Remanded

Bamino Agro Industries Limited, v. S.V.M.V. Ananda Rao

Telangana HC5 Nov 2012CRP/888/2012

Case brief

AI extract

What is this about?

High Court set aside the lower court's rejection of an application to strike out an unregistered firm's plaint and remitted the matter for hearing. The Court distinguished a Supreme Court precedent as it involved a suit between a principal and agent, not third parties, noting that the partner plaintiffs are suing their agent-firm.

What did the court decide?

The impugned order rejecting I.A. No. 121 of 2011 is set aside. The I.A. is remitted to the lower court to be heard within four weeks. The injunction application is also to be heard on merits.

Bamino Agro Industries Limited, Vs S.V.M.V. Ananda Rao — Company and Corporate | Telangana HC (2012)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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MONDAY, THE FIFTH DAY OF NOVEMBER TWO THOUSAND AND TWELVE

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PRESENT

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THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR

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CIVIL REVISION PETITION No.888 of 2012

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BETWEEN

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Bambino Agro Industries Limited and three others.

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... PETITIONERS

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AND

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S.V.M.V. Ananda Rao and another.

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...RESPONDENTS

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Counsel for the Petitioners: MR. PERIPRABHAKAR Counsel for the Respondents: --NONE APPEARED--

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The Court made the following:

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ORDER:

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Defendants in O.S.No.1400 of 2010, on the file of the

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V Additional Junior Civil Judge, Visakhapatnam, are aggrieved by the rejection of their application, I.A.No.121 of 2011, filed under Order VII Rule 11 of the Code of Civil Procedure, 1908.

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2. The aforesaid suit was filed by two plaintiffs, who claim in para III(a) as follows:

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‘III(a) Plaintiffs 1 and 2 are the partners of unregistered firm running in the name and style of Magna Agencies at Muralinagar, Visakhapatnam. On 21.7.1993, the 1^st Defendant-Company had appointed the firm of the Plaintiff as its stockist and redistributors of

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various products such as pasta foods, namkins, of the 1^st defendant Company, to the retail shops located in Visakhapatnam, in the area covering from Kancharapalem to Pendurthi, Simhachalam and N.H.5 which is called the trade territory of Defendant-Company in Visakhapatnam…’

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3. The relief sought for in the said suit was as follows:

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VI. Plaintiffs therefore pray for a decree against the defendants for a

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(a) Declaration that the impugned letter dt.19.11.2010 served by the defendants restricting the stockistship of the plaintiff’s business to minor areas of the trade territory is illegal, arbitrary, unilateral, capricious and void; and for a

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(b) Consequential Permanent Injunction restraining the defendants from effecting implementation of the impugned letter dt.19.11.2010 either by restricting the “Magnus Agencies” or appointing any other stockist in the place of “Magna Agencies” for doing the stockistship and dealership, to the trade territory covering Kancharapalem to Pendurthi, Simhachalam and N.H.5 or in any manner whatsoever.

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(c) Costs of the suit; and

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(d) Such other and further relief or reliefs as the Honourable Court may seem fit, proper and just in the circumstances of the case.

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4. It appears that the respondents/plaintiffs obtained interim injunction in the said suit restraining the petitioners herein from giving effect to the impugned letter dated 19.11.2010. Petitioners herein sought vacation of the said order and also filed I.A.No.121 of 2011 under Order VII and Rule 11 CPC to reject the plaint on the ground that there is a bar from maintaining the suit under Section 69 of the Indian Partnership Act, 1932 as, admittedly, the firm of the respondents herein, which is appointed as stockist of the petitioners,

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is an unregistered firm. The Court below has rejected the said application by placing reliance upon a decision of the Supreme Court in HALDIRAM BHUJIAWALA v. ANAND KUMAR DEEPAK KUMAR [(2000) 3 SCC 250 = AIR 2000 SC 1287]. Aggrieved thereby, petitioners are before this Court.

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5. Both the respondents have been served through the Court as well as through the personal notice taken out by the petitioners. However, nobody appears on their behalf, though service was effected long back.

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6. Section 69 of the Partnership Act provides as follows: 69 - Effect of non-registration

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(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.

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(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.

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(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,-

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(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

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(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.

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(4) This section shall not apply,-

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(a) to firms or to partners in firms which have no place of business in¹ [ the territories to which this Act extends], or whose places of business in² [ the said territories], are situated in areas to which, by notification under³ [ section 56], this Chapter does not apply, or

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(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 Presidencytowns, 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.

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7. From the above, it is clear that it is mandatory for any firm to be registered to enable it to sue. The admitted case of the respondents/plaintiffs being an unregistered firm, their attempt to sue their principal i.e. petitioners herein, prima facie, appears barred under Section 69 of the Partnership Act. Reliance placed by the Court below on the decision of the Supreme Court, referred to above, is wholly erroneous inasmuch as the suit, which was under consideration before the Supreme Court, was a suit concerning the actions of the third parties whereas the present suit is between the agent and its principal and admittedly, the agent is the firm, which is an unregistered one. It is clear and apparent that the Court below has not appreciated these aspects properly and has erroneously rejected the petitioners’ application. The impugned order is, therefore, clearly unsustainable and liable to be set aside and is hereby set aside.

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The civil revision petition is accordingly allowed and I.A.No.121 of 2011 shall stand remitted to the Court below with following directions:

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1. Within four (4) weeks from the date of receipt of a copy of this order the Court below shall hear and decide I.A.No.121 of 2011 by a reasoned order.

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2. The Court below shall also hear and decide the injunction application being I.A.No.1009 of 2010 on merits and pass appropriate orders simultaneously while disposing I.A.No.121 of 2011.

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3. The costs of this revision petition shall abide by the result of both the applications, referred to above, before the Court below.

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As a sequel, the miscellaneous applications, if any, shall stand closed.

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_____________________ VILAS V. AFZULPURKAR, J

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November 5, 2012 Note: Furnish C.C. of the order by 08.11.2012.

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(B/o) DSK

Bamino Agro Industries Limited, v. S.V.M.V. Ananda Rao

Case brief

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Bamino Agro Industries Limited, v. S.V.M.V. Ananda Rao

Case brief

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