1961 (11) TMI 80 - HC - Indian Laws

Summary

Issues Involved:
1. Maintainability of the suit.
2. Defaults in payment of rent.
3. Validity of the notice to quit.
4. Interpretation of Section 69(2) of the Indian Partnership Act.
5. Interpretation of Section 42 of the Indian Partnership Act.
6. Whether a suit for ejectment arises out of a contract.

Detailed Analysis:

1. Maintainability of the Suit:
The primary issue was whether the suit was maintainable. The suit was filed by a partnership firm, Messrs. Gorak Nath Champalal Pandey, where one partner had died, and the heirs were not registered as partners. The first court accepted an oral contract that the firm would continue with the heirs of the deceased partner. The courts below differed on the interpretation of Section 69(2) of the Partnership Act, which led to the question of maintainability being seriously contested.

2. Defaults in Payment of Rent:
Both the trial court and the appellate court found that there were defaults in the payment of rent by the defendant. This finding was consistent across both courts and was not contested in the higher appeal.

3. Validity of the Notice to Quit:
Both courts also agreed that the notice to quit served to the defendant was valid and proper. This point was not in dispute in the higher appeal.

4. Interpretation of Section 69(2) of the Indian Partnership Act:
The main contention was whether the suit was barred under Section 69(2) of the Indian Partnership Act, which requires that no suit to enforce a right arising from a contract shall be instituted by or on behalf of a firm unless the firm is registered and the persons suing are shown in the register of firms as partners.

- The defendant argued that the suit was not maintainable because the heirs of the deceased partner were not registered as partners.
- The plaintiff contended that the firm remained registered and that the suit was maintainable even if the heirs' names were not in the register.

The court concluded that both conditions of Section 69(2) must be satisfied: the firm must be registered, and the persons suing must be shown in the register of firms as partners. The court rejected the plaintiff's interpretation that only one condition needed to be satisfied. The court emphasized that the purpose of Section 69(2) is to protect third parties from fraud and omissions, ensuring they know who the partners of the firm are.

5. Interpretation of Section 42 of the Indian Partnership Act:
The court examined whether Section 42, which states that a firm is dissolved by the death of a partner unless there is a contract to the contrary, applied to a firm with only two partners. The court found that an oral agreement existed between the original partners that the firm would continue with the heirs. Therefore, the firm did not dissolve upon the death of one partner.

6. Whether a Suit for Ejectment Arises Out of a Contract:
The court addressed whether a suit for ejectment falls under the purview of Section 69(2). The plaintiff argued that a suit for ejectment does not arise out of a contract. However, the court held that the right to eject a tenant arises from the lease contract, making it intimately connected with the contract and not independent of it.

Conclusion:
The High Court allowed the appeals, set aside the judgment of the appellate court, restored the judgment of the trial court, and directed that the suits be dismissed. The court granted leave to appeal under Clause 15 of the Letters Patent.