“Memorandum Itself Indicates Registration”: Calcutta HC Sets Aside Trial Court Decision in Partnership Dispute, Directs Defendant to Pay Rs. 24.36 Lakh with Interest
Safiya Malik
The Division Bench of the Calcutta High Court, comprising Justice Sabyasachi Bhattacharyya and Justice Uday Kumar, adjudicated on an appeal against the dismissal of a money suit involving a contractual payment dispute. The case cantered around the rejection of claims made by the plaintiff regarding dues for goods supplied to the defendant company. The appellate court set aside the trial court’s judgement, directing the respondent to pay the decretal amount with interest.
The plaintiff initiated a money suit claiming dues from the defendant company for goods supplied. The trial court dismissed the suit, citing that the plaintiff, a partnership firm, was unregistered at the time of filing, thus rendering the suit barred under Section 69(2) of the Indian Partnership Act, 1932. The plaintiff appealed, presenting documentary evidence to substantiate its registration before instituting the suit.
The appellant’s counsel argued that the trial court had erroneously disregarded Exhibit-8, a memorandum of registration, which confirmed the firm's registration before the suit was filed. The appellant also contended that additional certified documents from the Registrar of Firms should be considered under Order XLI Rule 27 of the Code of Civil Procedure (CPC), permitting production of new evidence at the appellate stage.
The respondent countered that the plaintiff's registration evidence was insufficient and that the suit was time-barred as transactions occurred between 2005 and 2007 while the suit was filed in 2011. Further, the respondent argued that the appellant failed to produce a partnership deed, casting doubts on the firm’s legal standing.
Additional disputes arose over the validity of the defendant’s written statement, as it was signed by a director without express authorization or the company’s seal. The appellant asserted that this defect nullified the defendant’s pleadings.
The appellate court analysed multiple legal and evidentiary aspects, particularly the issues of limitation, registration of the plaintiff firm, and the credibility of documentary proof.
Regarding limitation, the court noted that the cause of action arose on August 1, 2008, when the defendant formally denied payments, and the suit was filed within the permissible period on June 5, 2010. The court stated:
“Although the transactions-in-question were for the period 2005 to 2007, the cause of action for the instant suit arose on the refusal of the defendant to pay a part of the claims, whereas by partial payment regarding the other bills, the defendant/respondent admitted the premise of the ongoing transactions between the parties. Thus, the suit is not barred by limitation.”
On the issue of the plaintiff’s registration, the court stated that Exhibit-8, corroborated by additional certified documents, was adequate to establish compliance with Section 58 of the Indian Partnership Act. The court observed:
“Exhibit-8 is a memorandum issued by the Registrar of Firms, West Bengal, acknowledging receipt of the documents, and an intimation that the same has been filed/recorded/registered pursuant to the Indian Partnership Act, 1932. Thus, the said memorandum itself, in the absence of any rebuttal, indicates that the firm was registered pursuant to the Partnership Act.”
The court also permitted the appellant to introduce additional certified evidence, holding that it satisfied the requirements under Order XLI Rule 27 of CPC. It observed:
“Since the additional evidence is a certified copy of a public document, Sections 65 and 74 of the Evidence Act, read conjointly, render the same admissible in evidence.”
On the validity of the defendant’s written statement, the court found that it lacked authorization from the company and was filed by a director in a personal capacity. Citing precedents, the court concluded:
“Under Order XXIX Rule 1 of the Code of Civil Procedure, the pleading of a corporation has to be signed and verified on its behalf inter alia by any of its directors. In the present case, there was no such averment in the verification to the defendant’s written statement that Subrata was verifying the plaint on behalf of the defendant-company as its director.”
The appellate court allowed the appeal and set aside the trial court’s judgment. It directed the defendant/respondent to pay the plaintiff/appellant a sum of Rs. 24,36,105, along with interest at 6% per annum from the date of filing the suit (June 5, 2010) until the realization of the amount. The court ordered:
“Accordingly, the defendant/respondent shall pay to the plaintiff/appellant a sum of Rs.24,36,105/- (Rupees Twenty-Four Lakh Thirty-Six Thousand One Hundred and Five Only), along with interest thereon at the rate of six per cent per annum from June 5, 2010 (the date of filing of the suit) till the date of realization of the amount, within ninety days from date.”
Failure to comply with the directive would entitle the plaintiff to execute the decree as per law.
Following the judgment, the court was informed that the decretal amount had been deposited with the court registrar. The court permitted the plaintiff to withdraw the amount, marking it as sufficient satisfaction of the decree.
Advocates Representing the Parties
For the Appellant: Mr. Kasinath De, Mr. Kaushik Chatterjee, Mr. Suparno Ghosh, Mr. Prantik Sarkar.
For the Respondent: Mr. S.P. Mukherjee (Senior Advocate), Mr. Swarup Banerjee, Mr. Manoj Kumar Tewari, Ms. Arpita Dey, Mr. Arinjay Pal.
Case Title: M/s. Trade Centre vs. Magebe Bridge Products Private Limited
Case Number: F.A. No.15 of 2023 with CAN 1 of 2022
Bench: Justice Sabyasachi Bhattacharyya and Justice Uday Kumar
[Read/Download order]
