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Chaturvedi, J.—This is a revision filed by the Defendant in a suit instituted in the Court of Civil Judge, First Class, Morena, against him by the Plaintiff Mills. It appears that the Plaintiff''s firm was not registered when the suit was instituted but was registered after the presentation of the plaint in Morena Court. The Defendant applicant resisted the suit on the ground that the suit was not maintainable; but the plea of the Plaintiff was that this subsequent registration of the partnership was enough to enable the Plaintiff to maintain the suit, notwithstanding the provisions of Section 69(2), Partnership Act. The Court upheld the Plaintiff''s plea observing that Section 69(2) had no application in this case and relying on - ''Nazir Ahmed v. People''s Bank of North India Ltd.'' AIR 1942 Lah 289 (FB) held that subsequent registration validated proceedings. The Defendant has come to this Court and desires me to revise this order.
There is no doubt that in Full Bench case of - ''Nazir Ahmed v. People''s Bank of North India Ltd.'' ILR (1942) Lah 517 : AIR 1942 Lah 289 (FB) and also in three other cases viz.; - ''Jakiuddin v. Vithoba'' AIR 1939 Nag 301 : 186 Ind. Cas. 670; - ''Radha Charan v. Matilal'' 41 Cal WN 534 and T. Varadarajulu Naidu and Kuppuswami Naidu and Co. Vs. R. Rajamanika Mudaliar and Others, the view that prevailed was in favour of the Plaintiff non-applicant. It was held that subsequent registration cured the defect and the suit was maintainable. On the other hand, in - M.S.A. Subramania Mudaliar Firm by partner M.S.A. Subramania Mudaliar Vs. The East Asiatic Co. Ltd., by Managing Agent, , in 1953 - A.P.M. Syed Ibrahim Sahib and Brother Vs. V.S. Gurulinga Aiyar, ; in - S. Girdharilal Son and Co. Vs. B. Kappini Gowder and Others, it was held that subsequent registration did hot remedy the defect. The views of the Patna High Court - ''Laluram Sagarmal Firm v. Jamuna Prasad'' 18 Pat 114, the Allahabad High Court - ''Danmal Parshotam Das v. Babu Ram Chhote Lal'' 58 Ail 495 and the Lahore High Court - ''Krishen Lal Ram Lal v. Abdul Ghafur Khan'' 17 Lah 275 were also to this effect.
The terms of Section 69(2), Partnership Act may be reproduced here for reference and they are:
No suit to enforce the 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 of the firm.
A plain reading of the terms above, without anything more, shows clearly that unless the firm is registered, the institution of the suit on its behalf to enforce a right arising from a contract will be barred.
The entire case law was reviewed in - K.K.A. Ponnuchami Goundar Vs. Muthusami Goundar and Another, and the learned Judges of the Madras High Court came to. the conclusion that the registration of a firm is a condition precedent to its right to institute a suit and a Court cannot proceed with a trial of a suit when the condition precedent has not been fulfilled. They further added that the great weight of authority was also in favour of the opinion that subsequent registration would not put the suit on a proper basis and that the Court''s duty was to dismiss it. The learned Judges also relied on - AIR 1927 176 (Privy Council) , where Section 80, CPC has been considered by the Judicial Committee and the provisions thereof had been held to be explicit and mandatory.
The learned Judges observed that Section 69, Partnership Act had very much in common with Section 80, CPC and on the basis of the Privy Council decision came to the conclusion that subsequent registration could not cure the initial defect and validate the institution of a suit. This view has since then been followed by various High Courts. The Bombay High Court in - Prithvisingh Devising Vs. Hasan Alli Vazirkhan, and the Nagpur High Court in - ''Abdul Karim v. Ram Das Narayan Das'' ILR (1951) Nag 81 : AIR 1951 Nag 159 : 1950 NLJ 554 have adopted this view. In my opinion these latter cases have laid down the correct position in law and I respectfully concur with them.
It is then contended that even if Section 69(2). Partnership Act applies the right of the Plaintiff to sue in the present case is saved by Section 73 of the Madhya Bharat Partnership Act ''Samvat'' 2006 (Act No. 67 of ''Samvat'' ''2006) which in terms is identically the same as Section 74 of the Indian Partnership Act and the, portion material to this case runs as follows:
Nothing in this Act shall affect or be deemed to affect
(a) any right, title, interest, obligation, or liability already acquired, accrued or incurred before the commencement of this Act, or
(b) any legal proceeding or remedy in respect of any such right, title, interest, obligation or liability, or
(c) anything done or suffered before the commencement of this Act; or
(e) any rule of law not inconsistent with this Act.
In this connection, it will be useful to refer to the following facts:
The Madhya Bharat Partnership Act came into force on 7-11-49, and, according to Clause (3) of Section 1 of the Act, Section 69 came into force on 17-12-49 (vide Madhya Bharat Government Gazette dated 17-12-1941 Part 2, page 189). According to the plaint, the Defendant purchased goods from the Plaintiffs on 26-11-1949 and asked the Plaintiffs to send goods to Surendra Nagar within two days. The Plaintiffs despatched the goods on 28-11-49 according to the advice and informed the Defendant accordingly. There are certain other things alleged in the plaint e.g., that the Defendant subsequently desired that the goods should be sent to Ahmedabad and not to Surendra Nagar, that the goods reached Surendra Nagar and could not be detained at Ahmedabad.
The Defendant then did not take delivery and on 16-12-49 informed the Plaintiffs, who sold the goods at a loss on 18-12-1949. The plaint mentions that the goods which were sold to the Defendant were worth Rs. 16,771-2-0 that the Plaintiffs spent Rs. 243-6-9 in sending people to Ujjain and Ahmedabad and that the goods sold by them at Surendra Nagar fetched only Rs. 10,569-9-9 and they had to suffer a loss of Rs. 6,444-12-3. Adding interest and notice charges the Plaintiff instituted a suit for Rs. 6500/- against the Defendant on 28-1-1950. According to the plaint, therefore, the contract was concluded'' on 28-11-49, when according to the order of the Defendant, goods were despatched to Surendra Nagar and the invoice and the Hundi about the value of goods were also sent to the United Commercial Bank Ltd, at Ahmedabad.
The Defendant asked the said Bank to present the Hundi after four or five days and then after that period refused to accept it. The Plaintiff also received a wire from the Defendant on 11-12-49 informing the Plaintiff that the Defendant would not take delivery of the goods. It will be apparent that the Plaintiff''s right to recover the value of goods from the Defendant had accrued on 28-11-49 when the contract had concluded or on 11-12-49 when the Defendant had refused to take delivery of goods. In my opinion ''Right'' in Section 74 of the Indian Partnership Act means ''substantive rights'' and not merely ''right to sue''. It should not be confined to ''cause of action''. In any case, the rights of the Plaintiff had accrued after the enactment of the Madhya Bharat Partnership Act, but before Section 69 could come into force.
The questions that arise for determination are: Can Section 69(2) take away those rights of the Plaintiff which had accrued to him before the said section came into force? Does not Section 73 of the Madhya Bharat Partnership Act (Section 74 of the Indian Partnership Act) save those rights?
It may be noted here that the India Partnership Act, except Section 69, had come into force in India on 1st October 1932 and Section 69 came into force a year later i.e., on 1st October 1933. The main question that was canvassed in - S. Girdharilal Son and Co. Vs. B. Kappini Gowder and Others, was, whether Section 69(2) relates to mere matter of procedure and can be given retrospective effect? Venkataramana Rao, J. was of opinion that Section 69(2) belongs to the law of procedure and an enactment altering the procedure is always held to be retrospective even where the alteration tends to the disadvantage of one of the parties. It was further observed by the learned Judge that the language of Section 69(2) is very general and will apply to all suits arising from contracts whether entered into before the passing of the Act or not. His Lordship also added that the postponement of the operation of the section may fairly be taken as an indication of the intention of the Legislature to give retrospective action to the section and that Section 74(b) does not go to save this retrospective operation.
Pandrang Rao J. differed from this view and held that Section 69(2) cannot be said to relate to mere matter of procedure, for, it requires something to be done, viz., registration ''de hors'' the court. Section 69(2) cannot be given retrospective effect particularly in view of Section 74(b). His Lordship further observed: (and I respectfully agree with it), that the real test when (deciding whether a particular provision of law is to be given retrospective effect or not, is not whether the law is a law of procedure or substantive law, but whether the law in question affects or impairs existing rights including rights of action which are substantive rights. Where existing rights would be adversely affected, Courts decline to give retrospective effect unless compelled thereto by the words of the Statute.
The matter was then referred to Varadachariar J. who agreed with Justice Pandrang Rao and held that Section 74(b) saves the ''remedy'' in respect of any right acquired or accrued prior to 1st October 1932 from the bar of Section 69(2). On the question whether Section 69(2) relates to law of procedure, his Lordship on pages 704-5 observed as follows:
In this connection it is necessary to consider the purpose and effect of the provision in Section 69. If it had such unintegral connexion with the subject-matter of the proposed suit as in some way to make the step required by it a step in the litigation, I should have been inclined to accept the argument that it related to a matter of procedure. But it is obvious that that was not its purpose. In a case for instance of a Patta being delivered or a notice being given or a bill being tendered by a solicitor, it is clear that the condition intimately bears upon the subject-matter of the suit to follow. The object however of Section 69 was to make sure that the general policy of the Legislature that all partnerships should be registered will be carried out.
It is true that occasionally questions may arise in a suit as to who are the partners of a particular firm; but that cannot justify my ignoring the real purpose of the provision in Section 69. As pointed out by Sir Dinshaw Mulla, the object of this provision was to bring pressure to bear on partners to have the firm and themselves registered. This policy has been attempted to be enforced in various ways in different systems. In the English Legislation, Section 7 of Registration of Business Names Act of 1916 imposes a penalty upon partners making default in the matter of registration. Such a provision certainly cannot be described as a processual provision.
I may pause here to mention that other High Courts did not share this view on the other grounds and there has been a conflict of opinion on this point.
A contrary view was held by the Calcutta High Court in - Surendra Nath De and Another Vs. Monohar De and Another, , wherein it was observed that Section 74 would go to indicate that the intention of the Legislature was to bring Section 69 into operation against the firms, if they, do not register themselves, or if they do not take proceedings respecting antecedent matters within a year from the date of the commencement of the Act. Section 74(b), therefore, said the learned Judges, did not save litigation started after 1st October 1933. This ruling was followed by the Patna High Court in - Shazad Khan and Others Vs. Darbar Babu Kuchhi, , wherein it was, held that Section 74(b) of the Act saves only pending suits. Mr. Motilal Gupta places reliance on these rulings.
In - (Firm) Danmal Parshotam Dass Vs. (Firm) Babu Ram-Chhote Lal, , Justice Bennet followed - ''Surendra Nath v. Monohar'' 62 Cal 213 but Sulaiman C.J. differed from him. The Full Bench of the Rangoon High Court in - ''Soonpiram Ramniranjan Das V. Junjilal'' AIR 1938 Rang 273 (FB) supported the views of Sulaiman C.J. In - Revappa Nandappa Hattarki Vs. Babu Sidappa Erandole, , Beaumont C.J. delivering the judgment of the Division Bench, and, commenting on the Calcutta case, observed as follows:
In ''62 Cal 213'', which the learned Judge in lower Court followed, a Division Bench of the Calcutta High Court held that Section 74 did not take out of the operation of Section 69, a suit to enforce a right accrued before Section 69 came into operation. The Court took the view that inasmuch as the Legislature had postponed the operation of Section 69 for a year they must have intended the section to have retrospective effect when it came into operation. I agree that one may feel a doubt as to whether the Legislature really intended Section 74 to operate to save a suit which was barred by Section 69. It certainly looks as if the Legislature had intended to give unregistered firm one year in which to effect registration and one would have expected that if they did not avail themselves of the opportunity given to them they would have to suffer the consequences.
But, in my opinion, where the words of a section in a Statute are plain the court must give effect to them, and is not justified in depriving the words of their only proper meaning in order to give effect to some intention which the Court imputes to the Legislature from other provisions of the Act. Such a course can only be justified where a literal construction of the section is inconsistent with the meaning of the Statute as a whole, and in my opinion no such case exists here.
In - Ramgopal Sriniwas Vs. Net Ram and Another, a Division Bench of the Allahabad High Court followed Sulaiman''s views and disapproved those of Bennet J., expressed in - ''Danmal Parshotam Das v. Babu Ram Chhote Lah. 58 All 495 : (Firm) Danmal Parshotam Dass Vs. (Firm) Babu Ram-Chhote Lal, . The Division Bench held that Section 74(b) relates to those legal proceedings or remedies which were open to a party in respect of any right, title, interest, obligation or liability which had already been acquired, accrued or incurred before the commencement of the Act and that section does not limit the exemption from the operation of Section 69 only to pending proceedings. I may say that I am in respectful concurrence with these views.
If, then, Section 69(2) cannot be held to have retrospective operation, it ought to be held that Section 73 saves not only the rights but also the suits to enforce those rights. It not only saves the rights which accrued before the commencement of the Partnership Act but also those rights which accrued before the date when Section 69 came into force. In - ''Lokram Das Chatomal Firm v. Tharumal'' ILR (1939) Kar 765 : AIR 1939 Sind 206 a suit by an unregistered firm for rent due upto October 1933 was held to have been saved by Section 74. A similar view was adopted by the Nagpur High Court in - AIR 1940 137 (Nagpur) wherein it was held that where part of the suit related to a cause of action which arose after the Partnership Act came into force but before Section 69 came into operation the whole suit is taken out of operation of Section 69 by Section 74 of the Partnership Act. In - ''Gurdinomal Chandumal v. Usto Muhammad Hayat'' AIR 1943 Sind 26 : ILR (1942) Kar 442 also it was laid down that Section 74 of the Indian Partnership Act saves those rights which accrued before 1st October 1933 i.e., before the date when Section 69 came into force.
Keeping in mind the great weight of authority and agreeing with the principle enunciated in these rulings, I hold, that Section 73 of the Madhya Bharat Partnership Act saves those rights which were acquired or had accrued prior to the coming into force of Section 69 and that Section 73 saves all legal proceedings or remedies in respect of such rights. In this view of the matter the suit in the Court below was maintainable and I dismiss the revision with costs.