Nagpur, June 10, 2022: Clarifying that under Section 69(2) of the Indian Partnership Act,1932 no suit can be filed by a firm unless it is registered and the names of the persons suing are shown in the register of firms as partners of the firm, the Nagpur Bench of the Bombay High Court has held that the courts below erred in holding that suit filed by the dissolved partnership firm was maintainable.
The Bench of Justice Manish Pitale also held that Section 69(3)(a) would come into operation when a suit is filed by a partner of a dissolved firm, concerning enforcement of a right for accounts of the dissolved firm or any right or power to realize the property of a dissolved firm,
Facts of this matter were such that the first respondent filed a suit for declaration, perpetual and mandatory injunction under Section 33 of the Maharashtra Rent Control Act, 1999, before the Small Causes Court at Nagpur, against the original defendants. Thereafter, the present petitioner (ninth defendant) was added as a party to the aforesaid suit and it was stated that the first respondent-M/s Maharashtra Industries was a registered partnership firm in which Kailashchandra Jankilal Bundiwal and Mohanlal Balmukund Bundiwal, were partners. The plaintiff firm claimed that the suit property in its possession was wrongly and illegally taken over by the original defendants.
The Small Causes Court directed the original defendants to restore the possession of the tenanted suit property to the plaintiff and not to disturb the possession of the plaintiff over the suit premises.When the petitioner filed the appeal, the District Judge confirmed the decree passed by the Small Causes Court. Aggrieved by the said judgments and orders, the petitioner filed the present writ petition.The main contention from the petitioner’s side was that the suit was filed on behalf of a dissolved firm, which was impermissible under Section 69.
The Bench took note of the fact that there was no question of said Kailashchandra Jankilal Bundiwal being inducted as a partner in the partnership firm and the same firm being re-registered on May 14, 2009. It was opined by the Court that the plaintiff firm bearing registration No. 907 of 1978-79, stood dissolved on December 17,2007 itself. Not only this, but the Court also made it clear that the defect in the present case was fundamental as the respondent firm already stood dissolved in 2007, while the suit was filed in 2009. The pleadings, documents, evidence and other material on record also clearly showed that the suit filed by the dissolved plaintiff firm herein was fundamentally defective.
Deprecating the way in which the issue of maintainability was handled by the Lower Courts, the Bench observed that the in the judgment of the Appellate Court as regards the dissolution of the firm in 2007, it had been erroneously held that the same did not matter since Mohanlal Balmukund Bundiwal was one of the partners in the new firm and he could be said to have continued in possession of the suit property. Such an approach was wholly unsustainable, added the Bench. Thus finding that the suit filed by the first respondent i.e. a dissolved firm was not maintainable, the Bench allowed the Writ Petition and quashed the impugned judgments passed by the Small Causes Court and Appellate Court.