P L D 1952 Lahore 314 (PLP)

MUHAMMAD SHARIF, J.‑"Could the statutory bar created by section 69 (2) of the Partnership Act against the institution of a suit by an unregistered firm, be taken to have been removed if it was registered at any time before the decision?" is the plain question calling for a clear answer in this case. The plaintiff firm brought a suit on 12th of April 1950 for the recovery of Rs. 50,671/11/3 against the Australasia Bank Ltd., on the basis of a contract. At the time the plaint was pre sented, the firm was unregistered and its registration took place on 6th of June 1950. An objection was taken by the defendants that the suit could not proceed in view of the clear provisions of section 69 (2) of the Partnership Act. The learned Senior Sub‑Judge, Rawalpindi, by his order of 14th of November 1950, overruled the objection, and relying upon Nazir Ahmad v. People's Bank Northern of India A I R 1942 Lah. 289, (F B) held that the subsequent registration cured the initial defect and ordered the suit to proceed. The defendants have come up in revision against this order. Subsection (2) of section 69 of the Partnership Act (IX of 1932) is as follows:‑ "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 Firm as partners in the firm." Similar prohibitory provisions are met with in the other statutes, for example, the Companies Act (VII of 1913), the Presidency‑Towns Insolvency Act (III of 1909), and the Provincial Insolvency Act (V of 1920). Section 171 of the Companies Act is as follows:‑ "When a winding up order has been made or a provisional liquidator has been appointed, no suit or other legal pro ceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose." Section 17 of the Presidency‑Towns Insolvency Act is as under:‑‑ "On the making of an order of adjudication, the property of the insolvent wherever situate shall vest in the official assignee and shall become divisible among his creditors, and thereafter except as directed by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insol vency proceedings, have any remedy against the property of the insolvent in respect of the debt or shall commence any suit or other legal proceeding except with the leave of the Court and on such terms as the Court may impose." Section 28 (2) of the Provincial Insolvency Act is in the following terms:‑ "On the making of an order of adjudication, the whole of the property of the insolvent shall vest in the Court or in a receiver as hereinafter provided, and shall become divisible among the creditors, and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property or the insolvent in respect of the debt, or commence any suit or other legal proceeding, except with the leave of the Court and on such terms as the Court may impose. The Courts in India are divided over the "effect upon the suit or other proceeding commenced without the requisite sanction of the Court required under the statute and even the same Court has not taken a consistent view of the matter. Some have held that if the leave was obtained before the expiry of the period of limitation, the suit or other legal pro ceeding could continue. A few have gone so far as to say that where an application for leave was made‑before the period of limitation had run out and the leave was actually granted after the expiry of the period of limitation, it would have no adverse effect upon the action initiated in Court. The majo rity have taken the view that the bar is mandatory and the suit or other proceeding must be dismissed where it did not, satisfy the pre‑existing condition imposed by the Act and no subsequent leave could validate the proceeding. In People's Industrial Bank Limited. v. Ram Chandra Shukla I L R 52 All: 430= A I R 1930 All. 503, a case under section 171 of the Companies Act, the learned judges constituting the Division Bench held that when leave has been granted pending the suit, the leave is not to be treated as a nullity and the suit cannot be dismissed on the ground that before it commenced, no leave had been obtained. Firm Ram Prasad‑Thakur v. Firm Kamta Prasad‑Sita Ram A I R 1935 All. 898, a case under section 69 of the Partnership Act, Kendall, J. held that section 69 was mandatory and before instituting a suit by a partner against a firm, the firm must be duly registered. Subsequently re gistering the firm and amending the plaint does not make a valid institution; merely making an application for registration before the suit is not sufficient. The question again arose in Firm Sarju Prasad‑Bhagwati Prasad v. Rafendra Prasad A I R 1937 All. 271 in connection with the interpretation of section 17 of the Presidency Towns Insolvency Act and came up for consideration before Sulaiman, C. J. and Niamatullah, J. The learned judges observed:‑ "The section as it stands prevents even the commence ment of a suit or proceeding when the leave of the insol vency Court has not been obtained. Prima Facie it implies that if a suit has been commenced in contravention of the provisions of the section, then it should riot be maintainable because the requirement of the section has not been complied with: Even if leave is obtained subsequently, it would not be sufficient to cure the initial defect, namely that the suit was commenced without such leave. Of course, if limita tion has not expired and leave is obtained subsequently, then the suit may be allowed to be continued inasmuch as it may be considered to have been commenced on the date on which leave was granted". Reference was made to the earlier case reported as People's Industrial Bank Limited v. Ram Chandra Shukla I L R 52 All. 430 and a distinction was drawn between cases where limitation had expired and those where it had not. The Bombay High Court has with one exception con sistently held the view that leave must be taken, as required by section 17, before the action could be commenced under the Presidency Towns Insolvency Act. In 1916 Davar, J. in a case reported as in re Dwarkadas Tejbhandas I L R 40 Born. 235 held:‑ "The words of the section are so clear and unambiguous that there is no possibility of construing them in any way other than that leave must be obtained before the com mencement of the action". In Maya Ockeda v, Kuverji A I R 1932 Bom. 338 Blackwell, J. approved In re Dwarkadas Tejbhandas I L R 40 Bom. 235 and agreed with Davar, J In another case reported as Bhimajee v. Chunilal A I R 1932 Bom. 344 under section 28 of the Provincial Insolvency Act Tyabji, J. expressed the view that where a suit is brought by a creditor without the leave of the Court, the Court need not necessarily dismiss the suit but may either stay it or allow to proceed with it on terms. This view was not followed in a later case reported as Jahangir Cursetjee v. Kasturji Pannaji I L R 1939 Bom. 493 and decided by Sir John Beaumont, C. J. He followed the earlier decisions delivered by Davar, J. In re Dwarkudas Tejbhandas I L R 40 Bom. 235 and Blackwell, J. in Maya Ookeda v. Kuverji A I R 1932 Bom.

135. A direct case under section 69 (2) of the Partnership Act was decided by Bhagwati and Dixit, JJ in a case reported as Prithvisingh v. Hasan Ali A I R 1951 Bom.

6. It was held:‑ "The plain terms of section 69 (2),.Partnership Act, bar the institution of a suit to enforce a right arising out of a contract unless the firms registered and the persons suing are or have been shown in the Register of Firms as partners in the firm and a subsequent registration of the partnership firm cannot and does not cure the initial defect in the institu tion of the suit":‑ The Lahore case reported as Nazir Ahmad v, Peoples Bank of `Northern India A I R 1942 Lah. 289 was criticised with the remarks:‑ "With the utmost respect to the learned Judge, we fail to understand how the notion of the right to enforce a claim being created by the decree could be brought in, in the construction of the plain words of the section. The words of the section do not say anything with regard to the right to enforce a claim being granted by the decree. They only refer to the institution of a suit to enforce a right arising from a contract. It would only be after a decision was reached by the Court in the suit which was thus instituted that the question would arise as regards a decree being passed granting the right to enforce that claim". This is the latest view of the Bombay High Court on the subject. Three cases of the Calcutta High Court were referred to Re: Steel Construction Ltd, (1936) 40 C W N 312 is a judg ment by Panckridge, J. under section 171 of the Companies Act. He held that the Court has no jurisdiction to give the plaintiff leave continue a suit instituted without leave subse quent to the winding up order. A different view was taken in a case arising under the Partnership Act and reported as Radha Charan v. Matilal (1937) 41 C W N 534 A suit was instituted by an unregistered firm on 25th of May 1934. The firm was registered on 20th of June 1934. No exception was taken in the written statement on the ground of non‑registration of the firm. The suit proceeded to trial and was decreed on contest by some and ex parte against the other defendants. An application was made to set aside the ex parte decree which was ultimately done. When the suit came on for hearing afresh, a plea was taken that the suit was not maintainable as the firm was not registered and that section 69 barred the insti tution of the suit. The lower Courts gave effect to this plea and dismissed the suit. In revision Mitter, J. held that the suit ought not to have been dismissed merely on the ground of non‑registration of the firm at the date of the institution of the suit but ought to have been deemed to have been instituted on the date when the firm was registered and tried, if it was not otherwise barred on that date. Re: Steel Construction Ltd. (1936) 40 C W N 312 does not appear to have been cited before him. In Harnarayan Kanhaiyalal A I R 1940 Cal. 166 a case under section 171 of the Companies Act came up before Pankridge, J. who had decided Re Steel Construction Ltd. (1936) 40 C W. N.

312. He followed his own judgment and stuck to the view that the Court had no jurisdiction to give the plaintiff leave to continue a suit which was instituted with out the leave of the Court subsequent to an order of compulsory liquidation. The Madras High Court may be taken to have adopted the view that the prohibitory words in the statute must be given their plain meaning and be allowed to have full effect regardless of the inconvenience or hardship that might be caused to a party. In Official Receiver Guddappa v. K. Subbian A I R 1927 Mad. 869 Odgers and Curgenven, JJ. held that under section 75 (3) of the Provincial Insolvency Act, it was not necessary that the appellant must apply for leave prior to filing the appeal in the High Court. The same Bench in C. Ghanse Khan v Bala Subba A I R 1927 Mad. 925=I L R 51 Mad. 883 construed section 28 (2) of the Provincial Insolvency Act as constituting a condition precedent and held that leave must be obtained before the institution of the suit, and that "failure to do so cannot afterwards be cured". Davar, J.'s judgment in In re: Dwarkadas Tejbhandas I L R 40 Bom. 235 was followed. The same view was followed by Wallace, J. in Ponnusami v. Kaliaperumal A I R 1929 Mad.

480. In Subaramania Mudaliar v. East Asiatic Co. A I R 1936 Mad. 991 Menon, J. held that the subsequent registration of the firm could not cure the initial defect and the amendment of the plaint could not be allowed. In Varadarajalu v Rajamanzka A I R 1937 Mad. 767 Horwill, J. struck a different note but held:‑ "Section 69 (2), Partnership Act, embodies a principle of public policy intended to penalise partnerships which do not register. However, when the registration has been carried out, the requirements of the Legislature are fulfilled and there is no reason in equity why from the moment of registration a suit previously filed should not be allowed to go on. The subsequent act of registration does not validate the plaint from the date of its being filed ; for no suit was maintainable before the date of registration. The most that the plaintiff can ask for is that his plaint should be treated as a valid one from the date of registration". In this case no objection on the ground that the plaintiff firm was unregistered was raised till one year after the written statement was filed. It was considered most inequitable that the firm be forced to bring another suit after paying the Court‑fee. The case reported as Girdharilal Son car Co. v. K. Gowdar, A I R 1938 Mad. 688 was decided by Varadachariar, J. on a difference between two judges of that Court on the construction of section 69 (2) of the Partnership Act. It was held,‑‑ The subsequent registration of the firm will not validate the original institution of the suit and enable the plaintiff to sustain action". The last case of that Court on section 69 (2) of the Partnership Act is reported as Ponnuchami v. Muthusami A I R 1942 Mad.

262. It was heard by a Division Bench and the judgment was delivered by Leach, C. J. It was held:‑ "A suit is instituted when the plaint is filed in a Court of competent jurisdiction. The registration of the firm is a condition precedent to the right to institute the suit and the Court has no jurisdiction to proceed with the trial when the condition precedent has not been fulfilled. Registration after the filing of the suit cannot cure defect". The most recent case of the Nagpur High Court is reported as Abdul Karim v. Ramdas A I R 1951 Nag.

159. It was held that "the registration of a firm is a condition precedent to its right to institute a suit. Registration' of the firm subsequent to the date of institution of the suit cannot remedy the defect and the Court is bound to dismiss it". The contrary view taken in Jakiuddin v. Vithoba A I R 1939 Nag. 301 that registration of the firm could be done during the pendency of the suit unless there was a bar of limitation, was treated as an obiter dictum. In Firm Laduram Sagarmal v. Jamuna Prasad Chaudhri I L R 18 Pat. 114=A I R 1939 Pat. 239 Harries, C. J. did not agree with Radha Charan v. Matilal (1937) 41 C W N 534 and observed that "I know of no provision of law which permits a Court to treat the plaint as filed on a date subse quent to the date upon which it was actually filed". It was held in Dost Muhammad v. Firm Jai Ram A I R 1935 Pesh. 151 that "the Court has no jurisdiction to entertain a suit if it is filed by a firm which has not been registered". In cases arising directly under the partnership Act, the High Court of Lahore was clearly of the opinion that an unregistered firm could not bring a suit in view of section 69 (2). Krishan Lal‑Ram Lai v. Abdul Ghafur Khan I L R (1936) 17 Lah. 275 dealt with a suit instituted by an unregistered firm. It was heard by Dalip Singh and Bhide, JJ. It was held that the suit was not maintainable as the plaintiff firm was not registered. It was further held that the suit could not be stayed to enable the plaintiff firm to get itself registered, as under section 69 the suit could not be "insti tuted" at all. Peoples Bank, Lahore v. Fateh Chand & Co., A I R 1936 Lah. 401 is a Division Bench case dealing with the provisions of section 171 of the Companies Act. The judgment was delivered by Addison, J. sitting with Abdul Rashid, J. It was held:‑ "If a suit by a company in liquidation has been instituted without leave of Court under section 171, Companies Act, but such leave has been obtained within the period of limitation, it would obviously be useless to dismiss the suit and to compel the plaintiff to bring another suit after obtain ing the leave". In Chhagan Lal v. Firm Mangal Sain A I R 1938 Lah. 767, Skemp, J. followed Krishan Lal‑Ram Lal v. Abdul Ghafur Khan I L R 17 Lah. 275 and held:‑ "A suit by an unregistered firm is invalid. Registration of the firm after the suit has been instituted does not relate back so as to make the suit valid". This was the position up till the year. 1942 when in a case arising under the Companies Act Ram Lal, J. in order to find support for the argument that a suit instituted against a company in liquidation without leave under section 171 should not be dismissed on that ground alone, incidentally referred to some cases decided under section 17 of the Presidency Towns Insolvency Act, section 28 of the Provincial Insolvency Act and section 69 (2) of the partnership Act. The Full Bench as such was not dealing with a case under the Partner ship. Act. The main judgment which was delivered by Beckett, J., does not refer to the Partnership Act at all. The opinion of Ram Lall, J. under the circumstances was no more than an obiter dictum and cannot be considered an authority on the exposition of section 69 (2) of the Partnership Act. The clear interpretation placed upon section 69 (2) of the Partnership Act by Krishan Lal‑Ram Lai v. Abdul Ghafur Khan I L R 17 Lah. 275 and Chhagan Lal v. Firm Mangal Sain A I R 1938 Lah. 767 could not be reduced in force because in both those cases the certificate of registration was not obtained during the whole of the period the suit was pending. It so happened that the firm was not registered at any time before the suit was decided but that fact cannot make any difference as to the construction placed upon section 69 (2). The wordings of section 69 (2) of the Partnership Act lead to one and one interpretation only, that is, a suit brought by an unregistered firm on the basis of a contract shall not be instituted in any Court. A suit is instituted when a plaint is presented to a Court of competent jurisdiction. Section 69 (2) of the Partnership Act forbids such a presentation of the plaint unless the plaintiff firm is registered in accordance with law. Wherever a different view has been taken, one has been consciously or unconsciously influenced by the supposed hardship or inconvenience that would be caused if the suit was not allowed to go on after the defect of non‑registration had been cured. What appears to have been lost sight of is that there was no suit at all pending before the Court. In some cases, it was pointed out that no prejudice would be caused to the opposite party where the registration of the firm had been effected before the period of limitation had expired. Once that inroad was allowed to be made in the construction of section 69 (2), the logical consequences, as pointed out by Ram Lall, J. in Nazir Ahmad v. Peoples Bank of Northern India A I R 1942 Lah. 289 would demand that even where the registration was made after the expiry of the period of limitation, the suit should not have been dismissed. This was carrying the matter too far and neutralising what the Legislature intended to emphasize that an unregistered firm should not be allowed to go to Court. The pertinent observations of their Lordships of the Privy Council in Bhagchand v. Secretary of State A I R 1927 P C 176 may be perused in this connection:‑ "The argument that a statutory provision as to procedure is subject to some exception of cases, where hardship or even irremediable harm might be caused, if it were strictly applied, might be used with equal cogency in connection with a Code fixing the admissibility of evidence or with a limitation section, recognizing rights but barring remedies. For this, however, there is no authority." It cannot be denied, and has not been denied, that sec tion 69 (2) of the Partnership Act read with an open mind prohibits the institution of a suit by an unregistered firm. It was only on the score of inconvenience or hardship that some other meaning was attempted to be put. This is in violation of the fundamental rules of construction. It would be profit able to refer to Maxwell on Interpretation of Statutes:‑ "A statute is the will of the Legislature, and the fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded `according to the intent of them that made it.' If the words of the statute are in themselves precise and unambiguous no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the Legislature. The object of all interpretation of a statute is to determine what intention is conveyed, either expressly or impliedly, by the language used, so far as is necessary for determining whether the particular case or state of facts presented to the interpreter falls within it. When the intention is expressed, the task is one of verbal construction only ; but when the statute expresses no intention a question to which it gives rise, and yet some intention must necessarily be imputed to the Legislature regarding it, the interpreter has to determine it by inference‑ grounded on certain legal principles." vide pages 1 and

2. At page 3 it was observed:‑ "The first and most elementary rule of construction is that it is to be assumed that the words and phrases of technical legislation are used in their technical meaning if they have acquired one, and, otherwise, in their ordinary meaning ; and, secondly, that the phrases and sentences are to be construed according to the rules of grammar. From these presumptions it is not allowable to depart where the language admits of no other meaning. Nor should there be any departure from them where the language under consider ation is susceptible of another meaning unless adequate grounds are found, either in the history or cause of the enactment or in the context or in the consequences which would result from the literal interpretation, for concluding that that interpretation does not give the real intention of the Legislature. "When the language is not only plain but admits of but one meaning, the task of interpretation can hardly be said to arise. It is not allowable, says Vattel, to interpret what has no need of interpretation. Absoluta sententia expositore non indiget. Such language best declares, without more, the intention of the Lawgiver, and is decisive of it. The rule of construction is 'to intend the Legislature to have meant what they have actually expressed.' It matters not, is such a case, what the consequences may be. Where, by the use of clear and unequivocal language capable of only one meaning anything is enacted by the Legislature, it must be enforced, even though it be absurd or mischievous." On the rules of construction enunciated above, it is not possible to give section 69 (2) of the Partnership Act the meaning that the plaint might be presented, it might be treated as lying dormant and becoming active only after the firm has been registered and then it might be taken to relate back to the time when it was first presented. An unregistered firm could not bring the suit ; the intention of the Legislature is quite clear that an unregistered firm must be subjected to a disability in order to compel registration, and that intention should not be allowed to be thwarted or nullified by an interpretation which the words are not capable of bearing. To resolve the confusion, created by the judicial conflict it would be desirable to have an authoritative pronouncement by a larger Bench on the following:‑ Where a suit based on a contract is instituted by an unregistered firm:‑ (a) should the plaint be immediately rejected. (b) should the suit be allowed to proceed in the hope that the firm shall secure registration in the meanwhile, and (c) where the firm is registered during the pendency of the suit, should the suit be taken to have been instituted on the day it is registered or on the day the application for registration was made? The record is submitted to my Lord the Hon'ble Chief Justice for necessary orders. JUDGMENT SHABIR AHMAD, J ‑The firm Messrs A. Ismailji & Sons and its eight partners instituted a suit for recovery of Rs. 50,671‑11‑3 against the Rawalpindi Branch of the Australasia Bank Ltd., on the 12th of April 1950. In the written statement put in by the defendant on the 19th of May 1950, one of the pleas taken was that suit could not proceed because of section 69 of the Partnership Act as the plaintiff firm was not registered and the other eight plaintiffs were not shown in the Register of Firms as partners of the firm. The case was adjourned to the 26th of June 1950, for the plaintiff to put in a replication to the written statement. In the replication the plaintiffs stated that the firm had since been registered and even if there was any defect in the original presentation of the plaint it had been cured by the subsequent registration of the firm and the suit could proceed. A docu ment evidencing the registration of the firm which was put on the record made it clear that the firm was registered on the 6th of June 1950. The Senior Subordinate Judge, Rawalpindi in whose Court the case was pending, framed the following two prelimi nary issues:‑

1. Is the present suit maintainable, in spite of the fact that the plaintiff firm was registered after the institution of the suit?

2. Are the plaintiffs 2 to 9 shown in the registers of firm as partners in the plaintiff No. 1 firm? If not, what is its effect? Both these issues were decided in favour of the plaintiffs by the Senior Subordinate judge on the 14th of November 1950 and the suit was ordered to proceed. Against the order dated the 14th of November 1950, the defendant Bank put in a petition for revision in this Court. The petition came up for hearing before my learned brother Muhammad Sharif J., who, in his detailed order dated the 15th of May 1951, considered all the authorities dealing with the effect of non‑registration of a firm and, finding that the judicial opinion on the question was not uniform, he suggested to my Lord the Chief justice that the matter be dealt with by a larger Bench. It is in this way that the case has come before us. The decision of the petition for revision depends on the ‑ interpretation of subsection (2) of section 69 of the Partner ship Act, which subsection reads as follow:‑ "(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." The decision of the trial Court on issue No. (2) was not questioned, but the finding on issue No. (1) was attacked by the learned counsel for the petitioner. It was urged that as no suit to enforce the right sued for in the present case could be instituted without the firm being registered under the Partnership Act, the suit instituted on the 12th of April 1950, could not in the eye of law be deemed to have been properly instituted and should have been dismissed. The language of subsection (2) of section 69 of the Partnership Act appears to be clear enough and if one were to go by that the suit institut ed on the 12th of April '1950, while the firm was registered on the 6th of June 1950, would appear to offend against subsection (2) of section 69 of the Partnership Act. Some judicial decisions, however, have taken a different view and it is, therefore, necessary to examine all the relevant judicial decisions. The trial judge, in coming to his finding that the sub sequent registration of the firm validated the proceedings in the present case, relied on some remarks made by Ram Lall J. in the Full Bench decision of this Court in Nazir Ahmad v. Peoples Bank of Northern India I L R 1942 Lah.

517. The question before the Full Bench was whether a suit brought against a company which had been ordered to be wound up without the leave of the Court, which had ordered the winding up, could be validated by the grant of leave after the period of limitation for the suit had expired. The leading judgment was given by Beckett J. and Ram Lall J., who was one of the other two members of the Full Bench, while considering the effect of section 171 of the Companies Act, mentioned at page 542 of the report that, though the views of the Madras and the Calcutta High Courts on the effect of registration of a firm after the institution of the suit differed from each other, but the right to enforce a claim is granted by a decree and if the condition for the enforcement of that remedy is complied with before the grant of a decree, it makes no difference whether the condition is complied with before or after the institution of the suit so long as it is complied with before the decree is made. Tek Chand J., who was the third member of the Full Bench, concurred in the views expressed by the other two learned judges. It was argued before the trial Judge that the remarks of Ram Lall J. about section 69 of the Partnership Act were in the nature of obiter dicta, but the trial judge thought that, being the remarks of the higher Court, they were binding on him even though they may be nothing more than obiter dicta. It is clear that the remarks of Ram Lall J. about the effect of the subsequent registration of a firm were in the nature of obiter dicta and not binding on us. They will, however, be fully considered before an opinion is given about the effect of subsection (2) of section 69 of the Partner ship Act on the present suit. I do not know if this Court has, subsequent to the deci sion in I L R 1942 Lah. 517 (F B) dealt with any case in which the firm which had brought a suit was registered after the institution of the suit by it, but I have not come across any such decision. Before the Full Bench decision, however, it had been held by this Court that the fact that a firm was not registered at the time of the institution of the suit was fatal to the suit and the defect could not be remedied by subsequent registration. This view was taken by a Divi sion Bench in Krishan Lal‑Ram Lal v. Abdul Ghafur Khan I L R 17 Lah. 275 and by a learned Single judge in Chhagan Lal v. Firm Mangal Sain‑Raj Narain A I R 1938 Lah.

767. The above-mentioned two cases dealt directly with subsection (2) of section 69 of the Partnership Act and the decisions therein were based on the intepretation of that section itself. The Court of the Judicial Commissioner, Peshawar, has also taken the view that the Court has no jurisdiction to entertain a suit if it is filed by a firm which has not been registered, as is evident from the case reported as Dost Muhammad v. Jai Ram Damodar A I R 1935 Pesh.

151. In the Bombay High Court, the matter came up for con sideration very recently in Prithvisingh Devisingh v. Hasan Ali Vazirkhan A I R 1951 Bom. 6 before a Division Bench which held that the plain terms of section 69 (2), Partnership Act, bar the institution of a suit to enforce a right arising out of a contract unless the firm is registered at the time of the insti tution of the suit and that a subsequent registration of the partnership firm cannot and does not cure the initial defect in the institution of the suit. The remarks of Ram Lal J., in the Full Bench decision in I L R 1942 Lah. 517 were considered but were held not to be a correct exposition of law. As far as I know there is no other case of the Bombay High Court dealing directly with section 69 of the Partnership Act, though there are cases dealing with other Acts which enjoin something precedent before any proceedings can be instituted. The Patna High Court has also taken the view that a suit, instituted before a firm is registered, is invalid and the subse quent registration of the firm cannot cure the initial defect in the institution of the suit. In the case Firm Laduram Sagarmal v. Jamuna Prasad Chaudhri I L R 18 Pat. 114, this was clearly laid down by Harries, C. J. and Varma J. With regard to the contention that the subsequent registration of the firm cured the defect of non‑registration which existed at. the time of the institution of the suit, Harries C. J., remarked as under:‑ " I know of no provision of law which permits a Court to treat the plaint as filed on a date subsequent to the date upon which it was actually filed * * * * * * * * * * * * * * * In my view the crucial date is the date of the institution of the suit. If on that date the suit was bound to fail, nothing that happens subsequently can give the plaintiff a right to sue. The case is very similar to a case where a plaintiff brings a suit prematurely. If it is held that he had no cause of action at the date of the institution of the suit, then it does not avail him in the slightest to show that his cause of action did come into existence a few days after the filing of the suit". Coming to the decisions given by the Madras High Court, one finds that but for one exception the view has been consistently taken that the subsequent registration of a firm would not cure the initial defect in the plaint presented by a firm which was not registered at the time of the. lodging of the suit. This view was taken by a learned Single Judge in M. S. A. Subramania Mudaliar v. East Asiatic Co., Ltd. A I R 1936 Mad.

991. A Division Bench of that Court in Ponnuchami v. Muthusami A I R 1942 Mad, 252 expressed the same view and remarked as under:‑ " The registration of the firm is a condition precedent to the right to institute the suit and the Court has no jurisdiction to proceed with the trial when the condition precedent has not been fulfilled. Registration after the filing of the suit cannot cure defect." In Girdharilal Son & Co. v. K. Cowder A I R 1938 Mad. 688, on a difference of opinion between two learned judges, the case was referred to Varadachariar J., who, agreeing with one of his colleagues,, held that the subsequent registration of the firm will not validate the original invalid institution of the suit. In Varadarajulu v. Rafamanika A I R 1937 Mad. 767, a learned Single judge held that in case of the registration of a firm during the pendency of the suit, though the plaintiff could not ask the Court to hold that the suit as instituted was valid, yet the plaint could be treated as a valid one from the date of the registration of the firm. In Nagpur High Court, opinion was expressed in the case Jakiuddin v. Vithoba A I R 1939 Nag. 301, that a suit instituted by an unregistered firm should not be dismissed if the firm is registered during the pendency of the suit, unless the bar of limitation intervened. The opinion, however, was, in my view, nothing but an obiter dictum and was held to be so in another case of that Court reported as Abdul Karim v. Ram Das A I R 1951 Nag. 159, wherein it was held that a suit by an unregistered firm was a nullity. In the Calcutta High Court, D. N. Mitter J. would appear to have taken the view in Radha‑Charan v. Motilal, 1937 41 C W N 534, that a suit by a non‑registered firm was not a nullity. It will not be out of place to mention that in Re: Steel Construction Ltd. 1936 40 C W N 312 and Harnarain v. Kanhaiyalal A I R 1940 Cal. 166, it was held that a suit instituted without obtaining the leave of Court mentioned in section 171 of the Companies Act could not be considered to be validly instituted and subsequent grant of the leave could not cure the initial defect. In the Allahabad High Court, Kendall J., in Firm Ram Prasad‑Thakar Prasad v. Firm Kamta Prasad‑Sita Ram A I R 1935 All. 898 held that a suit instituted by an unregistered firm was invalid as subsection (2) of section 69 was mandatory. He further held that the subsequent registration of the firm could not cure the defect. The above discussion will have shown that, except for one decision of the Madras High Court in Varadarajulu v. Raja manika A I R 1937 Mad. 767, a decision of the Calcutta High Court in Radha Charan v, Moti Lal (1937) 41 C W N 534, and decision of the Nagpur High Court in Jakiuddin v. Vithaba A I R 1939 Nag. 301, it has been consistently held that sub section (2) of section 69 of the Partnership Act, is mandatory and makes a suit instituted by an unregistered firm entirely invalid and that subsequent registration of the firm is of no C avail. I have mentioned already that the remarks about the subsequent registration of the firm in A I R 1939 Nag. 301 by a learned Single judge were obiter dictum but, at any rate, they have lost almost the whole of their force because of the deci sion of a learned Single judge of that Court in A I R 1951 Nagpur

159. The decision in A I R 1937 Mad. 767, was given by a learned Single judge and subsequent to that decision in A I R 1938 Mad. 688 and A I R 1942 Mad. 252, larger Benches of that Court have taken the view that subsection (2) of section 69 of the Partnership Act is mandatory in its terms and a suit instituted by an unregistered firm is invalid and cannot become regular by subsequent registration of the firm. It is not known if the decision in 41 C W N 534 has been considered by the Calcutta High Court in any other case under section 69 of the Partnership Act but if one were to go by the law reports it would appear that it has not been. There are some decisions of different High Courts given under section 17 of the Presidency Towns Insolvency Act, and section 28 of the Provincial Insolvency Act, (both of which sections 28 enact that the leave of the Insolvency Court is a prerequisite for the institution of certain proceedings) which lay down that the leave of the Court obtained after the insti tution of the suit may cure the initial defect. These decisions, however, lose much of their force because the same Courts have in some other cases taken the contrary view. With regard to section 171 of the Companies Act, which reads as follows:‑ 'When a winding up order has been made or a Provisional liquidator has been appointed, no suit or other legal proceed ing shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose," the decision of the Full Bench in Nazir Ahmad v. Peoples Bank of Northern India, I L R 1942 Lah. 517, is that the subsequent grant of leave cures the initial defect in a proceeding instituted without obtaining leave, and this view has been taken by the Allahabad High Court in People's Industrial Bank Ltd. v. Ram Chandra Shukla I L R 52 All.

430. It appears incongruous that non‑registration of a firm should be fatal to the suit even if registration was effected before the suit was dismissed on the ground of the suing firm not being registered while the almost similar question arising under section 171 of the Com panies Act should be decided differently, and if it is possible, without unduly stretching the meaning of the words used in section 69 of the Partnership Act, to attach to them the mean ings similar to those attached to the words in section 171 of the Companies Act, I would feel inclined to do so. The deci sion of the Full Bench of this Court about section 171 of the Companies Act was given mostly on the ground that a similar provision in the Companies Act of Great Britian, from which section 171 of the Companies Act is copied, had received that interpretation by Courts in England, and Beckett J., who wrote the leading judgment, stated at page 524 and 525 of the report as follows:‑ " The only serious difficulty in the way of holding that section 171 was intended to have the same effect as the corres ponding section in England arises from the fact that in a number of cases a different interpretation has been placed upon the similar provision contained in the Provincial Insolvency Act. There is some slight difference in the wording, but there is no great difference, and it would be difficult to base any distinction on the language used. Even so, I do not think that these decisions can affect the interpretation which should be placed upon section

171. In the first place, even with regard to the provisions of the Provincial Insolvency Act, there is a sharp divergence of opinion, as is shown by Bhimaji v. Chundal I L R (1933) 57 Bom.

623. In the second place, the decisions which have been cited before us were given after the original Indian Companies Act was passed. If they had been given beforehand, they might have been used to show that such a formula already had a different meaning attached to it in India ; but it is difficult to see how decisions based on the language of a different statute can be used to indicate the intention with which section 171 was incorporated in a different statute, when these were not given at an earlier date. There do not appear to be any decisions tending to show that the wording of section 171 of the Indian Companies Act could have been intended to have a different meaning in India from that which, had previously been placed upon its meaning. In short, while it may be said to be possible to place two different interpretations upon section 171, Indian Companies, Act, it is certainly permissible to hold that it was intended merely to secure that a suit instituted without leave should be stayed until leave was obtained ; and of the two possible interpretations I do not think there can be any possible doubt which entails‑ the least possible injustice." * * * * * * The above passages make it clear that, but for the fact that the English decisions had. taken a certain view, it is by no means unlikely that the decision of the Full Bench would have been that the leave of the Court under section 171 obtained sub sequent to the initiation of the proceedings was of no avail. The interpretation of subsection (2) of section 69 of the Partnership Act (IX of 1932) by the superior Courts of the territories where the Act Js in force has almost entirely been in one direction, the only noticeable exception being the decision of the Calcutta High Court in Radha Charan v. Moti Lal, (1937) 41 C W N

534. The facts of that case, which, because of their peculiarity, appear to have affected the decision on the question of law, may be briefly stated. The four partners of a firm instituted a suit for recovery of Rs. 370 on the 25th of May 1934 at which date the firm was not registered and the names of the plaintiffs were not shown in the Register of Firms as partners in the firm. In June 1934, defendant No. 2 in the case, put in a written statement. in which he did not take the plea based on section 69 in bar to the suit and the trial proceeded. The suit was decreed on contest against defendant No. 2 and ex parte against the other defendants. An appeal was taken by defendant No. 2 against the decree passed against him, but he allowed it to go in default, as in the meantime the other defen dants had applied for the setting aside of the ex parte decree against them. The ex parte decree was set aside, but the decree against defendant No. 2 was allowed to stand. He was, however, permitted to come in as one of the opposing defen dants in the restored suit. At the time of arguments in the proceedings after restoration, an objection was taken that the suit was barred by section 69 of the Partnership Act (IX of 1932). In the meantime the firm was registered on the 20th of June 1934 and the plaintiffs in the suit had been shown in the Register of Firms as partners in the firm. The trial Court upheld the objection and, the appellate Court having agreed with the finding of the trial Court that the suit be dismissed, the plaintiffs sought to have the order set aside by the High Court in revision. The revision petition was accepted by D. N Mitter J., who, after reproducing subsection (2) of section 69 of the Partnership Act, is reported at pages 535 and 536 to have said as follows:‑ " The effect of this clause is that no Court shall entertain any suit before the registration of the firm. In the present case according to the finding of the lower appellate Court, the petitioner's firm was registered on the 20th June 1934, that is, after the date of the institution of the suit. As the plea in bar of suit was not taken till in the course of the argument at the second hearing of the suit, that is, after the hearing which commenced after the order had been made under Order 9, rule 13 of the Code, the suit should not be thrown out. In the circumstances, there seems to be no reason why I should not hold that the suit was properly instituted at any rate on the 20th June 1934, when the firm was registered. The plaint in this suit was allowed to 'remain on the file and it did remain on the file till the date of registration. In such circumstances, the suit may be treated as though the plaint had been received and the suit instituted on the day following the day of registration. I am told by Mr. Bhagirath Chandra Das who appears for the petitioners that if the suit be held to have been filed either on the 20th or 21st June, the claim would not be barred by the statute of limitation. Of course, that is a question which should be ultimately decided in the Court of first instance. There can be no doubt that this view is in accordance with justice. The defendants waited till the last stage of the second hearing and took the objection after the close of plaintiff's case at the time of the argument. This objection has not been taken in the written statement which was filed in May (June?) 1934. There was nothing to prevent the plaintiffs for getting the firm registered immedi ately after the plea in bar had been taken in the written defence. But no such plea was taken." It is clear that the decision was influenced to a great extent by the fact that objection as to the suit not being maintainable was not taken till almost the conclusion of the proceedings in the trial Court. That this was so, is clear from the first instance of the passage reproduced above and in this view of the matter the decision in 41 C W N 534 must lose much of its weight. The main argument of the learned counsel for the respon dent in support of the view taken in 41 C W N 534 and by Ram Lall J. in I L R (1942) Lah. 517 (F B) was that cases can arise in which, though application for registration was made in time, the certificate of registration may not be granted before the expiry of the period of limitation fixed for the institution of a suit. The period of limitation will generally be at least three years from the date of the accrual of the cause of action and it is unlikely that a firm, if vigilant, will not be able to have itself registered in all this time. If the delay in registration is due to slackness, incompetence or dishonesty of a public servant, the firm will not be without remedy. At any rate, the consideration mentioned by the learned counsel for the respondent cannot change the meaning of sub section (2) of section 69 of the Partnership Act. It is well settled and hardly open to question that Courts are not makers but only interpreters of law and cannot water down the effect of a provision of a statute, because the interpreta tion based on well established principles is likely to work hard ship in some cases falling within the plain meaning of that provision. In the English statute dealing with partnerships (Partnership Act, 1899, 53 and 54 Victoria, Chapter XXXIX), there is no provision similar to section 69 of our Partnership Act and, therefore, there are no decisions of the English Courts to influence the interpretation as was the case in Indian Law Re ports (1942) Lah. 517 (F B). I am of the view that the language of subsection (2) of section 69 leaves no room or doubt that if' a suit falling within subsection (2) of section 69 of the Partner ship Act is instituted by a firm which is not registered at the time of the institution of the suit, the plaint must he rejected and the subsequent registration of the firm cannot validate the proceedings which were invalid in their inception. My learned brother Muhammad Sharif J. by his referring order wanted the following questions to be answered:‑ "Where a suit based on a contract is instituted by an unregistered firm: (a) should the plaint be immediately rejected, (b) should the suit be allowed to proceed in the hope that the firm shall secure registration in the meanwhile, and (c) where the firm is registered during the pendency of the suit, should the suit be taken to have been instituted on the day it is registered or on the day the application for registra tion was made? I have already answered question (a) and, in view of what I have stated in the discussion, the other two questions do not arise. For the reasons given above, 'I would accept the petition for revision and reject the plaint. In the peculiar circumstan ces of the case, however, I would leave the parties to bear their own costs. KAYANI, J.‑I agree. A. H. Petition accepted.