Meghalaya High Court
Shri. Vivek Agarwal & Ors. vs . The Secretary, Executive on 15 February, 2021
Author: H. S. Thangkhiew
Bench: H. S. Thangkhiew
Serial No. 02
Supplementary List
HIGH COURT OF MEGHALAYA
AT SHILLONG
WP(C) No. 189 of 2018 Date of Decision: 15.02.2021
Shri. Vivek Agarwal & Ors. Vs. The Secretary, Executive
Committee, Garo Hills
Autonomous District Council
& Ors.
Coram:
Hon'ble Mr. Justice H. S. Thangkhiew, Judge
Appearance:
For the Petitioner/Appellant(s) : Mr. R. Kar, Adv.
For the Respondent(s) : Mr. S. Dey, Adv. (For R 1).
Mr. K. P. Bhattacharjee, Adv. with Mr. H. Abraham, Adv. (For R 2).
i) Whether approved for reporting in Yes/No
Law journals etc.:
ii) Whether approved for publication
in press: Yes/No
1. The petitioners herein are partners in a firm known as M/S GLR Pharmaceuticals which runs a business on the basis of licenses issued by the concerned Government departments and also under a Trading License issued by the respondent No. 1. The main grievance as set out, apart from also impugning letter dated 11.06.2018, is that the respondent No. 1 vide a general circular dated 13th June, 2018, notified a decision of the respondent No. 1 to not renew the Trading License of the said firm 1 ostensibly because of complaints received from some NGO's. Being aggrieved thereby, this writ petition has been filed before this Court.
2. Mr. R. Kar, learned counsel for the petitioners submits that the petitioners through a firm named M/S GLR Pharmaceuticals had been conducting business, since 2014 under valid licenses issued by the Directorate of Health Services, Municipal License issued by the Tura Municipal Board and Trading License from the GHADC (Respondent No. 1) issued under the Garo Hills District (Trading by Non-Tribals) Regulation, 1957. Learned counsel submits that the initial Partnership Deed as well as a Deed of Retirement dated 08.11.2017, when one of the partners retired have been duly registered before the Office of the Sub- Registrar, West Garo Hills, Tura. He submits that due to business rivalry, persons inimical to the petitioners created problems for their business, and it appears that these persons exerted pressure on the respondents No. 1 and 2, which resulted in the impugned orders dated 11.06.2018 and 13.06.2018 Learned counsel submits that these impugned orders are arbitrary and violative of the principles of Natural Justice, inasmuch as, the petitioners were not given a show cause or were they heard before their issuance. He submits that the impugned letter dated 11.06.2018, issued by the Tura Municipal Board (Respondent No. 2), is illegal on the face of the record as well as the order dated 13.06.2018, which he submits is beyond the scope of law that regulates trading by non-tribals. As such, he submits the impugned orders being patently illegal are liable to be set aside and quashed.
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3. Mr. S. Dey, learned counsel on behalf of the respondent No. 1, at the outset has raised questions as to the maintainability of the writ petition by contending that the trading license was issued to the firm and that the firm is not before this Court as petitioner and that moreover, as per Section 69 of the Indian Partnership Act, 1932, no suit to enforce a 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 a partner in the firm. He submits that apart from the fact that the firm is not before this Court, the same is also not registered with Registrar of Firms, but it is only registered with the Sub- Registrar. Learned counsel submits that the effect of non-registration and non-joinder of necessary parties has rendered the writ petition unmaintainable in the eye of law and deserves no consideration by this Court.
4. Learned counsel on the other contentions raised, submits that it is not a fact that the trading license has been cancelled, but only that a decision had been taken by the respondent No. 1, in its meeting held on 20.04.2018, to not renew the trading license due to certain complaints lodged by social organizations which were to be ascertained before any further action was to be taken. Learned counsel further submits that the process has not concluded, and the matter is yet to be adjudicated finally as the writ petitioners have in the meantime come before this Court. Learned counsel contends that the writ petition does not contain full averments of the grounds on which equity is sought and as such, the writ petitioners are not entitled to any relief as claimed. Learned counsel also 3 on this aspect has placed reliance in the case of Katra Education Society, Allahabad vs. State of Uttar Pradesh & Ors. reported in AIR 1966 SC 1307 and also on the case of Amrit Lal Berry vs. Collector of Central Excise, New Delhi & Ors., And K.N. Kapur & Ors. vs. Collector of Central Excise, Central Revenue and Ors. reported in (1975) 4 SCC
714. He therefore submits that, there is no illegality in the impugned order dated 13.06.2018, in view of the circumstances as mentioned and that the writ petition is liable to be dismissed.
5. Mr. K.P. Bhattacharjee, learned counsel for the respondent No. 2, only submission in defence of the order dated 11.06.2018, is that the Municipal license was temporarily suspended in view of the non-renewal of the trading by non-tribal license by the respondent No. 1, and that no license can be issued by the Tura Municipal Board (Respondent No. 2), unless the applicant produces a valid trading license issued by the respondent No. 1.
6. I have heard learned counsels for the parties. The fact that the impugned orders were issued without hearing or show cause is not in controversy. However, the objection raised as to the maintainability of the writ petition shall have to be dealt with first. It would therefore be apposite to quote Section 69 of the Act, which is as follows:
"69. Effect of non-registration. -(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as 4 a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. (2) No suit to enforce a 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 in the firm.
(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect,-
(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or Court under the Presidency-
towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920) to realise the property of an insolvent partner.
(4) This section shall not apply,-
(a) to firms or to partners in firms which have no place of business in the territories to which this Act extends, or whose places of business in the said territories, are situated in areas to which, by notification under section 56, this Chapter does not apply, or 5
(b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882 (5 of 1882), or, outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim."
7. Plainly read Section 69(1) of the Act, bars partners of an unregistered firm from initiating proceedings for enforcing a right arising from a contract or conferred by this Act. Section 69(2) bars the filing of a suit to enforce a right arising from a contract by or on behalf of a firm against any third party unless the firm is registered and the persons suing have been shown in the Register of Firms as partners. Section 69(3) refers to claim of set-off or other proceedings to enforce a right arising from a contract with exceptions as provided in Section 69(3) (a) and (b). In the instant case, the petitioners who have come before this Court are partners in the said firm and an authorization to the petitioner No.1 to represent the other partners had also been filed by way of an affidavit dated 02.07.2018.
8. The petitioners here, have questioned the impugned action of the respondents No. 1 and 2 in suspending the operation of the trading license 6 of the firm namely GLR Pharmaceuticals of which they are all partners, and do not seek to enforce or impeach any contractual obligation. The challenge is to the impugned orders which has affected them as partners in carrying on the business of the firm for which licenses had been granted and abruptly suspended or not renewed, without the due process of law being followed. Admittedly, the impugned orders had been issued without affording any opportunity to the petitioners to show cause or be heard. The invocation of Article 226 by the petitioners against the unreasonable and arbitrary action of the respondents No. 1 and 2 therefore cannot be defeated by referring to Section 69 of the Indian Partnership Act. This proceeding being one for the enforcement of a fundamental right and not arising out of a contract, Section 69 of the Act in the opinion of this Court, cannot act as a bar for the petitioners to pray for the reliefs as set out in the writ petition.
9. The impugned orders in question dated 11.06.2018 and 13.06.2018, being patently arbitrary and also not in consonance with the provisions of the Garo Hills District, (Trading by Non-Tribals) Regulation, 1957, are therefore, liable to be interfered with in exercise of powers under Article 226 of the Constitution, even though the writ has been filed by partners of an unregistered firm within the meaning of the Indian Partnership Act of 1932. The decisions relied upon by the learned counsel for the respondent No. 1 are therefore not relevant in the context of the discussions and facts as placed above.
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10. For the reasons and circumstances aforestated, the writ petition is allowed and the impugned orders dated 11.06.2018 and 13.06.2018 are set aside and quashed. Needless to add, any further action by the respondents in this matter shall be done strictly in accordance with law and by following the principles of Natural Justice.
Judge Meghalaya 15.02.2021 "D.Thabah-PS"
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