Case Note & Summary
The case involves a Civil Revision Application filed by the petitioner, Mangilal Jagrupji Jain, who was defendant no.3 in a suit for specific performance. The plaintiffs (respondents 1 to 4) along with the petitioner, as partners of an unregistered firm named M/s. Mahavir Developers, entered into an agreement dated 29 December 2007 with respondents 5 and 6 (defendants 1 and 2) for purchase of a property. When the defendants failed to perform their part, the plaintiffs filed a suit for specific performance in their individual capacity. The petitioner filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) for rejection of the plaint, arguing that since the agreement was executed with the unregistered firm, the suit was barred under Section 69(2) of the Indian Partnership Act, 1932 (as amended in Maharashtra). The plaintiffs contended that they and the petitioner individually invested the amount and entered into the transaction in their individual capacity, though the document reflected the name of the intended firm which was not finalised or registered. The trial court rejected the application, leading to the present revision. The High Court, after hearing both sides, held that under Order VII Rule 11(d) CPC, only the plaint averments and documents filed therewith are to be considered, not the defence. The plaint disclosed that the plaintiffs sued in their individual capacity and the firm was not finalised. Therefore, the suit was not barred by Section 69(2) of the Partnership Act. The court dismissed the revision application, upholding the trial court's order.
Headnote
A) Civil Procedure - Rejection of Plaint - Order VII Rule 11(d) CPC - Scope - The court must consider only the plaint averments and documents filed therewith, not the defence or written statement, to determine if the suit is barred by law. (Paras 3-4)
B) Partnership Law - Unregistered Firm - Section 69(2) Indian Partnership Act, 1932 - Suit by Partners in Individual Capacity - A suit for specific performance filed by partners in their individual capacity, based on an agreement executed in the name of an unregistered firm, is not barred under Section 69(2) if the plaint discloses that the partners acted in their individual capacity and the firm was not finalised or registered. The court must examine the plaint averments to ascertain the capacity in which the plaintiffs sue. (Paras 2, 5-6)
C) Civil Procedure - Rejection of Plaint - Order VII Rule 11(d) CPC - Maintainability - The mere fact that the agreement mentions the name of an unregistered firm does not automatically bar the suit if the plaint alleges that the plaintiffs invested individually and the firm was not finalised. The application for rejection was rightly dismissed. (Paras 2, 6)
Issue of Consideration
Whether a suit for specific performance filed by partners in their individual capacity, based on an agreement executed in the name of an unregistered partnership firm, is barred under Section 69(2) of the Indian Partnership Act, 1932, warranting rejection of plaint under Order VII Rule 11(d) CPC.
Final Decision
The High Court dismissed the Civil Revision Application, upholding the trial court's order rejecting the application under Order VII Rule 11(d) CPC. The suit is not barred by Section 69(2) of the Indian Partnership Act, 1932.
Law Points
- Order VII Rule 11(d) CPC
- Section 69(2) Indian Partnership Act
- 1932
- Rejection of plaint
- Maintainability of suit by partners in individual capacity
- Unregistered partnership firm
Case Details
2011 LawText (BOM) (09) 49
Civil Revision Application No. 538 of 2011
Mr. P. S. Dani for the petitioner, Mr. N.V. Walawalkar, Senior Advocate i/by Mr. Suresh M. Sabrad for respondent no.2
Shri Bharat Shankarlal Dhakad (HUF) & ors.
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Nature of Litigation
Civil Revision Application against rejection of application under Order VII Rule 11(d) CPC for rejection of plaint in a suit for specific performance.
Remedy Sought
The petitioner (defendant no.3) sought rejection of the plaint on the ground that the suit was barred by Section 69(2) of the Indian Partnership Act, 1932.
Filing Reason
The petitioner contended that the agreement for purchase of property was executed with an unregistered partnership firm, and therefore the suit by partners in their individual capacity was not maintainable.
Previous Decisions
The trial court rejected the application under Order VII Rule 11(d) CPC, leading to the present revision.
Issues
Whether the suit for specific performance filed by partners in their individual capacity is barred under Section 69(2) of the Indian Partnership Act, 1932, due to the agreement being in the name of an unregistered firm.
Whether the plaint should be rejected under Order VII Rule 11(d) CPC as barred by law.
Submissions/Arguments
Petitioner argued that the agreement was with the unregistered firm M/s. Mahavir Developers, and under Section 69(2) of the Partnership Act, no suit can be enforced by or on behalf of an unregistered firm. The plaint should be rejected.
Respondents argued that the plaintiffs and petitioner individually invested and entered into the transaction in their individual capacity; the firm was not finalised or registered. The suit is maintainable.
Ratio Decidendi
Under Order VII Rule 11(d) CPC, only the plaint averments and documents filed therewith are to be considered for rejection of plaint. The plaint disclosed that the plaintiffs sued in their individual capacity and the firm was not finalised. Therefore, the suit is not barred by Section 69(2) of the Indian Partnership Act, 1932.
Judgment Excerpts
The Petitioner (Defendant No.3) is one of the purchaser, along with the Plaintiffs (Respondents 1 to 4) of a property described in the Agreement dated 29 December 2007 (the Agreement), executed with Respondents 5 and 6 (Defendants 1 and 2).
The Petitioner filed an application under Order VII, Rule 11 (d) of the Code of Civil Procedure (CPC) for rejection of the plaint basically on the ground that the Defendants executed the agreement with the partnership firm namely, M/s.Mahavir Developers (the firm), of which the Plaintiffs 1 to 4 are the partners. The firm is not registered. Therefore considering Section 69(2) of the Indian Partnership Act (Mah. Amendment), the suit as filed in the individual capacity is not maintainable.
The Apex Court in Vishnu Dutt Sharma vs. Daya Sapra (Smt) has elaborated the scope and purpose of the provision as follows: '7 Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) provides that the plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law.'
Procedural History
The plaintiffs filed a suit for specific performance in their individual capacity. The petitioner (defendant no.3) filed an application under Order VII Rule 11(d) CPC for rejection of the plaint. The trial court rejected the application. The petitioner filed the present Civil Revision Application before the High Court.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order VII Rule 11(d)
- Indian Partnership Act, 1932: Section 69(2)
