LAW FOR ALL

69. Effect of non- registration. --- (2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.= In the instant case, the firm was no doubt registered. However, the name of the person (PW.1), who instituted the proceedings on behalf the firm, is said to have been inducted later on as a partner, but his name was not entered in the register of firms. The appellant did make an effort to convince the trial Court that intimation of PW.1 joining the firm as a partner was given, to the Registrar of Firms in Ex.A.5. The fact, however, remains that by the time the suit was filed, the name of PW.1 was not entered in the register of firms. - In M/s. Shreeram Finance Corporation v. Yasin Khan[3], the Supreme Court held that a suit filed on behalf of a reconstituted firm cannot be maintained, unless the name of the newly added partner, and in whose name the suit is filed has been entered in the register of firms. The ratio of that judgment gets straight away attracted to the facts of the present case. The law requires that it is only when the firm is registered and the name of such person acting as a partner is entered in the register of firms, that he would be entitled to validly institute the proceedings. - the observation of the Supreme Court reads: “In the present case the suit filed by the appellants is clearly hit by the provisions of sub-section (2) of section 69 of the said Partnership Act, as on the date when the suit was filed, two of the partners shown as partners as per the relevant entries in the Register of Firms were not, in fact, partners, one new partner had come in and two minors had been admitted to the benefit of the partnership firm regarding which no notice was given to the Registrar of Firms. Thus, the persons suing, namely, the current partners as on the date of the suit were not shown as partners in the Register of Firms. The result is that the suit was not maintainable in view of the provisions of sub-section (2) of section 69 of the said Partnership Act and the view taken by the Trial Court and confirmed by the High Court in this connection is correct…”