Bhasker Finance and Commercial Syndicate vs B. Lakshminarayana Reddy and Another

Syed Shah Mohammed Quadri, J.—The substantial question of law that arises in this Second Appeal is whether Sub-section (2) of Section 69 of the Indian Partnership Act, 1932 (for short the Act) requires that the partner of the firm, who files the suit on behalf of the firm, should be shown as partner in the Register of Firms.

Appellant is the plaintiff in C.S. No. 559 of 1978 on the file of the Principal District Munsif, Anantapur. It is a registered firm represented by its Managing Partner Thippaiah. The suit was laid for recovery of a sum of Rs. 5,300/- on the foot of a promissory note, Ex. A-1, said to have been executed by the first defendant in the suit on obtaining a loan of Rs. 4,000/-. The plaintiff further stated that on 28-9-1973 a sum of Rs. 10/- was paid under Ex. A-2. The defendants denied the execution of the promissory note and contended that the suit was barred by limitation. They also contended that the person who purports to be the Managing Partner, was not a partner of the firm as on the date of the suit the firm stood dissolved. The trial Court after framing necessary issues decreed the suit. On appeal by the first defendant, the learned District Judge, Anantapur allowed the appeal (A.S. No. 102 of 1980), on 5-3-1982, holding that the person who purports to be the Managing Partner was not a partner of the firm when the suit was filed. Out of this decree and judgment, the present Second Appeal arises.

Sri Prasad, the learned Counsel for the appellant contends that Section 69(2) of the Act does not require that a person filing the suit on behalf of the firm must show that his name is recorded as partner in the Register of Firms; it is enough for him by whatever evidence, oral or documentary, to show that he was in fact a partner on the date of institution of the suit.

Sri Sadasiva Reddy, the learned Counsel for the respondents, on the other hand contends that mere oral evidence that the person was a partner of the firm on the date of the suit is not enough; he must also show that his name is so recorded in the Register of Firms.

To appreciate these rival contentions, it is necessary to read Section 69(2) of the Act. Section 69 deals with the effect of non-registration of firms. Sub-section (2), with which we are concerned here provides that 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; (i) the firm is registered and (ii) the persons suing are or have been shown in the Register of Firms as partners in the firm. It is therefore, incumbent to show that the firm which filed the suit was a registered firm and that the person who is suing on behalf of the firm is shown as a partner in the firm or has been so shown in the Register of Firms I am supported, in my view, by the judgment of the learned single Judge of this Court in Ramachandraiah Gupta v. Ravula Venkat Reddy 1970 (1) An.W.R. 243. In the aforesaid case it was urged before the Court that it was open to a person to establish that he was a partner even if he had not been shown in the Register of Firms as a partner. This contention was rejected. Chinnappa Reddy, J., (as he then was) held that the second condition requires that the names of the persons suing were shown at the time of the filing of the suit or had been previously shown in the Register of Firms as partners of the firm. The learned Judge further observed that construction of Section 69(2) as contended might well defeat the object of the provision which was avowedly to be provided the pressure which was to be brought to bear on partners to have the firm and themselves registered.

A Division Bench of this Court in V. Anjaneya Setty Vs. M.G. Brothers, referred to the above proposition of law laid down by the learned single Judge in Ramachandraiah Gupta''s case 1970 (1) An.W.R. 243 as correct.

The same view was taken by a Division Bench of the Delhi High Court in Shanker Housing Corporation (Ext.) Vs. Mohan Devi and Others, .

Sri Prasad however, contends that in M.A. Hussain v. P.V.G.K. and Brothers AIR 1970 Mys 299, the Mysore High Court had taken the view that it is enough to show that a person suing is a partner of the firm and he need not show that he is so shown in the Register of Firms.

The contention which was inter alia urged before a learned single Judge of Mysore High Court, was that the suit ought to have been dismissed on the ground that the plaintiff therein had not produced the extract of the Register of Firms showing that the plaintiff was a partner of the firm on the date of suit. The learned Judge having stated that there are two requirements of the Section and that they must be complied with, observed that the persons suing must establish that either they are the partners on the date of the suit or their names were shown in the Register of Firms as partners and that the second alternative, namely that the persons suing have been shown in the Register of Firms as partners of the firm could be established either by producing the relevant Register of Firms or certified copy of the same and not by adducing oral evidence and that there was no legal bar to prove that the first alternative, namely that the persons suing were partners of the firm by adducing evidence either by producing Register of Firms or its certified copies. This judgment in so far as it holds that the persons suing must establish either that they were partners on the date of the suit or that their names were shown in the Register of Firms., runs counter to the Division Bench judgment of this Court and therefore, I am unable to accept the said view.

On the facts it may be pointed out that to show that the appellant was the partner of the firm, the only evidence on record is Ex. A-4, assessment order of 1972, and evidence of P.W. 1. The said document as stated above was of the year 1972 whereas the suit was filed in 1980, but it is not shown that the appellant was the partner on the date of the filing of the suit. I have gone through the oral evidence of P.W.2 and even that evidence does not show that he was the partner of the firm. It must be added that there is no evidence on record to show that the said person was the partner of the firm and that in the Register of Firms he was shown as a partner on the date of the filing of the suit. In this view of the matter, the Second Appeal is without any merit. It is accordingly dismissed. No costs.