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How to file for a recovery suit from a co partner
14-Feb-2023 (In Recovery Law)
The Co-partner of my father threw him out of the partnership of a shop by saying (in verbal) that he don't want to continue the partnership and he will pay a sum of 4 lakh rupees for the same, but now on asking to pay the money, he is denying to pay the same. The partnership was not done on papers which lasted for 11 years, though they had a joint bank account for all the financial dealings and even they had contacts with wholesale dealers. What should we do now, please do help.
"Under Section 69(1) of the Partnership Act, a suit, inter alia, to enforce a right arising from a contract cannot be filled by a person suing as a partner in a firm against the other partners of the firm unless the firm is registered.
No member of an unregistered firm can enforce his rights under the partnership contract against either the firm or any present or past member of it, nor can the firm sue its customers on their contracts. The firm remains liable to be sued by persons outside it, and cannot plead a set-off. Only suits for dissolution of the firm, and the powers of official assignees under the Insolvency Acts, are exempt from the prohibition. A small and harmonious firm dealing in a small way and mainly for ready money might be content to take these risks, mitigated as they are by the proviso of sub-s (4)(b) as to claims not exceeding Rs 100 in value. For a business of any considerable magnitude they appear sufficiently deterrent. Mandatory character.
Now, the mischief primarily intended to be prevented by the mandatory provisions of Section 69 was the hardship and difficulty to which third parties dealing with a firm were subjected in the matter of proving as to who were the partners. As to the provisions affecting the partners themselves it seems clear that the main object and intention of the Legislature was to prevent a partner from enforcing his claims against fellow partners if the firm was not registered and to compel in such a case dissolution of the firm by laying down that the court will entertain suits only when dissolution and accounts and winding up of the affairs of the firm is sought or where accounts or winding up of the affairs of an already dissolved firm is sought.
Partnership Act, 1932 : Section 59(2). Suit by unregistered firm-Maintainability of–Unregistered firm filed a suit for permanent injunction restraining the defendants. from infringing its trademark-The suit was based on common law and contractu – Dismissing the appeal, this Court HELD : 1.1. A suit is not barred by Section 69(2) of the Partnership Act, 1932 if a statutory right or a common law right is being enforced. [1256-C] Raptokas Brett Co. Ltd. v. Ganesh Property, [1988] 7 SCC 1
No member of an unregistered firm can enforce his rights under the partnership contract against either the firm or any present or past member of it, nor can the firm sue its customers on their contracts. The firm remains liable to be sued by persons outside it, and cannot plead a set-off. Only suits for dissolution of the firm, and the powers of official assignees under the Insolvency Acts, are exempt from the prohibition. A small and harmonious firm dealing in a small way and mainly for ready money might be content to take these risks, mitigated as they are by the proviso of sub-s (4)(b) as to claims not exceeding Rs 100 in value. For a business of any considerable magnitude they appear sufficiently deterrent. Mandatory character.
Now, the mischief primarily intended to be prevented by the mandatory provisions of Section 69 was the hardship and difficulty to which third parties dealing with a firm were subjected in the matter of proving as to who were the partners. As to the provisions affecting the partners themselves it seems clear that the main object and intention of the Legislature was to prevent a partner from enforcing his claims against fellow partners if the firm was not registered and to compel in such a case dissolution of the firm by laying down that the court will entertain suits only when dissolution and accounts and winding up of the affairs of the firm is sought or where accounts or winding up of the affairs of an already dissolved firm is sought.
Partnership Act, 1932 : Section 59(2). Suit by unregistered firm-Maintainability of–Unregistered firm filed a suit for permanent injunction restraining the defendants. from infringing its trademark-The suit was based on common law and contractu – Dismissing the appeal, this Court HELD : 1.1. A suit is not barred by Section 69(2) of the Partnership Act, 1932 if a statutory right or a common law right is being enforced. [1256-C] Raptokas Brett Co. Ltd. v. Ganesh Property, [1988] 7 SCC 1
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