Law: Partnership Act, 1932

Section: 69,69(1),69(2)

Law: Civil Procedure Code (V of 1908)

Section: O.VII,R.11

(a) Partnership Act (IX of 1932)--- ----S. 69---Unregistered partnership firm---Bar on filing of suit by an existing unregistered partnership firm or its partners for enforcement of rights---Principles and exceptions. Following are the principles provided under section 69 of Partnership Act, 1932 regarding bar on filing of suit by unregistered partnership firm or its partners for enforcement of rights; (i) Partner of an unregistered firm cannot sue the firm or any of its partners, past or present, for enforcing a right conferred by the Partnership Act, 1932 or arising out of the contract of partnership; (ii) Unregistered firm cannot file a suit against any third person for enforcing a right arising out of a contract; (iii) Above two disabilities also apply to a claim of set off or any other proceeding to enforce a right arising out of contract. But they did not apply to- -- the right to sue for dissolution or for accounts of a dissolved firm, or to realize the property of a dissolved firm; or -- the power to realize the property of an insolvent partner; (iv) Section 69 of Partnership Act, 1932 did not affect,- -- firms located in areas to which the Act does not extend or which are exempt from the operation of the Act; -- proceeding, etc. not exceeding Rs.100 in value. Sections 69(1) & (2) of Partnership Act, 1932 place a complete bar on every proceeding initiated vide a suit by an unregistered firm and its partners. However, as expressly provided by section 69(3)(a) of Partnership Act, 1932 the above rules causing disabilities are not applicable to, and registration of a firm is not necessary in, the following cases:- where the suit is for the dissolution of a firm; where the suit is for rendition of accounts of a dissolved firm; where the suit is for realization of the property of a dissolved firm. Said three exceptions should be strictly contrived and applied. Partnership Act, 1932 placed no prohibition upon an unregistered partnership making contracts either inter se the partners or with some third party, nor forbids an unregistered partnership acquiring property or assets, all section 69 does is to make a suit instituted by an unregistered partnership…