CASE COMMENTARY ON:

C.V SUBRAMANIAN vs RAJESH RAGHUVANDRA RAO

Submitted by: Saniyam Chaudhary 2C(13617703823)

INTRODUCTION:

This case deals with Section 69 of the Indian Partnership Act, 1932 of Indian Partnership
Act, 1932 which talks about the effects of non-registration of a partnership firm.

FACTS:

This appeal stems from a case filed in the Bombay City Civil Court by the appellant seeking,
among other things, the dissolution of an unregistered partnership firm with the respondent.
The defendant argued that a suit was not maintainable under to sub-section (2A) of Section
69 of the Indian Partnership Act, 1932.
The sub-section provides suits for dissolution or accounts of a dissolved firm, or to realize its
property, cannot be filed by a non-registered partner unless listed in the Register of Firms.
The registration requirement does not extend to suits brought by heirs or legal
representatives of a deceased partner for accounts or property realization of a dissolved
firm.
The Bombay City Civil Court deemed this sub-section, introduced by the Maharashtra
Amendment, 1984 to Section 69 of the Indian Partnership Act, 1932, unconstitutional under
Articles 14 and 19(1)(g) of the Constitution of India, 1950.
Consequently, the court referred the matter to the High Court under Section 113 of the Civil
Procedure Code.
The High Court, however, in its ruling, deemed sub-section 2A of Section 69 of the Indian
Partnership Act, 1932, constitutional.
Thus, the appellant preferred an appeal before the Supreme Court challenging this decision.

ISSUES INVOLVED:

Whether sub-section 2A of Section 69 of the Indian Partnership Act, 1932 inserted by the
Maharashtra Amendment is constitutionally valid?

PRECEDENT ANALYSIS:

The Bombay City Civil Court held that sub-section (2A) was ultra vires the Constitution of
India, violating Articles 14 (right to equality before the law) and 19(1)(g) (right to practice any
profession, or to carry on any occupation, trade, or business).The High Court, however,
disagreed and upheld the constitutionality of sub-section (2A).

OBSERVATION:

The SC said that registration of a firm primarily aims to safeguard third parties from
difficulties in identifying partners and proving partnerships.
Earlier, third parties faced expenses and delays in proving partnership, leading to protection
issues.
Registration shields third parties against false partnership denials and liability evasion.
Registered firm statements are conclusive proof of partnership facts against partners.
While registration is not compulsory, the Maharashtra Amendment imposes strict disabilities
on unregistered firms, barring enforcement of claims against third parties.
Unregistered partners could not enforce claims against third parties or fellow partners,
except in dissolution suits or property recovery.
The 1984 Amendment extended restrictions to dissolution or property recovery suits.
This could lead to unfair situations where a dishonest partner might exploit the lack of
registration, depriving others of dues.
The Maharashtra Amendment's restrictions were deemed arbitrary and unreasonable,
violating constitutional provisions.

CONCLUSION:

The court declared the amendment unconstitutional, allowing suits to proceed without
considering the invalidated section.

NOTE:

Section 69 of the Indian Partnership Act, 1932: Effect of non-registration -

No suit to enforce a right arising from a contract or conferred by this Act 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 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:
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 firms.
Sub-section 2A which was introduced by the Maharashtra Amendment 1984 -
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 realize 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:
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 a dissolved firm or to realize the property of a dissolved firm.

SOURCES:

1) V. Subramaniam vs Rajesh Raghuvandra Rao on 20 March, 2009 - Indian Kanoon.

https://indiankanoon.org/doc/1679961/.
(2) V. Subramanian v. Rajesh Raghuvendra Rao | Bombay High Court | Judgment ....
https://www.casemine.com/judgement/in/56b4938f607dba348f007729.

(3) Case Analysis on V. Subramaniam Vs.Rajesh Raghuvandra Rao.

https://www.legalserviceindia.com/legal/article-1568-case-analysis-on-v-subramaniam-vs-raj
esh-raghuvandra-rao.html.