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Ashutosh Chakraborty & Another v/s Union of India (UOI) & Others

Company & Directors' Information:- A. S. INDIA LIMITED [Active] CIN = U70100MP2009PLC022300

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- UNION COMPANY LTD. [Active] CIN = U36900WB1927PLC005621

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- UNION COMPANY PRIVATE LIMITED [Dissolved] CIN = U99999KA1942PTC000292

    Writ Petition No. 9100 (W) of 2009

    Decided On, 19 November 2009

    At, High Court of Judicature at Calcutta


    For the Appellants: Kishore Datta, P.C. Maity, Advocates. For the Respondents: R3 & R5, Pratap Chatterjee, Amitesh Banerjee, S.K. Trivedi, R. Sarkar, Advocates.

Judgment Text

1. The two petitioners herein are sons of late B.P. Chakraborty. They have been carrying on business from a static unit (tea stall) installed on the platform of Andul Railway Station. In this petition, they have complained of arbitrary enhancement of license fees by the respondents 3 and 5.

2. Mr. Chatterjee, learned senior advocate representing the said respondents raised a preliminary objection in respect of maintainability of the writ petition. According to him, though the petitioners have described themselves as proprietors of the proprietorship firm "M/s. B.P. Chakraborty & Sons", in reality they are partners and carrying on business in partnership. The dispute in respect of enhancement of licence fees arises from a contract between the parties and unless the firm of which the petitioners are partners is registered in terms of provisions contained in The Indian Partnership Act, 1932 (hereafter the Act), a writ petition being a proceeding in a Court of law would be barred having regard to the provisions of Section 69 thereof. He relied on the decision in Jagdish Chander Gupta Vs. Kajaria Traders (India) Ltd., , to contend that the words "other proceeding" following "a claim of set off" in Section 69(3) of the Act must receive their full meaning untrammeled by the preceding words and that the words "a claim of set off" is neither intended nor can be construed to cut down the generality of the words "other proceeding".

3. He, accordingly, prayed for dismissal of the writ petition.

4. Countering the preliminary objection, Mr. Datta, learned advocate for the petitioners, submitted that the objection is without merit. It was contended by him that "other proceeding" in Section 69(3) of the Act does not comprehend an application under Article 226 of the Constitution of India. He further contended that for approaching a Court of Writ for enforcement of fundamental rights, no ordinary statute could create a bar. According to him, the petitioners are aggrieved by the impugned policy decision of the respondents to enhance licence fees and have challenged the same on the ground of arbitrariness and unreasonableness by jointly approaching the Court of Writ voicing a common grievance. Since the writ petition has not been filed in their individual capacity but as partners collectively sharing the profits and losses of business, it is maintainable notwithstanding the fact that the firm is not registered.

5. To support his argument, he placed reliance on the decision in Andhra Industrial Works Vs. Chief Controller of Imports and Others, wherein a writ petition filed by a partnership firm was held to be maintainable. The Court observed therein that since the firm stands for all the partners collectively, the petition may be deemed to have been filed by all the partners who were citizens of India.

6. An unreported decision of the Division Bench of this Court dated 19.8.2008 on MAT No. 593 of 2008 (Ujjal Transport Service v. State of West Bengal and Ors.) was also relied on, wherein it was held as follows:

We have heard the learned Counsel for the parties at length. We have also perused the materials on record.

This writ petition has been dismissed by the learned Trial Court only on the ground that in view of Section 69 of the Indian Partnership Act, 1932 the writ petition would not be maintainable as it has been filed by an unregistered partnership firm. We are of the considered opinion that the aforesaid proposition would not disable the Court to exercise its jurisdiction under Article 226 and 227 of the Constitution of India. In this case the Trial Court ought to have treated the Writ as having been filed in the individual capacity of the Managing Partner, i.e. Debasish Ganguly, who has filed the vakalatnama. This would have served the interest of justice. The Court has ample power under Articles 226 and 227 of the Constitution to do substantial justice. At this stage the learned Counsel appearing for the appellant has submitted that the appellant would be satisfied in case the writ petition is considered on its merits limited only to the individual members of the unregistered partnership. We find merit in the aforesaid submissions as the firm stands for all the partners collectively.

In view of the above, the appeal is allowed treating the same as on day's list. The order passed by the learned Trial Court is set aside. The matter is remanded back to the learned Trial Court for deciding the writ petition on merits after treating the same to have been filed by the individual members of the unregistered partnership. It is made clear that in passing the aforesaid order we have not gone into the merits of any of the points raised either by the writ petitioner or by the respondents. The learned Single Judge will decide the merits of the controversy on the basis of the case put forward by the parties before the learned Single Judge. The stay application is also disposed of.

7. He, accordingly, urged the Court to hold the writ petition to be maintainable.

8. In reply, Mr. Chatterjee submitted that the Division Bench while dealing with the appeal preferred by Ujjal Transport did not have the occasion to consider the point raised by him, i.e. registration of a partnership firm is a must if a proceeding is instituted to enforce a right arising from a contract and, therefore, having regard to the settled law that a decision is an authority for what it actually decides and not for what can logically be deduced therefrom, the said decision does not constitute a binding precedent.

9. The decision in Andhra Industrial Works (supra) was sought to be distinguished by contending that it was not clear therefrom as to whether the partnership firm that had approached the Court was unregistered or not.

10. This Court has heard learned Counsel for the parties. It would be profitable to read first Sections 4 and 69 of the Act, which provides:

4. Definition of 'partnership', 'partner', 'firm' and 'firm name'.-

'Partnership' is the relation between persons who have agreed to share the profit of a business carried on by all or any of them acting for all.

Persons who have entered into partnership with one another are called individually 'partners' and collectively 'a firm' and the name under which their business is carried on is called the 'firm name'.

69. Effect of non-registration.-(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

(2) No suits 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.

(3) The provisions of Sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect-

(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm; or

(b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909 (3 of 1909), or the Provincial Insolvency Act, 1920 (5 of 1920), to realise the property of an insolvent partner.

(4) This Section shall not apply-

(a) to firms or to partners in firms which have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which, by notification u/s 56, the CHAPTER does not apply, or

(b) to any suit or claim or set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in Section 19 of the Presidency Small Cause Courts Act, 1882 (15 of 1882), to outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim.

11. Mr. Datta, has not disputed the submission of Mr. Chatterjee that the petitioners are actually partners in respect of the business being carried on from the platform of Andul Railway Station. His only submission is that there is no written partnership deed. That is hardly relevant since an oral partnership is also recognized in law.

12. The first question that, therefore, arises for determination on facts of the present case is whether by agitating a grievance in relation to arbitrary enhancement of licence fees on the ground of violation of Article 14 of the Constitution, the petitioners are seeking to enforce a right arising from the contract between the parties or not. If the answer to this question is in the affirmative, the further question the Court would be required to answer is whether the writ petition must fail on the ground that the firm of the petitioners is not registered.

13. The decision in Jagdish Chandra Gupta (supra) is not an authority for the proposition that "other proceeding" in Section 69(3) of the Act would include a proceeding for issuance of prerogative writs. The same, therefore, does not lend any assistance to this Court.

14. At the same time, this Court agrees with Mr. Chatterjee that the decisions relied on by Mr. Datta are not applicable here. Andhra Industrial Works (supra) does not lay down that partners of an unregistered firm may institute writ proceedings for enforcement of the kind of rights mentioned in Section 69 of the Act. The decision in Ujjal Transport (supra), in the absence of any discussion on the nature of right infringed by the respondents for enforcement whereof the firm or its partners filed the writ petition, must be held to be a decision rendered in the fact situation obtaining therein and ought not to be considered an authority based whereon the point raised by Mr. Chatterjee could be answered.

15. Therefore, without the aid of the cited decisions, this Court shall proceed to decide the preliminary objection.

16. No doubt, Section 69 of the Act bars partner(s) of an unregistered firm to initiate proceedings for enforcing a right arising from a contract or a right conferred by the Act. Though the present dispute may seem to be relatable to the contract between the parties but factually it is not so, if one considers the grounds on which the writ petition is based. Here, the petitioners do not seek to impeach contractual obligations. The impugned action of demanding enhanced licence fees is based on certain policy decision taken by the respondents. The petitioners, being partners and collectively carrying on business, have challenged the policy decision and the consequent demands because the same have been affecting their business interests by urging that the same are utterly arbitrary and unreasonable and in the teeth of Article 14 of the Constitution, which forbids arbitrariness and unreasonableness in State action. Challenge to a policy decision on the ground of affectation of a right guaranteed under Part III of the Constitution and invocation of writ jurisdiction seeking remedy therefore, in the present fact situation, cannot be eschewed by referring to Section 69 of the Act. This proceeding is

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not one for enforcement of any right arising out of a contract, particularly in the absence of a valid subsisting contract. Whether or not the petitioners would ultimately succeed in such a situation is altogether a different aspect. Section 69 of the Act would not bar the partners of an unregistered firm to seek remedy by way of a writ petition for enforcement of their fundamental rights dehors the contract, which once upon a time subsisted between the parties, if such remedy is legally available to them. The genesis of the dispute in the present case is the so-called arbitrary and unreasonable policy decision, which the petitioners seek to be quashed by invoking the writ jurisdiction in their capacity as partners. Question of enforcement of a contractual right not being an issue here, this Court holds the preliminary objection to be not well-founded and overrules the same. 17. In view of the negative answer to the first question posed above, the second question need not be answered. 18. The writ petition shall be placed in the list under the heading 'For Orders' on Tuesday next (24th November, 2009). 19. Urgent photostat certified copy of this judgment, if applied for, be furnished to the applicant within 4 days from date of putting in requisites therefore.

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