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Opinion Summary — Revision Petition under Section 25, Provincial Small Cause Courts Act (V.S. Malimath, J.)

Factual and Procedural Background

The suit originated as Small Cause Suit No. 387 of 1963 before the II Additional Civil Judge, Mangalore. The plaintiff was the registered partnership firm M/s. Panchamal Vasudev Ganapath Kamath and Bros., suing in the name of one of its partners, Sri Panchamal Vasudev Kamath. The plaintiff alleged that defendants 1 to 3, carrying on business as "National Trading Co. Bunder Mangalore", purchased goods on credit on 6-10-1960 worth Rs. 4,077-87 P., paid Rs. 2,400 and owed a balance of Rs. 1,677-87 P. plus interest.

Defendant No. 1 denied liability and denied being a partner of National Trading Company; the lower court accepted his plea and dismissed the suit as against him, a part of the decree not challenged by the plaintiff. Defendants 2 and 3 denied the transaction, contested the plaintiff's status as a registered firm and disputed that Sri Panchamal Vasudev Kamath was a partner entitled to sue; they argued the suit was not maintainable under Section 69(2) of the Indian Partnership Act.

The trial court framed two issues: (i) whether the suit was maintainable in view of Section 69(2) of the Indian Partnership Act; and (ii) whether the claimed amount was payable by the defendants. The plaintiff produced an acknowledgment of registration (Ex. A-1) and called P.W.1 (Sri Panchamal) who swore he was a partner. The Civil Judge accepted that Ex. A-1 established registration and, on the unchallenged sworn testimony of P.W.1, found Sri Panchamal to be a partner. The trial court held defendants 2 and 3 liable to the plaintiff for Rs. 1,986-99 P. and interest on Rs. 1,677-87 at 6% p.a. from 3-10-1963, and passed decree on 11-10-1966.

Defendants 2 and 3 challenged the correctness of that decree by filing the present revision petition under Section 25 of the Provincial Small Cause Courts Act.

Legal Issues Presented

  1. Whether the suit was maintainable in view of the provisions of Section 69(2) of the Indian Partnership Act (i.e., whether the two mandatory conditions of registration and names shown in the Register of Firms were satisfied on the date of institution of the suit).
  2. Whether the amount claimed by the plaintiff was payable by the defendants (i.e., the substantive liability of defendants 2 and 3 for the balance and interest).

Arguments of the Parties

Petitioners (Defendants 2 and 3) — Principal Contentions

  • Section 69(2) of the Indian Partnership Act is mandatory. Its two requirements are: (1) the firm must be registered; and (2) the persons suing must be or have been shown in the Register of Firms as partners on the date of the suit.
  • Although the petitioners conceded the firm was registered and that Order 30, Rule 1 CPC formalities had been complied with, they argued that the plaintiff failed to produce the extract of the Register of Firms showing Sri Panchamal Vasudev Kamath as a partner on the date of the suit, and therefore the suit was not maintainable and should be dismissed.
  • They relied on Nagpur High Court authority (Kapurchand Bhagaji Firm v. Laxman Trimbak, AIR 1952 Nag 57) for the proposition that the Register of Firms is a public document and only a certified copy (secondary evidence under Section 65(e) and Section 76 Evidence Act) or primary evidence of the register suffices to prove names shown in the register; oral evidence of P.W.1 would be inadmissible to establish the register entry.

Respondent (Plaintiff & Trial Court findings)

  • The plaintiff produced Ex. A-1 (acknowledgment of registration) which the trial court accepted as establishing that the firm was registered.
  • P.W.1 (Sri Panchamal) testified on oath that he was a partner of the plaintiff firm; his testimony on this point was not challenged in cross-examination by any defendant.
  • The trial court and the revisional court treated the unchallenged sworn testimony of P.W.1 together with Ex. A-1 as sufficient to satisfy the two conditions of Section 69(2).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bharat Sarvodaya Mills Co. Ltd. v. Mohatta Brothers (Gujarat High Court) (as cited) Presented as authority that the conditions of Section 69(2) are mandatory and the provision bars institution of a suit unless conditions are satisfied. The court agreed with the Gujarat High Court's view that Section 69(2) is mandatory and that the two conditions must be satisfied as at the date of institution of the suit; the revisional court expressly stated respectful agreement with that decision.
Kapurchand Bhagaji Firm v. Laxman Trimbak, AIR 1952 Nag 57 (Nagpur High Court) Held that the Register of Firms is a public document and proof that names are shown in the register must be by producing the register or a certified copy; oral evidence cannot be used to prove the register entry. The revisional court accepted the Nagpur court's statement that the register or a certified copy is required to prove the register entry (the second alternative), but disagreed with the Nagpur court's broader conclusion that oral evidence cannot at all be adduced to prove the other alternative (i.e., that the persons suing are in fact partners on the date of suit). The revisional court distinguished the two alternatives in Section 69(2) and permitted oral evidence to prove actual partnership status.

Court's Reasoning and Analysis

The revisional court proceeded in a stepwise legal analysis grounded on the text of Section 69(2) of the Indian Partnership Act and the record from the trial court.

  1. The court analysed Section 69(2)'s language ("No suit ... shall be instituted ... 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 concluded that Parliament intended the provision to be mandatory. The two conditions (registration of firm; persons suing are or have been shown in the register as partners) are conditions precedent to the institution of the suit and must be satisfied as of the date of institution.
  2. The court considered the authorities cited by the parties. It agreed with the Gujarat High Court decision that Section 69(2) is mandatory. It also engaged with the Nagpur High Court decision which emphasised that the Register of Firms is a public document and that proving that names appear in the register ordinarily requires production of the register or a certified copy.
  3. The court then parsed the second condition of Section 69(2) into two alternatives (expressed in the conjunctive phrase "are or have been shown"): (a) the persons suing are partners on the date of the suit; or (b) the persons suing have been shown in the Register of Firms as partners. The court observed that the second alternative (names shown in the register) must be proved by the register or a certified copy; oral evidence cannot substitute for the register to prove an entry in the register.
  4. Crucially, the court held that the first alternative (that the persons suing actually are partners on the date of suit) may be established by evidence other than the Register of Firms, including oral testimony. The revisional court respectfully disagreed with the Nagpur decision to the extent that it suggested that oral evidence could never be adduced to prove partnership for the purposes of satisfying Section 69(2).
  5. Applying that interpretation to the present record: Ex. A-1 (acknowledgment of registration) established the first mandatory requirement (that the firm was registered). P.W.1 (Sri Panchamal) swore that he was a partner; this testimony was not challenged in cross-examination. Apart from a general averment in the written statement, there was no material contradicting P.W.1's unchallenged sworn testimony. Accordingly, the court found that the first alternative of the second condition was satisfied by admissible evidence (oral testimony) and therefore both conditions of Section 69(2) were met as of the date of institution of the suit.
  6. Having concluded that the suit was maintainable, the revisional court reviewed the trial court's appreciation of evidence regarding liability and found no infirmity pointed out by the petitioners. It therefore declined to interfere with the trial court's decree.

Holding and Implications

Holding: Revision dismissed.

Direct effect on the parties:

  • The revisional court upheld the decree of the II Additional Civil Judge, Mangalore, confirming that defendants 2 and 3 are liable to the plaintiff to the extent decreed by the trial court (the trial court had quantified liability as Rs. 1,986-99 P. and interest on Rs. 1,677-87 at 6% p.a. from 3-10-1963, and had passed decree on 11-10-1966).
  • The revision was dismissed with costs in favour of the respondent/plaintiff.

Broader implications (as reflected in the opinion):

  • The court clarified the correct construction of the second condition in Section 69(2): it contains two alternatives — either the persons suing must in fact be partners on the date of the suit (which can be proved by evidence other than the Register of Firms, including oral testimony), or their names must be shown in the Register of Firms (which can only be proved by producing the Register or a certified copy). The revisional court expressly disagreed with the view that oral evidence is never admissible to prove partnership for the purpose of Section 69(2).
  • The opinion did not state that it was announcing a binding new precedent beyond the dispute; its decision rests on the court's interpretation and application of Section 69(2) to the facts before it and its assessment of earlier High Court authorities.

    M.A. Hussain And Anr. v. Panchamal Vasudev Ganapath Kamath And Brothers And Anr.

    ORDER V.S. Malimath, J.

    1. This is a revision petition filed by the original defendants 2 and 3 against the decree passed by the II Additional Civil Judge, Mangalore, in Small Cause Suit No. 387 of 1963 under Section 25 of the Provincial Small Cause Courts Act.

    2. It is the plaintiffs case that M/s. Panchamal Vasudev Ganapath Kamath and Bros, is a registered partneship firm. The suit has been filed by the firm and in the name of the firm by its partner Sri Panchamal Vasudev Kamath. The case of the plaintiff is that defendants 1 to 3 who were doing business in the name and style of "National Trading Co. Bunder Mangalore" purchased from the plaintiff goods worth Rs. 4,077-87 P. on credit on 6-10-1960. The defendants having paid only a sum of Rs. 2,400 they are, according to the plaintiff, liable to pay the balance of Rs. 1,677-87 P. and interest thereon,

    3. Defendant No, 1 denied his liability by contending that he was never a partner of 'National Trading Company' and that he had no dealings in any capacity with the plaintiff. The lower Court accepting the vase of defendant No. 1 has dismissed the suit as against defendant No. 1. That part of the decree has not been challenged by the plaintiff and hence the same has become final.

    4. Defendants 2 and 3 resisted the suit on various grounds. Defendants 2 and 3 have averred that they were not the partners having any business dealings with the plaintiff, they denied the suit transaction and the liability arising therefrom. They further denied that the plaintiff is a Registered firm or that Sri Panchamal Vasudev Kamath is a partner of the firm entitled to represent the alleged firm. They, therefore, contended that the suit is not maintainable in view of Section 69(2) of the Indian Partnership Act.

    5. The learned Civil Judge framed the following points for determination in the suit:

    (i) Whether the suit is maintainable in view of the provisions of Section 69(2) of the Indian Partnership Act; and

    (ii) Whether the amount claimed by the plaintiff is payable by the defendants?

    6. In view of the production of the acknowledgment of Registration, Ex. A-l, by the plaintiff, defendants 2 and 3 did not press their contention that the plaintiff was not a Registered firm on the date of suit. The defendants however contended that the suit is not maintainable as the plaintiff has not produced the extract of the Register of Firms showing Sri Panchamal Vasudev Kamath as a partner of the firm on the date of suit as required by Section 69(2) of the Indian Partnership Act.

    The learned Civil Judge held that under Section 69(2), it is not incumbent upon the plaintiff-firm to produce the extract of Register of firms showing the names of the partners. He held that production of a certificate showing the registration of the firm is sufficient. He held that Ex. A.1 established that the plaintiff is a registered firm. He further held that Sri Panchamal Vasudev Kamath is a partner of the firm on the basis of the sworn testimony of Sri Panchamal which has not at all been challenged in cross-examination by any of the defendants. After analysing the evidence placed by the parties the learned Civil Judge came to the conclusion that defendants 2 and 3 are liable to the plaintiff to the extent of Rs. 1,986-99 P. and interest on Rs. 1,677-87 at 6% p. a. from 3-10-1963. The learned Civil Judge passed a decree accordingly against defendants 2 and 3 only on 11-10-1966, in the above referred Small Cause Suit No. 387 of 1963.

    7. It is the correctness of the aforesaid decree that is challenged by defendants 2 and 3 in this revision petition filed under Section 25 of the Provincial Small Cause Courts Act.

    8. Sri P. Basudev Aithal, the learned counsel for the petitioner contended that the suit ought to have been dismissed by the trial court as the mandatory requirements of Section 69(2) of the Indian Partnership Act have not been fulfilled on the ground that the plaintiff has not produced the extract of Register of firms showing Sri Panchamal Vasudev Kamath as a partner of the plaintiff firm. The learned counsel contends that Section 69(2) is mandatory and that as there is non-compliance with the same, the suit ought to be dismissed. The two mandatory requirements of Section 69(2) according to the learned counsel are:

    (1) That the firm is a registered one: and (2) that the persons suing are or have been shown in the Register of Finns as partners in the firm.

    The learned counsel for the petitioners does not dispute that the suit has been instituted by the firm to enforce a right arising from a contract against a third party. He also does not dispute that the firm is a registered one. He conceded that the provisions of Order 30, Rule 1 of the Civil P. C. have been complied with. The learned counsel for the petitioners urges that the suit ought to be dismissed on the ground that the plaintiff has not produced an extract of the Register of firms showing Sri Panchamal as a partner of the firm on the date of suit.

    9. Section 69(2) on which reliance is placed by the petitioner's counsel reads as follows:

    "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."

    10. This provision specifically bars the institution of a suit by or on behalf of a firm to enforce a right arising from a contract makes (unless?) the conditions specified in Section 69(2) are satisfied. The use of the expression "No suit ...... shall be instituted in any court. ..

    clearly indicates the intention of the Legislature to make this provision mandatory. The two requirements which must be fulfilled before a suit can be instituted to enforce a contractual right by the firm or on behalf of the firm are: (1) that the firm is a registered one and (2) that the persons suing are or have been shown in the register of firms as partners of the firm. As these are the conditions for the institution of the suit, the relevant date with respect to which these conditions must be satisfied is the date of the institution of the suit. On the date of the institution of the suit, the firm must he a registered one and the persons suing must either be partners or persons whose names are shown in the register of firms as partners. Both the conditions are mandatory and must be fulfilled. The suit would be wholly incompetent if either of these conditions is not fulfilled. The learned counsel for the petitioners invited my attention to a decision of the Gujarat High Court reported in Bharat Sarvodaya Mills Co. Ltd. v. Mohatta Brothers A Firm, . The view taken by their Lordships or the Gujarat High Court in this behalf accords with the view I have taken above. I therefore respectfully agree with the said decision.

    11. The learned counsel for the petitioners contends that the second condition mentioned in Section 69(2) has not been satisfied in this case as admittedly the respondent has not produced the extract from the Register of firms showing Sri Panchamal Vasudev Kamath as a partner of the firm. Dealing with this aspect of the matter, this is what the learned Civil Judge has observed in this case:

    "In view of the case law cited by the learned advocate for the plaintiff, I hold that the suit is maintainable even though the extract of Register of firms showing the partners has not been filed by the plaintiff as Ex. A.1 clearly shows that the plaintiff is a registered firm and P. W. 1 has stated on oath that he is a partner of that firm and he has not been cross-examined by any of the defendants regarding the fact of his being a partner of the plaintiff firm."

    The learned counsel for the petitioners fairly conceded that there is no cross-examination whatsoever of P. W. 1 challenging the sworn statement of P. W. 1 that he is a partner of the plaintiff firm. P. W. 1 is no other than Sri Panchamal Vasudev Kamath.

    The learned counsel also fairly conceded that barring the averment in the written statement there is no other evidence to indicate that Sri Panchamal Vasudev Kamath was not a partner of the plaintiff firm on the date of suit. But the learned counsel for the petitioners urges that the second condition cannot be satisfied by any evidence-other than the extract of the register of firms. He further contends that as no such extract has been produced in this case, the second condition which is a mandatory condition has not been fulfilled in this case.

    He therefore contends that the suit ought to be dismissed. In support of his contention, the learned counsel for the petitioners relied on a decision of the Nagpur High Court reported in Kapurchand Bhagaji Firm v. Laxman Trimbak, AIR 1952 Nag 57. The relevant portion of the aforesaid decision on which reliance was placed by the learned counsel for the petitioners is extracted below:

    "Para (4) There can be no doubt that the Register of Firms is a public document and the requirements of Section 69(2) are complied with by producing a certified copy of an entry from this register. The primary evidence of a document is the document produced for the inspection of the Court and secondary evidence means and includes certified copies given under Section 76 of the Evidence Act. Under Section 64 of that Act documents must be proved by primary evidence except in cases mentioned in See. 65. Under Section 65(e) a certified copy of a public document but no other kind of secondary evidence is admissible to prove the original.

    Para (5) It will thus be clear that the evidence of P. W. 1 is not admissible as secondary evidence to prove the fact of registration. It is not enough to prove that the firm was registered, but it must also be proved that the persons suing are or have been shown in the Register of Firms as partners of the firm. There is no evidence that the three partners have been shown in the Register of Firms. That fact could be proved only by producing a copy of the entry from the Register of Firms. The lower Court thus fell into error in relying on the evidence of P. W. 1 and holding that the requirements of Section 69(2) of the Partnership Act were satisfied. The plaintiff's suit should have been dismissed on this ground."

    This decision no doubt supports the case of the petitioners. I agree with the view expressed by Justice Deo that the only evidence that can be produced to prove that the persons suing have been shown in the Register of Firms as partners in the firm is the relevant register of firms or a certified copy of the same. I also agree that oral evidence cannot be adduced to prove that the names of the persons suing have been shown in the register of Finns as partners in the firm. But with great respect, I do not agree with the view that oral evidence cannot at all be adduced to prove the second condition. The second condition really consists of two alternatives and it is enough it one of them is fulfilled. The second condition of Section 69(2) reads as follows:

    ..... .and the persons suing are or have been shown in the Register of firms as partners in the firm.

    12. It is clear from this provision that there arc two alternatives available in the second condition. The persons suing may establish either that they are partners on the date of suit or that they are persons whose names are shown in the register of firms as partners in the firm. As already observed, the second alternative, namely, the fact that the names of the persons suing have been shown in the Register of firms as partners of the firm can be established either by producing relevant Register of firms or a certified copy of the same and not by adducing oral evidence. But there is no legal bar to prove the first alternative, namely, that the persons suing are partners of the firm by adducing evidence other than the register of Firms or its certified copy. It appears that pointed attention of the court has not been invited to the first alternative of the second condition in above referred case decided by the Nagpur High Court. In my opinion, the persons suing must either in fact be partners on the date of suit or must be persons whose names are shown as on the date of suit in the Register of Finns as partners of the firm. Even if the names of the partners suing have not yet been entered in the Register of firms, they can still institute the suit by proving that they are in fact partners of the firm on the date of suit. That can only be proved by evidence other than the Register of firms. I therefore respectfully disagree with the view taken by Justice Deo in the decision reported in AIR 1952 Nag 57. In my opinion, oral evidence other than the Register of Finns or its extract can be adduced to prove that the persons suing are partners of the firm as on the date of suit.

    13. In the present case, P. W. 1 Sri Panchamal has stated on oath that he is the partner of the plaintiff firm. There is no cross-examination of this witness on this point. Barring a general averment in the written statement of the defendants, there is no other material to doubt the testimony of P. W. 1 The learned Civil Judge has therefore rightly believed P. W. I and held that Sri Panchamal is a partner of the firm. Consequently, both the conditions specified in Section 69(2) have been satisfied in this case. The contention of the learned counsel for the petitioner that the suit is not maintainable must therefore fail.

    14. The learned Civil Judge has after appreciating the evidence on record decreed the suit. The learned counsel for the petitioners has not been able to invite my attention to any infirmities in the judgment of the lower court in this behalf. I do not find any grounds to interfere with the decree passed by the lower court.

    15. For the reasons stated above, this revision petition is dismissed with costs.

    16. Revision dismissed.

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    M.A. Hussain And Anr. v. Panchamal Vasudev Ganapath Kamath And Brothers And Anr.
    (Jun 9, 1970)