1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1081 OF 2008 Sharptech Construction Company .. Petitioner Versus Mannampone C. Sunny & Ors. .. Respondents Mr.V.A.Thorat, Senior Advocate with R.B.Choudhary and Anil Kumar Patil for petitioner Mr.P.S.Dani for respondents. CORAM : S.C.DHARMADHIKARI, J. DATE : 21st February 2008 P.C. . This petition under Article 227 of the Constitution challenges the order below exhibit 265 in Special Civil Suit No.17 of 1995. Since 2 short point is involved, with the consent of parties matter is taken up for admission and disposed of at this stage. 2. Before proceeding further, it would be convenient to deal with the objections raised with regard to the maintainability of this petition. Mr.Dani appearing for respondents submits that the impugned order is an order passed by a civil court refusing permission to withdraw the suit with liberty to file fresh one. Such an order is clearly revisable and in terms of Section 115 of the amended C.P.C., civil revision application ought to have been filed. Writ petition under Article 227 is not maintainable. 3. To my mind, this objection proceeds on the basis that a petition under Article 227 of the Constitution of India cannot be entertained merely because another remedy of civil revision 3 application in this Court itself is available. Existence of that remedy, is well settled, would not take away or affect the supervisory jurisdiction of this Court. That apart, it is not as if the said objection goes to the root of the case and, therefore, the same is overruled. 4. The writ petition challenges the order by which the petitioner original plaintiff’s Application under Order XXIII Rule 1 of C.P.C. to permit it to withdraw the suit with liberty to file or institute fresh suit on the same cause of action is rejected. It is not necessary to refer to the plaint allegations in detail because the application was made in the context of an objection to the Registration of the partnership firm - original plaintiff. 5. The case of the original plaintiff firm is that it has filed the suit against the original Defendants for specific performance of a 4 contract and declaration in respect of the suit property. The suit is filed in the year 1995. It is urged that prior to the suit being filed an application for registration of the plaintiff firm was made on 5th November 1993. The Application for Registration was received by the Registrar of Firms and certificate of registration was obtained on 16th August 1995. However, original defendant No.11 had amended the written statement and at the fag end of the matter pleaded that in view of the non registration of the petitioner plaintiff firm, the suit is not maintainable. It was urged that this was a purely technical plea and what was put in issue was formal defect in the suit. In such circumstances and when merits of the case are not affected, leave may be granted to withdraw the suit with liberty to file a fresh suit. 5. The original defendant No.11, who is only contesting respondent before me objected to this 5 application and firstly urged that the litigation is pending for twelve years. The prayer is not bonafide. Recording of Evidence is concluded and the matter is listed for arguments. At that stage, such an application is made. That apart, non registration of a firm is not a formal defect and, therefore, the application be dismissed. 6. Learned Judge, as is apparent from the reading of the impugned order, rejected the application firstly on the ground that the defect in so far as a suit filed in the name of an Unregistered firm cannot be said to be a formal defect but substantial one. According to learned Judge, the suit is not maintainable in law. The court must be satisfied as to whether the defect is technical or not. Secondly, the learned Judge referred to Order VII Rule 13 and Order VII Rule 11 and held that the defect as pointed out is not technical. 6 7. Before me, Mr.Thorat, learned Senior Counsel appearing for petitioner submits that the impugned order is wholly untenable. In his submission, learned Judge has not applied is mind while rejecting the plea of the petitioner. In his submission, Order XXIII Rule 1 has not been noticed by the learned trial Judge. He submits that Order XXIII Rule 1, sub-rule 3 contemplates satisfaction of the Court with regard to failure of a suit by reason of some formal defect or that there are sufficient ground for allowing plaintiff to institute fresh suit for the same subject matter or part of the claim, then, the Court may on such terms as it thinks fit, grant permission to withdraw from such suit or such part of the claim with liberty to file fresh suit, in respect of the subject matter of such suit or such part. He submits that the satisfaction of the Court with regard to either Order XXIII Rule 1(3)(a) or (b) entitles the plaintiff to a permission to withdraw and file a 7 fresh suit after necessary liberty is granted. Therefore, confining the application only to Order XXIII Rule 1(3)(a) was impermissible and erroneous. That apart, section 69 of the Indian Partnership Act, 1932, which contemplates registration of a firm, to enable it to sue and more particularly sub-section 2 thereof has been subject matter of decision of several High Courts including the Hon’ble Supreme Court. Mr.Thorat invites my attention to a decision in the case of Haldiram Bhujiawala & Anr. Vs. Anand Kumar Deepak Kumar & Anr., reported in 2000 (3) S.C.C. 250 and submits that identical controversy arose before the Supreme Court and in para 26 of the said decision the Supreme Court observed thus:- "26. In fact, the Act has not prescribed that the transactions or contracts entered into by a firm with a third party are bad in law if the firm is an unregistered firm. On the other hand, 8 if the firm is not registered on the date of suit and the suit is to enforce a right arising out of a contract with the third party defendant in the course of its business, then, it will be open to the plaintiff to seek withdrawal of the plaint with leave and file a fresh suit after registration of the firm subject of course to the law of limitation and subject to the provisions of the Limitation Act. This is so even if the suit is dismissed for a formal defect. Section 14 of the Limitation Act will be available inasmuch as the suit has failed because the defect of non-registration falls within the words "other cause of like nature" in Section 14 of the Limitation Act, 1963." 8. This decision has been followed by a learned Single Judge of this court when identical 9 controversy was before him. The Learned Judge after following the Supreme Court judgement granted necessary permission to withdraw the suit with liberty. That decision is in the case of Vilas Shriram Mahalle Vs. Rajdhaniprasad Rahinprasad Tiwari and reported in 2005 (1) MH.L.J. 546. For these reasons, he submits that the writ petition be allowed and the impugned order be quashed and set aside. 9. Mr.Dani learned Counsel appearing for contesting defendant No.11 submits that the Non Registration of a firm is not a technical defect but a substantial one, touching merits of the case in that behalf. He relied upon a decision of a Division Bench of this Court in the case of M.L.Chaturvedi Vs. M/s.Sanjay Finance Corporation, reported in 1998 (1) BLR 732. Further, he submits that the Supreme Court decision is not a decision for the proposition that absence of registration and compliance of 10 section 69(2) is a formal defect and, therefore, the same can be remedied by plaintiff applying for permission to withdraw the suit with liberty to file fresh suit. He submits that observations of the Supreme Court do not, with respect, constitute a binding precedent. The matter was not directly raised before the Supreme Court. In such circumstances, merely because the decision of the Supreme Court is with regard to interpretation of section 69, the observations in para 26 thereof could not be held to be binding. Consequently, the learned Single Judge of this Court erred in not following a binding precedent of this Court and holding that the same stands impliedly overruled in the light of the above observations of the Supreme Court. He submits that the learned Trial Judge in this case has rejected the application also because of the fact that it is not bonifide and made at a belated stage, when the matter is listed for arguments. For all these reasons, the impugned order being 11 discretionary does not require any interference by this Court under Article 227 of the Constitution of India. Consequently, the petition be dismissed. 10. I have perused the application filed in the trial court, reply thereto and the order thereon. I have also perused Order XXIII of C.P.C. and Section 69 of the Partnership Act. I have also perused the decisions brought to my notice. The issue before me is identical to that dealt with by the learned Single Judge in Mahalle’s case (supra). Even the Hon’ble Supreme Court’s observations are apposite. 11. To my mind, it would not be proper to hold that the observations of the Supreme Court in Haldiram’s case (supra) are not binding. In fact, a perusal of the decision would go to show that the Supreme Court framed two questions for its consideration in para 8 of its decision. 12 Question No.8(ii) was with regard to two aspects. The second part was whether bar under section 69(2) can be extended to any contract referred to in the plaint unconnected with the defendant as a source of title to the suit property. This point has been answered after making a reference to the earlier decisions. In paras 9 to 12 point No.I is answered and point No.II has been taken up from para 13 onwards. While dealing with rival contentions, the Supreme Court analyses section 69 and, thereafter, holds that the said provision is not attracted and more particularly sub-section 2 thereof. By way of illustration certain matters are referred to and in para 29, the Supreme Court held that a suit by an unregistered firm in the case of illustration given by it, would be maintainable and sub-section 2 would not be a bar even if the firm is unregistered on the date of the suit. Thereafter, the observations in para 26 have been made. Therefore, it is not possible to agree 13 with Mr.Dani that these observations are not binding on this Court. Since, nothing contrary was brought to the notice of the learned Single Judge, he chose to apply the law laid down in the Supreme Court Decision in preference to the Division Bench decision which was rendered much prior to that of the Supreme Court. Therefore and when identical controversy was before the learned Single Judge, atleast, that decision being of coordinate bench, is binding on me. Nothing is shown by which it can be held that the view taken by the learned Single Judge of this Court is per incuriam. 12. In the light of the law laid down by the Supreme Court following which a learned Single Judge of this Court granted leave to withdraw the suit with liberty to file a fresh suit, in my view, it would be fair, just and proper to apply the same to the facts of the present case. Merely because the application has been filed at 14 the stage of arguments in the suit, does not mean that the plaintiff is disentitled from applying for withdrawal of the suit and seek necessary liberty from the Court. It is a matter between the plaintiff and the Court and, therefore, the Court could have imposed conditions and permitted withdrawal. It did not permit the same on account of the fact that non-registration of a firm is not technical or formal defect. That it is so is clear from the decision referred to above. In such circumstances, the order under challenge is required to be set aside. It is accordingly quashed and set aside. Application Exh.265 preferred by the petitioner plaintiff in Special Civil Suit No.17 of 1995 is allowed. He is permitted to withdraw the said suit with liberty to file fresh suit subject to the bar of limitation. All pleas insofar as the merits of the case, are expressly kept open. Petition is allowed accordingly. No costs. 15 (S.C.Dharmadhikari, J)