of whether the firm is registered or not and whether on that ground the suit was not maintainable can only be decided after the written statement is filed. This is why the court-below had rightly held that the application is pre-mature. It was also stated by the learned counsel that the cause of action had come into existence long prior to the partnership firm. This was another reason why the suit cannot be rejected.

7. Learned counsel for the respondents cited several decisions Kalyan Singh v. Firm Lachiiminarain Shambhulal , Mohamad Ali v. Kariji Kondho Rayaguru : AIR1945Pat286 , Goverdhandoss v. Abdul Rahiman, A.I.R. 1942 Mad. 634, Chiman Ram Batar and others v. Ganga Saha and another : AIR1961Ori94 , Jalal Mohammed Ibrahim and others v. Kakka Mohammed Ghouse Sahib : AIR1972Mad86 , N.A.Munavar Hussain Sahib and another v. E.R.Narayanan and others : AIR1984Mad47 and Smt.Dropadi Devi v. Ram Dos and others, A.I.R. 1974 All. 476 to support his case.

8. For the purpose of this case it is necessary to see if the provisions of Sec.69(2) of the Act are attracted to the facts of this case, on a mere reading of the averments in the plaint, since the language of 0.7, Rule 11 (d) of C.P.C. is 'where the suit appears from the statement in the plaint to be barred by law'. Therefore, on a prima facie reading of the plaint it must be apparent that the plaint is barred by law. The fact that all the partners are before the court, and provisions of O.30, Rules 1 and 2, C.P.C. have been complied with does not wipe off the defect of non-registration in a suit of the nature specified in Sec.69(2) of the Act. The provisions of Sec.69(2) of the Act are substantive and the mandatory requirement of registration must be satisfied first, before a suit of the nature mentioned therein, is instituted. Therefore, the provisions of O.30, Rules 1 and 2 of C.P.C. come into play, they are procedural and they indicate the mode and form in which the suit has to be framed and the procedure applicable. Therefore, compliance of the procedural formality will not erase the violation of substantive law. In the decision reported in Seth Loonkaran Sethiya and others v. Mr.Ivan E.John and others, 1997 (1) S.C.C. 379. The Supreme Court held that the suit by a partner of an unregistered firm for endorsement of an agreement entered into by him as partner was not maintainable. The decision reported in Gandhi & Co. v. Krishna Glass Pvt. Ltd., A.I.R. 1987 Bom. 348, is with reference to the second limb of Sec.69(2) of the Act which requires that the persons suing are of have been shown in the register of firms as partners. In that case they were not and the bar of Sec.69(2) of the Act was held to operate. The decision reported in K.R.M.Money Lenders rep. by its Power Agent Karuppiah v. Mr.A.Manoharan alias Doss : (1999)3MLJ51 , is with reference to a suit by an unregistered firm which was subsequently registered. The question was whether the subsequent registration would cure the original illegality. In an elaborate judgment this Court held it did not, it also held in that case that the filing of a suit by an unregistered firm is a defect that goes to the root of the matter and the court is bound to consider this even if the defendants had failed to raise such an objection and if barred by law, the court was bound to reject the plaint.

9. Reference was made in this case to two other judgments of this Court reported in T.Savariraj Pillai v. M/S.R.S.S. Vastred & Co. represented by one of its partners M.M.Nalavad, 1989 (2) L.W. 418 and Selvam Estates represented by its Partner Mrs.Mohanasundari Murugan v. L.Thangapandia Maharajan & Co., 1991 T.L.N.J. 107. To decide whether Sec.69(2) of the Act is attracted the plaint statements must be perused. Though the plaint in this case refers to a partnership agreement dated 12.1.1996, the suit is filed in the name of two individuals who do not describe themselves as partners. It is also evident from the averment in the plaint that the rental advance to the petitioner who is the owner of the suit premises was paid on 25.8.1995 which is prior to the partnership deed. The tenancy agreement or contract is not before the court nor is there any averment in the plaint as to who were the parties to it. Though the plaint has not been very happily worded the cause of action appears to be the interference of the petitioner with the respondents' possession. The prayer is for restraining the petitioner from interfering with the respondents' possession of the partnership firm otherwise than by due process of law.

10. It is not necessary for the defendant to file a written statement or doanything further, because the court has to see if the suit is barred by law fromthe statements in the plaint. Therefore, if the suit answer to the description ofthe suits referred to in Sec.69(1) or Sec.69(2) of the Act from a mere reading of the plaint, the plaint has to be rejected. The contentions of the learned counsel for the respondents that unless the de-fendants files his writtenstatement he cannot raise this objection does not appear to be correct. But in this case, the statement in the plaint do not attract the provisions of Sec.69(2)of the Act. The right that is sought to be enforced by the respondents is their right to be in possession of the property pursuant to the contract of lease withthe petitioner in respect of the suit premises. The plaint does not disclose whether the lease agreement was entered into by the petitioner with thepartnership firm or with the four individuals in their personal capacity. The relevant recital in the partnership agreement Clause 13 also states that the tenancy right will belong to all the partners in equal proportion. The amounts have been paid by the respondents towards good will and advance to the petitioner on 25.8.1995 which is four months prior to the partnership agreement. Unless, the petitioner is able to show during the trial that this is a suit to enforce a right arisen from a contract entered into by or on be- half ofthe firm and the petitioner, the bar of Sec.69(2) of the Act will not come intoplay.

11. The respondents have also claimed their right to be in possession until evicted by due process of law. In the decision reported in Raptakos Brett & Co. Ltd. v. Ganesh Property : AIR1998SC3085 , the plaintiff/landlord alleging to be a registered partnership firm prayed for a decree of possession. The defendant filed an application under O.7, Rule 11 (d) of C.P.C. on the ground that the suit was not maintainable since the plaintiff was not a registered firm. The Supreme Court held that though the suit may be said to be partly barred by Sec.69(2) of the Act, in so far as it sought to enforce the obligation of the defendant under the specified clause of the contract of lease read with relevant recitals in the plaint, it was not barred in so far as the cause of action was based on the law of the land namely the Transfer of Property Act.

12. This case has been referred to in a recent decision of the Supreme Court in M/s.Haldiram Bhujiwala and another v. M/s.Anand Kumar DeepakKumar and another 2000 (2) M.L.J. 159. Here, the defendants filed an application under O.7, Rule 11 (d) of C.P C. on the ground that the plaintiff firm was not registered. The Supreme Court construing the words 'arising from a contract' in Sec.69(2) of the Act held,

'the purpose behind Sec.69(2) of the Act held,

was to impose a disability on the unregistered firm or its partners to enforce rights arising out of con-tracts entered into by the plaintiff firm -with third party defendant in the course of the firm's business transactions. The further and additional but equally important aspect which has to be made clear is that the contract by the unregistered firm referred to in Sec.69(2) of the Act held,must not only be one entered into by the firm with the third party-defendant but must also be one entered into by the plaintiff firm in the course of the business dealings of the plaintiff's firm with such third party-defendant.'

13. In the instant case, it is not known whether the petitioner entered into a contrast with the firm or only with the four individuals who later became partners. The finding of the court below that a reading of the plaint does not show that the suit has been filed by or on behalf of the firm also appears to me to be correct. It is evident that the respondents apprehending collusion between the petitioner and the other two persons with whom they have formed the partnership, have filed the suit to safeguard their personal rights. It is the possession of the two respondents in the partnership premises that is sought to be protected in the suit.

14. It is also not known if the contract was en-tered into by the firm with the petitioner, in the course of the business dealing of the firm with the petitioner. At least it is not apparent on the face of the statement of the plaint. Since the provisions of O.7, Rule 11 (d) of C.P.C. are clear and since it visits the person against whom the application is ordered with the harsh consequences of having the plaint rejected unless the requirements of Sec.69(2) of the Act held,

15. For the above reasons, I confirm the order of the court below. This civil revision petition is dismissed. No costs. Consequently, the C.M.P.No.22232 of 1999 is closed.


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