HIGH COURT OF HIMACHAL PRADESH AT SHIMLA OSA No. : 20 of 2000 Reserved on: 12.8.2008. Decided on: 14.8.2008 Naranjan Chauhan ……… Appellant. Versus State of H.P. and others. ………Respondents. Coram: The Hon’ble Mr.Justice Deepak Gupta, Judge. The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? Yes For the appellant: Mr. Bimal Gupta, Advocate. For the respondents: Mr. Rajesh Mandhotra and Mr. R.M. Bisht, Deputy Advocate Generals. Per V.K. Ahuja, J.: This is an appeal filed by the appellant against the judgment and decree of the court of learned Single Judge, dated 2.3.2000, vide which the suit of the appellant for recovery of the amount was dismissed. Briefly stated the facts of the case are that the appellant as plaintiff filed a suit against the respondents, who were impleaded as defendants, for recovery of Rs.8,50,105/- with interest at the rate of 18% per annum, w.e.f. 1.4.1993 till its payment. The plaintiff alleged that he had partnership concern alongwith two other persons as its partners, who were engaged in the business of retail sale of Indian made foreign liquor and country made liquor as Excise Licensees. On 16.3.1993, the defendants conducted an auction in respect of excise vends falling under Jubbal and Kotkhai Excise Unit. The plaintiff Firm had given the highest bid which was accepted by the defendants. The partners in between ___________ 1.Whether reporters of Local papers may be allowed to see the judgment? Yes. them decided as to how the vends should be run. The work of selling the liquor could not be started by the plaintiff due to the objections by the local Panchayat and other inhabitants of the area. The plaintiff approached the authorities including the local police for help to open the liquor vends, which help was not provided and the plaintiff alleged that they suffered loss. They had initially deposited a sum of Rs.15,15,000/- as security and they were asked to deposit the bid amount in monthly instalments. However, the plaintiff was not allowed to open and carry on the sales of liquor nor any quota of liquor was supplied and the defendants have been demanding interest on the delayed payment. Therefore, the plaintiff claimed the suit amount as damages. Defendants admitted the facts pleaded by the plaintiff, but they also pleaded that there was no lapse on their part and the plaintiff was not absolved from payment of bid money and as such the suit was liable to be dismissed. The learned Single Judge framed the following issues: 1. To what amount the plaintiff is entitled to? OPP 2. Whether the suit is bad for non-joinder of necessary parties? OPD 3. Relief. During the course of hearing of the case, the question was considered by the learned Single Judge whether the suit was maintainable or not in view of the bar contained in Section 69(2) of the Partnership Act since the suit had not been filed on behalf of the Firm but by the plaintiff as one of the partners and after hearing the parties, the learned Single Judge dismissed the suit holding that since the Firm was not registered and there was a bar to the filing of the suit on behalf of the Firm under Section 69 of the Partnership Act and no findings were given on merits but on this preliminary ground, it was held that the suit was not maintainable. We have heard the learned counsel for the parties and have gone through the record of the case. The learned counsel for the appellant had not disputed the question that the Firm was not registered when he filed the suit. It is also not disputed that the suit was filed by one of the partners alleging that they have separated and as such the suit was being filed by one of the partners. The main plea taken by the learned counsel for the appellant was that since the defendants have not taken a specific plea that the suit was not maintainable in view of the provisions of Section 69 of the Partnership Act, therefore, this point could not have been determined by the learned Single Judge in the absence of specific pleadings and, therefore, those findings are liable to be set aside. To substantiate his point, the learned counsel for the appellant had relied upon the decision in N.A. Munavar Hussain Sahib and another vs. E.R. Narayanan and others, AIR 1984 Madras 47. In that case, on the facts of the said case, it was held by the Madras High Court that plea based on Section 69 of the Partnership Act was not raised in the written statement and, therefore, cannot be allowed to be raised at later stage. On the other hand, the learned Deputy Advocate General for the respondents had drawn our attention to the decision in M/s. Paras Ram Darshan Lal v. Union of India and another, AIR 1979 Delhi 135. A perusal of the same shows that in referring to the provisions of Section 69 of the Partnership Act, the learned Single Judge of Delhi High Court has held as under: “The language of sub-secs. (1) and (2) of S.69 of the Act is wide enough to cover suits relating to a dissolved firm. Bare perusal of the section shows that it is not essential that the firm should be actually in existence at the date when the suit or proceedings were instituted. Sub-secs (3) and (4) specifically mention the suit and proceedings to which the provisions of sub-secs. (1) and (2) are not applicable. The statute does not provide that sub-secs.(1) and (2) will not apply to dissolved firm. A suit or proceeding to enforce a right arising from a contract thus will not be maintainable if the dissolved firm was unregistered on the date of institution.” It is, therefore, clear from a perusal of this decision that even if the Firm has been dissolved, the bar contained in Section 69 of the Partnership Act applies to the case. Section 69, Sub Sections (1) and (2) of the Partnership Act are relevant, which read 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 on 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 Firms 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.” The decision in Loonkaran Sethia etc. v. Mr. Ivan E. John and others etc., AIR 1977 Supreme Court 336, shows that while referring to the provisions of Section 69 of the Partnership Act, the following observations were made by their Lordships which are relevant and are being reproduced below: “Section 69 is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void. In other words, a partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract falling within the ambit of Section 69.” Coming to the facts of the present case, we have already mentioned above that the facts are not in dispute that the liquor vend for the year 1993-94 was taken in auction by the plaintiff Firm on 16.3.1993. According to the assertions made, there was an agreement in between the parties entered into on 9.6.1993 for division of the work and the partnership firm was dissolved on 18.3.1996. It is, therefore, clear that when the suit was filed by one of the plaintiff as partner, the partnership firm stood already dissolved. Even if be that so, still the bar of Section 69 of the Partnership Act will apply even in case of dissolved firm. The only point which was agitated by the learned counsel for the appellant was that there were no specific pleadings made by the defendants in their written statement in regard to this bar under Section 69 of the Partnership Act. We have gone through the written statement in detail filed by the defendants in which they have not specifically taken the plea under Section 69 of the Partnership Act, but it was specifically pleaded that the suit was not maintainable since the auction was held in the name and style of the company i.e. the partnership firm and the internal arrangements stand nowhere for the departmental concern. It is true that Section 69 of the Partnership Act has not been specifically mentioned in the written statement, but it was specifically mentioned that the suit is not maintainable having been filed by one of the partners only and, therefore, it was bad for non-joinder of necessary parties i.e. the other partners. Once the plea was taken that the suit was not maintainable, the plaintiff was not taken by surprise and he was well aware of the question being raised. The question was a legal one and the provisions of Section 69, as held by the Apex Court (supra) are mandatory, it cannot be said that this plea cannot be considered until and unless it was specifically pleaded that there was a bar under Section 69(1) of the Partnership Act. In our view, this plea being legal one can be raised at any stage and it cannot be said that the facts were not pleaded, though not specifically, but since the facts were pleaded, the decision of the Madras High Court is not applicable to the present facts and this plea is legal one can be considered by this Court. Apart from the above, even the pleadings made by the plaintiff himself were considered, it clearly showed that the liquor vend was taken by the partnership firm but the suit was being filed by one of the partners and on those assertions also, the plaint could have been rejected by the court under Order 7 Rule 10 CPC, even if no specific plea had been taken in this regard. In view of the above discussion, we accordingly hold that the findings recorded by the learned Single Judge holding that the suit was not maintainable and was liable to be dismissed since the partnership firm was not registered, call for no interference and as such there is no merit in the appeal filed by the appellant, which is dismissed accordingly. (Deepak Gupta), Judge. August 14, 2008. (V.K. Ahuja), (TILAK) Judge.