SHANMUGHA MUDALIAR Vs. P.V. RATHINA MUDALIAR AND ANR.

JUDGEMENT

(1.) THIS second appeal was referred to a Division Bench by Rajamannar, J., by reason of a conflict between the decision of Bell, J., in Ponnappa Chettiar v. Bodappa Chettiar, (1944) 2 M.L.J. 406 and the opinion of Sir John Beaumont, G.J., in Appayya Nijlingappa v. Subrao Babaji, I.L.R. (1938) Bom. 102 Rajamannar, J., preferring the opinion of Sir John Beaumont, G.J., to that of Bell, J., made the reference as above stated.

(2.) THE facts are as follows : From the 2nd March, 1940, until the 31st March, 1942, the plaintiff and the deceased husband of the second defendant carried on business in partnership. During that period dealings and transactions took place with the first defendant. As a result, his indebtedness to the partnership amounted to a sum of Rs. 819 -14 -0, and, by the date of suit, that amount was increased by a sum of Rs. 94 -4 -0 to a sum of Rs. 914 -2 -0, the amount for which the suit was instituted. It is alleged, and, so far as the matters relevant to this appeal are concerned, it is not in dispute, that there was some arrangement by which the plaintiff became entitled to the whole of the monies alleged to be recoverable from the first defendant. Hence the suit was brought, by the plaintiff alone but since the second defendant's husband had died before the suit the second defendant was joined by way of abundant caution. The only other material fact to be recorded is that the partnership was never registered as required by Section 58 of the Indian Partnership Act.

(3.) SUB -sections (1) and (2) of Section 69 of the Partnership Act forbid the institution of a suit to enforce a right arising from a contract in respect of a partnership when the partnership is not registered. Sub -section (3) of the same section, however, provides that the provisions of Sub -sections (1) and (2) shall not affect any right or power to realise the property of a dissolved firm. It is to be noticed that the Indian Partnership Act places no prohibition upon an unregistered partnership making contracts either between the partners inter se or with some third party nor upon an unregistered partnership acquiring property or assets. All that it does is to make a suit instituted by an unregistered partnership, to recover property, unenforceable. But relief from the disability can be obtained at any time as long as the partnership is in existence, and if the partnership is registered before the suit is instituted the partnership can recover its property and sue on contracts made with third parties even when those contracts were entered into at a time when a partnership was not registered. In Ponnappa Chetti's case, (1944) 2 M.L.J. 406 Bell, J., came to the conclusion that where an unregistered partnership has been dissolved any contract made with the partnership or moneys due to it in respect of dealings during the subsistence of the partnership cannot be enforced by a suit and that Sub -section (2) of Section 69 prevents such a suit succeeding. But, it has to be noticed, in that case there was no appearance on behalf of the partners of the partnership then under consideration ; nor, it seems to us, was the learned Judge's attention drawn to Sub -section (3) of Section 69.