Madras High Court
M/S. K.R.M. Money Lenders Rep By Its ... vs Mr. A. Manoharan @ Doss on 15 April, 1999
Equivalent citations: 1999(2)CTC540, (1999)3MLJ51
ORDER
1. The plaintiff, a partnership firm who had succeeded before the trial court and lost before the first appellate court is the appellant in this second appeal. This second appeal is directed against the judgment and decree dated 20.1.1998 made in A.S. No. 70 of 1997 on the file of the Principal District Judge, Chengalpattu in setting aside the judgment and decree dated 31.1.1997 made in O.S.No. 67 of 1984 on the file of the Sub Court, Thiruvellore.
2. This court ordered notice of motion to the respondents as the controversy requires to be decided in this second appeal lies in a narrow compass and it is not necessary to refer to the exhibits as such.
3. The question that has been raised before this court being whether the lower appellate court has acted illegally in framing an issue and deciding the same against the appellant without a pleading or proof with respect to either registration of the firm or the bar as to adjudication of claim at the instance of an unregistered firm without raising a jurisdictional ground in the memorandum of appeal.
4. It was further contended that the lower appellate court has acted with illegality in dismissing the suit against the 9th defendant while confirming the judgment against 10th and 11th defendants, who claimed to be the tenants under the 9th defendant. Incidentally, it had also been contended that the 9th defendant who had not claimed any right over any portion of the suit property and who had been impleaded as a formal party could not challenge the decree after having admitted that he is not claiming any portion of the suit property, nor he has any interest in the suit property nor he is an aggrieved party.
5. The plaintiff KRM Money Lenders represented by Karuppiah, its power agent claiming to be a registered partnership firm carrying on business at 7/5, Thatha Muthiappan Street, Chennai-1 instituted the suit O.S.No. 67 of 1984 for a declaration of plaintiff's right and title to the suit properties and for possession of the same besides for recovery of Rs. 10,800 from defendants 1 to 8 and for other incidental reliefs.
6. According to the plaintiffs, the defendants 1 to 4 along with their father Arumugham executed a mortgage by conditional sale on 29.8.1973 in favour of the plaintiff for a sum of Rs. 10,000, on valid consideration received in cash for mortgaging the suit property with the superstructure thereon for clearing the earlier mortgage debts dated 16.2.1960, 7.9.1962, 23.2.1965 and 27.4.1967 and transferred the possession of the schedule mentioned properties to the plaintiff with all rights of easement and privileges thereto and to hold the same until repayment of the said sum of Rs. 10,000 with interest at 9% per annum on condition that on repayment within 7 1/2 years from the date of deed dated 29.8.1973 the plaintiff will reconvey and in the event of non payment within the stipulated time, the plaintiff shall become the absolute owner of the schedule mentioned properties free from the right of redemption of the defendants 1 to 4. It is the claim of the plaintiff that the plaintiff has become the absolute owner on and from 1.3.1981. It is further pleaded by the plaintiff that the defendants 1 to 4 and their deceased father have not paid the interest every month as agreed and as the defendants 1 to 4 have failed to repay the amount, the plaintiff has foreclosed the right of redemption of the defendants 1 to 4 and consequently the sale has become absolute. It is further pleaded by the plaintiff that defendants 5 to 8 are the tenants in occupation of the premises, who have committed default in payment of rent due to the plaintiff and defendants 5 to 8 have been paying rental dues to the defendants 1 to 4 despite legal notice. Hence the plaintiff is entitled to recovery of rental dues or in the alternative damages for use and occupation from the defendants at the rate of Rs. 300 per month for the past three years up to the date of filing of the suit. The suit schedule mentioned property has been described in the plaint and the mortgage by conditional sale has also been produced besides power of attorney deed.
7. The first defendant filed a written statement denying the execution of the mortgage deed but admitted the signature as it had been taken as and by way of attestation. The first defendant also denied payment of Rs. 10,000 on 29.8.1973. The first defendant pleaded that his father and his brothers alone were indebted to the extent of Rs. 7,000 and for that sum, the mortgage deed was executed for Rs. 10,000. It was further contended that the conditions set out in the instrument is invalid. The defendants 2 to 4 have leased out the property and the first defendant has nothing to do with the plaint schedule property. The first defendant further pleaded that the plaintiff is not entitled to recover either the arrears of rent or damages from the defendants and at any rate, the rent claimed is excessive.
8. The second defendant also denied the plaintiff's claim and contended that the plaintiff is not entitled for a declaration or for possession. Nor he is entitled to recover Rs. 10,000 as damages, besides contending that it is against public policy to enforce such a condition. The second defendant further pleaded that the whole debt had been discharged, but the document had not been cancelled since the plaintiff firm was having shady transaction and the father Arumugham and the other defendants could not effectively or directly talked to the partners or Managing Partner who fled away to foreign countries during emergency. It was further pleaded that the plaintiff should be directed to produce the partnership document and the registration of that firm so that the court could find the legal existence of the plaintiff firm and the accounts maintained by it. The second defendant also denied the handing over of possession of the property with superstructure and the right of redemption had not been lost since it is a salutary right well recognized in law to the mortgagors. It was further pleaded that the plaintiff cannot be treated as absolute owners as claimed, much less, on and from 1.3.1981. Various other technical pleas have been raised.
9. The 9th defendant had filed a brief written statement. It is essential to extract the very written statement itself.
"Contents found in para 3 to 5 are hereby specifically denied and the plaintiff is put to strict proof of the same. This defendant namely Manoharan is not a party to the deed dated 29.8.1973. Though he is one of the sons of Arumugham, he has not signed the mortgage by conditional sale dated 9.8.1973."
This defendant was added as per I.A. No. 278 of 1989. In that I.A., the plaintiff has stated that this defendant has no right and interest over the suit property.
It is submitted that the description of the suit property is not correct and it is misleading. When Arumugham was alive he has settled through a registered settlement deed dated 27.3.1965 in favour of the 9th defendant. An extent measuring east to west 150 feet, North to South 45 feet in Survey No.450/5 in Puzal Village. Right from the date of settlement this defendant is in peaceful possession and enjoyment of the property. He is in exclusive possession of the property described above. This defendant has no connection with the suit property. He is unnecessary party. By virtue of the settlement dated 27.5.1965, this defendant has become absolute owner.
10. The trial Court framed number of material issues. The plaintiff marked exhibits A.1 to A.25, while the defendant marked Ex.B.1. The plaintiff examined P.Ws.l and 2, while the defendants have examined D.Ws.l to 7 and the 9th defendant was examined as D.W.5.
11. On a consideration of the oral and documentary evidence, the trial court decreed the suit holding that the plaintiff has become the owner and the contesting defendants have lost their right of redemption. The trial court also found that the issue No.5 that the Power of Attorney is competent to institute the suit and the suit is maintainable. The trial court also found that the defendants 1 to 4 alone continued in possession and the plaintiff's father was not in possession. The trial court found that the suit has been valued properly and the court fee paid on the plaint is correct. The trial court also while noting that the defendants 1 to 4 have not instituted the suit for redemption held that they have lost their right to redeem. The trial court also found that the plaintiff is entitled to damages in all amounting to Rs, 10,800. In the light of the said findings, the trial court, decreed the suit as prayed for.
12. Before the trial court, the 9th defendant had not in any manner resisted the suit claim and no issue has been framed in respect of the plea put forward by the 9th defendant which has already been extracted above.
13. Admittedly the defendants 1 to 8, nor the defendants 10 and 11 have preferred any appeal and they have allowed the said judgment and decree of the trial court to become final in so far as they are concerned. Only the 9th defendant alone preferred the appeal A.S.No.70 of 1997. The 9th defendant also took out an application for reception of additional evidence pending the first appeal, which application was resisted by the plaintiff.
14. The plaintiff in the suit has sought for a declaration against all the defendants in respect of its title while the claim or relief of damages had been confined to defendants 1 to 8. As already pointed out the 9th defendant had not challenged the plaintiff's claim of title to the suit property, nor he had claimed interest in any portion of the suit property as seen from the written statement filed by him. The first appellate court by judgment and decree dated 20th January, 1988 allowed the application for reception of additional evidence, allowed the appeal setting aside the judgment and decree of the trial court in so far as the 9th defendant is concerned and dismissed the suit against the 9th defendant and in other respects the judgment and decree of the trial court was confirmed by the first appellate court. Being aggrieved by the said judgment and decree of the first appellate court and dismissing the suit in respect of 9th defendant, the present second appeal has been preferred.
15. Mr. Rathina Durai, the learned counsel appearing for the appellant contended that either with respect to the maintainability of the suit or with respect to the plaintiff's claim of title or declaration prayed for in respect of the suit property, the 9th defendant having filed a written statement that he has no interest in the suit property cannot in law maintain the appeal. It was further pointed out that the 9th defendant was impleaded as a formal party as a dispute was sought to be raised by him. Further in the written statement, the 9th defendant had clearly admitted that he has no interest at all in the suit property and his property which is adjacent to the suit property is distinct and separate. In the light of the said written statement and his evidence in the box, it was contended by the counsel for the appellant that the first appellate court ought not to have set aside the judgment and decree of the trial court with respect to the declaration in respect of the 9th defendant.
16. The first appellate court raised the following three points for determination:
(i) Whether the suit filed by the Power Agent is not maintainable?
(ii) Whether the respondent/plaintiff became the owner of the suit property, under the mortgage by conditional sale deed dated 29.8.1973?
(iii) Whether the respondent/plaintiff is entitled to a decree against the appellant/defendant?
17. While discussing, the first appellate court noticed that the plaint scheduled property has been described as A- schedule while what has been claimed by the 9th defendant in terms of Ex.B.2 is in respect of B-schedule as described in the appeal memorandum. The first appellate court pointed out that the oral evidence of the 9th defendant is very specific and the suit property claimed by the plaintiff is materially different from the property claimed under Ex.B.1-B.2. and the property described in Ex.B.1/B.2 has nothing to do with the suit property as described in the plaint and as described in the mortgage deed Ex.A.19. This finding of fact recorded by the first appellate court and this finding of fact is not being challenged by Mr.T.V. Ramanujam, senior counsel appearing for the 9th defendant, in this appeal. Curiously in the first appeal, the 9th defendant had impleaded the defendants 1 to 8 as well as 10 and 11. Though the first appeal memorandum was returned specifically, for this purpose, the 9th defendant made an endorsement stating that the defendants 1 to 8, 10 and 11 have no interest in the property claimed by the 9th defendant and the appellant is seeking the relief to set aside the decree granted in favour of the plaintiff as he is claiming independent title and interest in the B- schedule property.
18. The first appellate court had also held that the 9th defendant is not entitled to raise any other ground or grounds which normally ought to have been raised by the other contesting defendants besides having been impleaded to the first appeal. The first appellate court also held that the 9th defendant is not entitled to canvass the case of the other defendants.
19. For the first time in the appeal, the 9th defendant contended that the suit is not maintainable as the suit instituted by the power agent is not maintainable as the deed of Power had not been produced and the power of attorney agent has not been recognized at the time of filing of the suit. It was further contended by the 9th defendant that the plaintiff firm is not in existence at present and therefore it follows that the suit is not maintainable as the plaintiff is not a registered partnership firm.
20. The first appellate court noticed that along with the plaint many documents were filed and document No.2 dated 8.11.1982 is the instrument of power of attorney. In the affidavit filed in I.A.No. 584 of 1984 it has been asserted that Karuppiah, the power of attorney agent is authorised to file the suit as per deed dated 8.11.1982 filed as Document No.2 along with the plaint. After hearing the suit I.A.No. 584 of 1984 was allowed on 29.9.1984 by the trial court, and the trial court applied its mind and ordered the power of attorney agent to represent the suit in his capacity as power agent to institute the suit. It has been endorsed in I.A.No. 584 of 1984 that the instrument of power of attorney had been produced. The document of power of attorney has also been marked as Ex.A.18 dated 8.11.1982. The first appellate court points out that Ex.A.18 relates to M/s. Kayarm Hotels Pvt. Limited. The power of attorney has been given to the M/s.Kayaram Hotels Pvt. Limited and M/s Kayaram and Company, while the plaintiff has been described as K.R.M. Money Lenders. Therefore according to the first appellate court KRM Money Lender is a separate entity which carried on Money lending business and hence on the basis of Ex.A.18, the power agent is not entitled to represent the plaintiff in this case.
21. Ex.A.20 is another instrument of power of attorney executed on behalf of the plaintiff which is a xerox copy. Ex.A.20 has been produced before the court only on 9.2.94 and it is dated 28.9.93. After taking into consideration of Ex.A.20. the first appellate court took the view that KRM Money Lenders was not properly represented by power agent which has not been recognized by the court and the very taking of the plaint on file is against the provisions of the Civil Procedure Code and Rules of Practice. Ex.A.20 is not the original, but a xerox copy of the document of power of attorney which has been marked.
22. To establish as to who are the partners, Ex.A.25, partnership deed has been produced, which relates to K.R. Murthayee Ammal Sankar and not KRM Money Lenders. Therefore, according to the first appellate court, the plaintiff had failed to prove who are the partners of KRM Money Lenders and whether they have given the power of attorney to P.W.1 to institute the suit on their behalf. In the light of the discussion, the first appellate court held that the suit instituted by the plaintiff firm represented by the power of attorney is not maintainable. The first appellate court also held that the admission of P.W.1 that the partnership firm is not functioning since 1982. The first appellate court also held that in the absence of original power of attorney and in the absence of details regarding the partnership firm or registration certificate, the suit is not maintainable. The first appellate court further held that the suit has not been properly instituted by a person who is having the authority to ' represent KRM Money Lenders on the date of filing of the suit.
23. The first appellate court however held that the suit is not maintainable only in respect of the 9th defendant alone as the other defendants have not challenged the decree and it would not be just and proper to set aside the judgment and decree in respect of other defendants who have not chosen to prefer an appeal against the judgment of the trial court. The first appellate court in that view of the matter allowed the appeal in part with respect to 9th defendant alone.
24. The first appellate court also held that Ex.A.19 has not been proved and P.W.1 is not competent to speak about Ex.A.19 or the execution of it as he was not present. However as the first defendant had admitted the execution of Ex.A.19, and admitted his signature, the first appellate court while noting that D.W.1 has no objection for a decree being passed in favour of the plaintiff held that no interference is called for with respect to the judgment and decree passed against the defendants 1 to 8 and 10 and 11 and while setting aside the decree against the 9th defendant, the first appellate court also held that Ex.A.19 executed by the defendants I to 4, as the execution had not been challenged, and in fact it has been admitted. The first appellate court had confirmed the findings of the trial court that Ex.A.19 is valid and consequently, the plaintiff is entitled to a declaration as prayed for.
25. With reference to the identity of the property claimed by the 9th defendant, the first appellate court after considering the evidence of 9th defendant as D.W.5 held that the 9th defendant is not a necessary party and therefore there cannot be a declaration and recovery of possession against the 9th defendant as well. According to the first appellate court, the trial court without considering the case of the plaintiff and the 9th defendant had granted a decree for declaration and possession against the 9th defendant which is not correct in its view and consequently allowed the appeal preferred by the 9th defendant and dismissed the suit in its entirety against the 9th defendant.
26. Mr. Rathina Durai, the learned counsel for the appellant contended that when no plea had been put forward by any of the defendants including the 9th defendant, the court ought not to have allowed any evidence let in by the parties and no amount of evidence can be looked into by the court. The learned counsel relied upon the judgment of Srinivasan, J. as he then was, in Ramachandran and others v. Valliammal and others, 1992(1) 188, wherein it has been held thus:
"When there is no pleading before court, the court ought not to have allowed any evidence to be let in by the parties. It is well settled that no amount of evidence without a plea can be looked into by the Court vide: Pir Siddick Mohammed Shab v. Mussamet Saran, 58 M.L.J. P.C 7. It is also well settled that a party who is in possession of best evidence and a party who is the best person to give evidence on certain matters should enter the witness box and place the facts before the court and in the event of his failure to do so. the court is bound to draw an adverse inference against him. vide: Sardar Gurbaksh v. Gurdial Singh, 53 MLJ 392 (P.C)."
27. There is no quarrel with the above proposition of law laid down by Srinivasan, J., nor Mr.T.V. Ramanujam, the Senior Counsel disputes the said legal position. However, the learned senior counsel appearing for the contesting defendants contended that the suit instituted by the firm is not maintainable as it has not been established that it is a registered firm and Section 69(2) of the Indian Partnership Act is a bar. According to the Senior Counsel, it has not been established by the plaintiff that it is a registered partnership firm and who are all the partners who have constituted the firm on the relevant date and who are the partners who have conferred the power of attorney has also not been established. The learned senior counsel also relied upon the decision of the Apex Court reported in Shreeram Finance Corporation v. Yasin Khan, 1989 (2) L.W. 542, as well as the decision of Sathiadev, J., in Savariraj Pillai T. v. M/s. R.S.S. Vastred & Co., 1989 (2) L.W. 418, and pointed out that the failure to establish that the plaintiff is a registered firm and that the power of attorney agent is competent to institute the suit is not a formal defect nor it could be rectified and in the result the entire suit has to be dismissed by the trial court.
28. The learned counsel for the respondent relied upon the decision of Lakshmanan, J., reported in Selvam Estates v. Thangapandia Maharajan, 1991 TLNJ 107 : 1991 (1) MU 421. According to the senior counsel even if the other defendants have not preferred an appeal, the first appellate court ought to have set aside the judgment of the appellate court as there could be no two different decrees when it has been held that the suit is not maintainable by an unregistered firm and when the suit has been instituted by an incompetent person and the defect in the institution cannot be cured in law. It was vehemently contended by the counsel for the 9th defendant that a suit which is bad or not maintainable or incompetent in all respects against the 9th defendant cannot be decreed in respect of the other defendants merely because they have either failed to prefer an appeal or they have failed to advance their case.
29. Mr.T.V. Ramanujam, the learned counsel raised very many contentions in this respect and contended that the very; suit itself is not maintainable as it has not been established that the plaintiff firm is a registered partnership firm, who are all the partners of the firm and the documents relate to some other firm and not to the plaintiff firm. The contention raised by the learned senior counsel Mr.T.V. Ramanujam is not only attractive but also forceful and deserves consideration. Merely because the other defendants have not preferred an appeal or the other defendants have not chosen to raise a defence, the decree cannot be allowed to stand as the illegality pointed out goes to the very root of the institution of the suit.
30. It is well settled that only a registered partnership firm alone could institute a suit and Section 69 of the Partnership Act not only bars, but also prohibits the institution of a suit by an unregistered partnership firm. It is rightly pointed out by Mr.T.V. Ramanujam that in the written statement filed by the other defendants, they have specifically pleaded that the plaintiff is called upon to prove that it is a registered partnership firm, that the power of attorney agent is competent to institute the suit and that the suit is maintainable. Despite such plea, put forward in the written statement, unfortunately the trial court had not framed any issue. The failure to frame the requisite and proper issue in this respect has resulted in miscarriage of justice.
31. The plaintiff to validly institute a suit should be a registered partnership firm and in the absence of registration the suit is not maintainable and section 69 bars the institution of a suit by an unregistered firm. It is also essential to prove who are all the partners who constituted the firm and who continued in the firm on the date of institution of the suit. This is also relevant and has not only a bearing but also essential as the debt which had been advanced by different person or entity or a firm cannot be allowed to be collected by a different firm or by another firm or establishment or collection of individuals or association of individual as the defendant/judgment debtor always has the risk of facing more than one claim in respect of the same transaction. Such an attempt should be put an end to.
32. In Shreeram Finance Corporation v. Yasin Khan, 1989 (2) L.W. 542, M.H. Kania, J speaking for the Bench, while considering the scope of section 69 of The Partnership Act held thus:
"In the present case the suit filed by the appellants is clearly hit by the provisions of Sub.S(2) of S. 69 of the said Partnership Act, as on the date when the suit was filed, two of the partners shown as partners as per the relevant entries in the Registrar of Firms were not, in fact, partners, one new partner had come in and two minors had been admitted to the benefit of the partnership firm regarding which no notice was given to the Registrar of Firms Thus, the persons suing, namely, the current partners as on the date of the suit were not shown as partners in the Registrar of Firms. The result is that the suit was riot maintainable in view of the provisions of Sub.S. (2) of S. 69 of the said Partnership Act and the view taken by the Trial Court and confirmed by the High Court in this connection is correct although the plaint was amended on a later date that cannot save the suit. Reference has been made to some decisions in the judgment of the Trial Court; however, we do not find it necessary to refer to any of them as the position in law, in our opinion, is clear on a plain reading of sub. S(2) of S. 69 of the said partnership Act."
33. Their Lordships have decisively laid down that a suit filed by an unregistered firm is not maintainable and the persons who suing, namely the current partners as on date of the suit should also establish to be the partners of such a registered firm. In the absence of both, the suit is not maintainable as sub section (2) of section 69 of the Partnership Act bars the institution of such a suit.
34. In Savariraj Pillai T. v. M/s. R.S.S. Vastred & Co., 1989 (2) L.W. 418, it has been held by Sathiadev, J., that a suit instituted by an unregistered firm is non est in the eye of law and Sathiadev, J., held thus:
Learned counsel Mr.E. Padmanabhan, would straight-away rely upon the decision in Loonkaran Sethia v. Ivan N. John, in which dealing with the scope of S. 39 of the Act, it was held that it is mandatory in character that a partner of an erstwhile unregistered partnership firm cannot bring a suit to enforce a right arising out of a contract within the ambit of S. 69.
In the matter of Abani Kantapal, a Division Bench in dealing with the scope of the section held that if a firm is not registered, excepting in a suit as contemplated under S. 69(1) of the Act, the Court will have no jurisdiction to entertain a suit in violation of S. 69(1). It further added:
... In other words, the plaint that has been filed by the plaintiff will be considered a void plaint, if it contravenes the provisions of sub-sec. (1)and (2) of S. 89 of the Partnership Act...
A Division Bench of the same Court in an earlier decision in Ram Kumar Sha Chandrai a firm v. Dominion of India, held that if the name of one person who was partner on date of suit is not shown in the register then the suit as filed is not maintainable. A Division Bench in Bank of KoothattuKulam v. Thomas, , held:
It is necessary not only that the firm should be registered, but the person suing must be shown as a partner in the firm. And when it is found that on the date when the plaint is filed the second part of this condition has not been carried out then S. 69(2) is not complied ... The registration after the institution of the suit cannot cure the defect of non registration before the date of suit.
A Division Bench of this court in Buhari Trading Co. v. Star Metal Co., in dealing with the dismissal of a suit which was sought to be withdrawn on the ground that the plaintiff therein was an unregistered firm, held that it would not . be a bar to file a fresh suit, on the same cause of action after the firm gets registered, for doing that, no permission is needed. This decision also proceeds on the basis that the suit earlier filed is non est in the eye of law.
To counter the contentions of learned counsel Mr.E. Padmanabhan based on these decisions learned counsel Mr.T.R. Rajagopalan, would submit that it is only a formal defect in view of the provisions found in Order 23 Rule 1 (3)
(b) C.P.C. and relied on Sri Saravana Chit Fund Co., v. Serudeen, which deals with failure to issue the statutory notice under Section 25 of the Chit Funds Act, and on the suit being dismissed for want of notice, it was treated as a technical defect, and to prevent parties from suffering, permission was granted to withdraw the suit under Order. 23 Rule.1 (3) C.P.C. with liberty to file a fresh suit, so that there may not be miscarriage of justice. This decision of the learned Judge could not apply in relation to a suit covered by S. 69(2) of the Act, which had been held by the Supreme Court as mandatory. The concept of formal defect which could be available under Order 23 rule 1(3) C.P.C. would have no relevance when a mandatory requirement is not complied with, for the institution of a suit. A learned Judge in Atul v.
Radkishore also took, the same view in respect of Order 23 rule 1 (d) C.P.C. to the effect that a formal defect is a defect of form which is prescribed by rules of procedure such as misjoinder of parties, causes of action, non payment of court fees etc., and in a case where plaintiff fails to incorporate a prayer for dissolution of partnership in a suit for accounts it would no doubt result in dismissal of suit, but it being a formal defect, plaintiff would be permitted to come again with a properly drafted plaint. This is again a decision, which does not deal with noncompliance of a mandatory requirement.
Kanniya v. Papayapa is a full Bench decision which dealt with the powers of an appellate court to allow a suit to be withdrawn with liberty to file a fresh suit, and hence, it has no application to the point in this revision. Therefore, those decisions do not in any manner enable the plaintiff to secure the withdrawal of the suit with permission to file a fresh suit.
Yet, learned counsel Mr.T.R. Rajagopalan, would submit that, when the suit had been filed by the firm, the fact that the firm being represented by a partner whose name was not registered with the Registrar of Firms, on the date of filing of the suit, would not make it a void suit, and that S. 69(2) would have no application. In the light of the decisions relied on by learned Counsel Mr.E. Padmanabhan and which had been referred to above, such a distinction would not be available to salvage a suit of this nature, which is hit by the mandatory requirements of S. 69(2) of the Act. In this context, Messrs. Shreeram Finance Corporation v. Yasin Khan, 1989 (2) LW 542 requires to be referred to. It was held therein that a suit hit by Section 69(2) is not maintainable, because it is a mandatory requirement."
35. AR. Lakshmanan, J., in Selvam Estates v. Thangapandia Maharajan, 1991 TLNJ 107 after detailed consideration held that the registration of a firm is a condition precedent to its right to institute a suit of the nature mentioned in Sec 69 (2) of the Partnership Act and that the registration after the institution of the suit cannot cure the defect of non registration before the date of the suit. In this respect AR. Lakshmanan, J., held thus:
"Mr.T.V. Ramanujam, placed reliance on the judgment reported in Bank of Koothattukulam v. Thomas, , a Division Bench of Travancore Cochin High Court held as follows:
In Loon Karan v. Ivan E. John, the Supreme Court held as follows:
Section 69 of the Partnership Act is mandatory in character and its effect is to render a suit by a plaintiff in respect of a right vested in him or acquired by him under a contract which he entered into as a partner of an unregistered firm, whether existing or dissolved, void.
In the matter of Abani Kanta Pai, a Division Bench of Calcutta High Court held as follows:
M/s. Shreeram Finance Corpn., v. Asin Khan, 1989 (2) LW 512, was relied on by the learned counsel for the defendants to say that the suit has been instituted against a person (1st defendant) who is not a partner. The firm registration certificate also does not show that name of the first defendant Thangapandian as a partner of the plaintiff firm. The Supreme Court in the above case held that the said suit is clearly hit by the provisions of sub sec (2) of Section 69 of the said Partnership Act, as on the date when the suit was filed, two of the partners shown as partners as per the relevant entries in the Registrar of Firms were not, in fact, partners, one new partner had come in and two minors had been admitted to the benefit of the partnership firm regarding which no notice was given to the Registrar of Firms. Thus, the current partners as on the date of suit were not shown as partners in the Registrar of Firms. Thus the Supreme Court dismissed the suit filed by the Appellant on the question of maintainability in view of the provision of sub section (2) of section 69 of the Partnership Act by confirming the view taken by the trial court and the High Court. The Supreme Court further held that though the plaint was amended on a later date that cannot save the suit. The Bar under . S. 69 can only be with reference to the plaintiff and not with reference to the persons who are sued as defendants.
Another recent decision of our High Court was also relied by the learned counsel for the defendants which is reported in T. Savariraj Pillai v. M/s R.S.S. Vastrad & Co . Sathiadev , J. held that requirements of Section 69 of the Partnership Act are mandatory and the suit filed by a party without complying with the requirements under Section 69 of the Partnership Act is fatal and hence, the suit filed is void. Hence permission to withdraw the suit with liberty to file a fresh suit cannot be granted.
It is very useful to refer a very recent judgment of our High Court by Srinivasan, J., reported in A.P.S. Baharudeen v. Antony, 1991 TLNJ 27. That is an appeal filed by plaintiffs in a representative capacity, who lost their case before both the courts below. They sought permission to withdraw the second appeal with liberty to file a fresh suit C.M.P. No. 1372 of 1990 was filed for the said relief in the second appeal. The said C.M.P. was resisted by the respondents in the appeal. Learned Judge in his detailed and well considered judgment held as follows:
The learned Judge was of the view that permission to withdraw a suit with liberty to file a suit can be granted if the suit has to fail by reason of formal defect or a ground analogous thereto. The learned Judge further held as follows:-
I have carefully considered the rival submission made by the learned counsel for the plaintiff and the learned counsel for the respective defendants. The above review of the case law on the subject shows that the views held by practically all the High Courts in India is that the registration of the firm is a condition precedent to its right to institute a suit of the nature mentioned in Section (2) of the Partnership Act and that the registration after the institution of the suit cannot cure the defect of non registration before the date of the suit. It follows from this, that the plaintiff is not entitled to withdraw the present suit and file afresh suit on the same cause of action. Since in my opinion, the defect pointed out by the defendants is not a formal defect but goes to the root of the matter Hence I have no jurisdiction to proceed with the trial with the condition precedent to the right to institute a suit has not been fulfilled in this case. Hence the question of withdrawing a void plaint does not arise since it is not a formal defect. If the plaint is treated as a void plaint, the question of granting permission does not arise at all." (Italics supplied)
36. On a review of the above case laws, this court holds that the illegality in the institution of the suit goes to the root of the very institution and the plaint itself is non est in law. The subsequent registration after the institution of the suit will not cure the defect of non registration before the date of presentation of the suit. The defect pointed by the contesting defendant not only goes to the root of the matter but the very plaint taken on the file is non est in law and consequently it follows that the court has no jurisdiction to proceed with the trial of such a suit as the primordial condition precedent to the very institution of the suit had not been complied or fulfilled by the plaintiff.
37. Mr. Rathina Durai, the learned counsel appearing for the appellant/plaintiff also on his part vociferously contended that when the defendants 1 to 8, 10 and 11 have not challenged the decree, nor they have raised a plea with respect to the non- registration of the plaintiff firm and the legal bar under section 69(2) of the Partnership Act, and there being no specific stand taken as to the institution of the suit by the partnership firm, it is sought to be salvaged by him that the other defendants have not only suffered the decree, but also waived the objections.
38. According to Mr. Rathina Durai, the 9th defendant was only interested in saving his property which has been described in B-schedule and if the B-schedule property is different and distinct and that being the position, there is no justification or reason or rhyme to hold that the plaintiff's entire suit has to be dismissed as against the 9th defendant. Though the contention is attractive, this court is unable to sustain the same as the defect which goes to the very institution of the suit cannot be salvaged in view of the above pronouncements relied upon. That apart, the very suit plaint is non est in law. It is obligatory on the part of the plaintiff to prove that it is a registered firm. The plaintiff had not proved that it is a registered firm and it is competent to institute the suit on the date of presentation of the plaint. The plaintiff has also failed to establish that who are all the partners who constituted the partnership originally continued even on the date of the plaint.
39. The partnership deed Ex.A.25 as found by the first appellate court do not relate to the suit firm and it is a different and distinct firm. Further Ex. A. 18 and Ex. A.20 also is not by the plaintiff firm, but by some others and it has not been established that the executant of Ex.A.18 and A.20 namely the Principal therein is the plaintiff firm and that they have got at some point of time or changed the constitution, name and style of the firm which had been changed at some point of time.
40. As rightly pointed out by the first appellate court Ex.A.25 is a partnership deed relates to K.R. Murthayee Ammal Sankar and not to KRM Money Lenders. The plaintiff had failed to establish that the firm is a registered partnership firm and Ex.A.25 is the partnership deed. This failure to establish is fatal as in any suit by an unregistered partnership firm, as provided in Sec. 69, it is not only essential but also the requirement to establish that the plaintiff is a registered firm and the plaintiff also should disclose who are all the partners who constitute the firm on the date of the plaint. Merely because the defendants have not raised the plea in detail, the plaintiff is not exonerated, nor it could be stated that me defendants have waived such an objection, An objection which goes to the root of the matter which relates to the registration and which if not answered in favour of the defendants would be hit by sec. 69(2) and the very plaint itself is non est in law.
41. That apart, Ex.A. 18 and Ex.A.20 were heavily relied upon by the plaintiff in support of the authority of the alleged power of attorney to institute the suit. Ex.A.18 is a power of attorney given in favour of P.W.1 Karuppiah who managed M/s. Kayaram Hotels Pvt. Ltd., and M/s Kayaram and Company and they do not relate to KRM Money Lenders as found by the first appellate court. It has hot been established nor it is the case of the counsel for the appellant that M/s. Kayaram Hotels Pvt. Ltd., or KRM Money Lenders are one and the same, or it is their case that there had been any merger or reconstitution or reorganisation in law to put forward the suit claim. KRM Money Lenders is a separate and distinct firm. As such on the basis of Ex.A.18 the suit instituted by P.W.1 Karuppiah is not maintainable.
42. Merely because at the time of taking the plaint on file notice has been ordered and a copy of the registration had been produced and the plaintiff had been permitted to institute the suit, it cannot be assumed that the plaintiff is a registered firm and it is not as if the plaintiff is exonerated from establishing that it is a registered firm or that the suit has been validly instituted or no objection is permissible on any later date. The formality that has been complied with at the initial stage before taking the plaint on file and at the time of institution of the suit is always subject to all exceptions. Therefore, it follows that the defendants are entitled to raise such an objection in respect of the plaint which is non est in law. It cannot be said that the defendants have waived such an objection by their failure to raise or on the part of the court to frame an issue in this respect. The failure to establish that the plaintiff is a registered firm and the failure to establish that the power of attorney is competent to institute the suit, in my considered view and in the light of the above pronouncements renders the suit plaint a nullity which cannot be cured. The failure on the part of the defendants will not eschew them and it cannot be stated that the defendants have waived their objection as Section 69(2) of the Partnership Act is a statutory bar.
43. In terms of Order 7 ,Rule 1 a plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law. In the present case Sub section (2) of Section 69 is a bar and the very plaint itself should have been rejected as pointed out by Sathiadev, J., in Savariraj Pillai T. v. M/s. R.S.S. Vastred & Co., 1989 (2) L.W 418, and by AR. Lakshmanan, J., in Selvam Estates v. Thangapandia Maharajan, 1991 TLNJ 107. The very plaint and institution of the suit is non est and the court has no jurisdiction to proceed with the trial of such suit as the condition precedent to institute a suit has not been fulfilled in this case. Any amount of waiver will not cure such inherent defects as the defendant renders the very plaint non est and it cannot at all be proceeded. The plaint instituted is no plaint in the eye of law.
44. It is also axiomatic that having sustained such a contention put forward by the 9th defendant, even if the other defendants have not challenged the judgment and decree of the trial court, the decree has to be set aside, less it will be a mockery of the system and there cannot be two different decrees on the same point though the cause of action may be different, and the claims or reliefs are different. Where the very institution is inherently defective, the very plaint is non est and barred by Section 69(2) of the Partnership Act, this Court cannot appreciate the view taken by the first appellate court in this respect that the plaint is valid in respect of other defendants and it is inherently defective in respect of the 9th defendant alone. Any other defect or irregularity which could be waived or given up could be put against the defendants and not such an inherent defect which renders the very plaint itself non est in law besides being without jurisdiction and barred by Section 69(2) of the Act.
45. In exercise of inherent powers, this Court set aside the judgment of the two courts below. This court is conscious that the other defendants namely defendants 1 to 8 and 10 and 11 have not preferred an appeal. They have not been made as parties to the first appeal as well as to the second appeal. But at the same time, there could be no decree based upon a plaint which is non est and the inherent defect goes to the very root of jurisdiction and it is hit by Section 69(2) of The Partnership Act.
46. In the result, the entire suit in O.S.No. 67 of 1984 on the file of the Sub Court, Thiruvellore will stand dismissed, but without costs. Though the other defendants have not preferred appeal, on the facts of this case, there cannot be two different decrees as the very plaint itself is non est and no suit could be maintained in view of the statutory bar under Section 69(2) of The Partnership Act, besides the Power of Attorney, who had instituted the suit is incompetent as he has no power at all, the entire suit claim wilt stand rejected.
The parties shall appear before trial court on 9.8.1999.