1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO. 156 OF 2009 Shri Sanjay Dattatraya Borude & Ors. ... Applicants (Orig.Defts.6,7,8) Vs. Shri Arun Pandurang Borade & Ors. ... Respondents Mr. S.M.Oak, i/b. Mr. Sagar Joshi,Advocate, for the applicants. Mr. Onkar Warange,Advocate, for the respondents 1 & 2. CORAM: J.H.BHATIA, J. DATE : 8th April, 2010. P.C. 1. Heard the learned Counsel for the parties. 2. The plaintiffs/respondents filed Regular Civil Suit No.56/2008 contending that the plaintiff is a partnership firm and the said partnership had entered into a development agreement with the defendant Nos. 1 to 5 in respect of the land Gat No.112 situated at Boraj, Taluka Maval, District Pune on 21.10.2003. That agreement was registered. Later on, defendant Nos. 1 to 5 had allegedly executed a power of attorney in favour of defendant Nos. 6 to 8 in respect of the same property granting a right to make development on the property. The 2 plaintiffs sought a declaration that the power of attorney executed in favour of the defendants Nos. 6 to 8 in respect of the suit property was not binding on the plaintiffs and the plaintiffs also sought perpetual injunction restraining the defendants Nos. 6 to 8 from interfering in the possession of the plaintiffs over the suit property and the development thereof. The suit was filed on 4.3.2008. On 24.3.2008, defendants Nos. 6 to 8 filed an application Exhibit 21 before the trial court contending that the plaintiff claims to be a partnership, but it was not registered and names of its partners were not entered in the Register of Firms maintained by the Registrar and therefore the suit based on the contract was not tenable in absence of such a registration certificate in view of the provisions of Section 69 of the Partnership Act. 3. The said application was heard and rejected by the learned Joint Civil Judge, J.D. Vadgaon Maval holding that according to the plaintiffs, application for registration of the plaintiff as a partnership firm was already submitted and names of both the partners were also disclosed in that application. It was also pointed out that the plaintiff was registered as a partnership firm on 29.8.2008 and the certificate to that effect was granted. The learned trial Court held that before this application was heard and the order dated 4.2.2009 was passed, the plaintiff was already registered as a partnership firm and the certificate to that effect was issued 3 and, therefore, it was only a technical defect at the time of filing of the suit which has been cured and therefore the application had become infructuous. That order is challenged in the present Revision Application 4. There is no dispute that in view of the provisions of Section 69(2) of the Partnership Act, no suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of the firm against any third party unless the firm is registered and persons suing are or have been shown in the Register of Firms as partners in the firm. Therefore, it is clear that the firm must have been registered and names of the persons suing on behalf of the firm must have been entered in the Register of Firms as partners on the day when the suit is instituted. If the firm was not registered and if the names of the partners suing on behalf of the firm were not entered in such register till the date of filing the suit, the suit cannot be instituted to enforce a right arising from a contract. In the present case, the plaintiffs filed the suit to enforce certain rights arising out of a contract between the plaintiff-firm and the defendants Nos. 1 to 5. The suit was filed on 4.3.2008. Even though an application for registration of the firm was submitted and names of both the partners suing on behalf of the firm were also disclosed in that application,the firm was actually registered on 29.8.2008 and certificate to that effect was issued. Thus, it is clear that when the suit was filed neither the 4 firm was registered nor names of its partners suing on behalf of the firm were entered in the Register of Firms and therefore under Section 69(2) the suit was not tenable. 5. It may be noted that a similar view was taken by this Court in Shivraj Fine Art Litho Works and Ors. vs. Purushottam Sitaramji Khandelwal &Ors. 1992 Mh.L.J.1260. In Delhi Development Authority vs. Kochhar Construction Work and Anr. (1998) 8 SCC 559 also the Supreme Court held that suit is not maintainable if the firm is not registered on the date when the suit is instituted in view of Sec.69(2) of the Partnership Act. 6. The learned Counsel for the respondents Nos. 1 and 2, who are the partners of the original plaintiff firm, contended that even though the firm was not registered on the date of filing of the suit, it was registered and registration certificate to that effect was issued before the objection of the defendants Nos. 6 to 8 about tenability of the suit was decided and therefore it was only a technical objection and in any case, even if the suit is dismissed as not tenable by virtue of Section 69(2), that will not take away right of the plaintiffs to file a fresh suit if the firm is later on registered. According to the learned Counsel, no purpose will be served by dismissal of the suit as void ab initio because the plaintiffs may file 5 another suit. This will be creating multiplicity of litigation and mounting arrears in Courts. The learned Counsel finds support from the observations of Their Lordships of the Supreme Court in M/s. Raptakos Brett and Co. Ltd. vs. Ganesh Property AIR 1998 SC 3085. In that some reliefs were sought for specific performance of the contract under the Transfer of Property Act and some reliefs were sought exclusively based on the terms of the contract. The Supreme Court framed certain points. The first point was as to whether suit was wholly or in part barred under Section 69(2) and the second point was, if the suit was so barred, whether subsequent registration of the plaintiff’s firm under the Partnership Act could revive the suit oro make it competent at least from the date on which such registration was obtained. In view of the facts of that particular case, the Supreme Court held that suit to the extent of the reliefs based on the Transfer of Property Act was not barred, but the suit in respect of the reliefs based on the rights created by a contract between the partnership firm and the defendant was barred under Section 69(2) . About the effect of subsequent registration, Their Lordships observed as follows in para 30 :- “30. We, prima facie, find substance in what is contended by Dr. Singhvi for the respondent. It is obvious that even if the suit is filed by an unregistered partnership firm, against a third party and is treated to be incompetent as per Section 69, sub-section 6 (2) of the Partnership Act, if pending the suit before a decree is obtained the plaintiff puts its house in order and gets itself registered the defect in the earlier filing which even though may result in treating the original suit as still born, would no longer survive if the suit is treated to be deemed to be instituted on the date on which registration is obtained. If such an approach is adopted, no real harm would be caused to ether side. As rightly submitted by Dr. Singhvi that, Order 7, Rule 13 of the CPC would permit the filing of a fresh suit on the same cause of Action and if the earlier suit is permitted to be continued it would continue in the old number and the parties to the litigation would be able to get their claim adjudicated on merits earlier while on the other hand if such subsequent registration is not held to be of any avail, all that would happen is that a fresh suit can be filed immediately after such registration and then it will bear a new number of a subsequent year. That would further delay the adjudicatory process of the court as such a new suit would take years before it gets ready for trial and the parties will be further deprived of an opportunity to get their disputes adjudicated on merits at the earliest and the arrears of cases pending in the Court would go on mounting. It is axiomatic to say that as a result of protracted litigation spread over tiers and tiers of Court proceedings in hierarchy, the ultimate result before the highest Court would leave both the parties completely frustrated and financially drained off. To borrow the analogy in an English poem with caption “death the leveller”, with appropriate modifications, the situation emerging in such cases can be visualised as under : “upon final Court’s purple alter see how victor victim bleed.” All 7 these considerations in an appropriate case may require a re-look at the decision of the two-member Bench of this Court in 1989 (3) SCC 476 : (AIR 1989 SC 1769) (supra). However, as we have noted earlier, on the facts of the present case, it is not necessary for us to express any final opinion on this question or to direct reference to a larger Bench for reconsidering the aforesaid decision. With these observations we bring down the curtains on this controversy. Point No.2, therefore, is answered by observing that it is not necessary on the facts of the present case in the light of our decision on the first point to decide this point one way or the other. Point No.2 is, therefore, left undecided as not surviving for consideration.” 7. From these observations, it appears that the two-Judge Bench of the Supreme Court in Raptakos Brett felt that if the partnership firm is registered subsequent to the filing of the suit, the suit filed by the said firm could be treated as competent at least from the date on which the registration was obtained to avoid multiplicity of litigation and the mounting arrears in the Courts. However, there was a direct authority of the Supreme Court in M/s. Shreeram Finance Corporation vs. Yasihn Khan 1989 (3) SCC 476 and Delhi Development Authority vs. Kochhar Construction Work & Anr. (1998) 8 SCC 559 wherein the Supreme Court held that suit filed by an unregistered firm against a third party to enforce the right based on a contract was void ab initio. Even though in M/s. Raptakos Brett, the learned Judges felt that earlier view needs to be reviewed, 8 Their Lordships had refrained from referring the matter to the larger Bench and Their Lordships did not decide that issue contrary to the earlier decision. Therefore, in view of the legal position as set out in in M/s. Shreeram Finance Corporation and Delhi Development Authority, it must be held that the suit filed by the plaintiff to enforce the right based on a contract was not tenable and void ab initio as the plaintiff’s firm was not registered under the Partnership Act on the date when the suit was filed. In view of this legal position, the impugned order is liable to be set aside. 8. For the aforesaid reasons, the Revision Application is allowed. The impugned order is hereby set aside. It is declared that the suit filed by the plaintiffs was not tenable as void ab initio by virtue of Section 69 of the Partnership Act. (J.H.BHATIA,J.)