Kadakia Sons, Proprietor of Imperial Products, registered partnership firm, Madras vs S.R.A. Reddiar, a firm carrying on business in Quilon and others

Venugopal, J.—Plaintiff, registered partnership firm and proprietors of Imperial Products, is the appellant before this Court. The defendants

are the respondents. Defendants 2 to 4 are carrying on business in partnership in the name and style of the first defendant. The plaintiff, registered

partnership firm, under the name and style of Kadakia Sons, supplied goods of the value of Rs. 1175.07 to the defendants under a trade name,

Imperial Products. As there was default in payment the plaintiff filed a suit to recover the amount due from the defendants. It was contended before

the trial Court that the defendants had dealings with only Imperial Products and the plaintiff-firm have to establish that Kadakia Sons are the

proprietors of Imperial Products and the suit, as framed is not maintainable. It was further contended that the suit claim is also barred by limitation.

The trial Court accepted both the contentions of the defendants and dismissed the suit. On appeal, it was held (1) that Messrs. Kadakia Sons is a

registered partnership firm and it was carrying on business in the name of Imperial Products. Order 30, R. 1, C.P.C., enables a registered

partnership firm to sue in the firm''s name. That, however, will not enable a registered partnership to file a suit in respect of a transaction it carried

on under a different trade name. The framing of the suit is not in accordance with the law and the suit as framed is, therefore, not maintainable. (2)

It is enough if the payment is made within the period of limitation and it does not matter that the acknowledgement in writing was made by the

debtor after the expiry of the period of limitation. The defendants made a payment of Rs. 100 on 18th August, 1970 which payment was within the

period of limitation. The acknowledgement of the payment in writing in Ex. A 19, dated 17th March, 1972 will come to the rescue of the plaintiff

and save the claim from the bar of limitation. In view of the first finding, the first Appellate Court confirmed the order of the trial Court, dismissing

the suit. Aggrieved against the order of the first Appellate Court the plaintiff has filed a second appeal to this Court. A partnership firm as such, has

no existence in law. It is a mere abbreviated name for the partners of which it consists and it is not a legal entity. Or. 30, R. 1, C.P.C. however,

permits the filing of the suit by the partners in the name of the partnership firm. To get the benefit of this provision, and Institute the suit in the firm''s

name, the partnership firm must be registered with the Registrar of Firms. Or.30, R. 10, C.P.C. applies only to the case of a single individual

carrying on business under a firm name and not to a partnership carrying on business under a firm name or assumed name. It follows that a

partnership business trading in the name of a firm cannot institute a suit to enforce a right arising from a contract unless and until the firm is

registered with the Registrar of Firms. It is contended for the appellant that so long as the partnership is a registered firm, there is no prohibition for

a registered partnership to carry on business under any trade name it pleases and the appellant, being a registered partnership firm, supplied goods

to the respondents under the trade name ''Imperial Products'' and S. 69(2) of the Partnership Act cannot operate as a bar for the institution of the

suit. It is further contended that Kadakia Sons is a registered partnership firm and it has supplied goods to defendants under the trade name

Imperial Products, and there is no bar under S. 69 (2) of the Partnership Act, to file the suit as proprietors of Imperial Products. It is contended for

the respondents that unless the trade name Imperial Products is also registered with the Registrar of Firms the ban under S. 69 (2) operates. The

short question is, when a registered partnership firm adopts another trade name that has not been registered with the Registrar of Firms aid supplies

goods to the respondents, can it file a suit against them in respect of the transaction which it had effected under that trade name?

S.69(2) of the Partnership Act lays down that a firm which has not been registered shall not be able to file a suit to enforce a right arising from a

contract until registration of the firm is effected and the names of the partners suing are shown in the Register of firms. The registration of a firm is a

condition precedent to its right to institute a suit. Thus S. 69 (2) of the Partnership Act makes claims arising out of a contract unenforceable if the

firm is unregistered on the date of institution of the suit. The object of the section is to protect the public against firms carrying on business under the

name which does not disclose to the public the names of the actual partners. It is, therefore, clear that a partnership firm cannot sue or be sued in a

name other than its own which it has assumed for its business purposes. In the present case, the appellant partnership firm has filed the suit in

respect of certain transactions which it carried on with the respondents under the trade name ''Imperial Products. The trade name ''Imperial

Product''s'' has not been registered with the Registrar of Firms. So the appellant is barred from filing the suit under S. 69 (2) of the Partnership Act

in respect of the transaction which it had carried on with the respondents under the trade name Imperial Products. If the appellant''s contention that

a registered partnership firm can trade under any name and institute a suit in respect of transactions done under that trade name is to be accepted,

then the mandatory provision under S. 69 (2) of the Partnership Act can be easily circumvented. Any unregistered firm can file a suit in respect of a

transaction done under a trade name and take the convenient plea that the transaction relates to a transaction of a registered firm done under a

trade name. Since the language of S. 69 (2) of the Partnership Act is imperative and absolutely debars a court from entertaining a suit instituted

without compliance with the provisions relating to registration, the appellant''s contention if accepted, would have the effect of nullifying S. 69 (2) of

the Partnership Act. Since the appellant''s dealings with the respondents were under a trade name that has not been registered with the Registrar of

Firms, the bar under S. 69 (2) of the Partnership Act operates and the suit as framed is not maintainable. The contract by the appellant with the

respondents was under a firm name that has not been registered. It cannot be got round by pleading that a registered firm carried on the business

under a trade name and there should be no bar for the registered firm to file the suit. In this view, the finding of the first appellate court is confirmed.

With regard to the plea of limitation, the Supreme Court in Sant Lal Mahton Vs. Kamala Prasad, has held that S. 20 of the Indian Limitation Act,

requires that the payment should be made before the expiration of the period of limitation and it does not require that the acknowledgement of the

payment should also be made within that period and the only essential thing is that such acknowledgement must be in existence prior to the

institution of the suit. In the present case, the payment of Rs. 100, was made on 18th August, 1970, which was well within the period of limitation.

The acknowledgement of the payment in writing in Ex. A-19, was in existence prior to the institution of the suit. Since the twin requirements of the

payment and acknowledgment in writing prior to the institution of the suit exist in the present case, the claim is not barred by limitation and the

finding of the first appellate court on this issue is accordingly confirmed. In the result, the second appeal fails and it will stand dismissed with costs.