Section 69(2) of the Partnership Act, 1932- 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 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 suits 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.
Section 69(2) of the Partnership Act, 1932 is not a bar to a suit filed by an unregistered firm, if the same is for enforcement of a statutory right or a common law right. The Hon’ble Supreme Court in CIVIL APPEAL NO. 785 OF 2022 (ARISING OUT OF SLP (C) NO. 20262 OF 2018) in SHIV DEVELOPERS THROUGH ITS PARTNER SUNILBHAI SOMABHAI AJMERI has held “Section 69(2) of the Act of 1932 is not a bar to a suit filed by an unregistered firm, if the same is for enforcement of a statutory right or a common law right.”
The Andhra Pradesh High Court in M/s. Samyuktha Cotton Trading Co. vs. Bheemineni Venkata Subbaiah & Ors. AIR 2005 AP 1 has held that the bar contained under Section 69 of the Act is applicable to the filing of the suit by the firm. It further held that Section 69 of the Act “does not insist that the transactions, which are subject matter of the suit, in relation to, or by a firm, shall be those which take place after the firm is registered. Once a firm is registered, there is nothing in law to disable it from bringing about claims or from pursuing remedies in a court of law, in relations to transactions, which preceded such registration”
Important Judgments
Raptakos Brett & Co. Ltd. v. Ganesh Property: (1998) 7 SCC 184,
Haldiram Bhujiawala and Anr. v. Anand Kumar Deepak Kumar and Anr: (2000) 3 SCC 250
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