g

MANISH BEHRA

Krishnan Neelakantan and Ors.

Vs.
Krishnan Kochukannan
SUBMITTED TO:
MISS. PADMA A. PARIJA
(Faculty of CONTARCT)

SUBMITTED BY:
MANISH BEHRA
Roll No. - 66
Semester - III
Section C

DATE OF SUBMISSION:
August 26, 2012

HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR (C.G.)

TABLE OF CONTENTS

1.
2.
3.
4.
5.
6.
7.

ACKNOWLEDGEMENTS
ABBREVIATION USED
ABJECTIVES
METHODOLOGY
INTRODUCTION
FACTS

ISSUE RAISED

8. ARGUMENTS
9. LEGAL PROVISIONS
10.
DECISION HELD BY HONBLE COURT
11.
CONCLUSION
12.
BIBLOGRAPHY

ACKNOWLEDGEMENTS
3

I would like to take this opportunity to express my deep sense of gratitude towards my course teacher,
Miss padma a. parija for his kind gesture in allotting me such a wonderful and elucidating research topic
and for giving me constant guidance and encouragement throughout the course of the project.
I would also like to thank the University for providing me the internet and library facilities which were
indispensable for getting relevant content on the subject and were instrumental in writing pertinent text.
Special thanks goes out to my seniors who have been relentless in their help and supporting providing
any material whenever required and my colleagues, who always stood by me, irrespective of the decisions
taken by me. Without their support this project would not have seen the light of the day.

_____________________________________________________________

MANISH BEHRA
THIRD SEMESTER
B.A. LL.B. (Hons.)
HIDAYATULLAH NATIONAL LAW UNIVERSITY
RAIPUR, CHATTISGARH

ABBREVIATION USED
i.

&

And
4

ii.

At the rate

iii.

Anr.

Anothers

iv.

CJ

Chief Justice

v.

Ed.

Edition

vi.

E.g.

Example

vii.

Honble

Honourable

viii.

Justice

ix.

Ker

Kerala

x.

No.

Number

xi.

Ors.

Others

xii.

P.

Page

xiii.

Pg.

Page

xiv.

PW

Prosecution Witness

xv.

HC

High Court

xvi.

Sec.

Section

xvii. V.

Versus

xviii. Vs.

Versus

xix.

Volume

Vol.

OBJECTIVE

The basic objective behind this project is to perform review of the case.

METHODOLOGY
The project is descriptive in manner. The notions of the project are completely related to
speculative study. The source of data for this project is secondary in nature i.e. including books,
articles, journals and online resources.

INTRODUCTION
Name of the case:
Krishnan Neelakantan and Ors. Vs. Krishnan Kochukannan1.
Decided On: 29.06.1966

Name of the Parties:

PETITIONER: Krishnan Neelakantan and Ors
Vs.
RESPONDENT: Krishnan Kochukannan.

Citations:
AIR1967Ker96, 1966(10)KLJ911

Bench:
T.C. Raghavan, J.

1 AIR1967Ker96, 1966(10)KLJ911
7

FACTS
1. The appellants started a chitty as a partnership; but the partnership was not registered.
2. The respondent was a subscriber to the chitty, who bid and received the prize money. He executed
a hypothecation bond, to secure the payment of future subscriptions.
3. On 10th October 1957 by a special resolution evidenced by the partnership was dissolved; and
thereafter, the suit giving rise to the second appeal. It was then contended by the respondent that
the suit was not maintainable, since the partnership was not registered.
4. The second appeal is ultimately allow ed, the decision of the lower appellate Court la set aside and
the decision of the trial Court is restored with the modification that the respondent will be entitled,
in execution, to benefit of Act XXXI of 1958, if he is otherwise en titled to them. The appellants
will gel their costs in this Court and in the lower appellate Court.

ISSUE RAISED
1. whether the failure to register under Section 69 of the Partnership Act was a bar to the suit.?

ARGUMENTS
Counsel for PetitionerLearned Counsel for the petitioner has vehemently argued that the Division Bench ruling of the Madras
High Court in Shanmugha Mudaliar v. Rathina Mudaliar, AIR 1948 Mad 187, Genlle, C. J., who spoke
for the Court, observed that the intention of the legislature in enacting Section 69 was only to inflict
disability for non-registration during the subsistence of the partnership. Sub-section (3) of Section 69 is in
the nature of a proviso to Sub-sections (1) and (2); and it enacts that the provisions of Sub-sections (1)
and (2) shall not affect, inter alia, "any right or power to realise the property of a dissolved firm". It is
clear from this that in the case of a dissol The registration of a partnership can be effected just before the
suit is filed; and such registration will enable the partnership to maintain the action regarding any claim or
transaction even prior to the registration. In other words, law does not impose any disability on
unregistered partnerships acquiring property or dealing with third parties; the only disability imposed is

that no suit by an unregistered partnership in certain cases is maintainable. It is evident that after the
dissolution of a partnership it can no more be registered. It follows that if the partnership is dissolved, for
bringing a suit to realise the properly of such dissolved firm non-registration of the firm will not be a
bar.ved firm the disability contemplated by the non-registration of the firm is not to apply.

Counsel for RespondentLearned Counsel for the respondent has pointed out that as a matter of fact, the Division Bench ruling of
the Travancore-Cochin High Court in Kuruvilla Thomas v. Kuruvilla Ittan, ILR 1955 Trav-Co 317. The
learned, Judges have interpreted in that decision Section 42 of the Partnership Act, Section 42 provides
that subject to contract between the partners, a firm is dissolved if the term of the partnership is over, if
the purpose of the partnership is over, on the death of a partner and by the adjudication of a partner
insolvent. These four clauses are subject to contract among the partners; and these clauses will not apply
when there is a dissolution by act of the partners. The Travancore-Cochin decision has held that by the
termination of a chilly the purpose of the partnership does not come to an end; and that the purpose can
come to an end only after the non-prized subscribers are paid their dues by collecting amounts from the
prized subscribers. It should be so, because the purpose of the partnership is not merely to close the chilly,
if further work of collecting and distributing amounts remains. But, this does not mean that by agreement
among the partners the partnership cannot be terminated. Partnership is the result of agreement among the
partners; and it can be terminated also by agreement of the partners. To such a case of dissolution by
agreement of the partners Section 42 will not apply; and the decision of the Travancore-Cochin High
Court can apply only to a case falling within Section 42. To the case before me, since the dissolution was
by special resolution and not by virtue of Section 42, the Travancore-Cochin decision will not apply.

LEGAL PROVISIONS
The court in the case consider the provision of Sec. 42 of the Indian Partnership Act 1932. The provision
runs as follow:-

Section 42
9

DISSOLUTION ON THE HAPPENING OF CERTAIN CONTINGENCIES

Subject to contract between the partners a firm is dissolved.
(a)
(b)
(c)
(d)

If constituted for a fixed term, by the expiry of that terms;

If constituted to carry out one or more adventures or undertakings, by the completion thereof;
By the death of a partner; and
By the adjudication of partner as an insolvent.

Section69
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 a behalf of any persons 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 : Provided that the requirement of registration of
firm under this sub-section shall not apply to the suits or proceedings instituted by the heirs or legal
representatives of the deceased partner of a firm for accounts of the firm or to realise the property of the
firm.
(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.
(2A) No suit to enforce any right 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 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 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 :
Provide that the requirement of registration of firm under this sub-section shall not apply to the suits or
proceedings instituted by the heirs or legal representatives of the deceased partner of a firm for accounts
of a dissolved firm or to realize the property of a dissolved firm.
(3) The provisions of sub-section(1),(2) and (2A) shall apply also to a claim of set-off or other proceeding
to enforce a right arising from a contract but shall not affect

10

(a) the firms constituted for a duration up to six months or with a capital up to two thousand rupees; or;
(b) The powers of an official assigned, receiver or court under the presidency Towns insolvency
Act,1909,or the provincial InsolvancyAct,1920 to realize the property of an insolvent partner.
(4) This section can not apply.
(a) to firm or partner in firm which have no place of business in the territories to which this Act extends,
or whose place of business in the said territories are situated in areas to which, by notification under
sectino56 this chapter does ont apply, or
(b) to any suit or claims of 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 Court Act, 1882, or outside
the presidency town, is not a kind specified in the second schedule to the provincial small cause courts
act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such
suit or claim.
Comment:- Thus the person suing, namely, the current partner as on the date of the suit where not shown
as partner in the register of firm. The result is that the suit was not maintainable in view of the provisions
of sub-sec.(2) of S.69 of the said partnership act M/S Shreeram finance Corporation , appealent V. Yasin
khan 2AIR 1989 Supreme Court 1769.

DECISION HELD BY HONBLE COURT

T.C. Raghavan J. , gave judgment over the case which follows:
Two questions come up for consideration in this Second appeal, the first being the more important one.
The question is whether the failure to register under Section 69 of the Partnership Act was a bar to the
suit. The trial Court held that it was not a bar, while the lower appellate Court held that it was. 3. The
counsel of the appellants alleged that the Division Bench ruling of the Madras High Court in Shanmugha
Mudaliar v. Rathina Mudaliar, AIR 1948 Mad 187, Genlle, C. J., who spoke for the Court, observed that
the intention of the legislature in enacting Section 69 was only to inflict disability for non-registration
during the subsistence of the partnership. Sub-section (3) of Section 69 is in the nature of a proviso to
Sub-sections (1) and (2); and it enacts that the provisions of Sub-sections (1) and (2) shall not affect, inter
alia, "any right or power to realise the property of a dissolved firm". It is clear from this that in the case of
a dissolved firm the disability contemplated by the non-registration of the firm is not to apply. The reason
2 AIR 1989 Supreme Court 1769.

11

for this is made clear by Gentle, C. J. The registration of a partnership can be effected just before the suit
is filed; and such registration will enable the partnership to maintain the action regarding any claim or
transaction even prior to the registration. In other words, law does not impose any disability on
unregistered partnerships acquiring property or dealing with third parties; the only disability imposed is
that no suit by an unregistered partnership in certain cases is maintainable. It is evident that after the
dissolution of a partnership it can no more be registered. It follows that if the partnership is dissolved, for
bringing a suit to realise the properly of such dissolved firm non-registration of the firm will not be a bar.
The counsel of the respondent alleged that the Division Bench ruling of the Travancore-Cochin High
Court in Kuruvilla Thomas v. Kuruvilla Ittan3, ILR 1955 Trav-Co 317. The learned, Judges have
interpreted in that decision Section 42 of the Partnership Act, Section 42 provides that subject to contract
between the partners, a firm is dissolved if the term of the partnership is over, if the purpose of the
partnership is over, on the death of a partner and by the adjudication of a partner insolvent. These four
clauses are subject to contract among the partners; and these clauses will not apply when there is a
dissolution by act of the partners. The Travancore-Cochin decision has held that by the termination of a
chilly the purpose of the partnership does not come to an end; and that the purpose can come to an end
only after the non-prized subscribers are paid their dues by collecting amounts from the prized
subscribers. It should be so, because the purpose of the partnership is not merely to close the chilly, if
further work of collecting and distributing amounts remains. But, this does not mean that by agreement
among the partners the partnership cannot be terminated. Partnership is the result of agreement among the
partners; and it can be terminated also by agreement of the partners. To such a case of dissolution by
agreement of the partners Section 42 will not apply; and the decision of the Travancore-Cochin High
Court can apply only to a case falling within Section 42. To the case before me, since the dissolution was
by special resolution and not by virtue of Section 42, the Travancore-Cochin decision will not apply.

CONCLUSION

3 ILR 1955 Trav-Co 317

12

The registration of a partnership can be effected just before the suit is filed; and such
registration will enable the partnership to maintain the action regarding any claim or
transaction even prior to the registration. In other words, law does not impose any
disability on unregistered partnerships acquiring property or dealing with third parties;
the only disability imposed is that no suit by an unregistered partnership in certain cases
is maintainable. It is evident that after the dissolution of a partnership it can no more be
registered. It follows that if the partnership is dissolved, for bringing a suit to realise the
properly of such dissolved firm non-registration of the firm will not be a bar.

BIBLIOGRAPHY
Table of Cases
1. M/S Shreeram finance Corporation , appealent V. Yasin khan AIR 1989 Supreme
Court 1769.
2. Kuruvilla Thomas v. Kuruvilla Ittan, ILR 1955 Trav-Co 317

Table of Books
1. R.K. Bangia, CONTRACT, Allahabad law agency, Allahabad, 2011
2. AVTAR SINGH the CONTRACT &SPECIFFIC RELIEF, EASTERN BOOK
COMPANY, LUCKNOW, 10th edition 2011
3. INDIAN CONTRACT ACT 1872 INDIAN PUBLICATION COMPANY BARE
ACT
4. THE SALE OF GOOD ACT 1930 UNIVERSAL LAW PUBLISHING CO.PVT
LTD BARE ACT
5. Anirudh Wadhwa MULLA INDIAN CONTARCT ACT lexisnexis
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Website
http://indiancaselaws.wordpress.com/2012/01/21/the-morvi-mercantile-bank-ltd-and-anrv-union-of-indi
http://indiankanoon.org/doc/292369/

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