1. Introduction

The applicant, a defendant in Special Civil Suit No. 150 of 2022, challenged the trial court's order dated 29.06.2022. The trial court rejected the defendant’s application for rejection of the plaint under Order VII Rule 11 CPC. The respondent (plaintiff) filed the suit for specific performance of an agreement to sell. The defendant sought rejection on the ground that the suit was barred under Section 69 of the Indian Partnership Act, 1932, claiming the plaintiff was not a registered partner.

2. Plaintiff's Case

The plaintiff firm contended that an agreement for the sale of the suit property was made between the defendant and the firm’s erstwhile partner in 1988. A fresh agreement was executed in 2021, but the defendant failed to complete the sale deed. Therefore, the plaintiff filed the suit for specific performance.

3. Defendant’s Argument

The defendant argued that the suit was barred under Section 69 as the person filing the suit, Vishal Kele, was not a partner in the firm at the time of filing. They cited M/s Shreeram Finance Corporation v. Yasin Khan (AIR 1989 SC 769) to support the contention that an unregistered firm or an unregistered partner cannot file a suit.

4. Plaintiff’s Counter Argument

The plaintiff responded by producing Deeds of Reconstitution of the Firm from 2001 and 2020, which showed that Vishal Kele was a registered partner as of 01.04.2001. The plaintiff also submitted certificates from the Registrar of Firms indicating the entry of Vishal Kele as a partner.

5. Section 69 of the Indian Partnership Act, 1932

The application for rejection was based on Section 69, which bars an unregistered partnership firm or an unregistered partner from enforcing a right arising from a contract.

6. Court’s Analysis

The court reviewed the deeds of reconstitution and the certificate from the Registrar of Firms. It found that though the entry in the Registrar’s certificate was made after the suit, it was effective from 31.03.2001.

7. Precedents Cited

The court relied on the judgment in Gwalior Oil Mills v. Supreme Industries (AIR 1999 SC 773), which held that belated registration of a partnership firm or partner could still maintain a suit if the registration has retrospective effect. The court further discussed Shiva Developers v. Aksharay Developers (2022), where the Supreme Court held that Section 69(2) does not bar a suit seeking specific performance, even if the firm is unregistered.

8. Ratio Decidendi

The court held that Section 69 does not apply if the plaintiff is seeking to enforce a common law right or statutory right such as specific performance. As the business of the respondent firm was related to property dealing, the suit was filed in the course of business, and thus, there was no bar under Section 69(2).

9. Final Conclusion

The court concluded that the plaintiff had established the firm’s registration, and the suit was filed within the purview of the firm’s business activities. Thus, the application for rejection of the plaint was not maintainable.

10. Disposition

The Civil Revision Application was dismissed, and the trial court's order was upheld.

Acts & Sections Discussed:

1. Order VII Rule 11 CPC – Rejection of plaint on specified grounds.
2. Section 69 of the Indian Partnership Act, 1932 – Effect of non-registration of a partnership firm, barring suits by unregistered firms or unregistered partners.

Ratio:

A suit filed for specific performance of a contract by a firm, even if it was not properly registered at the time of filing, is maintainable if the partner filing the suit is later shown to be a registered partner retrospectively. Section 69(2) does not bar such a suit if it relates to enforcing a common law or statutory right arising in the course of business dealings.

Subjecs:

• Civil Procedure
• Specific Performance
• Indian Partnership Act
• Partnership Registration
• Order VII Rule 11