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Girdhari Lal Vs. New Bharat Finance Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtJammu and Kashmir High Court
Decided On
Case NumberCivil Misc. First Appeal No. 39 of 1977
Judge
Reported inAIR1981J& K82
ActsArbitration Act, 1940 - Section 20; ;Partnership Act, 1932 - Sections 58 and 69; ;Jammu and Kashmir Partnership (Registration of Firms) Rules, 1996 (Smvt.) - Rules 5 and 9
AppellantGirdhari Lal
RespondentNew Bharat Finance Co. and ors.
Advocates: R.P. Sethi, Adv.
DispositionAppeal allowed
Excerpt:
- .....being that the respondent firm, namely new bharat finance company, kanak mandi, jammu, was not duly registered under the provisions of the partnership act. the controversy between the parties, amongst others, gave rise to the following preliminary issue :'whether the plaintiff firm is not registered in accordance with law o. p. d.'2. the parties joined the issues and led evidence in support of their respective cases. the trial court decided all the issues against the appellant and held that the firm was duly registered. it accordingly made a reference of the disputes mentioned in the application to the arbitrator. it is this order which has been assailed in this appeal.3. i have today heard mr. sethi appearing for the appellant only, as no one is present to oppose the appeal on.....
Judgment:

I.K. Kotwal, J.

1. This is an appeal under Section 39 of the Arbitration Act filed by fhe debtor, against whom an application under Section 20 of the Arbitration Act was filed by the first respondent in the Court of Sub Judge, Jammu. The other respondents are the sureties. A number of objections were raised to the maintainability of the application, one of these being that the respondent firm, namely New Bharat Finance Company, Kanak Mandi, Jammu, was not duly registered under the provisions of the Partnership Act. The controversy between the parties, amongst others, gave rise to the following preliminary issue :

'Whether the plaintiff firm is not registered in accordance with law O. P. D.'

2. The parties joined the issues and led evidence in support of their respective cases. The trial Court decided all the issues against the appellant and held that the firm was duly registered. It accordingly made a reference of the disputes mentioned in the application to the Arbitrator. It is this order which has been assailed in this appeal.

3. I have today heard Mr. Sethi appearing for the appellant only, as no one is present to oppose the appeal on behalf of the respondents.

4. The appeal, in my opinion, can be disposed of on the short ground that the respondent firm is not duly registered. It is now well settled that an application under Section 20 of the Arbitration Act cannot be filed on behalf of a firm unless the firm is duly registered. Section 57 of the Partnership Act empowers the Government to appoint Registrars of Firms for the purpose of the Act, and further empowers it to define the areas in which they shall exercise jurisdiction. This section speaks of appointing Registrars of Firms only but does not speak of appointing Assistant Registrars of Firms. There is also no other provision in the Act, under which a Registrar of Firms may include an Assistant Registrar of Firms. Obviously, therefore, an Assistant Registrar is an authority not known to the Act. Section 59 says that when a Registrar is satisfied that the provisions of Section 58 have been duly complied with, he shall record an entry of the statement in a Register called the Register of Firms. This Register in terms of R. 5 of the Rules framed under the Partnership Act shall be in Form A. The registration of a firm cannot take effect by merely sending a statement required to be made under Section 58 of the Partnership Act to the Registrar, but will take effect only when the necessary entry is made in the Register of Firms, after the Registrar is satisfied that provisions of Section 58 have been fully complied with. How these entries are to be made in the Register of Firms has been provided in Rule 5 which reads as under:

'5. Register of Firms-- The Register of Firms shall be in Form A annexed to these rules. The name of, and the particulars relating to a firm shall be entered therein in the order of its registration on a separate page or pages, as the case may be. Each firm shall be assigned a number in a consecutive series commencing and ending with a calendar year. A note of every document filed shall be entered in the Register in the page or pages allotted to the firm concerned and shall be signed by the Registrar.'

5. As would appear from the plain reading of this Rule, signing of the Register by the Registrar after the entries are made in it is a necessary requirement of the Rule. This is obvious because appearance of his signature on the Register will be a prima facie proof of his satisfaction that requirements of Section 58 have been duly complied with. It is true, that satisfaction reached by the Registrar is not open to challenge, either in an appeal or in a suit, but the fact still remains that the satisfaction is to be his and of none else.

6. That a firm has been duly registered may be proved either by proving the original record containing the entry made in it' or by production of certificate of its registration or a certified copy thereof. Rule 9 makes provision for issuing such a certificate. This Rule reads as under:

'9. Certificate of registration and filing of documents. -- (a) Upon the registration of a firm the Registrar shall grant to the firm a certificate in Form C annexed to these rules, and on the filing of any document required to be filed under the Act, he shall grant to the person filing it a certificate in Form D annexed to these rules.

(b) On every document filed under the Act the Registrar shall endorse the following particulars, namely :--

(i) the number borne by the firm on the register;

(ii) the name of the firm;

(iii) the description of the document;

(iv) the serial number of the document; and

(v) the date of filing.

The Registrar shall also affix his signature and the seal of his office to such document

(c) If there is no space on the document for entering the particulars referred to in CIause (b), the entry shall be made on a separate paper which shall be attached to the document and a note of the fact shall be made on the document itself and signed by the Registrar.'

The certificate according to this Rule has to be in Form C which is necessarily required to be signed by the Registrar besides containing the seal of his office. The other contents of this certificate are those mentioned in Clause (b) of the Rule.

7. In the instant case, copy of the certificate which has been produced by the first respondent is no doubt in Form C and also bears the seal of the office of the Registrar of Firms, it cannot still be taken as a proof of the registration of the firm, because it does not bear the signature of the Registrar but on the other hand bears the signature of the Assistant Registrar, who as already observed, is a non-entity under the Partnership Act This document therefore, clearly fails to satisfy the requirements of a certificate of registration of the firm and consequently fails to furnish the necessary proof that the respondent firm is duly registered. On the basis of this document it is impossible to hold that these entries were made in the Register by the Registrar of Firms after reaching his satisfaction that the requirements of Section 58 had been fully met with. This certificate, as ordained by Rule 9, ought to have contained not only all the information required to be conveyed through it under Clause(b) of Rule 9, but it ought to have been signed by the Registrar and borne the seal of his office as well. Then and then alone it could be said that the firm had been duly registered. True, the trial Court committed an error in placing the burden of proof of the issue on the appellant himself, though the same squarely lay on the first respondent, for if no proof were to be led from either side, the sufferer would be the respondent itself, nevertheless, the question of onus of proof lost all its significance because, if not the appellant, at least the first respondent produced all the evidence which' it could produce to prove the fact that the firm was duly registered. Copy of the certificate of registration produced by the first respondent, not being a proof in the eye of law of the registration of the respondent firm, it is not possible to hold that the firm was duly registered. Section 69 of the Partnership Act clearly came in its way. The trial Court, therefore, committed an error in entertaining the application made by the first respondent and making a reference of the disputes mentioned in it to the arbitrator. Its order is, therefore, liable to be set aside.

8. For the foregoing reasons, the appeal is allowed, the order impugned in it is set aside, and the application made by the first respondent under Section 20 of the Arbitration Act is dismissed. Parties to bear their own costs.


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