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Dwijendra Nath Singh and anr. Vs. Govinda Chandra and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberCivil Rule No. 1264 of 1952
Judge
Reported inAIR1953Cal497,57CWN225
ActsPartnership Act, 1932 - Section 69
AppellantDwijendra Nath Singh and anr.
RespondentGovinda Chandra and anr.
Appellant AdvocateRanjit Ghose, ;Manan Kumar Ghose and ;Nanigopal De, Advs.
Respondent AdvocateOabcgabab Samaddar, Adv.
Cases ReferredSubramania Mudaliar v. East Asiatic Co. Ltd.
Excerpt:
- .....in such circumstances, the suit may be treated as though the plaint had been received and the suit instituted on the day following the day of registration.'he observed further:'the defendant waited till the last stage of the second hearing and took the objection after the close of the plaintiff's case at the time of the argument. this objection has not been taken in the written statement which was filed in may 1934. there was nothing to prevent the plaintiffs from getting the firm registered immediately after the plea in bar had been taken in the written defence. but no such plea was taken.'6. on a consideration of these circumstances, his lordship came to the conclusion that it would be consonant with justice to hold that the suit was instituted after the registration and so did.....
Judgment:

Das Gupta, J.

1. The only question in this case is whether a suit which was not maintainable, under the provisions of Section 69 of the Partnership Act at the time it was instituted because the firm was not registered, became maintainable at a later date when the firm was registered during the pendency of the suit.

2. The suit was brought by two persons who are described as the owners of the firm Samanta Naskar and Co. On 8-6-1951, when the suit was instituted this firm had not been registered. It however was registered before the suit came to be heard. The learned Munsif relying on a decision of this Court in --'Radha Charan Saha v. Matilal Sana', 41 Cal WN 534 (A), held that the suit was maintainable in spite of the fact that the firm was not registered on the date of institution of the suit and passed a decree in part in favour of the plaintiffs.

3. It is contended before us that the decision in -- '41 Cal WN 534 (A)', was not correct.

4. The first and second sub-sections of Section 69 of the Partnership Act are in these words:

'(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(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 has been shown in the Register of Firms as partners in the firm.'

5. In --''41 Cal WN 534 (A)', the Court had to consider the provisions of Section 69(2) of the Partnership Act. What happened there was that the plaintiffs' firm was registered on 20-6-1934, the suit having been instituted on 25-5-1934. D. N. Mitter J. said that there was no reason why he should not hold that the suit was properly instituted at any rate on 20-6-1934 when the firm was registered. He observed:

'The plaint in this suit was allowed to remain on the file and it did remain on the file till the date of registration. In such circumstances, the suit may be treated as though the plaint had been received and the suit instituted on the day following the day of registration.'

He observed further:

'The defendant waited till the last stage of the second hearing and took the objection after the close of the plaintiff's case at the time of the argument. This objection has not been taken in the written statement which was filed in May 1934. There was nothing to prevent the plaintiffs from getting the firm registered immediately after the plea in bar had been taken in the written defence. But no such plea was taken.'

6. On a consideration of these circumstances, his Lordship came to the conclusion that it would be consonant with justice to hold that the suit was instituted after the registration and so did not offend against the provisions of Section 69(2) of the Partnership Act.

7. A contrary view has been taken by Roxburgh J. in an unreported decision in -

'Abdul Hayet Mondal v. Siddheswar Kumar', A.F.A.D. No. 405 of 1948, D/- 28-6-1951 (Cal) (B). After considering the decision in --'Radha Charan Sana's case (A)', Roxburgh J considered the views taken by several other High Courts on this question and finally came to the conclusion that there was abundant weight of judicial opinion that Section 69(2) of the Partnership Act was also to be interpreted in the same strict sense as the Privy Council had laid down for Section 80, C. P. C. and that the suit being bad at its inception was not made good by a subsequent registration of the firm. In that view his Lordship confirmed the order passed by the appellate Court dismissing the suit by the plaintiff firm when the same was registered sometime after the date of institution of the suit.

8. These appear to be the only cases In which this question has been considered by our Court. The question 'however arose for decision in .several cases before the Lahore, Allahabad, Patna and Bombay High Courts and it will be helpful to see the views taken by those Courts. In -- 'Krishan Lal Ram Lal v. Abdul Ghafur Khan', AIR 1935 Lah 893 (C), the Court after rejecting the plaintiff's contention that Section 69 was not applicable to the suit by reason of Section 74 of the Act had to consider whether the suit should have been stayed to enable the plaintiff firm to get itself registered The Court held that that could not be done as the institution of the suit itself was barred. Bhide J. observed:

'In the end, it was urged by the learned counsel for the appellant that the suit should have been at the most stayed to enable the plaintiff firm to get itself registered and not dismissed. But the Act does not seem to provide for a procedure of this kind. Section 69 clearly says that no suit falling within its purview shall be instituted. It is the institution of the suit that is barred.'

9. In -- 'Danmal Parshotamdas v. Babu-ram Chhotelal' : AIR1936All3 , the main question was whether the right to enforce a suit prior to the coming of the Partnership Act saved it from the operation of Section 69. Bennet J. held it did not but he held also that though it appeared that the firm was registered on 27-6-1934 and the certificate of registration was filed in Court on 27-7-1934, two days before the case was heard the suit was rightly dismissed and that the suit could not have been deemed to have been instituted after registration of the firm. His Lordship pointed out that the terms of Section 69 were imperative and where a plaint is filed in breach of the provisions of that section the case is more parallel to the provisions for rejection of a plaint under Order 7, Rule 11 on the ground that the suit appears from the statement of the plaint to be barred by any law, than to the provisions of Section 17 of the Small Cause Courts Act to which parallel was sought to be drawn by the learned counsel.

10. In -- 'Firm Laduram Sagarmal v. Jamuna Prasad', AIR 1939 Pat 239 (E), the question arose in exactly the same form as before us. After an exhaustive review of the case law Harries C. J. held that the trend of authority was in favour of the contention that a suit which was not maintainable by reason of non-compliance with S. 69 of the Partnership Act cannot become maintainable at a later stage by reason of registration and held that subsequent registration cannot cure the initial defect. His Lordship observed:

'In my view, subsequent registration cannot cure the initial defect. A plaint filed by an unregistered firm is in effect no plaint at all, because Section 69 makes claims arising out of a contract unenforceable if the firm is unregistered at the date of the institution of the suit. An unregistered firm has no right to sue, and, therefore* a plaint filed by it has no legal effect. If at the time the plaint is filed the claim is bound to fail, I cannot see how subsequent registration can improve the position. The single Judge of the Calcutta High Court held that there was no reason why the Court should not treat the plaint as filed on the date of registration. That is possibly a very fair view to take; but I know of no provision of law which permits a Court to treat the plaint as filed on a date subsequent to the date upon which it was actually filed. In neither of the cases cited on behalf of the appellant is any authority cited which would enable a Court to treat a suit as being instituted months later than the date upon which it was in fact instituted. In my view, the crucial date is the date of the institution of the suit. If on that date the suit was bound to fail nothing that happens subsequently can give the plaintiff a right to sue. The case is very similar to a case where a plaintiff brings a suit prematurely. If it is held that he had no cause of action at the date of the institution of the suit, then it does not avail him in the slightest to show that his cause of action did come into existence a few days after the filing of the suit. If the plaintiff had no cause of action when the suit wss filed, then such a suit is bound to fail, though a cause of action might come into existence within a very short time after the institution of the suit. For the same reason, I cannot understand how an unregisteredfirm can file a suit and the defect be cured by subsequent registration. It appears to me that if the suit as filed is not maintainable, then it must be dismissed.

Varma J. in a separate judgment came to thesame conclusion.

11. The same view was taken by the Bombay High Court in -- 'Prithvisingh v. Hasan Alli', : AIR1951Bom6 (F). There after an exhaustive discussion of different cases on the point their Lordships came to the con-elusion:

'the plain terms of Section 69(2), Partnership Act, bar the institution of a suit to enforce a right arising out of a contract unless the firm is registered and the persons suing are or have been shown in the register of firms as partners in the firm and a subsequent registration of the partnership firm cannot and does not cure the initial defect in the institution of the suit.'

In the Madras High Court, Horwill J. in --'Varadarajulu v. Rajmanika', AIR 1937 Mad 767 (G), took the same view as Mitter J. in --'Radha Charan Saha's case (A)'. In other cases, however, the Madras High Court has taken the view that subsequent registration did not make the suit already filed maintainable (-- 'Ponnuchami v. Muthusami', AIR 1942 Mad 252 (H); -- 'Subramania Mudaliar v. East Asiatic Co. Ltd.', AIR 1936 Mad 991 (I) ).

12. I am in respectful agreement with the view taken in this matter by Roxburgh J. and by the Allahabad, Patna, Bombay and Lahore High Courts as mentioned above.

13. When the Legislature forbids the doing of an act it is not proper for a Court to allow the doing of that act by subterfuge. Subsections (1) and (2) of Section 69 forbid the institution of a suit by or on behalf of an unregistered firm. With the policy underlying: that legislation we are not concerned but we are bound to give effect to the fiat of the Legislature. The only way we can do it is by dismissing the suit. Not to dismiss such a; suit by reason of the fact of later registration is really to relieve the party who has not carried out the requirements of the law by means of a subterfuge.

14. It might seem hard and at first sight pointless to drive a party to bring a fresh suit but if the law requires that, I do not see that we should be justified in helping him to avoid that position by interpreting the law to mean something which it does not say. If later registration would have been sufficient compliance with the law, it was for the Legislature to say that the Legislature did not say that but said on the contrary that no suit shall be instituted fay or on behalf of a firm in certain matters unless the firm has been registered. It is the duty of the Courts to carry out the law as it is and to resist the temptation of interpreting it to meet the hardship supposed or real of a particular case.

15. I have therefore come to the conclusion that the suit as filed was not maintainable.

16. I would therefore set aside the order passed by the learned Munsif and order that the suit be dismissed. The petitioners will get their costs in both the Courts.

Guha Ray, J.

17. I agree.


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