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Nokhu and ors. Vs. Gokal and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtHimachal Pradesh High Court
Decided On
Case NumberCivil Revn. No. 36 of 1955
Judge
Reported inAIR1957HP59
ActsCode of Civil Procedure (CPC) - Section 115 - Order 14, Rule 5; ;Partnership Act, 1932 - Section 69
AppellantNokhu and ors.
RespondentGokal and anr.
Appellant Advocate K.L. Mehra, Adv.
Respondent Advocate H.L. Vaidya, Adv.
DispositionRevision allowed
Cases Referred(iii) Mohamad Ali v. Kondho Rayaguru
Excerpt:
- .....not confer any right on the defendant which he could waive at his option. its effect is that a suit by an unregistered firm is, at its inception, bad and the moment the court is satisfied that the plaintiff's are an unregistered firm it must treat the suit as not having been filed and dismiss it. no act of the defendant can make a suit good which is, at its inception, bad and therefore the consent of the defendant in such a suit cannot enable the court to pronounce a decree in favour of the plaintiff's, who are found to be an unregistered firm.'4. it is true, that in their written-statement, the petitioners did not raise the plea of the bar of section 69. that would not, however, in my opinion, relieve the court of the duty of looking into the matter and deciding it. i may point out.....
Judgment:
ORDER

Ramabhadran, J.C.

1. After hearing learned counsel for the parties, I have come to the conclusion that the order under revision cannot be upheld.

2. The Court below has refused to go into the question as to whether the suit was barred under the provisions of Section 69 of the Indian Partnership Act on the following two grounds:

(a) The plaint did not disclose that the suit had been filed on behalf of a firm.

(b) No objection was taken in the written statement that the suit was barred under Section 69 of the Indian Partnership Act.

3. Learned counsel for the petitioners argued--and in my opinion with great justification--that the mandatory provisions of Section 69, Partnership Act, could not be defeated on either of the above two grounds. Reliance was placed by him on the following authorities Lokramdas Chatomal v. Tharumal Shewaram, AIR 1939 Sind 206 (A). There, a Division Bench of that Chief Court observed that:

'Section 69 prevents a Court from taking cognizance of a suit brought by an unregistered firm, in the same way a Court shall not take cognizance of a suit barred by limitation; and to hold that because as the result of ignorance or mistake, objection was not taken by the defendant in the suit, so the provisions of the law could be flouted, would be to frustrate the intention of the Legislature clearly expressed. Therefore, the Judge is right in allowing to be taken or himself taking the objection under Section 69 in appeal, for the first time.'

(2) Ponnappa Chettiar v. Bodappa Chettiar AIR 1945 Mad 146 (B). There, Bell, J., remarked that:

'Section 69 is a bar to a suit by a person claiming to be entitled to sue for the outstandings due to a dissolved unregistered partnership because it would otherwise defeat the provisions of the Act.'

(3) Mt. Santokhu v. The State, AIR 1953 Him. Pra. 82 (C). There, my learned predecessor, while dealing with the scope of the Mandi Land Revenue Regulation of 1975 Sm. indicated that :

'It is certainly open to a Court to suggest a point of law and hear counsel for the parties, even though the law in question may not have been pleaded before, provided only that it be a point that could be raised at that stage without prejudice to any party.'

(4) Govindmal Gianchand v. Kunj Beharilal, AIR 1954 Bom. 364 (D). There, a learned Judge of that High Court pointed out that:

'The provisions of Section 69 are mandatory and unlike their counterpart in England there is no power in the High Court to grant to the defaulting partnership any relief against the disability imposed by the section. The section debars an unregistered firm from filing a suit and it does not confer any right on the defendant which he could waive at his option. Its effect is that a suit by an unregistered firm is, at its inception, bad and the moment the Court is satisfied that the plaintiff's are an unregistered firm it must treat the suit as not having been filed and dismiss it. No act of the defendant can make a suit good which is, at its inception, bad and therefore the consent of the defendant in such a suit cannot enable the Court to pronounce a decree in favour of the plaintiff's, who are found to be an unregistered firm.'

4. It is true, that in their written-statement, the petitioners did not raise the plea of the bar of Section 69. That would not, however, in my opinion, relieve the Court of the duty of looking into the matter and deciding it. I may point out that under Order 14, Rule 5, Civil P. C., it is incumbent on the Court to amend issues, or frame additional issues, as may be necessary, for determining the matters in controversy between the parties. The mere fact that the application dated 26-7-1955 made by the petitioners to the learned trial Judge was one styled under Section 9, C. P. C. read with Section 69 of the Partnership Act, makes no material difference. We have to look to the substance of the application and not to its heading. That application clearly stated that the suit was on behalf of the unregistered firm and, consequently, was barred by the provisions of Section 69 of the Partnership Act. A copy of that application was supplied to the other side (plaintiff).

The latter, in his reply dated 9-8-1955, categorically denied that the suit was on behalf of a partnership. It was contended, on the other hand, that it was a suit by joint contractors. In the alternative, it was pleaded that the partnership had been dissolved and, therefore, the bar under Section 69 would not operate.

5. Consequently, the Court below should not have shirked its duty of looking into the matter and deciding it in accordance with law.

6. Learned, counsel for the respondent argued that this Court should not interfere in revision, because no application was made by the defendants for amendment of their pleadings. He further submitted that the application under Section 9, Civil P. C., read with Section (69 of the Partnership Act was made by the defendants at a very late stage. Inter alia, Mr. Hira Lal Vaidya cited the following authorities :- (i) Goverdhandoss v. M. Abdul Rahiman, AIR 1942 Mad. 634 (E). There a Division Bench of that High Court held that:

'A stringent provision like Section 69(2) must be strictly construed. The provisions of Section 69(2) can only be attracted to a suit if it was instituted either by or on behalf of the firm, that is to say ex facie it purports to be filed either by or on behalf of the firm or even in the interests of the firm.'

(ii) Shanmugha Mudaliar v. Rathina Mudaliar, AIR 1948 Mad 187 (F), There, a Division Bench of that High Court pointed out that:

'The intention of the Legislature was to inflict disability for non-registration only during the subsistence of the partnership. The words in Section 69(3), particularly 'or any right or power to realise the property of a dissolved firm', remove any disability which existed during the continuance of the partnership. Hence where an unregistered partnership has been dissolved money due to the partnership from a third party in respect of dealing between him and the partnership during its subsistence can be recovered by means of a suit.'

Mr. Vaidya urged that by means of this decision, the earlier decision, reported in AIR 1945 Mad. 146 (B), has been superseded. In AIR 1945 Mad 146 (B), Bell, J., had come to the conclusion that where an unregistered partnership had been dissolved any contract made with the partnership during its subsistence cannot be enforced by suit. It was only this conclusion that was dissented from in the later Division Bench ruling. There is, however, no dispute regarding the scope of Section 69. The Division Bench, in AIR 1948 Mad 187(F), made it clear that:

'Partnership Act places no prohibition upon an unregistered partnership making contracts either between the partners inter se, or with some third party, nor upon an unregistered partnership acquiring property or assets. All that it does is to make a suit instituted by an unregistered partnership, to recover property, unenforceable.'

(iii) Mohamad Ali v. Kondho Rayaguru, AIR 1945 Pat. 286(G). There, a Division Bench of that High Court was of the view that:

'Whether the firm was or was not actually registered under the Partnership Act, is a mixed question of fact and law and the point cannot be raised, for the first time, in second appeal. Since it is the defendant, who intends to contest the performance of the condition precedent viz. the registration of the firm and if the point is not raised in the pleadings the question is not at all before the Court.'

7. As already shown, although this matter was not pleaded in the written-statement, nevertheless, it was brought to the notice of the Court by means of an application dated 26-7-1955 which was erroneously labelled as one under Section 9, Civil P. C., and Section 69 of the Partnership Act.

8. I am, therefore, of the opinion that the matter having been brought to the notice of the trial Court, it was incumbent upon it to frame the necessary additional issues or amend the existing issues, permit the parties to lead evidence thereupon, enter findings on the issues and dispose of the suit in accordance with law. In not doing so, I am constrained to remark that the Court below has shirked its duty.

9. I allow this revision petition and set aside the order passed by the Senior Subordinate Judge, Mandi (Sri Lachman Das) on 26-9-1955, rejecting the defendants' application dated 26-7-1955.

10. The learned Judge, in whose Court the suit is now pending, will frame such additional issues as may arise out of the defendant' application dated 26-7-1955 and the plaintiff's reply dated 9-8-1955 thereto and also amend the existing issues, if necessary. Parties should be given an opportunity of adducing their evidence on these and other issues.

The suit should then be decided in accordancewith law.

11. Since, in my opinion, the Court below has shirked the duty cast upon it, I make No order as to the costs of this revision petition. The entire court-fee paid on the revision petition will be refunded to the petitioners under paragraph 36(2), Himachal Pradesh (Courts) Order.


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