Introduction

This case deals with Section 69 (2) of the Partnership Act, 1932, related to a suit filed by a firm unregistered on the day of filing of the suit.

Facts

• The case involves a disagreement among the descendants of the late Shri Ganga Bishan.
• Shri Ganga Bishan, widely recognized as Haldiram, initially began the business of selling snacks such as namkeen, papads, and bhujia, operating under the trade name and trademark "Haldiram Bhujiawala".
• Over time, his sons also became involved in the business, and it became a partnership firm.
• In November 1997 one of the sons of Ganga Bisha tried to trademark “Haldiram Bhujiwala” which was already registered.
• The dispute then arose when grandson of Ganga Bishan tried to open a shop in the name of M/s Haldiram Bhujia Wala at Arya Samaj Road, Delhi.
• The partnership firm of other sons of Ganga Bishan M/s Anand Kumar Deepak Kumar filed a suit asking the court for injunction against the appellants.
• The Trial Court gave the verdict in favour of M/s Anand Kumar Deepak Kumar.
• The Delhi High Court dismissed the appellants' appeal against the order of Trial Court.
• This appeal was preferred by the two defendants, M/s. Haldiram Bhujiawala and Sri Ashok Kumar against the judgment of the Delhi HC.
• The Appellants filed an application for rejection of the plaint filed by two plaintiffs, Anand Kumar Deepak Kumar trading as Haldiram Bhujiawala and Shiv Kishan Agarwal, on the ground that the 1st plaintiff was a partnership not registered with the Registrar of Firms on the date of suit i.e. on 10th December 1991 and that the subsequent registration of the firm on 29th May 1992 would not cure the initial defect.

Issues Involved

• Whether Section 69(2) of Partnership Act, 1932 bars a suit by a firm not registered on the date of suit where permanent injunction and damages are claimed in respect of a trademark as a statutory right or by invoking Common Law principles applicable to a passing-off action?
• Whether the words 'arising from a contract' in Section 69(2) of Partnership Act, 1932 refer only to a situation where an unregistered firm is enforcing a right arising from a contract entered into by the firm with the defendant during the course of Its business?

Observations

• The Court observed Section 69(2) of Partnership Act, 1932 cannot bar the enforcement by way of suit by an unregistered firm in respect of a statutory right or a common law right.
• They further observed that if the reliefs of permanent injunction or damages are being claimed on the basis of a registered trademark and its infringement, the suit is to be treated as one based on a statutory right under the Trademarks Act, 1999 and then it is not barred by Section 69(2) of Partnership Act, 1932.
• The Court further said that the purpose behind Section 69(2) of Partnership Act, 1932 was to impose a disability on the unregistered firm or its partners to enforce rights arising out of contracts entered into by the plaintiff firm with third party-defendant in the course of the firm's business transactions.

Conclusion

• The Court finally held that the suit was not barred by Section 69 (2) of Partnership Act, 1932 even if the right to be enforced does not arise from contract.

Notes

Section 69 (2) of The Partnership Act, 1999: 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.