2002 (6) TMI 604 - HC - Indian Laws

Summary

Issues Involved:
1. Incorporation of partners' names in the Register of Firms after the institution of the suit.
2. Binding nature of unreported judgments and Supreme Court decisions.
3. Application of precedent from a specific case.
4. Validity of the claim of surrender by the plaintiffs against the defendant.

Detailed Analysis:

1. Incorporation of Partners' Names in the Register of Firms After the Institution of the Suit:
The primary issue was whether the incorporation of the names of some of the partners of the plaintiff's firm in the Register of Firms after the institution of the suit could cure the defect and save it from dismissal under Section 69(2) of the Indian Partnership Act, 1932. The trial court dismissed the suit because the names of plaintiffs 3 and 4 were not in the register at the time of filing. However, the First Appellate Court allowed the appeal, holding that the subsequent incorporation of their names did not invalidate the suit. The appellate court's decision was supported by the fact that the plaintiffs 3 and 4 had joined the firm before the suit was filed, and their names were incorporated during the pendency of the suit.

2. Binding Nature of Unreported Judgments and Supreme Court Decisions:
The appellant argued that the subsequent incorporation of the names of the 3rd and 4th plaintiffs did not cure the defect, citing various judgments, including AIR 1990 Madras 198, AIR 1989 Madras 405, AIR 1989 Supreme Court 1769, and AIR 1977 Calcutta 37, which supported the view that a suit is not maintainable if the names of all partners are not registered at the time of filing. However, the court found these judgments not applicable to the present case. Instead, it relied on other precedents, such as AIR 1961 Supreme Court 325, which allowed for the suit's validity despite the late registration of partners.

3. Application of Precedent from a Specific Case:
The court considered the applicability of the precedent from (1989) I Madras Law Weekly 405. The learned counsel for the respondent cited several cases, including 1999 (9) Supreme Court Cases 113 and (1998) 2 SCC 171, which supported the view that the reconstitution of the firm and subsequent registration of partners did not invalidate the suit. The court agreed with these precedents, holding that the suit was maintainable since the firm was registered and the names of the partners were later incorporated.

4. Validity of the Claim of Surrender by the Plaintiffs Against the Defendant:
The trial court unequivocally found that the defendant was liable to pay the suit amount of Rs. 20,000/- to the plaintiff. Since the defendant did not file any appeal against this finding, the fourth substantial question of law did not arise and was accordingly answered. The court emphasized that the suit was not for enforcement of any right arising out of a contract entered into by the plaintiff firm with the defendant in the course of business transactions, and Section 69(2) did not bar the suit.

Conclusion:
The court dismissed the second appeal, holding that the suit was maintainable despite the subsequent incorporation of the names of the partners in the Register of Firms. The substantial questions of law were answered in favor of the respondents/plaintiffs, and the appeal was dismissed with costs.