Jayesh Pandya vs Sukanya Holdings Pvt. Ltd. And ...
2005 Latest Caselaw 608 Bom

JUDGMENT

Deshpande D.G., J.

1. I had earlier framed two Issues as Preliminary Issues. They are :

(1) Whether the suit is maintainable in view of Section 69 of the Indian Partnership Act; In the said order Section 67 was quoted. By consent it was corrected.

(2) Whether the suit is maintainable in as much as the plaintiff has filed the present suit No. 2812 of 2001 without withdrawing his earlier Suit No. 1991/2000 for the same cause of action.

2. I heard Advocate Mr. Sen, appearing for the plaintiff; Advocate Mr. Dhakephalkar, appearing for defendant No. 13; Advocate Mr. Sanjay Jain, appearing for defendant No. 22; and defendant No. 7 in person. Following is the background for raising the preliminary objections.

Plaintiff Jayesh Pandya was the real estate broker. He was doing a business in the name of Pandya & Shah Associates. A partnership firm, in the name and style of M/s. Hetali Construction Company came to be formed in, 1992. One Ms. Jaikirti Mehta was a partner with 10% share; the plaintiff and his brother defendant No. 2 were to have 50% share and, defendant No. 4, through his nominated Company defendant No. 1 was to have 40% share. Then on 11.3.1993 Jaikirti Mehta retired from the firm. Her 10% share was distributed and then the firm continued between the plaintiff and his brother and Gupta-defendant No. 4 through defendant No. 1. Mr. Gupta acquired some TDR rights through his front company and dispute arose between the plaintiff and him. This is in May 2000 the plaintiff has filed the Suit vide Suit No. 1991 of 2000 [herein after referred to as the 1st suit] for dissolution of the firm and accounts of the said firm and, declaration that the deed of conveyance be declared as null and void.

3. Thereafter i.e. before the 1st suit was withdrawn, the plaintiff filed the second suit vide Suit No. 2812 of 2001 and prayed that the suit firm viz. M/ s. Hetali Construction Company stands dissolved with effect from the date of filing of the present suit or in the alternative, the Court should dissolve the firm and for other consequential reliefs and accounts etc. It was also prayed in the 2nd suit that the original documents, as per particulars given in Exhibit T, be cancelled and for a declaration that deed of conveyance dated 29.6.99 (Exhibit H) be declared as null and void and not binding upon the plaintiff and defendant No. 2, then other relief of possession was sought. It is in this background that the defendants took out the aforesaid two motions and on the basis of which the aforesaid two issues were framed as preliminary issues.

4. It is the claim and contention of the defendants that when the 1st suit was filed, the firm was not registered. The plaintiff on 6.11.1995 applied for registration of the firm. On 12-12-1995 objections were raised by the Registrar and the plaintiff was asked to remove certain objections. The firm came to be registered on 31.5.2000. The 2nd suit came to be filed on 14.8.2001 and earlier suit was withdrawn on 31-8-2001. Their application for registration was pending since 1992. Then they renewed that application in November 1995 and the firm on the basis of representation made by the plaintiff and defendant No. 2 his brother to the Registrar came to be registered on 31.5.2000.

5. Mr. Dhakephalkar for defendant No. 13 and supported by other contesting defendants contended that admittedly when the 1st suit was filed the firm was not registered. In the 1st suit the plaintiff has claimed that M/s. Hetali Construction Company stands dissolved with the date of filing of the suit. Therefore, according to Mr. Dhakephalkar when the 1st suit came to be lodged firm stood dissolved without registration and, therefore, there was no question of registration of dissolved firm. He alternatively contended that copy of the plaint in the 1st suit was served upon all the defendants; they appeared in the suit; raised objections to the interim orders; preferred appeal also and, therefore, in this background, if the firm was not registered on the date of filing of the 1st suit, then it stood registered on the service of the plaint and, therefore, in any case the firm which stood dissolved in 2000 could not be registered on 31.5.2000 and the registration is non est. It is no registration in the eyes of law. Mr. Dhakephalkar relied upon the judgment of the Rangoon High Court in this regard reported in A.I.R. 1940 Rangoon 294, Bilasroy v. Scindia Steam Navigation Co. In that case the Rangoon High Court, in para two of its judgment, held that registration of a firm, which has been dissolved, is not contemplated by the Act.

6. Mr. Dhakephalkar also drew my attention to Section 43 of the Partnership Act which lays down as under :-

"43. Dissolution by notice of partnership at will.-(l) Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.

(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice."

Mr. Dhakephalkar, therefore, contended that when the 1st suit was filed by the plaintiff, the firm came to be dissolved on presentation of the plaint or at any rate when the defendants were served with the plaint and, therefore, when the firm stood dissolved soon after May 2000, then it could not be registered on 31.5.2000. Therefore, the registration is non est, void and the plaintiff cannot take advantage of registration for preventing his suit for being dismissed for office objections.

7. Mr. Dhakephalkar also with reference to the 2nd preliminary issue contended that the 1st suit of the plaintiff was filed on 9.5.2000; the 2nd suit came to be filed on 14.8.2001; the reliefs in both the suits are identical; same may be with some addition in the 2nd suit; before filing the 2nd suit, the plaintiff had not withdrawn the earlier suit or before filing the 2nd suit the plaintiff had not obtained leave of the Court under Order XXIII, Rule 1; that leave was subsequently obtained and, therefore, the 2nd suit was barred and the plaintiff was precluded from instituting the 2nd suit. Order XXIII, Rule 1 of the Code of Civil Procedure is as under :-

"1. Withdrawal of suit or abandonment of part of claim. - (1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim:

Provided that where the plaintiff is a minor or other person to whom the provisions contained in rules 1 to 14 of Order XXXII extend, neither the suit nor any part of the claim shall be abandoned without the leave of the Court,

(2) An application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the next friend and, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other person.

(3) Where the Court is satisfied,--

(a) that a suit must fail by reason of some formal defect, or

(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.

(4) Where the plaintiff -

(a) abandons any suit or part of claim under sub-rule (1), or

(b) withdraws from a suit or part of a claim without the permission referred to in Sub-rule (3), he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim.

(5) Nothing in this rule shall be deemed to authorise the Court to permit one of several plaintiffs to abandon a suit or part of a claim under sub-rule (1), or to withdraw, under Sub-rule (3), any suit or part of a claim, without the consent of the other plaintiffs.

8. According to Mr. Dhakephalkar under Sub-rule (3) of Rule 1 if the Court is satisfied, obviously, after the plaintiff applies to the Court for that purpose, that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, then Court may grant the plaintiff permission to withdraw from such suit or such part, of the claim with liberty to institute a fresh suit in respect of the same cause of action or same claim. Therefore, according to Mr. Dhakephalkar, if at all the plaintiff wants to institute a 2nd suit on the basis of same cause of action and claim, then he is bound to obtain leave of the Court before instituting the 2nd suit.

Mr. Dhakephalkar then relied upon Sub-rule (4) of Rule 1 and contended that if the plaintiff withdraws from a suit or part of a claim without the permission of the Court, then he shall be precluded from instituting any fresh suit in respect of the subject-matter of part of the claim.

9. Mr. Dhakephalkar therefore contended that firstly the plaintiff could not have instituted the 2nd suit without withdrawing the 1st suit and obtaining leave of the Court and, secondly, if he had filed the 2nd suit without obtaining the leave of the Court, then it amounts to abandoning the entire claim in the 1st suit and, in that case the plaintiff is precluded from instituting the 2nd suit. Therefore, on that count also the 2nd suit is not maintainable. Therefore, Mr. Dhakephalkar contended that both the Issues framed by his Court are required to be held in favour of the defendants raising those objections and, the suit: is liable to be dismissed as not maintainable on both the counts.

10. Mr. Dhakephalkar also contended that one of the partners of the firm Ms. Jaikirti Mehta has referred the matter to the arbitration and the arbitrator has ordered and held that the firm stands dissolved and, therefore, according to Mr. Dhakephalkar, this was the 2nd reason in support of his contention that the dissolved firm could not be registered.

11. Advocate for defendant No. 22 supported Mr. Dhakephalkar, so the Advocate for defendant Nos. 3 and 7 supported. He drew my attention to Section 7 of the Partnership Act which lays down as under :

"7. Partnership at will. - Where no provision is made by contract between the partners for the duration of their partnership, or for the determination of their partnership, the partnership is "partnership at will".

Then, on the basis of Section 43, he contended that when the 1st suit was instituted by the plaintiff for dissolution of the firm, then that suit constitutes a notice to all the partners of dissolution and the firm stands dissolved from the date of institution or from the date of service of the plaint upon the defendants/ partners.

The counsel for defendant No. 22 contended that when the 2nd suit wan filed, there was no mention in the plaint of any liberty granted to the plaintiff to file 2nd suit. He also contended that in such a situation Section 12 of the Code of Civil Procedure was attracted and, there was a bar in instituting the 2nd suit. Section 12 of the C.P.C. is as under :-

"12. Bar to further suit. - Where a plaintiff is precluded by rules from instituting a further suit in respect of any particular cause of action, he shall not be entitled to institute a suit in respect of such cause of action in any Court to which this Code applies."

12. Advocate for defendant No. 22, therefore, contended that if the plaintiff could not have instituted the 2nd suit without obtaining leave of the Court and if he had not applied for withdrawal of the 1st suit with leave to file 2nd suit, then by virtue of Order XXIII and Section 12 of the Code of Civil Procedure, he was precluded from instituting the further suit. Therefore, according to him, the 2nd suit was not maintainable and the Issue No. 2 was required to be answered in favour of those defendants.

13. Defendant No. 7, who was present in person, was supported by Mr. Dhakephalkar and advocate for defendant No. 22. He tried to rely upon certain documents and correspondence between the parties wherein the plaintiff has written to the Income Tax officer and Department that the firm is closed. But that fact is controverted and I told defendant No. 7 that I would not be dealing with the controversial questions of fact at this juncture. He, however, contended that the MOU, arrived at between the partners in 1990, was used by the plaintiff for re-registration. There was no new partnership deed between the parties and, the plaintiff and defendant No. 1, who applied for registration in 2000, had practiced fraud upon Registrar. This contention of fraud was raised by Mr. Dhakephalkar and advocate for defendant No. 22 also. According to them, the plaintiff and defendant No. 1 committed fraud in getting registration. Firstly when the firm was registered, it could not be re-registered. Secondly, the firm was dissolved on the date of filing of the 1st suit on 9.5.2000 or upon service of the plaint on the defendants and they appeared in the Court and challenged the order passed in favour of the plaintiff. Thirdly there was dissolution supported by the order in the matter referred to the Arbitrator by Jaikirti Mehta. Further the plaintiff did not consult with other partners as to whether they are willing to continue as partners. Then their signatures were not obtained for re-registration and the MOU of 1990 and the application for registration filed in 1992 were proceeded by the plaintiff by suppression of material facts from the Registrar and from the other partners and, therefore, this registration certificate was obtained by fraud.

14. Defendant No. 7 relied upon the Amended Section 50 of the Partnership Act so far as it relates to Maharashtra. In this amendment the words "at any time" in original Section 58 have been deleted. Then after the words "prescribed fee", in Sub-section (1) of Section 58 of the original Act, the Maharashtra Amendment requires "a true copy of the deed of partnership" to be accompanied to the application and, Sub-section (1-A) of the Maharashtra Amendment lays down that "The statement under Sub-section (1) shall be sent or delivered to the Registrar within a period of one year from the date of constitution of the firm. This Maharashtra Amendment came into force by the Indian Partnership (Maharashtra Amendment) Act, 1984 (Maharashtra Act XXIX of 1984) with effect from 1.1.1985. Therefore, he contended that the registration could not have been granted in 2000 by the registrar on the basis of the MOU of 1990 and on the basis of application dated 30.4.1992. If the Amended Act of Maharashtra has come into force in 1985, then it was necessary that the application for registration was accompanied by the partnership deed and it was filed within one year from the date of constitution of the firm. Obviously that was not done in the present case by the plaintiff and, therefore, the registration granted is no registration, at all.

15. As against these submissions, counsel for the plaintiff contended that Section 69 of the Partnership Act is a technical requirement. If the firm is registered before institution of 2nd suit and the certificate of registration is issued, then the bar in institution of suit stands removed. None of the defendants can challenge, whether the certificate of registration was properly granted or improperly granted or it was defective or null and void and, according to him, this court was not a forum to decide about the validity of registration or defects in registration or the fraud practiced by the plaintiff in obtaining the registration. According to him, only question with which the Court was concerned is, whether the firm was registered or not on the date of institution of the 2nd suit. Secondly, he contended that regarding so called allegations of dissolution, the Arbitrator in his Award has not dissolved the firm, but the firm to continue and carry on its business with the remaining partners. Therefore, that award does not constitute dissolution of firm.

16. So far as Section 58 of the Indian Partnership (Maharashtra Amendments) Act is concerned, he contended that if at all there were any defects in the application for registration or in the process of re-registration, that was the matter to be taken care of by the registrar and, this Court was not competent nor concerned with those defects and, once the certificate is issued by the Registrar of Firm, then that nullifies the effect of Section 69. He agreed that provisions of Section 69(2)(a) of the Indian Partnership (Maharashtra Amendments) Act were wider than the original Section 69. But once the firm is registered, that chapter stood closed and, there could be no objection of any of the defendants for continuation of the suit. According to him, improper registration is no ground to challenge the suit. He relied upon the judgment of Calcutta High Court Sohanlal Pachisia & Co. v. Bilasray Khemani and Ors., in this regard. Secondly he contended that all the reliefs in the 2nd suit were not covered by Section 69. The suit was also for recovering the property from third party i.e. from Defendant Nos. 3 to 36. Therefore, those reliefs did not fall under Section 69. Further he contended that defendant No. 7 sought reference of dispute to Arbitration on the basis of partnership deed and, therefore, he is estopped from challenging that the partnership was not registered or suit was liable to be dismissed on that count. About dissolution of firm by institution of 1st suit, he contended that, it is a notional dissolution and actual dissolution does not take place only because the suit is filed. About award of the Arbitrator in the proceedings initiated by Jaikirti Mehta, he contended that the tenor of the Award was fair enough to satisfy that the firm was not dissolved but the partnership business and, the firm was allowed to continue even after the award. He relied upon, Loonkaran Sethia v. Ivan E. John , the judgment of this Court reported in Sharyau Armando Pereira v. Vishnu Yeshwant Sawant, A.I.R. 1981 Goa, Daman & Diu 57 and (A.I.R. 1963 S.C. 1665). So far as service of writ of summons is concerned, as per his instructions, the writ of summons was not served upon the defendants in 1st suit, but this statement was subject to correction. Thereafter Mr. Sen for the plaintiff contended that if the registration is obtained without curing the lacuna and defects then there was no fraud in obtaining the registration of firm on the basis of MOU of 1990 or on the basis of 1st application of 1.992. Regarding objection under Order XXIII of the C.P.C., he contended that if the 2nd suit was already filed before withdrawal of 1st suit, then leave was not necessary. He relied upon the judgment of Punjab and Haryana High Court Girdhari Lal Bansal v. Chairman, Bhakra Beas Management Board, Chandigarh and Ors., followed by Kerala High Court in the case of P.A. Muhammed v. Canara Bank and Anr. and also relied upon the judgment of Madras High Court Buhari Trading Co. v. Star Metal Co.

17. The Counsel for defendant No. 2, supporting the claim of plaintiff, contended that the defendants cannot challenge the registration in this suit. There was no bar in filing the 2nd suit and, Section 10 of the CPC could be operative only when the trial commenced. There was no stage for the trial to commence in the 1st suit.

18. Mr. Dhakephalkar, appearing for defendant No. 13, in reply to all the submissions made by Mr. Sen, Advocate for the plaintiff, contended that the judgment of Calcutta High Court and other judgments relied upon by Mr. Sen were not applicable to the facts of the present case. In all these cases, relied upon by Mr. Sen, the suits were filed by firm. Whereas in the present case, the earlier suit was not filed by the firm nor the second suit was filed by the firm but the 1st suit and the 2nd suit both were filed by the partner claiming dissolution of the firm and all other consequential reliefs. And therefore, those judgment, firstly were not applicable and, secondly the facts of the two suits were totally different.

19. Further reply to the submissions of Mr. Sen and repeating his argument, Mr. Dhakephalkar contended that, they are challenging the registration not because of the defects in it but because it is a registration in non est, void and obtained by fraud. He contended that if there was some formal defects in registration it could be cured but when the firm was dissolved it could not be registered and that defect is not the formal but going to the root of the matter and, according to him, the Registrar has no power to register a dissolve firm.

20. Mr. Dhakephalkar further contended that the defendants were served with the plaint in the earlier suit and that constitute a notice of dissolution and, therefore, long before registration of the firm, the partnership stood dissolved. Regarding interpretation of word "service of summons" Mr. Dhakephalkar contended that serving the plaint along with other papers, in the 1st suit, as a consequent of which, the defendants appeared, opposed the interim order and filed the appeal, was sufficient to constitute the notice. Defendant No. 7 contended that he was served with writ of summons and he contradicted Mr. Sen in that regard. Mr. Dhakephalkar also contended that all process in the 2nd suit and all process in the first suit were almost identical and if the suit was for recovering property of the firm, then merely because some new defendants joined in the 2nd suit did not alter the cause of action, because cause of action for recovering property was the same for both the suit. Mr. Dhakephalkar also contended, with reference to Order 23, Rule 1 of the CPC, that effect of abandonment was to non-sue the plaintiff in the 2nd suit.

21. Counsel for defendant No. 22, while giving his reply, contended that the judgment of Supreme Court in A.I.R. 1963 S.C. 1665 was interpreted by the Madras High Court and the Andhra Pradesh High Court and, there was no estoppel of going before the arbitrator. At this juncture, it is necessary to refer different authorities relied upon by the respective parties. Mr. Sen for the plaintiff relied upon the judgment of this Court Vitas Shriram Mahalle and Anr. v. Rajdhani Prasad Rahinprasad Tiwari, decided by Justice Vazifdar. The matter came before the High Court when the application of the plaintiff for permission to withdraw the suit with leave to file a fresh suit on the same cause of action was rejected. When the suit was filed, the firm was not registered under Section 59 of the Indian Partnership Act, 1932, it was registered on 28th April 2000 i.e. after the suit was filed. Therefore, the plaintiff wanted to withdraw the suit with liberty to file a fresh suit. In that background of the matter, this Court set aside that order and allowed the plaintiffs prayer. This case is not applicable to the facts in the present case and is of no help to the plaintiff. The facts are totally different.

22. Mr. Sen for the plaintiff relied upon the judgment reported in A.I.R. 1981 Goa, Daman & Diu 57, Sharyau Armando Pereira v. Vishnu Yeshwant Sawant and Anr. wherein it is held that the partnership at will stands dissolved from the date of service of summons on other partners. Perhaps Mr. Sen wanted to contend that there is no service of summons of the earlier suit upon the other partners. This fact is contradicted by defendant No. 7 and as rightly argued by Mr. and Advocate for defendant No. 22. The defendants were served in the 1st suit, they had appeared, they opposed the ad interim order, applied for vacating the same, and when the prayer was rejected, they filed the appeal also. All these clearly show that they were served with the plaint and all other documents. The service of summons is held by Court as notice. But if the plaint is served, the question of service of summons does not arise. The prayer and intention of the plaintiff of dissolution of firm stands communicated when the plaint is served upon the defendants.

23. Mr. Sen for the plaintiff also relied upon the judgment of the Supreme Court reported in 2000(2) S.C.C. 250, Haldiram Bhujiawala and Anr. v. Anand Kumar Deepak Kumar and Anr. The Supreme Court was concerned with Sections 69(2) and 2(d) of the Partnership Act. The matter in that case was arising out a passing-off action. That was a contract entered into by the unregistered firm with the third party in the course of mutual business dealings and, the Court held that "An unregistered firm's suit for permanent injunction to restrain the defendants from using the plaintiffs trademark/name, which was based on statutory rights under the Trade Marks Act and on common law principles of tort applicable to passing-off action was not barred by Section 69(2). The Supreme Court also held that "Suit by unregistered firm for enforcing a right arising out of a contract with the third party defendant, if barred by Section 69(2) then plaintiffs firm, after withdrawing the plaint with leave or even after dismissal of the suit for a formal defect, could file a fresh suit after registration albeit subject to the law of limitation. This case also does not help the plaintiff. Both the suits before me are not filed by the firm, as rightly argued by Mr. Dhakephalkar. They are filed by the partner/plaintiff for dissolution of firm against other partners claiming reliefs in respect of the property of the firm wherever that may and in respect of deed of conveyance which directly affect the right of the partners in the property.

24. , Sohanlal Pachisia & Co. v. Bilasray Khemani and Ors. was also relied upon by Mr. Sen for the plaintiff. In that case the objection was that the firm was not properly registered and therefore the suit was not maintainable. It was pointed out to the Court that the statement which was filed by the partners before the Registrar of Firms contained a declaration that out of the four partners who carried on business, two partners retired from the partnership and, two partners continued to carry on business, but in the Register of Firms all the four persons were shown as partners of the firm on 5th September, 1945, the date on which the partnership was registered. In this background of the matter, the Calcutta High Court rejected the objection and held that because of this defect, the registration could not be challenged to defeat the suit. This judgment is also of no help to the plaintiff. In the instant case, what is challenged is, the registration is non est, it is null and void, firstly because the firm was dissolved on the date of registration and the dissolved firm could not be registered. The issue involved in this case is totally different.

25. I am at all not in agreement with the submissions made by Mr. Sen for the plaintiff. However, his one submission is required to be accepted and, that is, the Arbitral Award passed in the matter of Jaikirti Mehta does not dissolve the firm. The Award is clear. It is in favour of the continuation of firm and the sentence in the Award Para 1 that the firm shall stand dissolved is only with reference to Jaikirti Mehta. Therefore, that award cannot help those defendants who are arguing for dismissal of the suit, as not maintainable.

26. However, the other contentions of Mr. Sen regarding registration are required to be rejected. Firstly, because on the date when the firm was registered, the partnership has already stood dissolved. This has occurred or has happened by filing 1st suit by the plaintiff for dissolution and by serving the plaint upon other defendants and as soon as the service was complete the firm stood dissolved. Admittedly, a dissolved firm can not be registered. But the plaintiff not only suppressed the facts of dissolution of firm but also did not comply with the mandatory provisions of Section 69 of the Partnership (Maharashtra Amendments) Act. He did not file partnership deed. He did not apply within one year. He did not obtain consent of other partners against whom the suit was filed. No fresh partnership deed was tendered to the sub-registrar. As rightly argued by Mr. Dhakephalkar, this registration of firm is non est, it is null and void and when the facts come to the knowledge, the Court cannot be expected to shut its eyes and accept the contention of Mr. Sen that registration is a technicality and as soon as certificate is produced, the Court should disregard all such attending circumstances and the conduct of parties and the representation made by them to the registering authority. This argument is devoid of substance and even if it is accepted for the sake of arguments that the Court should not go into those aspects, the facts remain that by service of plaint of the 1st suit upon the defendants, the firm has stood dissolved and the registration is, therefore, non est. It is of no help to the plaintiff. He cannot over come the provisions of Section 69 and the bar operates against the plaintiff.

27. The Issue No. 1 has to be answered in the negative i.e. the suit is not maintainable in view of Section 69 of the Partnership Act.

28. The cause of action in the 2nd suit the reliefs claimed in the 2nd suit are identical in both the suits. Relief of setting aside the documents and conveyance is also there in the suit and in any case the entire claim in the suit is in respect of the property of the firm which came to be transferred to other defendants by the act of other partners and, therefore, the second suit of the plaintiff cannot be said to be a different suit or of such a nature so as to not affect the provisions of Section 69 as applicable to Partnership Act (Maharashtra State Amendments).

29. Third contention of Mr. Sen that filing arbitration petition by defendant No. 1 amounts to an estoppel. I do not agree with this submission. There is no force in it. There is no admission of contesting defendants that the firm was registered. There is no admission of any of the contesting defendants that firm continued to exist after dissolution and, has rightly argued by Mr. Dhakephalkar on the basis of judgment of this Court Sunil Girdhalilal Shah v. Sanjay Navneetdas Shah and Ors., wherein it was held that application under Section 20 or 8 of the Arbitration and Conciliation Act of 1940 was a judicial proceeding, but request under Section 11 of the said Act was an administrative Act and not a judicial one. Mr. Sen did not state as to the section under which defendant No. 1 has filed Arbitration Petition No. 500/01. Even in the synopsis or submissions on behalf of the plaintiff, there is no reference to any section. Mr. Dhakephalkar, who relied upon the aforesaid judgment contended that firstly applying to the Arbitrator does not amount to estoppel. Secondly, there was no admission about continuation of firm or existence of firm, nor was there any admission about registration of firm. And lastly, as held by the Court in this judgment, it was an administrative Act and not a judicial Act. Therefore, the contention of Mr. Sen about estoppel is required to be rejected.

30. About the effect and objection of the contesting defendants under Order XXIII, Mr. Sen relied upon Girdhari Lal Bansal v. Chairman, Bhakra Beas Management Board, Chandigarh and Ors. Buhari Trading Co. v. Star Metal Co., A.I.R. 1930 Lah. 599, Secy. of State v. Ahmad Nur. In the case of Girdhari Lal Bansal v. Chairman, Bhakra Beas Management Board, Chandigarh, the Board allowed work of construction to Girdharilal. The contractor filed an application under Sections 5, 8, 11 and 12 of the Arbitration Act, 1940. The board contested the application. Evidence was led. The Court dismissed the application after recording findings on Issue No. 1 in favour of the Board i.e. whether the petition was barred under O 23, Rule 1(4) of C.P.C.? In that case, the Court found that earlier application was filed on 6th October, 1982 and the second application was filed on 26th October 1982 and the first application was withdrawn on 18.11.1982. The Punjab and Haryana High Court relied upon two judgements of Lahore High Court in (A.I.R. 1928 Lah. 710), and A.I.R. 1830 Lah. 599, and held that if second suit is filed before the first suit is withdrawn then Order 23, C.P.C. is not attracted and the second suit cannot be dismissed under Order 23, Rule 1(4) of the C.P.C.

31. Mr. Dhakephalkar for defendant No. 13 contended that the Issue before the Punjab and Haryana High Court was that whether the second petition filed by the contractor on the same allegations and for the same reliefs was barred under Order 23, Rule 1(4) of the C.P.C. or not in view of the fact that earlier petition was got dismissed as withdrawn. He drew my attention to the specific provision of Order 23, Rules 3 and 4 and contended that Rule 3 of Order 23 was not at all before the Punjab & Haryana High Court and, therefore, that judgment is not applicable. I have already reproduced Rule 3 of Order 23 and Sub-rule (b) of Rule 3 provides that if the Court is satisfied that there are sufficient grounds for allowing the plaintiff to institute a fresh suit, then the plaintiff may be permitted to withdraw the suit with liberty to file a fresh suit. Therefore, what is necessary and mandatory is that, when the plaintiff had filed 1st suit, he should have applied to the Court for withdrawal of that suit. He should have satisfied the Court that there are sufficient grounds or reasons to do. The Court could have permitted or granted to him leave or liberty to file 2nd suit after withdrawing 1st suit. Admittedly, in this case, when the 2nd suit was filed, the 1st suit was not withdrawn. By filing 2nd suit, as rightly argued by Mr. Dhakephalkar, the plaintiff has abandoned his 1st suit, and therefore, when the plaintiff has abandoned his 1st suit, then by virtue of Section 12 of the C.P.C., he was not entitled to institute a fresh suit in respect of the same cause of action or claim.

32. The other judgment relied upon by Mr. Sen was Buhari Trading Co. v. M/s. Star Metal Co. In that case a firm came to be registered on 30-11-1981. Prior to that a suit came to be filed on 24.11.1981. The plaintiffs Advocate made a statement that the suit is not pressed and the suit may be dismissed. The Court consequently dismissed the suit. However, it appears that, in the mean time the plaintiff had applied for registration on 28.11.1981 and the firm was registered on 30.11.1981 and, then the plaintiff filed fresh suit on the same day. On the face of it, the facts in this case are altogether different from the facts in the present case. In the present case the 1st suit was filed when the firm was not registered. The 2nd suit was filed without withdrawing the 1st suit or without seeking liberty of concerned Court to withdraw the suit and file fresh suit. The issues are, therefore, totally different. This judgment is of no help to the plaintiff.

33. Mr. Sen also relied upon the judgment of the Lahore Court reported in A.I.R. 1930 Lah. 599, Secy. of State v. Ahmad Nur. A suit for permanent injunction was filed by the plaintiff. Issues were framed. Then on 20th June 1920, the plaintiff stated to the Court that they did not desire to proceed with the suit. The Court dismissed the suit purporting to act under Order 9, Rule 3 of the C.P.C., but prior to that on 4th June 1920 the plaintiff had instituted another suit. In that background of the matter, the Lahore High Court held that Order 23, Rule 1 refers to permission to withdraw a suit with liberty to institute a fresh suit after the first one has been withdrawn. Admittedly, Rules 3 and 4 were not before the Lahore High Court for consideration or interpretation and, therefore, this judgment is of no help to the plaintiff.

34. Mr. Jain, appearing for Defendant No. 22 relied upon the judgment of the Division Bench of this Court ML. Chaturvedi v. Sanjay Finance Corporation. It was an appeal before the High Court by the defendant against the order of the Single Judge, granting permission to withdraw the suit with liberty to file a fresh suit. The plaintiff filed summary suit for recovery of Rs. 15,00,000/- and they took out a notice of motion for attachment before judgment. It was placed for hearing before the Single Judge on 7th February 1997 then the plaintiff applied for withdrawal of the notice of motion on the ground that the suit is not maintainable in view of Section 69(2) of the Partnership Act. The notice of motion was allowed to be withdrawn. At that time, the plaintiff prayed for withdrawal of the suit with liberty to file a fresh suit. The prayer was opposed by the Counsel for the defendant. He contended that if withdrawal is permitted, liberty to file a fresh suit should not be granted. The learned Single Judge rejected this contention and granted the prayer for withdrawal of the suit with liberty to file a fresh suit. Two questions were decided by the Division Bench one which is relevant is, whether the Single Judge is right in permitting the withdrawal of suit with liberty to file a fresh suit. It was the contention of the defendant that admittedly on the date of the suit, the plaintiff firm was not registered under Section 59 and, therefore, the suit could not have been instituted against the defendant in view of Section 69(2) of the Indian Partnership Act. This defect was not a formal defect and, therefore, permitting the plaintiff to withdraw the suit and granting liberty to file a fresh suit was totally illegal. According to the plaintiff's Advocate, non-registration of the plaintiff firm was a defect of a technical and formal nature and therefore there was no mistake or error committed by the Single Judge. After considering the provisions of Section 69(2) and the judgment of the Supreme Court in different cases, the Division Bench held that non registration of the firm is not a formal defect but a defect affecting the merits of the suit, in other words, the very root of the plaintiff's suit. And, therefore, the Single Judge was in error in permitting the plaintiff to withdraw the suit with liberty to file a fresh suit. Consequently the Single Judge's order was set aside by the Division Bench and prayer for simpliciter withdrawal of the suit was granted. This judgment of the Division Bench covers two aspects of the matter. Firstly, non-registration is not a formal defect nor a mere technical defect. Converse of this proposition is that registration is not technical formal as argued by Mr. Sen. Secondly, this judgment also shows that application for withdrawal of suit is one thing and liberty to file a fresh suit is another. When the plaintiff applies for liberty to file a fresh suit, the defendants have all the rights to oppose his prayer. It appears that the plaintiff was aware of this judgment of the Division Bench. He was also aware that if he applies for withdrawal of 1st suit with liberty to file a fresh suit, the defendants would oppose his move because granting leave to file fresh suit is not mere formality but it is a matter of substantive right of the parties and, therefore, the plaintiff chose not to make any such application to the Court in respect of the 1st suit and then after obtaining registration he quietly filed the 2nd suit.

35. Considering therefore all these legal submissions, I held that two preliminary issues are answered as under :

Issue No. 1: The suit is not maintainable in view of Section 69 of the Indian Partnership Act.

Issue No. 2: The suit is not maintainable in as much as the plaintiff has filed the present suit without withdrawing the Suit No. 1991 of 2000 for the same cause of action.

As a result, the suit of the plaintiff fails and it is dismissed with costs. All the interim orders stand vacated two motions, referred to above, also disposed of.

After this order was pronounced, the Counsel for the plaintiff Ms. Jacinta D'Silva prays for staying operation of this order for eight weeks. Defendant No. 7, who is present in person, Counsel for defendant No. 13, and Counsel for defendant Nos. 18, 19 and 20 pray that the amount deposited with the Court Receiver i.e. the rent paid by the Occupants should be ordered to be paid to the concerned and respective owners of the property. This prayer is opposed by the counsel for the plaintiff and defendant No. 2. Looking to the facts and circumstances, the operation of order passed today is stayed for eight weeks. However, the Receiver to pay the amount to the concerned defendants upon such defendants giving undertaking that in case they looses or the plaintiff succeeds, they will bring back the amount within two months or will be liable to pay interest thereupon thereafter.

Parties to act upon ordinary copy of this order duly authenticated by the Court Associate.