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Bar of section 69 Partnership Act

(Querist) 23 December 2009 This query is : Resolved 
A highest bidder whose bid was provisionally accepted withdrew his bid before finalisation by the competent authroity of a government department. Now the bidder wants to file a suit for recovery of the amount of security/Earnest Money retained by the Govt. Department. The highest bidder is an unregistered partnership firm. Whether such firm can file suit for recovery without its registration under the Partnership Act or the suit will be hit by section 69 of the Act?
prakash vathore (Expert) 23 December 2009
yes u can file a suit for recovery of ur earnest money even though u r a unregistered partnership firm.
Manish Singh (Expert) 23 December 2009
yes, an unregistered firm can file suits byut the suit must be on its partner's names.
Parveen Kr. Aggarwal (Querist) 23 December 2009
Any case law on the point.

What is the reason for the bar of section 69 not coming in the way of such an unregistered firm?
R.R. KRISHNAA (Expert) 23 December 2009
I disagree with the above opinions.

Except for the reason of dissolution of firm or any dispute in accounts, an unregistered partnership firm has no right to file a suit and suit if any filed for recovery of money is not maintainable.
N.K.Assumi (Expert) 23 December 2009
Interesting issue!
Raj Kumar Makkad (Expert) 23 December 2009
An unregistered partnership firm has got no right, title or authority to sue or be sued in the competent court of law. Section 69 is definitely a bar.
K D Pande (Expert) 23 December 2009
As per sec.69(2)the partnership firm should be registered & name of the partner should be entered in the register of Pegistrar of Partnership Firm. otherwise unregistered partnership firm can not sue against any third person.
K D Pande (Expert) 23 December 2009
I, am partly agreed with answer given by Mr. Rajkumar Makkad, as suit against unregistered partnership firm definately can be filed.
Parveen Kr. Aggarwal (Querist) 24 December 2009
Friends,

All suits by an unregistered firm are not barred. Section 69(2) of the Partnership Act speaks of 'a suit to enforce a right arising out of contract'. So any suit which does not arise out of contract can certainly be filed by an unregistered firm.
That being so, suit for refund of earnest money of an unconcluded contract may be filed even by an unregistered firm without being hit by section 69. ?
K D Pande (Expert) 24 December 2009
I, agree with Mr. Parveen.
J K Agrawal (Expert) 24 December 2009
If your remedy is arising out of "Contract" only you are barred under s 69(2) but if you have right otherwise to contract ( like right to seek injunction, right to evict a tenant, constitutional rights, rights provided under any other law apart from Contract Act.) You can file a suit. You will find certainly a clause in concerning Government rules regarding refund of earnest money. if so you can file a suit. If the government has promised to pay back (even in contract or proposal form) you may go under s 115 Evidence Act.

You case is really critical but do not afraid, you will find a favorable way. These cases may be a bit helpful to you.

Rptakos Brett and Company Ltd v Ganesh Property AIR 1998 SC 3085
Haldiram Bhujiawala v Anand Kumar Deepak Kumar AIr 2000 SC 1287.
Parveen Kr. Aggarwal (Querist) 24 December 2009
Thanks Mr. Agrawal.
Manish Singh (Expert) 19 January 2010
Dear all experts,
i differ from your point of you since legally a suit by partnership firm through its partners name can validly be brought in the court of law. but we must keep in mind herein that the suit shall be instituted on the name of the partners. bar under the partnership act is only limited to the use of name f the partnership firm while instituting a suit. also partners can easily be sued collectively against an unregistered firm.


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