LexPURUSHOTTAM AND ANR versus SHIVRAJ FINE ART LITHO WORKS AND ORS
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A B c PURUSHOTT AM AND ANR v. SHIVRAJ FINE ART LITHO WORKS AND ORS NOVEMBER 7, 2006 [B.P. SINGH AND AL TAMAS KABIR. JJ.] Indian Partnership Act, Section 69(2)-bar under-scope ofexplained The question involved in the instant appeal was whether a suit by an unregistered firm to enforce a right not arising from a contract to which it was a party or arising from a contract entered into by it in connection with its business, but for the enforcement of a right arising out of a contract D entered into by its partner when the firm was his proprietary concern which he continued to the partnership when constituted was maintainable against third party and not barred under the provisions of section 69(2) of the Indian Partnership Act E F Allowing the appeals, the court HELD. 1.1 Once registration is granted, even though after the filing of the suit, the suit should be held to be maintainable as from the date on which registration is granted subject to the law of limitation. Subsequent registration of the firm would not cure the initial defect in the filing of the suit. (527-F-G; 528-D] Mls.Shreeram Finance Corporation v. Yasin Khan and Ors, (1989] 3 SCC 476; D.D.A. v. Kochhar construction Work and Anr., (1998) 8 SCC 559 and U.P. State Sugar corporation ltd v. Jain Construction Co. and Anr., (2004) 7 sec 332, relied upon. 1.2. After coming into the existence of the partnership and having G transferred to the said partnership all his assets and liabilities of his proprietary concern, the erstwhile proprietor has no subsisting exclusive right to enforcl; the liability against others since such rights as he had as the proprietor vested in the partnership, Such a partner in his personal capacity could not sue the respondent firm.for the amount in question, ifthe H 524 .-. .. / - PURUSHOTTAM v. SHIVRAJ FINE ART LITHO WORKS [B.P. SINGH, J.]525 firm of which he was a partner was for reason of non-registration unable A maintain a suit. He can not, therefore, either file a suit for claim any relief in the suit filed by the partnership asserting his right as the erstwhile proprietor. [529-F-G) Addanki Narayanappa and Anr. v. Bhaskara Krishnappa (D) <It Ors., [1966) 3 SCR 400, relied upon. B 1.3. The bar under Section 69(2) would apply to a suit for enforcement of right arising from a contract entered into by the unregistered firm with a third party in the course of business dealings with such third party. If the right sought to be enforced does not arise from a contract to which the unregistered firm is a party, or is not entered into in connection with the business of the firm with a third party, the bar of Section 69(2) will not apply. C [53~E-F) Haldiram Bhujiawala and Anr. v. Anand Kumar Deepak Kumar and Anr., [2000] 3 sec 25, relied upon. Raptakos Brett & Co. Ltd. v. Ganesh Property, (1998) 7 SCC 184, D referred to. 2.1. Observations made and principles laid down in a judgment if obiter do not have the force of a binding precedent However, that does not preclude the Court from appreciating the reasons given for the principles laid down, and if the reasoning appears to the Court to be cogent, and merits acceptance, E the same may be accepted by the Court and applied to the case before it [531-F-G) CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4092of1998. From the Judgment and Order dated 10.4.1992 of the High Court of Judicature at Bombay, Nagpur Bench, Nagpur in First Appeal No. 35/1998. F V.A. Mohta, B.J. Aggarwal, S.G. Hartalkar, J.S. Wad, Ashishwad, Neeraj Kumar, Arvind Gupta and Simanti Chakrabarti for the Appellant. S.V. Deshpande, Prashant Kumar, V. Sheshagiri and Rahul Prasanna G Dave for the Respondents. The Judgment of the Court was delivered by B.P. SINGH, J. In this appeal by special leave the plaintiffs are the appellants. Their suit against original defendant nos. I to 9 was decreed for H the sum of Rs.8,92,815.14 by the Third Joint Civil Judge (Senior Division), 526 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. A Nagpur in Civil Suit No.52 of I 980. On appeal by original defendants I to 3, the High Court in First Appeal No.35 of I988 by its impugned judgment and order of April 10, 1992 allowed the appeal and dismissed the suit holding that in view of the provisions of Section 69(2) of the Indian Patnership Act (hereinafter referred to as the 'Act'), the suit was not .B maintainable, the plaintiff being an unregistered firm. The facts of
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