Prakash Jain and others vs Vijay Saxena and another

Dipak Misra, J.

In this civil revision preferred u/s 115 of the CPC (hereinafter referred to as ''the Code'') challenge is to the order dated 23-12-99 passed in C.S. No. 236-A/99 by the IIIrd Civil Judge, Class-II, Bhopal.

The facts as have been undraped are that the non- applicant No. 1 initiated the aforesaid civil litigation for rendition of accounts, injunction and appointment of receiver on the ground that the firm had already been dissolved as per the terms and conditions of the Partnership deed. After the defendants/ applicants entered contest, they moved an application under Order 7 Rule 11 of the Code to reject the plaint on the ground as the firm is not registered a suit cannot be instituted as envisaged u/s 69 of the Partnership Act, 1932 (hereinafter referred to as ''the Act''). The learned Trial Judge on consideration of the material on record negatived the prayer of the applicants/ defendants. The said order is cause of grievance of the present revisionists.

Assailing the aforesaid order it is contended by Mr. Prashant Jaiswal that the reasonings ascribed by the learned Trial Judge are unsound in as much as the embargo as stipulated u/s 69(3) in respect of the unregistered firm would apply in full force. It is his further submission that the exception carved out u/s 69(3)(a) is not applicable to the present ase as the firm in question has not yet been dissolved and is in continuance.

Resisting the aforesaid submissions it is put forth by Mr. S.A. Shobhani, learned counsel for the non-applicant No. 1 that as per the averments in the plaint the firm has been dissolved and hence the plaintiff as partner is entitled under law to ask for rendition of accounts and make such other ancillary prayers. It is his submission that the exception to Section 69 would cover the present controversy and, therefore, the learned Trial Judge is correct in rejecting the application preferred under Order 7 Rule 11 of the CPC.

To appreciate the rival submissions raised at the Bar, I have carefully perused the impugned order. On a close scrutiny of the order it appears that the learned Trial Judge has appreciated the pleadings and has observed that the suit is for rendition of accounts in respect of a dissolved firm. The core question that arises for consideration is whether on the basis of the said pleadings Section 69 of the Act would be applicable. Section 69 of the Act reads as under:--

"69. Effect of non-registration.-- (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 or is or has been shown in the Register of Firms as a partner in the firm.

(2) No suits 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.

(3) The provisions of sub-section (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect-

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm; or

(b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909 (3 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realise the property of an insolvent partner.

(4) This section shall not apply-

(a) to firms or to partners in firms which have no place of business in (the territories to which this Act extends), or whose places of business in (the said territories) arc situated in areas to which, by notification under (Section 56), the Chapter does not apply, or

(b) to any suit or claim or set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in Section 19 of the Presidency Small Cause Court Act, 1882 (15 of 1882), to outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceedings incidental to or arising from any such suit or claim."

On a bare reading of the aforesaid provision it is quite vivid that a suit against the unregistered firm would be maintainable for rendition of accounts. The embargo created by the provision would not be attracted. In this context, I may profitably refer to a decision rendered in the case of Smt. Premlata and another Vs. M/s. Ishar Dass Chaman Lal and others, , wherein the Apex Court held that right to sue for dissolution includes right to invoke arbitration clause as such a right can be worked out u/s 69(3)(a). The purpose of citing the said decision is that an action is maintainable for dissolution of a firm and that would include reference of dispute to arbitration. Quite apart from the above an action for rendition of accounts is also maintainable against the dissolved firm. It is categorically averred in the plaint that the firm has been dissolved and, therefore, relief has been sought for rendition of accounts, grant of injunction and appointment of receiver. The prayer for injunction and appointment of receiver being anciliary, in my considered opinion the same shall also be tenable. The submission of Mr. Jaiswal that the firm has not been dissolved and is in continuance shall be gone into during the final hearing of the suit. If eventually the Trial Court comes to hold that the firm has not been dissolved, he would decide the question keeping in view the provisions as enshrined u/s 69 of the Act but as presently advised, I am inclined to concur with the order passed by the learned Trial Judge.

In the result, the civil revision is sans substance and is accordingly dismissed. However, there shall be no order as to costs.

Civil Revision dismissed.