1991 (3) TMI 398 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the suit.
2. Plaintiff's title to the suit property.
3. Entitlement to reliefs of declaration and injunction.

Issue-wise Detailed Analysis:

1. Maintainability of the Suit
The primary issue was whether the suit as framed was maintainable. The defendants argued that the plaintiff firm was not registered under Section 69 of the Partnership Act at the time of filing the suit, rendering the suit non-maintainable. The plaintiff contended that the registration process was initiated on the same day the suit was filed, and they were under the bona fide impression that the firm had been registered. However, the actual registration occurred on 16.2.1987, after the suit was filed on 9.2.1987. The court held that the registration of the firm is a condition precedent to the right to institute a suit. The defect of non-registration cannot be remedied by subsequent registration during the pendency of the suit. Therefore, the suit was deemed non-maintainable.

2. Plaintiff's Title to the Suit Property
The plaintiff sought a declaration that it was the absolute owner of the property described in the schedule. However, since the suit was found to be non-maintainable due to the non-registration of the firm at the time of filing, the court did not proceed to examine the merits of the plaintiff's title to the property.

3. Entitlement to Reliefs of Declaration and Injunction
The plaintiff also sought a consequential injunction to restrain the defendants from interfering with its peaceful possession of the property and a mandatory injunction directing defendants to demolish the superstructure put up on the property and deliver vacant possession. Again, due to the suit's non-maintainability, the court did not address the plaintiff's entitlement to these reliefs.

Additional Observations:
The court cited several precedents to support its decision, including the case of Ponnuchami Goundar v. Muthusami Goundar, where it was held that registration of the firm is a condition precedent to the right to institute a suit. The court also referred to the Supreme Court's decision in Loon Karan v. Ivan E. John, which emphasized that Section 69 of the Partnership Act is mandatory and renders a suit by an unregistered firm void.

Conclusion:
The court concluded that the suit was void ab initio due to the non-registration of the plaintiff firm at the time of filing. Consequently, the application to withdraw the suit with liberty to file a fresh suit on the same cause of action was dismissed. The court also ordered costs to be paid to the defendants due to the legal expenses incurred in opposing the void plaint. All interim orders passed during the pendency of the suit were dissolved.