M/S UMESH GOEL versus HIMACHAL PRADESH COOPERATIVE GROUP HOUSING SOCIETY LTD.

Citation: [2016] 6 S.C.R. 703 · Decided: 29-06-2016 · Supreme Court of India · Bench: F.M. IBRAHIM KALIFULLA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2016] 6 S.C.R. 703 
MIS UMESH GOEL 
v. 
HIMACHAL PRADESH COOPERATIVE GROUP HOUSING 
SOCIETY LTD. 
(Civil Appeal No.79f6 of2009) 
JUNE-29, 2016 
[FAKKIR MOHAMED IBRAHIM KALIFULLA AND C. 
NAGAPPAN, JJ.] 
Partnership Act, 1932 - s.69(3) - Scope and ambit of -
Whether the ban imposed u!s.69 against an unregistered firm can 
operate in the matter of arbitral proceedings by interpreting that 
the expression "other proceedings" in sub-section (3) of s.69 will 
include arbitral proceedings by equating the arbitral proceeding 
to a suit filed in a Court - Held: The ban imposed u!s.69 can have. 
no application to arbitral proceedings or arbitration award - Such 
proceeding will not come under the expression "other proceedings" 
in sub-section (3) of s.69 - Expressions couched in sub-section (3) 
cannot have independent existence - The "other proceedings" 
should be intrinsically connected with the "suit"which are banned 
under sub-sections (1) and (2) of s.69 - The provisions of sub-
sections (1) and (2) have been impliedly incorporated in sub-section 
(3) -
The arbitral proceedings cannot be treated as civil 
proceedings/suit for the purpose of s.69(3) by takii1g a cue from 
Limitation Act, Arbitration and Conciliation Act or Interest Act -
Arbitration and Conciliation Act, 1996 - ss. 35 and 36 - Limitation 
Act, 1963 - s.14 - Interest Act, 1978 - s. 2(a). 
Interpretation of Statutes - A statutory provision has to be 
interpreted from the words that are expressly used - Court should 
not add or substitute any word to it. 
Words and Phrases - 'Court' - Meaning of 
Allowing the appeal, the Court 
HELD: 1.1 While under sub-section (1) of s. 69 of 
Partnership Act, the ban imposed operates against the firm itself 
or any of its partners, under sub-section (2) the ban operate against 
any third party. The provisions of sub-sections (1) and (2) have 
703 
A 
B 
c 
D 
E 
F 
G 
H 
704 
A 
B 
c 
D 
E 
SUPREME COURT REPORTS 
[2016) 6 S.C.R. 
been impliedly incorporated in sub-section (3) of of s.69. When 
the opening set of expression in sub-section (3) states that the 
provisions of sub-sections (1) and (2) shall apply, the entirety of 
sub-sections (1) and (2) should be held to be bodily lifted and 
incorporated in sub-section (3). It is difficult to state that any one 
part of sub-sections ,(1) and (2) alone should be held to be 
incorporated for the purpose of sub-sec.tion (3). [Paras 10 and 
UJ [713-A-B; 714-A] 
1.2 Having regard to the manner in which the expressions 
are couched in sub-section (3), a claim of set off or other 
proceedings c.annot have independent existence. In other words, 
the foundation for the application of the said sub-section should 
be the initiation of a suit in which a claim of set off or other 
proceedings which intrinsically connected with the suit arise and 
not otherwise. [Para 20] (717-A-B] 
1.3 The condition precedent for the operation of ban under 
sub-section (3) is that the launching of a suit in a Court of law 
should be present and it should be by an unregistered firm or by 
a person claiming to be partner of an unregistered firm either to 
a claim for set off in the said suit or any other proceedings 
intrinsically connected with the said suit. In the event, the above 
ingredients set out under sub-sections (1), (2) and (3) being 
fulfilled then and then alone the ban prescribed against an 
unregistered firm under Section 69(1), (2) and (3) would operate 
and not otherwise. [Paras 13 and 14) (714-F-H) 
, 
1.4 When under sub-section (3) which also relates to a ban 
F. concerning 'other proceedings', the law makers wanted to 
specifically exclude from such ban, such of those proceedings 
which also likely to arise in a suit, but yet the imposition of ban of 
an unregistered firm need not be imposed. Keeping the said intent 
of the law makers in mind, when sub-clauses (a) and (b) of 
G 
H 
sub-section (3) are read, it can be understood that even though 
such other proceedings may be for the enforcement of any right 
to sue but yet if it is for the dissolution of a firm or for accounts of 
a dissolved firm or any right or power to realize the property of a 
dissolved firm, the same can be worked out by way of a suit in a 
Court or by way of other proceedings in that suit and the same 
will not be affected by the ban imposed under sub-section (3). 
M/S UMESH GOEL v. HIMACHAL PRADESH COOPERATIVE 
GROUP HOUSING SOCIETY LTD. 
Similarly, any steps initiated at the instance of an official assignee, 

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