Collection of investment from un registered partnership co
koteswara rao jonnalagadda
(Querist) 20 February 2012
This query is : Resolved
i am apartner in unregistered partnership co with 33% share,the other two partners areholding each 33`5% since 2006.the other two partners are son-in-law and father-in-law.son-in-law is looking after day to day operations and with cheque powers.
till date he has not submitted accounts to any govtdept,he is not responding to me.when i got the bank a/c under r.t.i,i observed he syponed out the total money.
kindly advise me for further course of action.
with regards,
j.k.rao,
91-8106998849.
A V Vishal
(Expert) 20 February 2012
Sub-section (1) of section 69 of the Act bars suits by partners against an unregistered firm or against any person alleged to be or to have been a partner of such a firm [29] . The bar applies to enforcement of (a) right arising out of a contract [30] , or (b) right conferred by the partnership Act. On the other hand, sub-section (2) of section 69 of the Act bars suits for enforcement of a right arising out of a contract by or on behalf of the unregistered firm against ‘third parties’. The operation of section 69 would extend to the suit in which a partner sues his co-partner or sues the firm to enforce any right arising from the contract between the partners [31] .
However, so far as a partnership firm is concerned, its rights would depend upon its legal status. In a recent case, the Karnataka High Court considered this issue in the case of a complaint filed by an unregistered firm Beacon Industries v Anupam Ghosh [49] . After receipt of the complaint filed by Beacon (revision petitioner in the aforesaid case), the Trial Court at Bangalore dismissed the complaint by holding that there was a bar under section 69 of the Act and that an unregistered firm could not prosecute any person or a firm.
The High Court observed that even a plain reading of section 69(2) of the Act, left no scope for doubt that what was barred by the said section was the institution of a suit. The court further observed that enforcing a right arising from a contract or conferred by the Act and suing, as a partner in a firm against the firm or any partner in the firm would not be possible unless the firm was registered firm.
