Indian partnership act 1932
c n vittal rao
(Querist) 21 August 2010
This query is : Resolved
I had posted a query regarding sections 52 and 69 in regard to unregistered partnerships. I received one response from our panel of experts giving the opinion that section 69 is a bar to suits under section 52 for unregistered partnerships. I reframed the question and sought the comments of experts; there were zero responses and my query is in the unresolved query list at page 10. I am resubmitting my query in a more convenient format so that interested experts may respond.
QUERY: IS SECTION 69 A BAR FOR INSTITUTING SUITS UNDER SECTION 52 FOR UNREGISTERED PARTNERSHIPS
If I am to answer in the affirmative, my argument would be as follows:
Section 69 was put in the Act to avoid unregistered partners from agitating their rights under the partnership deed as it would put an impossible burden on the courts to determine if the litigant is/was a partner and had locus standi to litigate. Also, section 69 follows section 52 thereby inviting a surmise that section 69 is a bar because obviously section 52 would have been in the minds of the law makers and should they have wished to exempt it from the mischief of section 69 they would have explicitly done so. In the absence of such clear mandate section 69 would constitute an insuperable bar for suits of unregistered partnerships.
If I were to argue the negative, my arguments would be as follows:
1. Section 52 is a section for partners defrauded or induced into partnership by misrepresentation to rescind such partnerships. Section 69 scope is for litigants who wish to agitate their rights under the partnership deed and Act. Therefore, section 69 should be read without reference to section 52.
2. If section 69 is a bar to suits then defrauded partners would be driven to take recourse to the criminal justice system therefore putting them to the difficulty of going to a more difficult forum as well as burdening the States criminal justice system.
3. The Indian Partnership Act is a spawn of the Indian Contract Act and the principles of equitable contracts namely, to prevent unjust enrichment, enforce minor contracts, etc can be freely imported to interpret liberally the provisions of section 52.
4. The cardinal and valuable principle of liberal interpretation is to so interpret as to "advance the remedy and supress the mischief". If this principle is applied section 52 should be considered independent of section 69.
5. If section 69 is a bar, fraudsters will get a liberal hand to dodge the consequences of their wrong doing.
6. If section 69 is interpreted as a bar then it would be tantamount to the courts becoming accomplices to fraudsters.
7. The Partnership Act is based on the foundation of mutual trust and faith among partners as well as fidelity. This interpretation would militate against this spirit of the Act.
COMMENTS FROM EXPERTS ARE SOLICITED.
PLEASE FIND TIME TO COMMENT AS IT WILL BE A MUTUAL LEARNING EXPERIENCE.
Whichever limb of the argument you favour, please adduce your reasons as well as make notes of whatever dissent you wish to record.
IN ANTICIPATION,
Chanchal Nag Chowdhury
(Expert) 21 August 2010
U have not understood the scope of the two sections. S.69 applies in case of Regd.partnerships whereas if the partnership is unregistered, the case cannot be filed in the name of the firm but partners can, in their individual capacity, file a suit.
However if a person intends to proceed against such a partnership, he can always file a suit against the firm in the firm-name. There is no bar to that.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 21 August 2010
If you want to really learn why such lenghy querry.
Any way Mr chowdhary has pin pointed all the provisions.
c n vittal rao
(Querist) 26 August 2010
Sir thank you for taking time out to respond but i humbly submit MR chanchal nag chowdhury revist the section in my humble opinion that construction of sec 69 does not appear to my mind as correct
