SHARAD VASANT KOTAK AND ORS. A

v.

RAMNIKLAL MOHANLAL CHAWDA AND ANR.

DECEMBER

17, 1997 (SUHAS C. SEN AND K. VENKATASWAMI, JJ.] B

Partnership Act, 1932 :

Sections 4, 17(a), 31, 39, 58, 59, 63, 69-A and 69(2-A) (as amended

by State of Maharashtra Amendment introduced by Act 29 of 1984)-Suit for C

dissolution of finn--Maintainability-Conditions for filing a suit are that the

Jinn must be registered and the persons suing must be shown in Register of

Finns as partners-Partnership firm 01iginally registered-Reconstitution of

Jinn after death of a partner in which widow of deceased partner inducted as

partne1~Reconstitu(ed finn not registered-Suit filed by a founder partner of

that Jinn whose name. included in the Register of Fi171ls, for dissolution of the D

fimi-Held, suit maintainable.

Sections 58, 59 & 63 and 69-A (as in force in the State of

Maharashtra)-Registration of [inn-Does not cease on reconstitution of the

firm pursuant to induction of a new partner (widow of a deceased E

partner)-No fresh registration required-Howeve1; infonnation about chan-

ges made after reconstitution must be given-Failure to comply attracts penal-

ties under Section 69-A.

Sections 17 (a), 31 & 32-lnduction of a new partner will amount to

reconstitution and not dissolution of the [inn-Dissolution and reconstitution F

are two different legal concepts.

lnte1pretation of deeds and documents-Substance and not mere words

used, is relevant.

A partnership firm with seven partners was registered. One of the G

partners died and in his place, his widow was admitted as a partner in the

firm and this was not brought to the notice of the Registrar of Firms.

R-1

gave a notice of dissolution of the

firm to the appellant and filed a suit for

dissolution of partnership firm. Subsequently R-1 sought amendment of

the plaint to the effect that subsequent changes and/or modificatil!ns in H

543

544 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A the original partnership deed and also in the subsequent deed were merely

in the nature of changes and/or modifications which did not affect registra­

. tion of the said firm, as 1re11uired under the Partnership Act, for entitling

a partner to institute a suit for relief against the other partners on

dissolution of the firms and alternatively, the other amendments sought

B

to challenge the vires of Section 69(2-A) of the Act as in force in the

State

of Maharashtra. These amendments were seriously opposed by the appel­

lants inter alia contending that the suit as filed was not maintainable and

hence amendments cannot be allowed. The Trial Judge accepted the con­

tentions of the appellant and dismissed the suit. On appeal before the

Division Bench

by Respondent No.1, it not only restored the suit but also

C allowed the amendments. Hence this appeal.

Dismissing the appeal, this Court

HELD :

1. The suit in

question is not hit by Section 69(2-A) of the

Partnership Act. On the induction of the second respondent, the existing

D firm was only reconstituted and, therefore, there was no necessity to get a

fresh registration.

If by virtue of non-compliance of certain mandatory

provisions in not informing the Registrar of Firms about the change in the

constitution

of the firm, certain penalties provided in the Act alone are

attracted,

that will not lead to the conclusion that the registration of the

E firm ceased. This conclusion is based on a conjoint reading of

Sections

58-63 and the forms prescribed thereunder. Further, this con~lusion does

not in any

way mitigate

the object of the Maharashtra Amendment intro­

duced by Act 29 of 1984. [570-G-H]

Wazid Ali Abid Ali v. CIT, [1988] Suppl. SCC 193 and Bharat

F Saivodaya Mills Co. Ltd. v. Mis Mohatta Brothers, AIR (1968) Guj. 178,

referred to.

2. In view of clause 11 of the second deed of partnership it cannot

be contended by the appellants that by reason of death of one of the

partners, the existing firm stood dissolved.

By clauses 4 and 5 of the said

G deed relating to the commencement of the partnership and the accounting

year, minimal changes

were introduced in the second deed of partnership.

in place of clauses 4 and 5 in the first partnership deed and in other

respects, namely, the name of the partnership firm, the address

and

location of the firm, the business carried on and shares allotted among the

H partners and duration of the partnership, are identical. Having regard to

·

I

'

-

SHARAD VASANT KOTAK v. R.M. CHAWDA 545

the substance of the three deeds there was no indication that the old firm A

was dissolved. Thus the existing firm continued. [564-A-D]

Tyresoles (India) v. Commissioner of Income Tax, (1963) 49 ITR 515

and Commissio11er of Income Tax v. A.N. Figgies & Co., [1954) 5 SCR 171,

relied on.

3. The contention that the induction of new partner will result

Jn

dissolution of the firm is not acceptable. Section 17(a) suggests only

reconstitution of the firm where a change occurs in the reconstitution of

the firm. Otherwise, the old firm remains the same. The dissolution and

reconstitution of a partnership are two different legal concepts. The dis­

solution put an end to the partnership, but reconstitution keeps it subsist­

ing, though in another form. [565-C]

Tyreso/es (India) v. Commissioner of Income Tax, (1963) 49 ITR 515

and Commissio11er of I11cori1e Tax v. Pigat Cltampan & Co., AIR (1982) SC

1085, relied on.

4. Rules 3, 4, 6 and 17 and Forms "A", "E", "G" and "H" show that

there is a definite distinction between the Certificate of Registration given

to the firm and any alterations to

be entered in the Register of Firms. This

will suggest in no uncertain terms that the changes in the constitution of

the firm

will not affect the registration once made. In other words, it is not

required that every time a new partner is inducted, fresh registration has

to

be applied and obtained. However, information about changes have to

be given. Failure to comply attracts penalties under Section

69-A of the

Act. [566-D-E]

1

Maddi Sudarsanam v. Borogu Visltawanadham Brothers, AIR (1985)

AP 12; Girdhamial Kapur Chand v. Dev Raj Madan Gopal, [1964) 1 SCR

995, relied on.

B

c

D

E

F

Pratapchand Ramchand & Co. v. Jehangirji Boma11ji Chinoy, AIR

(1940) Born 257; Tapendra Clnmder Goopta v. Joge11dra Chw1der Goopta, G

AIR (1942) Cal 76; Durga Das Janak Raj v. Preete Shah Sallt Ram, AIR

(1959)Punj. 530 andKesrimal v.Da/ichand, AIR (1959) Ra,j.140, approved.

5. Section 69(3)(a) of the Central Act enables the partners of both

registered

and unregistered firms to

file a suit fo1· dissolution and/or H

546 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

A accounts. By introducing sub-section (2-A) in Section 69, the Maharashtra

Legislature has placed certain restrictions to the extent

that even the suit

for dissolution of a firm or for accounts, the suit can

be filed only if the

firm is registered

and the 'person' suing as a partner is shown in the

Register of Firms as a

partner in the firm. In other words, a person, who

B is not shown in the Register of Firms by induction after registration even

though the firm is registered, cannot

file a suit for dissolution or accounts.

This does not in any

way mean that the registration given to the firm

earlier

will cease. In this case, the firm was registered and there was only

a reconstitution of the firm

and the first

re~pondent, the plaintiff in this

c

case, is a person whose name is shown in the Register of Firms along with

the names

of the appellants and, therefore, there is compliance of

Section

69(2-A). [569-E·F]

Madho Prasad v. Gauli Dutt Ganesh Lal, AIR (1939) Pat. 323; Minak­

. shiAchi v. P.S.M. Subramaniam Chettim; AIR (1957) Mad. 8; Gawi Shankar

D Shroff v. Central Hindustan Bank Ltd., AIR (1959) Cal 262; Nandlal Sohan­

lal v. Commissioner of Income Tax, AIR (1977) P & H 320, distinguished.

6. It is not possible to accept the argument that if the definition of

E Section 4 is applied to Section 69(2-A) then unless the names of all' the

partners find a place

in the Register of Firms, the suit

filed by the plaintiff

cannot be sustained. The facts

that the firm was registered and the

plaintiff's name finds

a place in the Register of Firms are not in dispute.

The name of the newly introducted partners, of course, does not find a place

in the Register of Firms. That means the person whose name does not find

F a place in

the Register of Firms may incur certain disabilities and that will

not disable the plaintiff to press the snit against the firm, which was

registered against the persons whose names find a place in the Register of

Firms.

It is not

necessary to decide what the disabilities of the person,

whose name does not find a place in the Register of Firms. For the purpose

G of

Section 69 (2A), the partnership firm will mean the firm as found in the

certificate

of registration and the partners as found in the Register of' Firms

maintained as per rule in Form

"G". The present suit being one for dissolu­

tion accounts by one of the partners, whose name admittedly finds place in

the Register of Firms along with the names of all the appellants, the re­

ttuirements of Section 69(2-A) are satisfied. Section 4 of the Act is also

H complied with for this limited propose. [570-C-F]

-

..

•

SHARAD V ASANT KOTAK v. RM. CHA WDA [K. VENKATASWAMI,J.] 547

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8830 of A

1997.

From the Judgment and Order dated 15.7.97 of the Bombay High

Court

in A.N. No.

509 of 1997.

R.F. Nariman, P.H. Parekh, Sameer Parekh and Ms. Sunita Sharma, B

for the Appellants.

Soli J. Sorabjee, Ramesh Singh, Parimal K. Shroff, Ms. Bina Gupta,

Ms. Rakhi Ray and Pritesh Kapur for the Respondents.

The Judgment of the Court was delivered

by

K. VENKATASWAMI, J. Leave granted.

This appeal

by special leave has arisen under the following cir­

cumstances

:-:

The appellants are the partners of a suit firm called 'M/s

Paramount

Builders'. The partnership was entered into on 29.11.1979 with the follow­

ing individuals

as partners :

S. No. Name of

Pmt11e1~· Share

1. Shri Sharad Vasant Kotak 15%

2. Shri Dilip Vasant Kotak 15%

3 . Shri Anil Dhirendra Kotak 15%

4. Smt. Hemkuver Vasant Kotak 15%

5. Smt. Lilavati D hirendra Kotak 15%

6. Shri Mohanlal Hinji Chawda 12112%

7. Shri Ramniklal Mohanlal Chawda 12112%

The said partnership firm was registered on 15.12.1980 under

Registration

No. 158675 with the Registrar of Firms.

On 6.5.1986, Shri

Mohanlal Hinji Chawda, a partner of the firm (Sr.

No. 6 above) died and

c

D

'E

F

G

in his place, his widow Smt. Jijiben Mohanlal Chawda was admitted as a H

548 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A partner in the firm. After the admission of the said Smt. Jijiben Mohanlal

Chawda, another deed of partnership was made consisting of the old

six

partners and the newly admitted partner Smt. Jijiben Mohanlal Chawda.

As a matter of fact, the induction of the new partner

was not brought to

the notice of the Registrar of Firms

by forwarding the required particulars.

B

It is on record that still later on 3.11.1992 another partnership deed was

brought into existence consisting of the same partners. It is also on record

that yet another partner Smt. Hemkuver

B. Kotak (S.No. 4 above) died in

September, 1994. The fact of death of this partner also was not intimated

to the Registrar of Firms. While

so, the 1st respondent gave a notice of

dissolution of the

firm to the appellants and also filed a suit for the

C dissolution of the partnership firm bearing suit No.

5016/94 on 15.12.94 in

the High Court of Judicature at Bombay on the original side. Initially in

the plaint, the constitutional validity of Section 69(2A) of the Indian

Partnership Act (hereinafter called the "Act"), as amended by Maharashtra

Act,

was not raised. The 1st respondent moved a Chamber Summon No.

D

301/97 seeking permission of the Court to carry out certain amendments

to the plaint. Briefly, the amendments sought were that subsequent changes

and/or modifications

in the partnership deed of M/s. Paramount Builders

under the deed of partnership dated

20.10.1986 and also in the deed of

partrnership dated 3.11.1992 are merely

in the nature of changes and/or

modifications which do not affect registration of the said

firm of Mis

E Paramount Builders, as required under the Act, for entitling a partner to

institute a suit for reliefs against the partners on dissolution of firms and

alternatively, the other amendment sought

was to challenge the vires of

Section 69(2A) of the Act

as in force in the State of Maharashtra.

F The amendment sought was seriously opposed by the appellants inter

alia contending that the suit as filed was not maintainable and, therefore,

the amendment cannot be allowed. In other words, according to

. the

appellants on and from 20.10.1986 when a new partnership deed was made,

the registration already given to the

firm ceased to have validity and the

partnership

as at present must be deemed to

be an unregistered one and,

G therefore, the suit was hit by Section 69(2A). It was also contended that

without impleading State of Maharashtra and Union of India, the vires of

Section 69(2A)

in the Partnership Act cannot be challenged. The learned

trial Judge accepting the objections raised

by the appellants found that

Section 69(2A) of the Act creates a bar on the threshold of the filing of

H the

suit for the relief covered in the suit and the very suit filed by the

SHARAD V ASANT KOT AK v. R.M. CHA WDA i.K. VENKA TASW AMJ,J.] 549

plaintiff was incompetent. That being the position, the application for A

amendment could not be permitted. Consequently, the application was

rejected.

Aggrieved

by the rejection of the amendment

appliGation, the first

respondent preferred

an appeal to the Division Bench of the High Court

in Appeal

No.

509/97.

The appellate court was of the view that the registration of the firm

continues to be

in force notwithstanding any reconstitution of the firm and

even when dissolution takes place, the registration of the firm continues.

The Division

Bench further held that Section 69(2A) requires the registra­

tion of a

firm and it does not require a fresh registration each time a

reconstitution or dissolution of the continuing

firm takes place. After

finding that the suit filed

by the first respondent was not hit by Section

69(2A), the Division Bench held

as follows :-

B

c

"The proposed amendment consists of two parts. The first part is D

only a factual aspect which has been sought to be introduced in

order to demonstrate that the bar under Section 69(2A)

is not

attracted. There

is no reason as to why such an amendment should

not be granted. The second part of the amendment pertains to the

constitutional challenge of the validity of Section 69(2A). As

we

have

already taken a view that Section 69(2A) is not attracted, the

question of challenge does not survive and, therefore, it

is not

necessary to grant the amendment containing constitutional

chal­

lenge."

Ultimately the appellate court allowed the appeal and permitted the

amendment only regarding the factual· portions and not regarding the

constitutional validity of Section 69(2A).

Aggrieved

by the judgment of the Division Bench, the appellants

have preferred this appeal

by special leave.

. In this appeal, the following substantial question of law arises for our

consideration

:-

''Whether on the facts of this case the suit for dissolution and

account of partnership

is hit by Sec. 69(2A) of the Act as amended

E

F

G

in the State of

Maharashtra''. H

A

B

c

D

E

F

550 SUPREME COURT REPORTS 11997] SUPP. 6S.C.R.

For answering the question, it is necessary to set out the relevant

provisions

of the Act as amended in the

State of Maharashtra, which are

given below

:-

"4. Definition of "partnership". "Partnership" is the relation

between persons

who have agreed to share the profits of a business

carried on

by all or any of them acting for all.

"Partner" "firm" and "firm-name"

Persons who have entered into partnership with one another

are called individually, "partners" and collectively "a firn°i", and the

name under which their business

is carried on is called the

"firm­

name".

17. Rights and duties of partners after a change in the firms.

Subject to contract between the partners -

(a) where a change occurs

in the constitution of a firm, the

mutual rights and duties of the partners in the reconstituted firm

remain the same

as they were immediately before the change, as

far as may be;

(b) ............................................................................................ ;

( c)

···························································'································

CHAPTER V

Incoming and outgoing partners

31. Introduction of a partner. (1) Subject to contract between the

partners and to the provisions of Section

30, no person shall be

introduced

as a partner into a firm without the consent of all the

G existing partners.

H

(2)

~ubject to the provisions of Section 80, a person who is

introduced as a partner into a firm does not thereby become liable

for any act of the firm done before he became a partner.

SHARAD Y ASANT KOT AK v. R.M. CHAWDA [K. YENKA TASW AMI,J.] 551

CHAPTER VI A

Dissolution of a firm

39. Dissolution of a firm. The dissolution of a partnership between

all the partners of a firm is called "dissolution of the firm''.

CHAPTER VII

Registration of Firms

58. Application for registration. (1) [Subject to the provisions of

sub-section (lA), the registration of a firm] effected by sending by

post or delivering to the Registrar of the area

in which any place

of business of the firm

is situated or proposed to be situated, a

statement in the prescribed form and accompanied by

the

prescribed

fee [and a true copy of the deed of partnership]

stating

:-

(a) the firm-name,

[(aa) the nature of business of the

firm;]

B

c

D

(b) the place or principal place of business of the firm, E

( c) the names of any other places where the firm carries on

business,

( d) the date when each partner joined the firm,

( e) the names

in full and permanent addresses of the

partners, and

(f) the duration of the firm.

The statement shall be signed by all the partners, or by their

agents specially authorised

in this behalf.

[(IA) The statement under sub-section (1) shall be sent or

delivered to the Registrar within a period of one year from the

F

G

date of constitution of the firm : H

552

A

B

c

D

E

F

G

H

SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

Provided that

in the case of any firm carrying on business on

or before the date of commencement of the Indian Partnership

(Maharashtra Amendment) Act,

1984, such statement shall be sent

or delivered to the Registrar within a period of one year from such

date).

(2) Each person signing the statement shall also verify

it in the

manner prescribed.

(3)

.: .............. : .................................................................................... .

(4) ..................................................................................................... .

59. Registration [(1)) When the Registrar is satisfied that the

provisions of section

58 have been duly complied with, he shall

record an entry of the statement

in a register called the Register

of Firms, and shall file the statement.

[On the date such entry is

·recorded and such statement is filed, the firm shall be deemed to

be registered.)

[ (2) The firm, which

is registered, shall use the brackets and

word

"(Registered)" immediately after its name.[

63. Recording of changes in and dissolution of a firm. (1) When a

change occurs

in the constitution of a registered firm, (every)

incoming, continuing or outgoing partner, and when a registered

firm

is dissolved, (every) person who was a partner immediately

before the dissolution, or the agent of (every) such partner or

person specially authorised

in this (shall, within a period of

90 days

from the date of such change or dissolution,

give notice to the

Registrar of such change or dissolution, specifying the date there­

of;) and the Registrar shall make a record of the notice in the entry

relating to the firm in the Registrar of Firms and shall file the

notice along with statement relating to the firm filed under section

59.

[(IA) Where a change occurs in the constitution of a registered

firm, all persons, who after such change are partners of the firm,

shall jointly send

an intimation of such change duly signed by them,

to the Registrar, within a period of 90 days from the date of

' occurrence of such change and the Registrar shall deal with it in

SHARADVASANTKOTAKv. R.M. CHAWDA[K. VENKATASWAMl,J.) 553

the manner provided by section 61.) A'

(2) .................................................... ..

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 a partner in a B

firm against the firm on 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 :

'

[Provided that the requirement of registration of firm under

this sub-section shall not apply to the suits

or proceedings

in­

stituted by the heirs or legal representatives of the deceased

partner

of a firm for accounts of the firm or to realise the property

of 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

~egistered and the persons suing are or

have been shown in the Register of Firms as partners in the firm.

(2A) No suit to enforce any right 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 shall

be instituted in any Court

by or on behalf of any person suing as a partner in a firm against

c

D

E

the firm or any person alleged to be or have been a partner in the F

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 :

Provided that the requirement of registration of firm under this

sub-section shall not apply to the suits

or proceedings instituted

by the heirs or legal representatives of the deceased partner of a G

firm for accounts of a dissolved firm or to realise the property of

a dissolved firm.]

(3) ...............................

.' ...................................................................... .

H

554

A

B

c

D

E

F

G

H

SUPREME COURT REPORTS 11997) SUPP. 6 S.C.R.

[69A. Penalty of contravention of sections 60, 61, 62 or 63. If any

statement, intimation or notice under sections

60, 61, 62 or 63 in

respect of any registered firm

is not sent or given lo the Registrar,

within the period specified

in that section, the Registrar, may, after

_giving notice to the partners of the

firm and after giving them a

reasonable opportunity of being heard, refuse to make the suitable

amendments in the records relating to the firm, until the partners

of the firm pay such penalty, not cx.:ccding ten rupees per day, as

the Registrar may determine in respect of the period between the

date

of expiry of the period specified in sections 60, 61, 62 or as

the

caM; may be, 63 and the date of making the amendments in

the entries relating to the firm. J

Rule 3. Forms of Statements. --The Statements required to be

sent or delivered to the Registrar under sections 58 and 60 of the

Act shall, respectively, be in Forms "A" and "B" and be verified in

the manner

as laid down in the footnotes to the respective Forms.

'Rule 4. Forms of intimation and nolice. --Intimations and notices

which arc required to be given under sections

61, 62 and 63 of the

Act shall, respectively, be given in Forms

"C", "D", "E" and "F" and

be verified in the manner set forth in the footnotes to the respective

Forms.

Rules

6. Form of Register. --The Register shall be maintained in

Marathi in Form

"G" and a separate page shall be devoted to each

firm. The pages, after the entries are made, shall be

bound in

proper permanent registers in the order of the consecutive number

allotted to each firm on registration. Every entry in Register shall

be signed

by the Registrar.

Rule

17. Certificate of Registration. --Where a firm is registered

under section

59 of the Act, the Registrar shall issue a certificate

in Form 'H'.

Form 'A'

Application for Registration

of Firms

(See rule 3)

We, the undersigned, being partners, hereby apply for registra­

tion

as a firm and for that purpose supply the following particulars

SHARADVASANTKOTAK v. R.M. CHAWDA[K VENKATASWAMU.[ . 555

pursuant to section 58 of the Indian Partnership Act, 1932 : --A

(a) Firm Name

(b) Nature of business of the firm Place

( c) Principal place of business of the firm Taluka District

B

( d) Names of any other places where the

firm carries on business in the above name.

(e) Names in

full and permanent address

(residential) of

all the partners.

(f) Date on which each partner joined the firm.

(g) Duration of the firm. In case there

is any

provision made by contract for the duration

of the partnership or for the determination of

the partnership, please state the provisions

briefly.

If no such provision is made, words

"AT WILL" may be stated.

Note

l. -For the registration of each Firm a separate

applica­

tion is necessary. Accordingly the applicants should apply in this

- .

application only particulars of the Firm in respect of which the

application

is made. This applies to the case of the same persons

carrying on business in partnership under different Firm names.

Note

2. -Against items ( c) and ( d), the exact location of the

place should be given.

Note

3. -This application must be signed by all partners or

their agents specially authorized in this behalf

on solemn

affirma­

tion before a Magistrate or other officer duly empowered to

administer Oaths.

Note 4. -Making a false, untrue, or incomplete statement is

punishable under section 70 of the Indian Partnership Act, 1932.

(h) In case there are any minors admitted to the benefits of

c

D

E

F

G

partnerships :- H

556 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A Name & Name & Date of Date when

Address of Address of admission to he/she will attain

Minor Guardian benefits majority

(1) (2) (3) (4)

B

We are sending the prescribed registration fee by cash/money order.

We the abovenamed, solemnly affirm that what

is stated in paragraphs is

true to our own knowledge and that what is stated in the remaining

C paragraphs is stated on information and belief, and I/We believe the same

to

be true.

D

E

We also declared on solemn affirmation that up to the date of

submission of this application there has not been any change whatever in

any of the particulars aforesaid.

Solemnly affirmed at

Dated this ................................. day of... ....................................... ..

(1)

(2)

(3)

(4)

(5)

Name

and

Signatures

Certified that the persons who have signed the application have

F signed in my presence and have solemnly affirmed that the particulars

furnished therein are true.

Name of Attesting Witness

Designation

G

Address

And

Seal, if available

Before me

H

(Price Re. 1)

SHARADVASANTKOTAKv. R.M. CHAWDA iK VENKATASWAMl,J.] 557

FORM 'E' A

INDIAN PARTNERSHIP ACT, 1932

Notice of change of Constitution or Dissolution of Firm

•

(See rule 4)

FIRM REGN. NO. and DATE

Firm Name ............................................................................................... .

Regi.~tered Address ................................................................................ .

Partners in the above named firm

We, being agents of a partner in the abovementioned firm persons

specially authorised by a partner

iri the above mentioned firm to

give notice in this behalf hereby give notice that

(a) the constitution of the firm has changed as follows :

(1) Mr./Messrs ...................... of .................................. has/have joined

the firm

as new partner/partners on

(2) Mr./Messrs ...................... of ..................

.. has/have retired as

partner/partners of the firm with effect

froin ............................................................ .

(b) the said firm has been dissolved on ............................................. .

I/We ................... the abovenamed ....................... solemnly affirm

that what

is slated in paragraphs .................... is true to my/our own

knowledge,

and that what is stated in the remaining para-

graphs ..............

is stated on information and belief, and I/We belief

the same to

be true.

I/We declare on solemn affirmation that up to the date of

submission of this application there has not been any change in

any of the particulars previously intimated save and except the

change notified above.

Solemnly affirmed at :

B

c

D

E

F

G

H

558

A

B

c

,

SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

Dated this ............... day of ............. 19 ......... .

Name and Signatures -

(1)

(2)

(3)

Certified that the

pt:,rson who has signed this notice has signed

it in my presence and he has solemnly affirmed that the particulars

furnished therein are true.

In the case

of person not conversant with the English language,

the contents of the above particulars have been explained to him

in a language familiar to him and he has affirmed the truth thereof.

Signature.

Note

1. -Please strike out item (a) or (b) whichever is not

D applicable.

Note

2. -

Please give dates according to the English Calendar.

Note

3. -In case there is only one person left then the firm should

be

..:onsidered as dissolved and the form should be filkd in accord-

E ingly.

F

G

Note 4. -This notice must be signed by every partner or his agent

specially authorised

in this behalf on solemn affirmation before a

Magistrate

or other

Officer duly empowered to administer Oaths.

(Price Re. 1)

FORM 'G'

(See rule 6)

Register of firms

Firm No ................. .

H

Name: ......................................................................................................... .

,

SHARAD VASANT KOTAKP. R.M. CHAWDA[K. VENKATASWAMU.] 559

Business: A

Number of

Entry

Date of

Entry

Nature of

Entry

FORM 'H'

(See rule. 17)

Certificate

of Registration

(National Emblem)

The Indian Partnership Act,

1932

(Act No. IX of 1932)

Registration No ........................... .

Remarks·

It is certified that a firm by name ................ with its head office

at .................... has this day been duly registered under the Indian

Partnership Act, 1932 (Act No. IX of 1932).

B

c

D

E

Given under my hand this F

day of ................ 19 ... .

Registrar/ Assistant Registrar

of Firms

Bombay, Fune, Nagpur, Aurangabad.

Before proceeding further. we remind ourselves that we are

concerned with a suit filed hy a partner for <lissolution and accounts. No

third party rights

or liabilities are involved in the present

;;uit file<l by

G

respondent no. 1. H

A

B

c

560 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

Undoubtedly counsel on both sides addressed arguments covering

larger questions. But

we propose to confine

ourseives strictfy to the facts

of the case and decide the controversy without touching upon the larger

issues or connected issues arising out of the pleadings because the

maintainability of the suit

is the sole issue based on

Section 69(2A) of the

Act.

Section

69(2A) (extracted above) requires two conditions before a

partner can sue for dissolution of a firm and for accounts :

l. The firm must be registered.

2. The person suing is or has been shown in the register of firm as

partner in the firm.

It

is not in dispute that the partnership, as entered into under a deed

dated

28.11.1979, was duly registered and a certificate of registration was

D granted. It is

al'io an admitted fact that the plaintiff, first respondent herein,

was one of the founder partner under the deed dated

28.11.1979 and his

name did find a place

in the register of firm as a partner and there is

nothing to show that at any point of time, his name has been removed from

the register of lirm. We have seen that on the death of one of the partners,

E his widow was inducted into the partnership and a deed

was entered into

on

20.10.1986, repealing almost all the clauses in the partnership deed

dated 28.11.1979 except for consequential changes necessitated by the

induction of new partner

in the place of deceased partner.

It

is the contention of learned senior counsel, Mr. Nariman, that

F when

the new partner was inducted under the partnership deed dated

20.10.1986 in the place of the deceased partner, the firm registered under

the partnership deed dated

28.11.1979 ceases to be on the records of

register of firm and, therefore, the registration already given

will not ensure

to the benefit of the partnership entered on

20.10.1986. If that be so,

G according to Mr. Nariman, learned senior counsel, the conditions impos;;:d

by Section 69(2A) arc not satisfied and, therefore, the suit as filed W<•.s not

maintainable.

In support of his argument, he placed strong reliance on the

expression 'partnership'

as defined in Section 4 of the Act.

It is the

H contention of Mr. Nariman that bearing in mind the definition in Section

SHARADVASANTKOTAKv. R.M.CHAWDAIK VENKATASWAMJ,.l.J 561

4 of the Act, the partners including second respondent will collectively be A

a firm and that firm is not registered inasmuch as the name of the second

respondent docs not

fin.d a place in the Register of Registrar of Firms.

Therefore, the learned

S.ingle Judge was right in holding that the suit was

not maintainable at the threshold. According to the learned senior counsel,

the mere fact that the plaintifPs name find a place in the Register of B

Registrar of Firms is not sufficient to maintain the suit when admittedly

one of the partner's name (second respondent's name) was not shown

in

the Register of

Re;,oistrar of Firms. He also contended that a comparison

of language employed

in Sections 31 and 32 of the Act, will show that

whenever a partner

is inducted into an existing firm, the

old firm ceases to

exist and an altogether

new firm comes into existence from the date of

induction of the new partner and that new

firm must get fresh registration.

In support of this

proposition, he placed reliance on Madho Prasad and

Othm· v. Gowi Dutt Ganesh Lal, AIR (1939) Patna 323; Meenakshi Achi

and Another v. P.S.M. S11brama11ian Chettiar and Others, AIR 1957 Madras

c

8 and Gouri Sankar Sherojf and Others v. Ce11tral Hi11d11stan Bank Ltd. and D

Others, AIR 1959 Calcutta 262. He also submitted that the partners entered

into another deed on 3.11.1992 and they have expressly treated the

firm as

reconstituted one.

In other words, according to the learned. senior counsel,

the deed dated

20.10.86 in the absence of such expressi"i: (reconstituted

firm) the understanding was the old firm, ceases to be

in existence and a E

new lirm was brought into existence. For this, he also placed reliance on clauses 4 and 5 regarding 'Commencement' and 'Accounting Year'. He also

placed reliance

on a passage from Lindley on the Law of

Partnership, 15th

Edition, page

374 :

F

"Each partner is, it is true, the agent of the firm; but as before

pointed out, the

firm is not distinguishable from the persons from

time to time composing

it; and when a new member is admitted

be becomes one of the

firm for the future, but not as from the

past, and his present connection with the firm

is no evidence that

he ever expressly or

impli::dly authorised what may have been done G

prior to his admission. This is wholly consistent with the fact that

after the admission of a new member, a new partnership is con­

stituted, and thus special circumstances are required to be shown

before the debts and liabilities of the old partnership are treated

as having been undertaken by the new partnership." H

562 SUPREME COURT REPORTS I L997] SUPP. 6 S.C.R.

A Contending contrary and supporting the judgment of the Division

Bench, Mr. Soli J. Sorabjee, learned Senior Counsel, submitted that there

is a well-recognised distinction between the legal concept of dissolution

and reconstitution or a

firm. In the case of an incoming or an outgoing

partner

in an existing

firm, there is only a reconstitution of the firm and in

B all other respects, the existing firm continues with old and new partners.

A look at Chapter V of the Act, according to

him, will fortify the above

contention. In other words, Chapter V deals with

"Incoming and Outgoing

partners" while Chapter VI separately deals with "Dissolution of a Firm''.

The two are totally different concepts and cannot in law be equated with

C each other. According lo the learned

Senior Counsel, the rules framed by

Maharashtra Government

in 1989 and the forms prescribed under the rules

in particular Forms E, G and H clearly support the said contention. It is _jlso his contention that even when there is a dissolution of a firm, it does

· not cease to be registered firm but for the purposes of Partnership Act it

D continues to be registered. In other words, according to the learned Senior

Coun~e!; ·the registration of a firm is valid till it is cancelled in a manner

known

lo law. Non-compliance of Sections 61, 62 and 63, as amended in

Maharashtra; if at all, will attract the penalties prescribed under Section

69A and nothing more and

it is incorrect to contend that non-compliance

E of the said provisions will result in deregistration of the firm. As the

consequence of deregistration

is a drastic one, it is impermissible to hold

that_ non-compliance with Sections 63(1) and 63(1A) would lead to

deregistration of a firm

in the absence of express and clear

lei,>islative

provision to that effect. He further contended that merely because another

F partnership deed was made on 20.10.1986, it cannot be said that there was

a dissolution of the old firm and consequential formation of a new

firm

under the latter deed. According to the learned

Senior Counsel, it is the

substance of the matter that

is relevant to be looked into and not the

phraseology employed

by the parties. In other words, the test is whether

G after the execution of the deed dated

20.10.1986, for all intents and pur­

poses, the firm as reconstituted was a different unit or remained the same

unit

in spite of change iri its constitution. Looked at from this angle, the

unit remained the same as it originally

was in spite of change in its

constitution and the contention to the contrary, according to the learned

H

Senior Counsel, was not correct. To support this, he pointed out the

...

...

.. ~

•

· SHARADVASANTKOTAKv. R.M. CHAWDA IK. VENKATASWAMl,J.J 563

similarities between the two deeds. The alleged dissimilarities as found in A

Clauses 4 and 5 of the Document dated 20.10.1986 are really not dis­

similarities but consequential and incidental changes.

In support of .his contentions, he placed reliance on the following

judgments of this Court and other High

Court~ :

Commissioner of Income-Tax, West Bengal v. A. W. Figgies & Co. and Others,

(1954] 5 SCR 171; Mis. Wazid Ali Abid Ali v. C.J.T Lucknow, (1988] Supp.

SCC 193; Tyresoles (India) Calrntta v. Commissimier of Income-Tax, Coim­

batore,

[1963] Vol. 49 ITR 515;

Finn Girdhar Mal Kapur Chand v. Finn Dev

B

Raj Madan Gopal, [1964] l SCR 995; Pratapchand Ramchaml & Co. v. C

Jehangi1ji Bomanji Chinoy, AIR (1940) Bombay 257; Tapendra Clumder

Goopta

v. Jogendra Clmnder Goopta

and Others, AIR 29 (1942) Calcutta

76; Messrs. Durga Das Janak Raj v. Messrs. Preete Shah Sam Ram, AIR

1959 Punjab 530; Bharat Smvodaya Mills Co. Ltd. Ahmedabad v. Ms.

Mohatta Brothers a Finn, AIR (1969) Gujarat 178 and Ke.1·1i111al and

Another v. Daliclwnd and Others, AIR (1959) Rajasthan 140. D

In reply to the contention of Mr. Nariman that the purpose for which

Section 69(2A) was introduced by Maharashtra legislature will be the last

if the view projected

by him is not accepted, Mr. Sorabjee submitted that f~ilure to comply With the mandatory provisions in Sections 61, 62 or 63

may attract the penalties provided under Section 69 A of the Act but not

the deregistration of the firm. In support of this, he placed reliance

on a

judgment of the Andhra Pradesh High Court

in Maddi

S11da1wna111 and

Othe1:1· v. Botogu Viswanadlwm Brothers, AIR 1955 Amlhra 12.

At the outset, we would like to deal with the substance of the

Partnership Deeds in this case. As noticed earlier, the first

Deed of

Partnership was entered into on

29.11.79 and that partnership firm was

registered

on 15.12.80.

One of the partners (Shri Mohanlal Hinji Chawda)

died on

6.5.86 and in his place, his widow was inducted. The second Deed

E

F

of Partnership was drawn on

20.10.86. By reason of the second Deed of G

Partnership, can it be said that the existing firm dissolved or ceased. It is

relevant here to note that in both the deeds ii was expressly made that the

death, insolvency or retirement of any partner shall not dissolve the

partnership

firm.

On the other hand, the partner .shall be entitled to carry

on the partnership business

on the terms and conditions mutually agreed H

564 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A upon by the said partners (vide Clause 11). Therefore, it cannot be

contended

by the appellants that by reason of death of one of the partners,

the existing

firm stands

dissolved. Can it then be said that by reason of

inducting the widow of the deceased partner the existing registered firm

ceased and totally a new partnership

firm came into existence. According

B to the appellants, by reason of Clauses 4 and 5 in the second Deed of

Partnership, it must be deemed that the old partnership ceased and entirely

a new partnership firm was found under the second Deed. We are unable

to agree with the contention of the learned senior counsel for the

appellants on this aspect. Clauses 4 and

5 relate to commencement of the

C partnership and accounting year. These are

mini1pal changes introduced in

the second Deed of Partnership by reason of the introduction of a new

partner in place of Clauses 4 and 5

in the first Partnership Deed and in

other respects, namely, the name of the partnership firm, the address and

location of the firm, the business carried on and shares allotted among the

partners and duration

of the partnership, are identical. Moreover a careful

D reading of clauses 5 of and 6 of the second partnership deed will give an

impression that the partners have agreed lo continue the existing firm. The

profits

or losses for the period prior to and up to the death of deceased

partner is dealt with and provided. There

is no indication that the old firm

was dissolved. Likewise, reliance placed on the recitals

in the third Deed

E of

Partnership drawn on 3.11.92 will not come to the help of the appellants.

F

G

Learned counsel for the appellants placed reliance on the term used in tlie

third Partnership Deed reconstituted in the Preamble portion. We are of

the opinion that this does not make any substantial diffen,nce when we

look into the substance of the three deeds. In this connection, the learned

counsel

for the respondents has rightly placed reliance on the following

observations made

in Tyresoles (India), Calcutta (supra). "In our opinion, the test of the pudding is in the eating and the

true scope of the instrument can readily

be ascertained from what

actually happened instead

of merely depending upon expressions

which the parties might have under some mistaken notion loosely

used."

Likewi~e, this Court in A.W. Figgies & Co. and Ors. (supra) at page

177 observed on a construction of two documents of partnership as

H follows:-

•

•

,.

'

SHARADVASANTKOTAKv. RM.CHAWDA(K. VENKATASWAMLJ.] 565

"To all intents and purposes the firm as reconstituted was not a A

different unit but it remained the same unit in spite of the change

in its constitution."

We are, therefore, of the

view that the existing firm continued.

The contention of the learned counsel for the appellants that the

B

induction of the new partner will result in dissolution of the firm is not also

acceptable. Reliance placed on the language of Sections

31 and 32 of the

Act to support the said contention

will be of no avail if we look into Section

17 of the Act. Section 17( a) of the Act (extracted above) suggests only

reconstitution of the firm where a change occurs

in the constitution of the C

firm.

Otherwise, the old firm remains the same. Here we can usefully quote

the passages from the judgments of this Court and other High Courts.

In

Tyres oles

(India), Calcutta (supra) a Division Bench of the Madras

High Court observed thus :

"The dissolution and reconstitution of a partnership are two dif­

ferent legal concepts. The dissolution puts an end to the partner­

ship, but reconstitution keeps it subsisting, though in another form.

D

A dissolution followed by some of the erstwhile partners taking

over the assets and liabilities of the dissolved partnership and

E

forming themselves into a partnership is not reconstitution of the

original partnership. The partnership formed after the dissolution

is a new partnership and not a continuation of the old partnership,

for

it would be a contradiction in terms to say that what ceased to

exist

was continued. A reconstitution of a firm of partnership F

necessarily implies that the firm never became extinct. What it

denotes

is a structural alteration of the membership of the firm,

by addition or reduction of members, and an incidental redistribu-

tion of the shares of the

partners."

To the same effect, this Court in Commissioner of Income-tax, West G

Bengal-III v. M/s. Pigat C/1ampa11 & Co., AIR (1982) SC 1085 observed as

follows :

"The principle is well settled that it is on examination of relevant

documents and relevant facts and circumstances that the Court has

H

A

B

c

'D

566 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

to be satisfied

in each case as to whether there has been a

succession or a mere change

in the constitution of the partnership.

It

cannot be disputed that 'dissolution' and 're-constitution' are

two distinct legal concepts, for, a dissolution brings the partnership

lo an end while a reconstitution means the continuation of the

partnership under altered circumstances but

in our view in law

there would be no

difliculty in a dissolution of a firm being followed

by the constitution of a new firm by some of the erstwhile partners

who may take over the assets and liabilities of the dissolved firm."

The next question is whether Lhe registration given to the firm under

the first Partnership Deed ceases when a new partner was introduced into

the firm. For this, we refer lo Sections 58, 59 and 63, the relevant portions

have already been extracted. Rules

3, 4, 6 and 17 have also been extracted.

The forms prescribed in this connection have also been extracted. A close

perusal of these provisions with Forms

"A", "E", "G" and "H" will show that

there

is a definite distinction between the Certificate of Registration given

to the firm and any alterations to be entered in the

Register of

Finns. This

will suggest in no uncertain terms that the changes in the constitution of

the firm

will not affect the registration once made. In other words, it is not

required that every time a new partner

is inducted, fresh registration has

E to be applied and obtained. However, information about changes have to

be given. Failure to comply attracts penalties under

Section 69A of the Act.

In this context, the judgment

in Maddi

Sudm:rnnam (supra) can be usefully

cited. It was held that

:-

F

G

H

"The second 'condition laid down in Section 69(2) is also satisfied.

The persons now suing i.e. the present partners are shown

in the

Register of Firms as partners of the firm, though the same Register

shows two other partners, one of whom died and than other retired.

It may be that the fact of retirement of one of the partners and

the death of another should have been notified to the Registrar

under

Section 63(1) as the said events effected change in the

constitution of the firm. But the default made

by the

firm is not,

in not so notifying, of any relevance

in considering the question of

the maintainability of the suit under

Section 69(2). There is the

essential distinction between the constitution of a firm and its

dissolution. Non-compliance with the provisions of S. 63(1) may

-

-

-

SHARAD V ASANTKOTAK v. R.M. CHA WDA [K VENKATASWAMI,J.] 567

have other consequences, but under S. 69(2) only two conditions should A

be complied with by a firm to enforce a right arising from a contract

and those two conditions are complied with in the present case.

The above

view is supported by the decisions of this Court and

various other High Courts.

In

Fi1111 Girdhar Mal Kapur Chand (supra), this

Court held that "once there was registration under the Indian Partnership

Act that registration,

in our opinion, continues to operate as registration

under that Act and continues

to be effective

-in other words, valid

registration in the

eye of law as administered in India so long as the

registration

is not cancelled in accordance with

law."

In Pratapchand Ramclzand & Co. (supra), the Bombay High Court

observed as

follows :

"Dealing in particular with S.63(1), that sub-section among other

things provides that when a registered furn

is dissolved any person

who

was a partner immediately before the dissolution, or the agent

of

any such partner or person specially authorized in this behalf,

may

give notice to the Registrar of such change or dissolution,

specifying the date thereof, and the Registrar shall make a record

of the notice

in the entry relating to the firm in the Register of

Firms, and shall

file the notice along with the statement relating

to the

firm filed under

S.59. Pausing there, that Section evidently

contemplates

in the case of a dissolution of a firm by death that

notwithstanding the death the firm should still be treated for the

purpose of the Act

as still registered. Mr. Davar has argued that

by reason of the death and the dissolution of the firm the firm

ceased to be registered, and in his argument he went so far

as to

say that the firm ought

to have been registered again. No doubt it

would have been logical having regard to

S.42 if the Act had so

provided. But in fact it has not. The Act does contemplate not-

withstanding dissolution by death that

so far as registration is

concerned the firm is to be deemed

still to be registered, and it

empowers any person who

was a partner immediately before the

dissolution to

give notice

o0f the change and requires the Registrar

to record that notice

in the entry relating to the registration of the

B

c·

D

E

F

G

firm and to file it

aJo.1g with the original statement which had been H

A

B

c

D

E

F

G

568

SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

filed. The next Section requiring notice is S.69(2). That is in these

terms:

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.

Applying that sub-section to the present case the firm was

registered and

in my opinion continued to be registered at the date

of the institution of this suit on 26th'

October 1939. There is no

time limit fixed

in any of the

Ss.60 to 63 as to when notice of

alterations or changes should be given. Mr. Davar argued that the

word "when" with which each of those Sections begins involves an

obligation upon the person proposing to give notice of the change

to

give it immediately upon the change occurring. The Sections do

not

say so. The position therefore, is this : The firm was registered

at the time of the institution of the suit. The

firm then consisted

of Chhogamal Dhanaji and Chunilal Idanji,

two of the original

partners whose names were shown on the register at the date

of

registration and were shown on the register at the date of the

institution

of the suit. The fact that the firm was registered at the

date of the institution of the suit and

that ihc names of the person

suing (the firm being a compendious name for the persons suing)

were shown

in the register at the date of the institution of the suit

appears to me to be a compliance with

S.69(2) of the Act.

It would seem that the Legislature introduced the words with

which that sub-section concludes,

viz.

"and the persons suing are

or have been shown

in the Register of Firm as partners in the firm

advisedly.

If additional partners had come into the firm as partners

since the date of registration and their names had not been entered

on the register

in accordance with notice of a change in the

constitution of the firm given to the Registrar,

it may well be that

the

firm as then constituted could not sue, because although it was

a registered firm some of the persons then suing would not be

shown

in the

Re1,rister of Firms as partners in the firm at the date

H of the suit. That is not this case. The partners who are suing were

-

•

SHARADVASANTKOTAKv. RM.CHAWDA(K. VENKATASWAMI,J.] 569

shown

in the register originally and are still shown, and the firm A

according to my construction of the Act remained registered

notwithstanding the death of one of the original

partners."

The above view of the Bombay High Court was followed and applied

by the Calcutta High Court in Jogendra Chunder Goopta (supra), Punjab

High Court in M/s. Durga Das Janak Raj (supra) and the Rajasthan High

Court in

Kesrimal & Anr. (supra).

In our opinion, the view taken by the Bombay High Court and

followed

by the other High Courts is the right view.

Learned counsel for the appellants placed strong reliance on the

Objects and Reasons for the amendments introduced in the Maharashtra

Act. According to the learned counsel, if his contention

is not accepted,

the object with which Section 69(2A)

was introduced will be lost. We do

B

c

not think so. In this context, we wish to point out that Section 69(3)( a) of D

the Central Act enables the partners of both registered and unregistered

firms to

file a suit for dissolution and/or accounts. That being the position

by introducing sub-section (2A)

in Section 69, the Maharashtra Legislature

has placed certain restrictions to the extent that even the suit for

dissolution of a

furn or for accounts, the suit can be filed only if the firm E

is registered and the 'person' suing as a partner is shown in the Register

of Firms

as a partner in the firm .. In other words, a person, who is not

shown

in the Register of Firms by induction after registration even though

the

firm is registered, cannot file a suit for dissolution or accounts. This

does not

in any way mean that the registration given to the firm earlier will

cease. In this case, the firm was registered and there was only a

reconstitution of the

firm and the first respondent, the plaintiff in this case,

is a person whose name is shown in the Register of Firms along with the

names of the appellants and, therefore, there

is compliance of Section

69(2A). The contention to the contrary

by the learned counsel for the

appellants cannot be

ac;:;epted.

F

G

The decisions cited by the learned counsel for the appellants are

distinguishable. In

Madho

Prasad and Others v. Gouri Dutt Ganesh Lal

(supra), the principal question that arose for consideration was whether an

incoming partner can be made liable for debts contracted by a firm before H

570 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A he joined it. In Gouri Sankar Sheroff and Othe1:v v. Central Hindustan Bank

Ltd. and Othe1~· (supra), again a creditor's right to proceed against assets

of partnership

firm and not a suit by partners for accounts. In Meenakshi

Achi and Another v.

P.S.M. Subramanian Chettiar and Othe1:f (supra), again

it was a case concerning the liability of partner for obligations incurred

B before his introduction. Mis. Nan dial

Solrnnlal, lullwzdur v. The

Commissioner of Income-Tax, Patiala, AIR (1977) Punjab & Haryana 320

also is not helpful to the appellants.

We are also not impressed by the arguments of the learned counsel

for the appellants that if the definition of Section 4 is applied to Section

C 69(2A) then unless the names of all the partners find a place in the Register

of Firm, the suit filed

by the Plaintiff cannot be sustained. The fact that the

firm

was registered and

Plaintiffs name finds a place in the Register of

Firms are not in dispute. The name of the newly introduced partner, of

course, does not find a place

in the Register of Firms. That means the

D person whose name docs not find a place in the Register of Firms may

incur certain disabilities and that

will not disable the Plaintiff to press the

suit against the

firm, which was registered against the persons whose names

find a place in the Register of Firms.

We are not called upon to

~ecide

what are the disabilities of the person, whose name does not find a place

E in the Register of Firms. For the purpose of Section 69(2A), the

partnership firm will mean the firm as found in the certificate of

registration and the partners

as found in the register of firms maintained

as per rule in Form 'G'. The present suit being one for dissolution and

accounts

by one of the partners, whose name admittedly finds place in the

F

G

Register of Firms alongwith the names of all the appellants, the

requirements of

Section 69(2A) are satisfied. Section 4 of the Act is also

complied with for this limited purpose.

Oilr conclusion is that on the induction of the second respondent,

the existing

firm was only reconstituted on the facts of this case and,

therefore, there

is no necessity to get a fresh registration. If by virtue of

non-compliance of certain mandatory provisions

in not informing the

Registrar of Firms about the change

in the constitution of the firm, certain

penalties provided

in the Act alone are attracted and that will not lead to

the conclusion that the registration of the

firm ceased. This conclusion is

H based on a conjoint reading of

Sections 58-63 and the Forms prescribed

SHARAD VASANT KOTAK v. RM. CHA WDA [K. VENKATASWAMi,1.] 571

thereunder. Further, this conclusion does not in any way militate the object A

of the Maharashtra Amendment introduced by Act 29 of 84.

In the result, we hold that the suit in question is not hit by Section

69(2A) of the Act and, therefore, -the Division Bench is right in allowing

the Appeal. Consequently, the Appeal

is dismissed. However, there will be

no order as to costs.

R.K.S. Appeal dismissed.

B