Shiv Developers Through Its Partner v. Aksharay Developers & Ors -2022 LiveLaw (SC) 104 -Section 69(2) Partnership Act

2022 LiveLaw (SC) 104 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION DINESH MAHESHWARI; VIKRAM NATH, JJ. CIVIL APPEAL NO. 785 OF 2022 (ARISING OUT OF SLP (C) NO. 20262 OF 2018); January 31, 2022 SHIV DEVELOPERS THROUGH ITS PARTNER SUNILBHAI SOMABHAI AJMERI v. AKSHARAY DEVELOPERS & ORS. Partnership Act, 1932 - Section 69 – Effect of Non-registration – Whether a suit filed by an unregistered partnership firm, is covered by the bar created by Section 69(2) of the Act of 1932? Held, Section 69(2) of the Act of 1932 is not a bar to a suit filed by an unregistered firm, if the same is for enforcement of a statutory right or a common law right. The transaction in question was not the one entered into by the plaintiff firm during the course of its business (i.e., of building construction); and it had been an independent transaction of sale, of the firm's share in the suit property, to the contesting defendants. The bar of Section 69(2) is not attracted in relation to the said sale transaction. Moreover, the subject suit cannot be said to be the one for enforcement of right arising from a contract; rather the subject suit is clearly the one where the plaintiff seeks common law remedies with the allegations of fraud and misrepresentation as also of the statutory rights of injunction and declaration in terms of the provisions of the Specific Relief Act, 1963 as also the Transfer of Property Act, 1882 (while alleging want of the sale consideration). Therefore, the bar of Section 69(2) of the Act of 1932 does not apply to the present case. [Para 20] Petition for Special Leave to Appeal (C)No. 20262 of 2018 (Arising out of impugned final judgment and order dated 15-02-2018 in CRA No. 241/2017 passed by the High Court of Gujarat at Ahmedabad) For Appellant(s) Ms. Shreya Jain, Adv. Mr. Gaurav Tanwar, Adv. Mr. Sachin Mittal, AOR For Respondent(s) Mr. Kruthin Joshi, Adv. Mr. Rajesh Mahale, AOR Mr. Purvish Jitendra Malkan, AOR Mr. Jitendra Malkan, Adv. Ms. Dharita P Malkan, Adv. Ms. Deepa Gorasia, Adv. Mr. Alok Kumar, Adv. Ms. Nandini Chhabra, Adv. Ms. Bhavna Sarkar, Adv. J U D G M E N T DINESH MAHESHWARI, J. The relevant factual matrix and background The application seeking rejection of plaint: divergent views of the Trial Court and the High Court Rival Submissions Section 69 of the Act of 1932 and the relevant principles Application of the relevant principles to the subject suit Conclusion Leave granted. 2. This appeal, by the plaintiff of a suit for declaration and injunction, is directed against the judgment and order dated 15.02.2018, as passed by the High Court of Gujarat, (For short, 'the High Court') in Civil Revision Application No. 241 of 2017, whereby the High Court has allowed the revision application filed by the contesting defendants (respondent Nos. 1 to 3 herein) and has reversed the order dated 07.04.2017, as passed by the Court of 9th Additional Senior Civil Judge, Vadodara (For short, 'the Trial Court') in Special Civil Suit No. 333 of 2015. 2.1. By the said order dated 07.04.2017, the Trial Court had rejected the application moved by the contesting defendants under Order VII Rule 11(d), Order XXX Rules 1 and 2 and Section 151 of the Code of Civil Procedure, 1908 (For short 'the Code') read with Section 69 of the Indian Partnership Act, 1932 (For short, 'the Act of 1932') for rejection of plaint on the ground that the suit filed by and on behalf of an unregistered partnership firm was barred by law. The Trial Court essentially held that, on its subject-matter relating to the validity of the sale deed in question, the bar of Section 69(2) was not operating against this suit. However, the High Court has taken a contrary view of the matter and has held that the plaintiff, being an unregistered firm, would be barred to enforce a right arising out of the contract in terms of Section 69(2) of the Act of 1932. 3. We may take note of the factual matrix and the background aspects of the matter, so far relevant for the question calling for determination in this matter, i.e., as to whether the subject suit, filed by an unregistered partnership firm, is covered by the bar created by Section 69(2) of the Act of 1932? The relevant factual matrix and background 4. For a proper comprehension of the subject-matter, worthwhile it would be to take note of the status of respective parties before dilating on the pleadings and submissions. 4.1. The appellant herein is an unregistered partnership firm by the name "Shiv Developers". It is stated that this firm is engaged in the business of construction of buildings and is comprising of two equal partners, namely, Mr. Sunilbhai Somabhai Ajmeri and Mr. Jignesh Kanubhai Desai. The said Mr. Sunilbhai Somabhai Ajmeri is also referred to as 'the administrator' of this firm and has filed the suit on behalf of the firm. 4.2. In the suit so filed by the...

Shiv Developers Through Its Partner v. Aksharay Developers & Ors -2022 LiveLaw (SC) 104 -Section 69(2) Partnership Act

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