DWARKA PRASAD, J. - (1.) THIS appeal has been referred by a learned single Judge of this Court for decision by a larger Bench, as according to him it involves an important question of law relating to the interpretation of the provisions of Section 69 (2) of the Indian Partnership Act, 1932 (hereinafter referred to as 'the Act').
(2.) THE only question argued before us in this appeal related to the Maintainability of the suit by a partnership firm and it was submitted by the learned counsel for plaintiff-appellant that the suit was maintainable as the petitioner firm was a registered partnership firm within the meaning of Section 69(2) of the Act; while according to the learned counsel for the defendant-respondent, the suit by the plaintiff firm was not maintainable. THE facts which have a bearing on the aforesaid question raised in this appeal lie in a very narrow compass. Umraomal defendant is alleged to have taken a loan of Rs. 11,000/- from the plaintiff firm on June 27, 1968 with the stipulation to repay the same together with interest @Rs. 12% per annum and he executed a promissory note and a receipt for the said amount in favour of the plaintiff, firm, by way of collateral security for the repayment of the amount of Rs. 11,000/- borrowed from the plaintiff-firm. As the defendant failed to make payment of the loan inspite of repeated demands, the plaintiff firm filed a suit against the defendant-respondent on March 26, 1971 in the court of District Judge, Jodhpur for the recovery of the sum of Rs. 11,000/- as principal and Rs. 3,500/- by way of interest, in all a sum of Rs 14,550/-. THE plaintiff in the said suit was referred to as M/s Sohanlal Basant Kumar, a registered partnership firm of Jodhpur. It was stated in the plaint that the plaintiff was a registered partnership firm duly registered under the provisions of the Act and that there were three partners of the plaintiff firm, namely, Sohanlal, Gumanmal and Mangilal. THE plaint was signed on behalf of the partnership firm by Sohanlal, one of the partners of the plaintiff firm. The defendant contested the suit on the ground inter-alia that neither Sohanlal. Gumanmal and Mangi Lal were partners of the plaintiff firm, nor the plaintiff firm was duly registered. The receipt of the loan was also denied by the defendant. One of the issues framed in the suit was, "whether the firm (plaintiff) is a registered partnership firm?" The said issue was considered to be preliminary issue and with the consent of the parties arguments were heard in respect of the said issue. The learned District Judge, Jodhpur, following the decisions of this Court in Kesrimal vs. Dalichand (1) held that the requirements laid down in Section 69(2) of the Act was not complied with, inasmuch as the name of Mangilal was not shown in the Register of Firms as a partner of the plaintiff firm on the date of the institution of the suit and so the suit could not be held to be maintainable. The learned District Judge, therefore, dismissed the plaintiff's suit by his judgment and decree dated March 7, 1972. When the first appeal filed by the plaintiff was argued before the learned single Judge, he was of the view that even though the names of some of the partners suing have not been shown in the Register of Firms on the date of the institution of the suit, yet if it is proved that such persons were infact partners of the plaintiff firm on the date of the suit, they could institute the suit without committing any breach of the provisions of Section 69(2) of the Act. Learned single Judge was of the view that there decisions given by a Single of this Court in Kesrimal's case (1) and Firm Alwar Iron Syndicate vs. Union of India (2) and M/s Chandrabhan Bansilal vs. Municipal Council, Bikaner (3) required reconsideration in the light of the interpretation of the provisions of Section 69(2) which appealed to him. The learned single Judge (S.N. Modi J.) also observed that one of the decisions referred to above, in the case of M/s Chandrabhan Bansilal's case (3) though delivered by him, but on second thought in his opinion the same also required reconsideration and in this view of the matter, the appeal was referred to a larger Bench for decision. It is common ground between the parties that the plaintiff firm was duly registered on November 5. 1963 with the Registrar of Firms, Rajasthan, Jaipur under the provisions of the Indian Partnership Act, 1932, as appears from the registration certificate Ex. 1. A certified copy of the entry of the Register of Firms produced as Ex. 2 on the record shows that on November 5, 1963 the plaintiff firm M/s Sohanlal Basant Kumar consisted of two partners, namely, Sohan Lal and Gumanmal. both the partners having joined the firm on October 28, 1962. It also appears from a perusal of Ex 2 that the constitution of the plaintiff firm was subsequently altered by the admission of Mangi Lal as a partner thereof with effect from November 4, 1964. The entry relating to the admission of Mangilal as a partner in the plaintiff firm was made on July 13, 1971, when the requisite notice of change in the constitution of the firm was given to the Registrar of Firms under Section 63 of the Act. As we have mentioned earlier, the suit was filed by the plaintiff firm on March 26, 1971 and thus undoubtedly the modification in the constitution of the plaintiff firm was recorded in the Register of Firms on July 13,1971, after the institution of the suit and thus the name of Mangilal was not shown on the date of the institution of the suit as a partner of the plaintiff firm in the Register of Firms. Now the question which arises for determination in this appeal is as to whether on the aforesaid facts the suit filed by the plaintiff firm was maintainable or not ? The decision of the aforesaid question rests upon a proper interpretation of the provisions of Section 69(2) of the Act, which are as under :- "69(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.) IT is undisputed that the provisions of section 69 2) of the Partnership Act are mandatory in nature and that two essential conditions must be fulfilled before a suit can be instituted in any court by or on behalf of a partnership firm against a third party to enforce a right arising out of a contract, which are:- (i) the firm is registered; and (ii) the persons suing are or have been shown in the Register of Firms as partners in the firm. IT is also well settled that the aforesaid two requirements are conditions precedent for the institution of a suit and that these two conditions must be satisfied on the date of the institution of the suit. There is no doubt that first of the aforesaid two conditions was fulfilled in the present case, as the plaintiff firm was duly registered under the provisions of Section 59 of the Act on November 5, 1963, much before the institution of the suit. Thus, the only dispute in the present case relates to the fulfilment of the second of the aforesaid two conditions on the date of the institution of the suit. On behalf of the plaintiff - appellant it was contended that the second condition envisages two alternatives the first alternative was that the persons suing must be the partners of the firm on the date of the suit; the second alternative suggested by the learned counsel for the plaintiff-appellant was that the names of the parsons suing should be shown on that date in the Register of Firms as partners of the firm It was submitted that if one of the two alternatives was proved, the second condition would stand satisfied and as Mangilal was undoubtedly a partner of the plaintiff firm on the date of the institution of the suit, the suit was maintainable, irrespective of the fact that his name was not shown as partner of the firm in the Register of Firms on the date of the institution of the suit. This interpretation appealed to the learned single Judge; who observed that the use of the word "or" in the second condition is significant, which according to him was suggestive of two alternatives. The view which the learned single Judge was thus inclined to take was that for the fulfilment of the second condition contained in Section 69 of the Act, either the names of the persons suing must be shown to have been entered, on the date of the suit, in the Register of Firms as partners of the firm or the persons suing must be proved as a matter of fact to be partners of the said firm on the date of the suit. Thus, according to the learned single Judge, even if the name of some of the partners suing have not been shown in the Register of Firms as partners of the firm on the date of the institution of the suit, they could still institute the suit in the names of the partnership firm if it was proved that they were as a matter of fact partners of the plaintiff firm on the date of the suit. On the other hand, it was contended by the learned counsel for the defendant that the second condition specified in Sec. 69 (2) of the Act contemplated that the names of the persons suing must presently be shown in the Register of Firms as partners in the firm on the date of the suit or should have been previously shown in the Register of Firms as partners in the firm; and that in case some persons were actually partners of the firm on the date of the institution of the suit, but their names were not shown in the Register of Firms as partners in the firm on that date, then the suit on behalf of such firm was not maintainable because of the bar created by Section 69 of the Act. ;