Sri Laxmi Cloth Stores, Vijayawada Krishna Dist. vs Ratna and Co., Machilipatnam

Inspite of service of notice, the respondent has not chosen to appear either in person or through Counsel. Heard the learned Counsel for the appellant.

This appeal arises out of a suit filed by the appellant herein against the respondent for recovery of a sum of Rs.2,91,900/- being the balance of principal and interest due under the Katha dealings between the parties. The suit was filed by the appellant-firm represented by its Managing Partner V.L Venkateswarlu @ Laxmipathi. The respondent-defendant, after receipt of summons in the suit, put in appearance through an advocate but failed to file the written statement despite the grant of several adjournments. He was finally set ex parte. In support of the plaintiff''s claim, one witness was examined as PW1 and Exs.A1 to A6 were marked. Ex.A1 is the photostat copy of the acknowledgment of registration of firms issued by Registrar of Firms dated 7-7-1996. Ex.A2 is the photostat copy of partnership deed dated 1-4-1996. Ex.A3 is the Katha of the defendant in the ledger of the plaintiff for the year 1997-98. Ex.A4 is the letter dated 31-3-1997 written by the defendant to the plaintiff admitting the liability to pay the outstanding amount due as on 31-3-1997. Ex.A5 is the photostat copy of the legal notice dated 25-10-1997 got issued by the plaintiff to the defendant prior to the suit demanding the amount due. Ex.A6 is the postal acknowledgment evidencing the receipt of the said notice by the defendant to which the defendant did not send any reply. On this evidence the lower came to the conclusion that the plaintiff is a registered firm, that the defendant opened an account with the plaintiff and used to purchase cloth from the plaintiff on credit basis and also admitted his liability to pay the outstanding amount due as on 31-3-1997. The lower Court, however, dismissed the suit on the sole ground that though it was established that the plaintiff-firm is a registered firm, the plaintiff failed to establish that the person suing is or has been shown in the register of firms as one of the partners of the firm as required in sub-section (2) of Section 69 of the Indian Partnership Act and as such the suit is not maintainable. Hence this appeal by the plaintiff.

The learned Counsel for the appellant, placing reliance on the decisions of this Court in M.J. Velu Mudaliar and Another Vs. Sri Venkateswara Finance Corporation and Others, and Sreeram Finance Corporation, Ongole Vs. K. Devashahayam and Others, , contended that it is sufficient to establish that the firm is registered and it is not necessary to show further that the persons suing are shown in the register of firms as its partners and that the lower Court committed a gross error in dismissing the suit. In the former decision, it was held that where the plaintiff had filed a certificate of registration of the firm and the defendants merely took the plea in the written statement that the pre-requisitc condition was not observed but did not join in issue with the plaintiff, nor did they press for inclusion of it in issue, nor called upon the plaintiff to disclose the names of partners, the suit cannot be dismissed on the ground that pre-requisite conditions of Section 69(2) were not complied with. It was further held that the expression "suing as partners" in Section 69(2) must be read and understood in the light of the provisions of Order 30 CPC and the proof of registration of firm is sufficient to overcome the hurdle interposed by Section 69(2). Further the conjunction "and" in Section 69(2) should be construed in the disjunctive sense and read as "or". When it is read, the latter part of Section 69(2) would come into play only in those cases where a disclosure of names is made under Order 30 CPC. This judgment was followed by another learned single Judge of this Court. The lower Court was, however, of the view that the judgment of the Division Bench of this Court in Special Officer and Competent Authority, ULC Vs. Jyothi Art Studio, , runs contra and felt constrained to follow the said decision of the Division Bench ignoring the other two decisions of the learned single Judges cited above. A perusal of the judgment of the Division Bench, however, does not bear out this view. The Division Bench mainly dealt with the question as to how the land held by a partnership firm should be dealt with for the purpose of determining the vacant land held by each partner under the provisions of the Urban Land (Ceiling Regulation) Act, 1976. The Division Bench held that the entire land held by the firm has to be notionally divided among the partners for the purpose of determining the vacant land held by each partner. In that context the Division Bench merely noticed the provisions of Section 69 of the Partnership Act and observed that as per the said section no suit shall He by or against the firm or its partners unless the firm is registered and unless its partners are recorded in the register of firms. The Division Bench nowhere considered the question whether the term "and" occurring in Section 69(2) should be construed in the disjunctive sense and read as "or" and whether both the requirements should be satisfied even in a case where the defendant remains ex parte and no issue is raised with regard to the fulfilment of the conditions prescribed in Section 69(2) of the Partnership Act. The judgment of the Division Bench relied on by the lower Court cannot, therefore, be understood as being contrary to the decisions of the learned single Judges referred to above. I am, therefore, satisfied that the lower Court has clearly committed an error in dismissing the suit as being not maintainable. The appeal is, therefore, allowed. The interim conditional attachment before judgment ordered on 23-4-1999 is made absolute. The appeal is allowed. The judgment and decree of the lower Court are set aside and the suit is decreed with costs throughout granting subsequent interest at 12% per annum from date of suit till date of decree and at the rate of 6% per annum from date of decree till date of realisation.