S. Girdharilal Son and Co. vs B. Kappini Gowder and Others

Varadachariar, J.—I agree with Pandrang Row, J., that the present suit is maintainable and that the objection based on Section 69(2) of the

Partnership Act must be overruled. The arguments that can be urged in favour of one view or the other have been fully set out in the judgments

delivered by my learned brothers; it is therefore not necessary for me to deal with every one of them in detail or with the several decisions referred

to in their judgments.

The relevant facts and dates are: The promissory note sued on was executed on 12th March, 1931, the Partnership Act except Section 69

came into force on 1st October, 1932, Section 69 came into force on 1st October, 1933, and this suit was filed in August, 1934. On these facts,

the question arises, whether the plaintiffs who admittedly constitute a firm but had not got themselves registered before the date of the institution of

the suit are entitled to maintain the suit. If the matter were wholly res Integra it may be open to argument whether the language of Section 69 of the

Partnership Act clearly and necessarily applies to contracts entered into before the date of the coming into force of the Act. In Wright v.

Greenroyd (1861) 1 B. and S. 758 : 121 E.R. 896 where the question arose with reference to Section 32 of the English Medical Act of 1858,

Blackburn, J., thought that it was clear from the language of that section that the prohibition referred to a charge incurred after the 1st January,

1859. The language of that section was that:

After the 1st January, 1859, no person shall be entitled to recover any charge in any Court of law for any medical or surgical advice, attendance or

for the performance of any operation, or for any medicine which he shall have both prescribed and supplied, unless he shall prove upon the trial

that he is registered under this Act.

As a matter of language, it is not easy to see any marked difference between the above words and the language of Section 69 of the Partnership

Act. In view however of the way in which the general words of this section of the Partnership Act have been understood in many of the reported

decisions, I prefer to deal with the case on the footing that, but for other considerations, the language employed is capable of being applied even to

contracts entered into before the Act came into force and to causes of action that accrued before that date.

On the above assumption two questions arise for decision : (1) Whether the saving words found in Section 74 have the effect of exempting a suit

like the present from the operation of Section 69, and (2) if Section 74 has no such operation, whether on general principles the Court ought to

hold that Section 69 does not apply to a suit to enforce a cause of action which had accrued prior to the date of the coming into force of the Act.

In dealing with Section 74,1 may note one ambiguity which however is not very material to this case. In Clause (a), (b) and (c) reference is made

to ""the commencement of this Act"" and the learned Counsel for the respondents rightly pointed out that it may not be easy to say when dealing with

an objection u/s 69, whether the above words should be held to refer to 1st October, 1932, when the Act except Section 69 came into force or to

1st October, 1933, when that section came into force. I do not however express any opinion upon this question because the right of action in the

present case accrued even before 1st October, 1932, when the Act came into force. The material clause of Section 74 is Sub-clause (b) which

[omitting the unnecessary words and importing what is necessary from Sub-clause (a)] will read as follows:

Nothing in this Act shall affect any remedy in respect of any right acquired or accrued before the commencement of this Act.

In view of the words ''legal proceeding'' found in Sub-clause (b) it has been held in some of the reported decisions that all that, the exemption

was intended to secure was the continuance of proceedings pending at the commencement of the Act. With great respect I am unable to hold that

the language of the section is capable of being so read. The difficulty in the way of so reading it is adverted to by Sulaiman, C.J., in Danmal

Parshotamdas v. Baburam Chhotelal (1935) ILR 58 All. 495 and by Stodart, J., in Davood Mohideen Rowther v. Sahabdeen Sahib (1937)

M.W.N. 654. By way of contrast I may refer to the language employed by the Legislature in Section 63 of Act XX of 1929 where the difference

between the provision saving remedy in respect of a right already accrued and the special provision made in respect of proceedings pending on the

date of the commencement of the Act is clearly brought out. Even if it is possible to read the expression ''legal proceeding'' in Sub-clause (b) of

Section 74 as in some way relating only to ''pending'' proceedings, it is difficult to read the word ''remedy'' with the same qualification because it is

not appropriate to speak of a ''pending remedy''. If Section 74(b) could be read - and I am inclined so to read it - as saving the ""remedy"" in

respect of any right acquired or accrued prior to 1st October, 1932, the preliminary objection raised in the present suit must be overruled.

Learned Counsel for the respondents however adopted another line of argument in dealing with Sub-clause (b) of Section 74. He emphasised

the distinction between remedy in the sense of action or right of action and rules of procedure incidental to"" the working out of that remedy. I agree

with him that this distinction is recognised in some of the cases referred to by him. The question still remains, under which of these categories, will

the provision in Section 69 fall. He asks me to hold that it is a mere rule of procedure and does not affect any remedy that the plaintiffs were

entitled to before the commencement of the Act. At one stage, he went the length of contending that the remedy can be said to be ""affected"" only if

it is ""extinguished""; but he did not persist in that contention, in view of decisions like The Colonial Sugar Refining Co., Ltd. v. Irving (1905) A.C.

369 Sadar Aliv. Dalimuddin I.L.R.(1928) Cal. 512 (S.B.) and Andi Thevan Vs. Nagayasami Chettiar and Another, . These cases show that an

alteration or restriction or even the imposition of a condition preliminary to the enforcement of the remedy must be held to affect the remedy, within

the meaning of the rule presuming against the retrospective operation of statutes. He argued that it is not the imposition of every condition that can

be said to affect the remedy even in this sense. He strongly relied upon two English decisions relating to the condition that a solicitor should deliver

a bill of costs before he could sue for the recovery of the amount thereof. The judgments in Coburn v. Colledge (1897) 1 Q.B. 702 do not throw

much light upon the question in the form in which it now arises for decision; but the earlier decision in Brooks v. Bockett (1847) 9 Q.B. 847 : 115

E.R. 1500 does suggest that the Court regarded a condition of the above kind as a matter of procedure. The discussion in the case turned so much

on the form of the pleading that there is hardly much light derivable from the judgment as to the reasons why this view was taken. Learned Counsel

also relied upon the cases which have held that requirements like those relating to the delivery of a patta before a landlord could sue for rent or the

delivery of a notice u/s 80, Civil Procedure Code, are in the nature of a provision of processual law. These decisions undoubtedly support his

contention that ""processual provisions"" are not for the purposes of the present discussion necessarily limited to steps to be taken after the institution

of a suit or in the Court itself. While I agree with that contention, I must point out that it is not every condition that may be imposed Sipon a plaintiff

in respect of his right of suit that can be regarded as a mere provision of processual law. In the English Medical Act case that I already referred to,

it was certainly not regarded as a mere matter of procedure though the restriction was framed in very similar language. (See also Thistleton v.

Frewer (1861) 31 L.J. Exch. 230.

In this connection, it is necessary to consider the purpose and effect of the provision in Section 69. If it had such unintegral connection with the

subject-matter of the proposed suit as in some way to make the step required by it a step in the litigation, I should have been inclined to accept the

argument that it related to a matter of procedure. But it is obvious that that was not its purpose. In the case for instance of a patta being delivered

or a notice being given or a bill being tendered by a Solicitor, it is clear that the condition intimately bears upon the subject-matter of the suit to

follow. The object however of Section 69 was to make sure that the general policy of the Legislature that all partnerships should be registered will

be carried out. It is true that occasionally questions may arise in a suit as to who are the partners of a particular firm; but that cannot justify my

ignoring the real purpose of the provision in Section 69. As pointed out by Sir Dinshaw Mulla, the object of this provision was to bring pressure to

bear on partners to have the firm and themselves registered. This policy has been attempted to be enforced in various ways in different systems. In

the English legislation, Section 7 of Registration of Business Names Act of 1916 imposes a penalty upon partners making default in the matter of

registration. Such a provision certainly cannot be described as a processual provision. The Indian Legislature did not wish to go so far and for the

present thought that it would be sufficient pressure to deprive unregistered partners of the right of suit. Though I do not wish to base any conclusion

upon the language of a marginal note, it is noteworthy that in Section 8 of the English Act corresponding to Section 69 of the Indian Partnership

Act, the marginal note is ""Disability of persons in default"". In the Indian Companies Act, the Legislature has provided that unregistered associations

of the kind contemplated by the Act will be illegal on default of registration. These are, in my opinion, different ways adopted by the Legislature to

enforce this policy of compelling registration, and"" I do not think it right to hold that the provision contained in Section 69 is really in the nature of

''processual'' law in the sense in which that term is used in the cases discussing principle of retrospective operation of statutes. In an early case, for

example, Lee Morris, Receiver of the Estate of the late Rajah of Tanjore v. Sambamurthi Rayar (1871) 6 M.H.C.R. 122 Justice Holloway drew

attention to the danger of confounding what are merely processual provisions with those which under that fictitious appearance are really provisions

of material or substantive law. The particular application which the learned Judge made of that distinction in the case before him has no doubt been

dissented from in later cases. (See R.M.P.V. Muthia Chettiar Vs. S.R.M.A.R. Ramasami Chettiar, But the distinction is undoubtedly true.

In the above view, it does not seem to me to be necessary to deal with the second question stated at the outset, namely, whether even

independently of Section 74, Section 69 can be given retrospective operation. Nor is it necessary to consider the argument based on the fact that

the Legislature gave an interval of one year before Section 69 was brought into operation. It cannot be said that that interval can be explained only

on the ground that the provision must have been intended to be retrospective. There are other considerations which required such an interval,

particularly the necessity for bringing into existence the necessary machinery, and for the framing of rules contemplated by Section 71.

The result is that the decree of the lower Court will be set aside and the case remanded for disposal on the merits. The appellants will be entitled

to a refund of the Court-fee paid on the Memorandum of Appeal and they will also be entitled to the costs of this appeal.