Praveen Kumar
January 27, 2025 at 07:55 AM
*Sunkari Tirumala Rao V. Penki Aruna Kumari (2025 SC)*
1. Registration of a Partnership firm is not mandatory.
2. However, S.69 of the Partnership Act, 1932 bars the institution of any suit by an unregistered firm or its partners.
3. S. 69 is mandatory. S.69(1) prohibits a suit amongst the partners of an unregistered partnership firm, for the enforcement of a right either arising from a contract or conferred by the Act, unless the suit amongst the partners is in the nature of dissolution of the partnership firm and/or rendition of accounts.
4. A suit by one partner against another partner for (i) declaration that an unregistered firm exists, and (ii) dissolution of such firm- is maintainable.
5. A suit for recovery of money on the basis of partnership deed by one partner of unregistered firm against another is not maintainable. Such a suit is based for enforcement of a right arising out of the agreement and hence is not maintainable. It doesn’t matter whether the partnership business has yet not commenced.
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