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Firm Of v. Ramachandraiah Gupta And K. Anjaiah Gupta Commission Agents
Factual and Procedural Background
The plaintiff, a firm described as "Ramachandraiah Gupta and K. Anjayya Gupta, commission agents, Mahaboobnagar," filed a suit which was dismissed by both the trial and appellate courts. The suit was founded on a bond dated 26th July 1967 (Exhibit A-1), which both lower courts found genuine and supported by consideration. The plaintiff relied on Exhibit A-4, an acknowledgment of registration of the firm, to prove the firm's registration. However, the plaintiff did not file a certified extract of the register of firms disclosing the names of the partners, and Exhibit A-4 did not mention the partners' names. Consequently, both courts held that the requirements of section 69(2) of the Indian Partnership Act were not fulfilled and dismissed the suit. The appellate court also declined to admit a deed of partnership dated 11th December 1961 as additional evidence.
Legal Issues Presented
- Whether the suit filed by the firm satisfies the conditions prescribed by section 69(2) of the Indian Partnership Act, specifically:
- That the firm must be registered.
- That the persons suing are or have been shown in the register of firms as partners in the firm.
- Whether a suit filed in the name of the firm by one or more partners under Order 30, Rule 1 of the Civil Procedure Code complies with the registration requirements under section 69(2).
- Whether the absence of a certified extract of the register of firms showing the partners justifies dismissal of the suit.
Arguments of the Parties
Appellant's Arguments
- The appellant argued that the second condition under section 69(2) should be read as meaning that the persons suing are partners in the firm or alternatively have been shown in the register of firms as partners.
- It was contended that a person suing may establish partnership status even if not shown in the register of firms as a partner.
Court's Response to Arguments
- The court rejected the appellant's construction, emphasizing that allowing a person to sue without being shown in the register would defeat the provision's object to encourage registration and transparency.
- The court highlighted the statutory scheme under sections 58, 59, 66, and 67 of the Partnership Act, which aims to ensure public knowledge of partners through the register.
- The court preferred the plain meaning of section 69(2) requiring that persons suing must be or have been shown in the register of firms as partners.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hansraj Manot v. Gorak Nath Champald, (1969) 66 C.W.N. 262 | Supports the interpretation of section 69(2) requiring persons suing to be shown in the register of firms as partners. | The court relied on this judgment to affirm the plain construction of section 69(2) and reject the appellant's broader interpretation. |
| Ram Kumar Ramchandra v. The Dominion of India, A.I.R. 1952 All. 695 | Interpreted the requirement of registration and showing partners in the register for suits by or on behalf of a firm. | The court distinguished this precedent, rejecting its interpretation that the requirement applies only to suits on behalf of a firm and not suits by a firm, reaffirming both conditions must be met. |
Court's Reasoning and Analysis
The court analyzed section 69(2) of the Indian Partnership Act, which mandates two conditions for suits by or on behalf of a firm: (1) the firm must be registered, and (2) the persons suing must be or have been shown in the register of firms as partners. The court explained that a firm is not a legal entity but a collective of partners, and suits may be instituted by all partners jointly or by some partners suing in the firm's name under Order 30, Rule 1 of the Civil Procedure Code. Regardless of the mode of suing, the statutory conditions must be fulfilled.
The court rejected the appellant's argument that a person could sue as a partner without being shown in the register, reasoning that such a construction would undermine the statutory objective of promoting firm registration and transparency. The court referred to the statutory scheme governing firm registration and inspection of the register, emphasizing that the register's purpose is to inform third parties about the firm's partners.
Further, the court distinguished a prior ruling by the Allahabad High Court, which suggested the requirement applies only to suits on behalf of a firm, holding that the language of section 69(2) requires both conditions to be satisfied in suits by or on behalf of a firm. Finally, the court noted that the plaintiff failed to file a certified extract of the register showing the partners, justifying dismissal of the suit.
Holding and Implications
The court's final decision is DISMISSED the civil revision petition.
The direct effect of this decision is the affirmation of the lower courts' dismissal of the suit due to non-compliance with section 69(2) of the Indian Partnership Act, specifically the failure to file a certified extract of the register showing the partners. The opinion does not establish any new precedent beyond clarifying the strict requirements for suits by or on behalf of a firm under the Act and the Civil Procedure Code.
(1) The plaintiff, whose suit was dismissed by both the courts below is the petitioner in the civil revision petition. The petitioner is described in the plaint as the ' firm v. Ramachandraiah gupta and k. Anjayya gupta, commission agents, mahaboobnagar'. One k. Narayana claiming to be a partner of the firm signed and verified the pleadings. The plaintiff filed exhibit a - 4, an acknowledgment of registration of firm', to prove that the firm was a registered firm. The plaintiff, however, did not file any certified extract of the register of firms disclosing the names of the partners of the firm. Exhibit a - 4 also did not mention the names of the partners and therefore both the lower courts held that the condition prescribed by section 69 (2) of the indian partnership act had not been fulfilled and therefore dismissed the suit. Before the appellate court a deed of partnership dated nth december, 1961 was sought to be introduced as additional evidence, but the appellate court declined to receive the document as additional evidence. On the merits. , however, both the lower courts found that the bond, exhibit a - 1 dated 26th july, 1967, on which the suit was founded was true and supported by consideration and that the denial of the genuineness of the bond by the defendant was false.
(2) These concurrent findings on the merits are findings of fact based on evidence and are binding on me. The only question for consideration is whether the requirements of section 69 (2) of the partnership act are satisfied. Sub - sections i and 2 of section 69 are as follows:
"69. (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 is registered and the persons suing are to have been shown in the register of firms as partners in the firm."
(3) Now, a firm is not a legal entity at all, but is a mere abbreviated name for the several partners of which it consists. Ordinarily, therefore, a suit may not be brought by a firm in its own name but a suit may be brought by all the partners acting together or by some of the partners only but impleading the other partners also as parties to the suit. However order 30, rule 1 of the civil procedure code prescribes a special procedure by which a suit may be brought in the name of the firm. It provides that any two or more persons claiming or being liable as partners and carrying on business may sue or be sued in the name of the firm of which such persons were partners at the time of the accruing of the cause of action and that in such a case it shall suffice if one of such persons signs, verifies or certifies any pleadings or document required by the code to be signed, verified or certified by the plaintiff or the defendant. The effect of a suit instituted in the name of the firm in the manner, prescribed by order 30 rule 1 is as if the suit is filed by all the partners collectively.
(4) Whether the suit is filed by all the partners collectively or by some only of the partners impleading the rest as parties to the suit or whether it is filed in the name of the firm by one or more partners in the manner indicated by order 30, rule 1, the conditions prescribed by section 69 (2) must be fulfilled. They are (1) that the firm must be registered and (2) that the persons suing are or have been shown in the register of firms as partners in the firm. The second condition requires that the names of the persons suing are presently shown or have been previously shown in the register of firms as partners in the firm. That appears to follow plainly from section 69 (2).
(5) But mr. B. V. Subbarayudu urges that the second condition must be read as meaning that the persons suing are partners in the firm or alternatively they have been shown in the register of firms as partners. According to mr. Subbarayudu, it is open to a person suing to establish that he is a partner even if he has not been shown in the register of firms as a partner. I do not think that i can so construe the provision.
(6) Such a construction may well defeat the object of the provision which is avowedly to provide the pressure which is to be brought to bear on partners to have the firm and themselves registered'. (see statement of objects and reasons). Sections 58 and 59 of the partnership act prescribe the manner in which registration of a firm may be effected. A statement in the prescribed form stating the name of the firm, places of business, names and addresses of all partners with the dates when the partners joined the firm and duration of the firm, and signed by all the partners or their authorised agents is required to be sent to the registrar with the prescribed fee, whereupon the register is required to record an. Entry of the statement in the register of firms and to file the statement. Section 66 enables any person to inspect the register on payment of the prescribed fee and section 67 enables any person to obtain certified copies of the entries in the register on payment of the prescribed fee. These provisions emphasise that the primary object of registration of a firm is to enable persons who deal with a firm or who desire to deal with a firm to know who are the partners of the firm by a reference to the register of firms. This object will be defeated if a person suing is allowed to plead that he is a partner of the firm even if he is not shown in the register of firms as a partner. I therefore prefer the plain construction of section 69 (2) indicated by me earlier than the construction which mr. Subbarayudu seeks to place upon it. I may add that my conclusion is supported by a judgment of chatterjea j. , in hansraj manot v. Gorak nath champald, (1969) 66 c. W. N. 262.
(7) A division bench of the allahabad high court has held in ram kumar ramchandra v. The dominion of india, a. I. R. 1952 all. 695, that the requirement that persons suing are or have been shown in the register of firms as partners applies only to suits instituted on behalf of a firm and not to suits by a firm. According to the learned judges, in the case of a suit by a firm it is enough if the firm is registered. The language of section 69 (2) does not justify such an interpretation. Whether a suit is by a firm or on behalf of a firm the sub - section seems to clearly prescribe that both the requirements should be satisfied. It is true that a suit instituted in the manner laid down in order 30, rule 1, may be called a suit by a firm, but the firm itself not being a legal entity, some partners must sue in the name of a firm and those partners must be shown in the register of firms as partners.
(8) In the present caae for reasons best known to the plaintiff a certified extract of the register of firms showing the partners of the firm has not been filed. The lower courts were therefore justified in dismissing the suit. The civil revision petition is accordingly dismissed. At my request sri m. Jagannatha rao acted as amicas curiae. I thank him for his assistance. Revision dismissed.
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