RSA No.117 of 2009(O&M) 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH R.S.A. No. 117 of 2009 (O&M) Date of Decision:October 06, 2009 Achhru Ram ...........Appellant Versus Narinder Kumar Jain ..........Respondent Coram: Hon'ble Mrs. Justice Sabina Present: Mr.A.S.Syan, Advocate for the appellant. ** Sabina, J. Plaintiff filed a suit for recovery of Rs.2,09,515/- i.e. Rs.1,94,500/- principal amount and Rs.15,015/- as interest @ 12% per annum from the date of payment till 10.8.2003 along with pendente lite and future interest @ 12% per annum till full and final payment on the allegations that the defendant approached the plaintiff to deal with the sale and purchase business of property jointly and plaintiff agreed for the same and both of them started the joint business. The suit of the plaintiff was dismissed by the Additional Civil Judge (Senior Division) Patiala vide judgment and decree dated 22.2.2007. Aggrieved by the same, the plaintiff filed an appeal which was dismissed by the Additional District Judge (Adhoc) Patiala vide judgment and decree dated 5.5.2008. Hence, the present appeal by the plaintiff-Achhru Ram. The facts of the case, as noticed by the Additional District RSA No.117 of 2009(O&M) 2 Judge in paras 2 to 5 of its judgment, read as under:- “ 2. Briefly stated the facts of the case as stated in the plaint are that he and the defendant both agreed for dealing with the sale purchase business of the property in different cities and States through out India jointly, having its offices at Patiala and Kurukshetra namely “Jain and Co” and “Jain Property Advisor”. It is further averred that it was settled between them that the plaintiff will come in the share at a consideration as per his discretion and financially status. The defendant used to purchase the properties and used to receive money from the plaintiff of his share and himself used to sell the same and the plaintiff used to deal with the business while sitting in the office being an old man and used to pay the amount of his share only. They started their business and dealt with so many properties, but in some cases, the defendant failed to perform his part of the contract as they purchased a plot for Rs.2.25 lacs situated at Kurukshetra and to pay Rs.50,000/- as earnest money, the defendant received Rs.12,500/- from him as 1/4th share i.e. Rs.25 paise share vide receipt dated 9.1.2003. It is further averred in the plaint that another land measuring 2 acres 7 kanals and 19 marlas situated at Kurukshetra was purchased by them for a consideration of Rs.16 lacs per acre and to pay the earnest money, the defendant received Rs.1,02,000/- from him as 1/17th share vide receipt dated 3.11.2002. Some other properties were also purchased by them jointly. One property measuring 5-1/4 acres at Kurukshetra was purchased for a consideration of Rs.24 lacs and to pay the earnest RSA No.117 of 2009(O&M) 3 money, the defendant received Rs.50,000/- from him as 5 paise share on 29.12.2002. Another property i.e. a built house situated at Kurukshetra was also purchased for a consideration of Rs.3 lacs and to pay the earnest money, the defendant again received Rs.30,000/- from him vide a receipt dated 28.1.2003. The defendant agreed to execute all the agreements regarding these properties in favour of the plaintiff, but to no effect. The plaintiff as such received a sum of Rs.1,94,500/- from him. Neither he executed any agreement nor he refunded the amount. Due to this failure of the contract, the plaintiff is not interested to carry on this business now. He requested the defendant to return the amount along with interest, but to no effect. Hence, the suit. 3. In the written statement, the defendants took the preliminary objections that the court has got no jurisdiction to entertain and decide the suit; that the plaintiff has no cause of action; that the plaintiff has not come to the court with clean hands and the suit of the plaintiff is false and frivolous. 4. On merits, the defendant denied the joint business as alleged by the plaintiff because the plaintiff is a stranger to him. He also denied if there was any settlement between them. It is alleged that the defendant used to purchase and sell the properties, but it is denied that he has received any amount from the plaintiff and receipt, if any, is forged one. Since there was no contract between them, so the question of carrying on the same business in future, does not arise. Remaining averments are also denied and a prayer for dismissal of the suit has been prayed. RSA No.117 of 2009(O&M) 4 5. Replication has also been filed by the plaintiff in which he controverted the pleas taken in the written statement and reiterated those made in the plaint. On the pleadings of the parties, the following issues were framed by the trial Court:- “1. Whether the plaintiff is entitled to recovery of Rs.1,94,500/- as principal amount?OPP 2. Whether the plaintiff is also entitled to interest, if so at what rate?OPP 3. Whether this Court has no jurisdiction to try the present suit?OPD 4. Whether the plaintiff has no cause of action to file the present suit?OPD 5. Relief.” After hearing the learned counsel for the appellant, I am of the opinion that the present appeal deserves to be dismissed. Plaintiff had filed a suit for recovery of the amount in question on the allegations that the defendant had approached the plaintiff to deal with the sale and purchase business of property jointly and they had started a joint business. Both the plaintiff and defendant started their business at Pataila and Kurukshetra. However, the defendant failed to perform his part of the contract. Due to this reason, plaintiff asked the defendant to return the amount of Rs.1,94,500/- along with interest. Learned trial Court, after appreciating the evidence on record, held as under:- “If both the firms were unregistered firms, no suit for recovery was competent by one partner against the other as framed by the RSA No.117 of 2009(O&M) 5 plaintiff. Moreover, the receipts nowhere state that the sums mentioned therein were paid by the plaintiff to the defendant or that the defendant was liable to return those amounts to the plaintiff with interest in case the transaction does not succeed rather the remedy to the plaintiff lay under the provisions of the Indian Partnership Act but the plaintiff has failed to pursue the remedy available to him and as such I have no option but to hold that the plaintiff is not entitled to recover the suit amount from the defendant and also any amount as interest and the plaintiff has got no cause of action to file the instant suit and as such findings on issue nos. 1 and 2 are answered against the plaintiff while those on issue no.4 in favour of the defendant.” Section 69 of the Indian Partnership Act, 1932 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 non 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 is or has been shown in the Register of Firm as a partner in the firm. (2) No suit 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-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from RSA No.117 of 2009(O&M) 6 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, or the Provincial Insolvency Act, 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 [the said territories] are situated in areas to which, by notification under [Section 56], this Chapter does not apply,or (b) to any suit or claim of 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 Courts Act, 1882, or outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act,1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim” Thus, since the suit had been filed by the plaintiff seeking enforcement of a right arising from an unregistered firm, both the Courts below rightly held that the suit of the plaintiff was not maintainable. Both the Courts below, after appreciating the evidence on record, have given a finding of fact that in the receipts Exhibit PW1/B and Exhibit PW2/B, there was no mention that the amount had been received by the defendant from RSA No.117 of 2009(O&M) 7 the plaintiff. No substantial question of law arises in this regular second appeal which would warrant interference by this Court, Accordingly, this appeal is dismissed. (Sabina) Judge October 06, 2009 arya