Jammu Cold Storage and General Mills Ltd. vs Khairati Lal and Sons

J.N. Wazir, C.J.—This is a revision application against the order of the City Judge, Jammu, dated 8-8-1959, and arises out of the following

circumstances.

M/s. Khairati Lal and Sons Plaintiffs instituted a suit for the recovery of Rs. 1,000 from M/s. Cold Storage and General Mills Ltd., Jammu on

15-4-1959. The Plaintiff firm was not registered under the Partnership Act on the date when the suit was instituted. The Defendants in their written

statement pleaded that the Plaintiffs' suit could not proceed in view of the Plaintiff firm not being registered on the date the plaint was filed. It

appears that the Plaintiff firm got the partnership registered on 30-5-1959, and it was averred by them that the firm had already been registered.

The question for consideration before the trial Court was whether the registration of the firm after it had filed the suit could cure the defect.

The learned trial Judge following a Full Bench decision of this Court reported as Ghulam Mohd. v. Ghulam Mohd. 7 J & K LR 120, held that the

subsequent registration cured the defect and the suit was maintainable. Against that order the Defendants came up in revision to this Court and the

case was put up for hearing before a Single Judge of this Court on 2-12-1959. In view of the conflict of decisions on this point the case was

referred to the Full Bench for an authoritative pronouncement.

It was argued that the view taken by the trial Court based on the Full Bench decision was not correct. Relying on Dwijendra Nath Singh and

Another Vs. Govinda Chandra and Another, , Prithvisingh Devising Vs. Hasan Alli Vazirkhan, and AIR 1954 P&H 233 (sic) it was argued that

the suit which was not maintainable by reason of non-compliance with Section 69 could not become maintainable at a later stage by reason of

subsequent registration. In the Full Bench judgment of this Court which was delivered in 1946 reliance was placed on Radha Charan Saha v.

Matilal Saha 41 Cal WN 534 and Varadarajulu Naidu v. Rajamanika Mudaliar AIR 1937 Mad 767 and it was held that if the firm was not

registered on the date of the institution of the suit but the registration was effected during the pendency of the suit, the suit may be considered to

have been instituted on the date when the firm was registered if it was not otherwise barred on that date.

It appears that the later decisions of the Madras and Calcutta High Courts and of other High Court were not brought to the notice of their

Lordships at that time. The cases relied upon by the Full Bench have been overruled subsequently by the decisions of the same High Courts. AIR

1937 Mad 767 is a Single Bench judgment by Horwill, J. and in that case an unregistered firm had instituted a suit and during the course of the

proceedings had registered itself in accordance with the Partnership Act.

On objection being raised that the firm was not registered on the date of the institution of the suit, the suit was dismissed though registration had

taken place before the hearing. Horwill, J. held that it would be most inequitable for the firm to have its suit dismissed and be forced to file another

after paying fresh court-fee. The suit was therefore, treated as instituted on the date when the firm was registered. This case was overruled by a

Division Bench of the Madras High Court. K.K.A. Ponnuchami Goundar Vs. Muthusami Goundar and Another, in which it was held that:

a suit is instituted when the plaint is filed in a Court of competent jurisdiction. The registration of the firm is a condition precedent to the right to

institute the suit and the Court has no jurisdiction to proceed with the trial when the condition precedent has not been fulfilled. Registration after the

filing of the suit cannot cure defect.

A Single Bench of the Calcutta High Court, Mitter, J., in 41 Cal WN 534 took the view that the suit ought not to have been dismissed merely

on the ground of non-registration of the firm but ought to to have been deemed to have been instituted on the date when the firm was registered,

but subsequently a Division Bench of the same High Court in Dwijendra Nath Singh and Another Vs. Govinda Chandra and Another, , took a

contrary view holding that a suit by the firm not registered on the date of the institution of the suit but registered on a later date before the suit came

to be heard did not become maintainable by the subsequent registration.

Section 69 Clause (2) of the Partnership Act 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 the firm has been registered and the person suing is or has been shown in the Register of Firms as

partners in the firm. The provisions of Section 69, Clause (2) are mandatory and the registration of the firm is a condition precedent to the right to

institute the suit and if on the date of the institution of the suit the firm is not registered, the suit cannot proceed.

The view taken by this Court in an earlier Full Bench case that if the partnership is subsequently registered the suit may be considered to have been

instituted on the date the firm was registered if it was not otherwise barred on that date, does not appear to be correct as there is no provision of

law nor is there any case cited which permits the Court to treat the plaint as filed on a date which is other than the date on which, it was actually

filed.

In AIR 1927 176 (Privy Council) , their Lordships considered the provisions of Section 80 of the CPC and laid down that they were explicit

and mandatory and if the permission to sue was not sought before the institution of the suit, the suit was not maintainable. The provisions of Section

80, C P C, have very much in common with Section 69 of the Partnership Act and if the condition precedent is not fulfilled, i.e., if the partnership is

not registered on the date of the institution of the suit, the Subsequent registration could not validate the suit. The only option left to the Court is to

dismiss it.

There is no doubt that it is hard on the Plaintiffs if their suit is dismissed merely because of the defect of non-registration which is subsequently

removed by registration; but as laid down by their Lordships of the Privy Council in the above case that the Act must be construed in accordance

with the natural and plain meanings of its words; it is not open to the Courts in trying to save the Plaintiffs from hardship to construe the Act by

going behind the plain meanings of its words.

The Allahabad High Court in (Firm) Danmal Parshotam Dass Vs. (Firm) Babu Ram-Chhote Lal, , the Patna High Court in Firm Laduram

Sagarmal Vs. Jamuna Prasad Chaudhuri and Others, and the Lahore High Court in Firm Kishen Lal Ram Lal v. Abdul Ghafur Khan ILR Lah 275

: AIR 1935 Lah 893, have all held that subsequent registration of the firm will not allow the suit to proceed. The weight of authority on this point is,

therefore, clearly to the effect that subsequent registration will not validate the suit.

For the reasons given above, we allows this revision application and set aside the order of the City Judge allowing the suit to proceed. We

should not however be understood;as saying that the Plaintiffs are not entitled to withdraw the suit if they are so advised. In view of the special

circumstances of the case the parties are left to bear their own costs in this Court.

S. Murtaza Fazl Ali, J.

I agree.

Gopalakrishnan Nair, J.

I agree.