Deen Mohammad vs Paradise Garh Nirman Shahkari Samiti on 5 March, 2026

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    Madhya Pradesh High Court

    Deen Mohammad vs Paradise Garh Nirman Shahkari Samiti on 5 March, 2026

             NEUTRAL CITATION NO. 2026:MPHC-JBP:17989
    
    
    
    
                                                                   1                                 FA-1458-2025
                                 IN      THE      HIGH COURT OF MADHYA PRADESH
                                                        AT JABALPUR
                                                             BEFORE
                                                HON'BLE SHRI JUSTICE DEEPAK KHOT
                                                       ON THE 5 th OF MARCH, 2026
                                                      FIRST APPEAL No. 1458 of 2025
                                                  DEEN MOHAMMAD
                                                       Versus
                                  PARADISE GARH NIRMAN SHAHKARI SAMITI AND OTHERS
                              Appearance:
                                 Shri Avinash Zargar with Shri Kedar Prasad Kuswaha - Advocate and Shri
                              Gouransh Bhurrak and Shri Arvind Soni - Advocate for the appellant.
                                 Shri Ashok Kumar Gupta - Advocate for the respondent No.1.
                                  Shri Anshuman Singh, with Shri Anuj Shrivastava - Advocate for the
                              respondents No.2, 4 and 5.
                                 Shri Fuzail Usmani, learned counsel for the respondent No.3.
    
                                                                       ORDER
    

    The present appeal has been filed under section 96 of the CPC
    assailing the impugned order dated 9.5.2025 passed by 18th District Judge,
    Jabalpur, in R.C.S.A.No.15063/2024, whereby the suit filed by the
    appellant/plaintiff has been rejected under Order 7 Rule 11 CPC.

    2. It is the case of the appellant/plaintiff that the appellant/plaintiff has
    filed a suit seeking declaration that he is co-owner of the suit property and
    also claimed permanent injunction to restrain the respondents from creating
    third party interest and alienating the suit property. It is averred in the plaint
    that plaintiff, defendant no.3 and one Farog Ahmed Ansari, who were
    partners, entered into an agreement dated 5.5.2016 with defendant no.1,
    which is a registered co-operative society, to purchase the lands mentioned in

    SPONSORED

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    para 1 of the plaint. It is further averred that the aforesaid agreement to sell
    was made for sale consideration of Rs.1,35,00,000/- per acre, total
    amounting to Rs.15,18,75,000/-. All the partners have paid their respective
    shares in advance. It is averred that one partnership deed dated 18.7.2016
    was also executed between plaintiff, defendant no.3 and Ahmad Ansari. It is
    further averred that since defendants are trying to sell the suit property in
    parts, therefore, plaintiff made paper publication on 13.1.2024 and has also
    sent a notice dated 18.9.2024 to the defendants, however, the defendants are
    continuously changing the nature of suit property, hence present suit seeking
    relief of permanent injunction has been filed.

    3. Defendants no.2, 4 and 5 filed an application under Order VII Rule

    11 CPC on the ground that the plaintiff was not party to the agreement dated
    5.5.2016, hence the suit is liable to be dismissed. Secondly, the suit is barred
    under the provisions of Section 2(c)(vii)(xi) & (xv) of the Commercial
    Courts Act, 2015
    . Further, it is stated that the suit is hit by section 69 of the
    Indian Partnership Act because the partnership firm is an unregistered firm
    and the agreement to sell dated 5.5.2016 is also an unregistered document. It
    is further stated that defendant no.1 is a registered co-operative society and
    any disputed between the plaintiff and the defendant no.1 will lie before the
    Registrar, Co-operative Society as per the provisions of section 64(1)(c) and
    64(2)(iv) of the M.P. Co-operative Societies Act.

    4. The learned court below held that the plaintiff along with defendant
    no.3 and one Farog Ahmed Ansari have executed a partnership deed on
    18.7.2016 and thereafter on expiry of Farog Ahmed Ansari, another

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    partnership deed has been executed on 14.3.2018 showing one Santosh
    Usrethe to be the partner of the said firm. The learned court below while
    considering the application of the defendants under Order 7 Rule 11 CPC,
    found that the abovesaid partnership firm is an unregistered partnership firm
    and, therefore, as per the provisions of section 69(2) of the Indian
    Partnership Act, 1932, a suit arising from a contract by or on behalf of any
    person suing as a partner in a firm against any firm or person is not
    maintainable unless the said partnership firm is a registered firm and,
    accordingly, rejected the suit of the plaintiff. Thereafter, the plaintiff has
    preferred a review under Order XLVII Rule 1 CPC, which was also
    dismissed vide order dated 16.7.2025.

    5. Learned counsel for the appellant submitted that the plaintiff has
    filed the suit for enforcement of legal rights and they were not arising out of
    the partnership deed. It is submitted that the plaintiff has invested huge
    amount in the suit property hence, he has incurred right in the same and is
    entitled for the relief of declaration in his favour. Secondly, it is contended
    that question with regard to the suit being barred by section 69 of the Indian
    Partnership Act, 1932, could not be decided without adducing evidence. It is
    further submitted that the partnership firm in question alleged to have been
    constituted on 18.7.2016 and 14.3.2018 is not a party to the suit, hence, the
    question of the suit being hit by section 69 of the Indian Partnership Act,
    1932 does not arise. It is further submitted that even assuming that the
    plaintiff has failed to establish formation of partnership firm, then also the

    plaintiff share over the suit property could not vanish as the plaintiff has

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    made payment of portion of sale consideration. It is further submitted that
    the court below has committed grave error of law in rejecting the suit under
    Order 7 Rule 11 CPC without affording an opportunity to lead evidence to
    prove the case. To buttress his contention, reliance has been placed upon the
    judgment of Apex Court in the case of Kumari Geeta Vs. Nanjundaswamy &
    others, (2024) 14 SCC 390, Sania Patel & Others Vs. Rav Himavatsing &
    Ors., 2021 SCC Online MP 3995, Mayor (H.K.) Ltd. & Ors. Vs. Owners &
    Parties Vessel MV Fortune & Ors.
    , (2006)3 SCC 100, Dahiben Vs.
    Arvindbhai Kalyanji Bhanusali
    , (2020) 7 SCC 366, Shri Mukund Bhavan
    Trust Vs. Shrimant Chhatrapati
    , (2024)15 SCC 675 and Mansukhlal Dhanraj
    jain & Others Vs. Eknath Vitthal, (1995) 2 SCC 665 and a judgment of
    Madras High Court in the case of S.Sri Sagana Vs. K.Padmavathi, passed on
    18.2.2022 in CRP.PD.No.1304/2019 & CMP No.8523/2019.

    6. Per contra, learned counsel for the respondents submitted that even
    if it is assumed that an agreement has been entered into with the defendant
    no.1 and the plaintiff has paid the sale consideration, he cannot claim himself
    to be owner of the property in absence of execution of registered sale-deed.
    Therefore, the suit seeking relief of declaration of co-owner of the suit
    property and permanent injunction itself is bad in law and is not
    maintainable. At the most, the plaintiff could have filed a suit for specific
    performance of contract if the defendant no.1 has refused the execute the
    sale-deed, or in case of refusal by the defendants to execute the sale-deed he
    could have claimed his share of consideration by way of a suit seeking
    refund of money and damages. But, the present suit seeking declaration as a

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    co-owner of the property which is not yet sold to the plaintiff cannot stand in
    the eyes of law. Moreover, the plaintiff has filed the suit on the basis of
    agreement dated 5.5.2016 in which he himself was not a party. Moreover,
    the partnership deed dated 18.7.2016 on the basis of which the plaintiff is
    claiming ownership over the suit property is an unregistered partnership
    deed, thus the suit is hit by section 69 of the Indian Partnership Act. Thus, it
    is contended that the court below has rightly passed the impugned order
    rejecting the plaint under Order VII Rule 11 CPC, which does not call for
    any interference. To bolster his contention, counsel for the respondents have
    relied upon a judgment of Hon’ble Apex court in the case of Haldiram
    Bhujiawala v. Anand Kumar Deepak Kumar
    , (2000) 3 SCC 250 and
    judgment of a coordinate Bench this Court dated 23.07.2024 in the case
    o f Ashoka Group Vs. Shri Hariram Buddhraja and others, passed in
    F.A.No.302/2013.

    7. Heard learned counsel for the parties and perused the record.

    8. From perusal of the application filed under Order 7 Rule 11 CPC by
    defendants no.2, 4 and 5, it is found that the application has been filed on
    various factual and legal grounds. However, the court below has decided the
    application only on the ground that the suit has been found to be not
    maintainable under section 69(2) of the Indian Partnership Act.

    9. It is trite law that for consideration of rejection of plaint, only the
    plaint averments are germane. The Hon’ble Apex court in the case of Nusli
    Neville Wadia v. Ivory Properties
    , (2020) 6 SCC 557 , has held that the
    pleadings of the plaint are germane to decide the application under Order 7

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    Rule 11 of CPC. No other documents of defence is required to be seen at the
    time of deciding the application under Order 7 Rule 11, that is to be seen at
    the time of final hearing if those documents are brought by the other side in
    accordance with law. The Hon’ble Apex Court has held as under :-

    “69. In Hareendran v. Sukumaran [Hareendran v. Sukumaran,
    (2018) 14 SCC 187 : (2018) 4 SCC (Civ) 510] , this Court has laid
    down that question of limitation in the case being mixed question
    of law and facts, could not have been decided as preliminary issue.

    The provision under which a plaint can be rejected is provided in
    Order 7 Rule 11( d ). The language used in Order 7 Rule 11 is
    where averments made in plaint does not disclose a cause of
    action; relief claimed is undervalued, and the plaint is not
    corrected in spite of the direction of the Court; plaint is
    insufficiently stamped, and in spite of the Court’s order the
    plaintiff has failed to supply the requisite stamp duty; where the
    suit appears from the statement in the plaint to be barred by any
    law; where it is not filed in duplicate; and where the plaintiff fails
    to comply with the provisions of Rule 9. What is of significance
    under Order 7 Rule 11 is that from the averments of the plaint
    itself the suit is barred by any law and it would include limitation
    also including bar created by any other law for the time being in
    force. For the rejection of plaint, averments made by the defendant
    in the written statement or otherwise cannot be seen, only the
    averments of the plaint are material and can be taken into
    consideration and no other evidence”.

    (emphasis supplied)

    10. The Hon’ble Apex Court in the case of Dahi Ben Vs. Arvind Bhai,
    (2020) 7 SCC 366, has held that even the documents filed along with the
    plaint when they are referred to in the plaint, forms the basis of the plaint, it
    should be treated to be a part of the plaint. In exercise of the power under
    Order 7 Rule 11 CPC, the court would determine if the assertions made in
    the plaint are contrary to the statutory law or judicial dicta or for deciding

    whether case for rejecting the plaint at the threshold is made out. The
    Hon’ble Apex Court has held as under :-

    “23.2. The remedy under Order 7 Rule 11 is an independent and

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    special remedy, wherein the court is empowered to summarily
    dismiss a suit at the threshold, without proceeding to record
    evidence, and conducting a trial, on the basis of the evidence
    adduced, if it is satisfied that the action should be terminated on
    any of the grounds contained in this provision.
    23.3. The underlying object of Order 7 Rule 11( a) is that if in a
    suit, no cause of action is disclosed, or the suit is barred by
    limitation under Rule 11( d ), the court would not permit the
    plaintiff to unnecessarily protract the proceedings in the suit. In
    such a case, it would be necessary to put an end to the sham
    litigation, so that further judicial time is not wasted.

    ***
    23.6. Under Order 7 Rule 11, a duty is cast on the court to
    determine whether the plaint discloses a cause of action by
    scrutinising the averments in the plaint [Liverpool & London S.P.
    & I Assn. Ltd. v. M.V. Sea Success I
    , (2004) 9 SCC 512] , read in
    conjunction with the documents relied upon, or whether the suit is
    barred by any law.

    ***
    23.9. In exercise of power under this provision, the court would
    determine if the assertions made in the plaint are contrary to
    statutory law, or judicial dicta, for deciding whether a case for
    rejecting the plaint at the threshold is made out.
    23.10. At this stage, the pleas taken by the defendant in the
    written statement and application for rejection of the plaint on the
    merits, would be irrelevant, and cannot be adverted to, or taken
    into consideration. [Sopan Sukhdeo Sable v. Charity Commr. ,
    (2004) 3 SCC 137]
    ***
    23.13. If on a meaningful reading of the plaint, it is found that the
    suit is manifestly vexatious and without any merit, and does not
    disclose a right to sue, the court would be justified in exercising
    the power under Order 7 Rule 11 CPC.

    23.14. The power under Order 7 Rule 11 CPC may be exercised
    by the court at any stage of the suit, either before registering the
    plaint, or after issuing summons to the defendant, or before
    conclusion of the trial, as held by this Court in the judgment
    of Saleem Bhai v. State of Maharashtra [Saleem Bhai v. State of
    Maharashtra, (2003) 1 SCC 557] . The plea that once issues are
    framed, the matter must necessarily go to trial was repelled by this
    Court in Azhar Hussain case [Azhar Hussain v. Rajiv Gandhi,
    1986 Supp SCC 315.
    Followed in Manvendrasinhji Ranjitsinhji
    Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2
    GLH 823].

    11. The Hon’ble Apex court in the case of Liverpool & London S.P. &
    I Assn. Ltd. v. M.V. Sea Success I
    , (2004) 9 SCC 512 has held that the test
    for exercising the power under Order 7 Rule 11 CPC is that if the averments

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    made in the plaint are taken in entirety, in conjunction with the documents
    relied upon, would the same result in a decree being passed. The Hon’ble
    Apex court has further held as under :-

    139. Whether a plaint discloses a cause of action or not is
    essentially a question of fact. But whether it does or does not must
    be found out from reading the plaint itself. For the said purpose
    the averments made in the plaint in their entirety must be held to
    be correct. The test is as to whether if the averments made in the
    plaint are taken to be correct in their entirety, a decree would be
    passed.

    12. It is further held by the Hon’ble Apex court that it is not
    permissible to cull out a sentence or a passage, and to read it in isolation. It is
    the substance, and not merely the form which has to be looked into. The
    plaint has to be construed as it stands without addition or substraction of
    words. If the allegations in the plaint prima facie show a cause of action, the
    court cannot embark upon an enquiry whether the allegations are true in
    fact. (See D.Ramchandran Vs. R.V. Jankiraman, (1999) 3 SCC 267.)

    13. The Hon’ble Apex court in the case of Dahi Ben (supra) has
    delineated the meaning of cause of action which means every fact which
    would be necessary for the plaintiff to prove, if traversed in order to support
    his right to judgment. It consists of bundle of material facts which are
    necessarily for the plaintiff to prove in order to entitle him to the reliefs
    claimed in the suit.

    14. The Hon’ble Apex court in the case of Swamy Atmananda v. Sri
    Ramakrishna Tapovanam
    , (2005) 10 SCC 51, has held as under :-

    24. A cause of action, thus, means every fact, which, if traversed,

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    it would be necessary for the plaintiff to prove in order to support
    his right to a judgment of the court. In other words, it is a bundle
    of facts which taken with the law applicable to them gives the
    plaintiff a right to relief against the defendant. It must include
    some act done by the defendant since in the absence of such an act
    no cause of action can possibly accrue. It is not limited to the
    actual infringement of the right sued on but includes all the
    material facts on which it is founded.

    15. From perusal of the plaint, it is found that though the plaintiff has
    submitted that there was some monetary transaction with defendants, for
    which details have been mentioned in para 3 of the plaint; but, from other
    pleadings it is found that the appellant has pleaded that such amount has been
    used for payment of consideration of land of Rs.15,18,75,000/- in which the
    plaintiff has also paid his share along with defendant no.3 and one Farog
    Ahmed Ansari. It is also submitted that the land has been agreed to be
    purchased under the partnership by way of agreement dated 5.5.2016, in
    which name of one of the defendants has been mentioned as representative
    of the firm. Thereafter, one another partnership deed dated 14.3.2018 has
    been executed in which another partner has been included and defendant
    no.3 has been made consent giver. It is the case of the plaintiff that by use of
    that money, of which details have been mentioned in the plaint, the
    defendant no.3 has been made Vice President of defendant no.1 Society and
    defendant no.2 has been appointed as President. It is nowhere mentioned
    that how the defendant no.1 has become owner of the land, which is a co-
    operative society.

    16. Moreover, from perusal of the partnership deed dated 18.7.2016, it
    is found that there is a mention that an agreement to purchase land from the
    said society has been executed. The deed has also got some recitals of other

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    agreement executed with defendant Sarvesh Mishra, who has been appointed
    as Vice President of the society. Thereafter, one another deed with name and
    style ‘Partnership deed’ has been sought to be executed on 14.3.2018, which
    has also been filed along with the plaint.

    17. In the said deed, there is a recital that one of the Investor/partner
    Farooq Ahmed has expired and in his place one new partner has been
    inducted. When the entire deed is read, it is found that it contains all the
    recitals of the partnership deed. The appellant is claiming his rights through
    the said partnership deed and on the basis of payment which has been made
    pursuant to the said deed. Section 69 of the Indian Partnership Act reads as
    under :-

    “69. Effect of non-registration.–(1) 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.

    (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.
    (3) The provisions of sub-sections (1) and (2) shall apply also to a
    claim of set-off or other proceeding to enforce a right arising from
    a contract, but shall not affect–

    (a) the enforcement of any right to sue for the
    dissolution of a firm or for accounts of a dissolved firm,
    or a ay right or power to realise the property of a
    dissolved firm, or

    (b) the powers of an official assignee, receiver or Court
    under the Presidency-towns Insolvency Act, 1909 (2 of
    1909), or the Provincial Insolvency Act, 1920 (5 of
    1920), to realise the property of an insolvent partner.
    (4) This section shall not apply–

    (a) to firms or to partners in firms which have no place
    of business in 1 [the territories to which this Act
    extends], or whose places of business in 2 [the said
    territories] are situated in areas to which, by notification

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    under 3 [section 56], this Chapter does not apply, or

    (b) to any suit or claim of set-off not exceeding one
    hundred rupees in value which, in the Presidency-

    towns, is not of a kind specified in section 19 of the
    Presidency Small Cause Courts Act, 1882 (15 of 1882),
    or, outside the Presidency-towns, is not of a kind
    specified in the Second Schedule to the Provincial
    Small Cause Courts Act, 1887
    (9 of 1887), or to any
    proceeding in execution or other proceeding incidental
    to or arising from any such suit or claim.

    18. The Hon’ble Apex court in the case of Haldiram Bhujiawala
    (supra) has held as under :-

    22. In Raptakos Brett and Co. [(1998) 7 SCC 184] it was clarified
    that the contractual rights which are sought to be enforced by the
    plaintiff firm and which are barred under Section 69(2) are “rights
    arising out of the contract” and that it must be a contract entered
    into by the firm with the third-party defendants. Majmudar, J.

    stated as follows: (SCC p. 191, para 9)
    “A mere look at the aforesaid provision shows that the
    suit filed by an unregistered firm against a third party
    for enforcement of any right arising from a contract
    with such a third party would be barred….”

    (emphasis supplied)

    19. A coordinate Bench of this court in the case of Ashoka Group
    (supra) has held as under :-

    “20.Hon’ble Apex Court in Purushottam and another Vs. Shivraj
    Fine Arts Litho
    works and others, (2007) 15 SCC 58, dealing with
    present issue, has held as under:-

    “21. It would thus appear that registration of a firm was
    conceived as a protection to third parties dealing with a
    partnership firm. Registration ensured the certainty of
    existence of the firm and its membership, so that later
    an unsuspecting third party contracting with the firm
    may not run the risk of being defeated on discovery that
    neither the partnership firm nor its partners existed in
    fact. On the other hand, an unregistered firm could not
    bring a suit for enforcing its right arising from a
    contract.

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    22. In Raptakos Brett & Co. Ltd. [(1998) 7 SCC 184]
    this Court after noticing Section 69 of the Act observed:

    (SCC p. 191, para 9)
    “A mere look at the aforesaid provision shows that the
    suit filed by an unregistered firm against a third party
    for enforcement of any right arising from a contract
    with such a third party would be barred at its very
    inception. To attract the aforesaid bar to the suit, the
    following conditions must be satisfied:

    (i) That the plaintiff partnership firm on the date of the
    suit must not be registered under the provisions of the
    Partnership Act and consequently or even otherwise, the
    persons suing are not shown in the Register of Firms as
    partners of the firm, on the date of the suit.

    (ii) Such unregistered firm or the partners mentioned in
    the sub-section must be suing the defendant third party.

    (iii) Such a suit must be for enforcement of a right
    arising from a contract of the firm with such a third
    party.”

    23. Relying upon the aforesaid analysis this Court in
    Haldiram Bhujiawala [(2000) 3 SCC 250] held that the
    contract contemplated by Section 69 of the Act is the
    contract entered into by the firm with the third-party
    defendant. The contract by the unregistered firm
    referred to in Section 69(2) must not only be one
    entered into by the firm with a third-party defendant,
    but must also be one entered into by the plaintiff firm in
    the course of the business dealings of the plaintiff firm
    with such third-party defendant.

    24. With respect, we find ourselves in complete
    agreement with the principles enunciated in Haldiram
    Bhujiawala [(2000) 3 SCC 250]. Having regard to the
    purpose Section 69(2) seeks to achieve and the interest
    sought to be protected, the bar must apply to a suit for
    enforcement of right arising from a contract entered into
    by the unregistered firm with a third party in the course
    of business dealings with such third party. If the right
    sought to be enforced does not arise from a contract to
    which the unregistered firm is a party, or is not entered
    into in connection with the business of the unregistered
    firm with a third party, the bar of Section 69(2) will not
    apply.”

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    21. Hon’ble Apex Court in Shiv Developers (supra) also, after
    referring and relying upon Haldiram Bhujiwala (supra) , has held
    as under:-

    “15. In our view, the questions arising in this matter
    could be directly answered with reference to the
    principles enunciated by this Court in Raptakos Brett &
    Co. Ltd. v. Ganesh Property [Raptakos Brett & Co. Ltd.

    v. Ganesh Property, (1998) 7 SCC 184] , which have
    further been explained and applied by this Court in
    Haldiram Bhujiawala [Haldiram Bhujiawala v. Anand
    Kumar Deepak Kumar
    , (2000) 3 SCC 250] and
    Purushottam [Purushottam v. Shivraj Fine Arts Litho
    Works
    , (2007) 15 SCC 58] .
    We may take note of the
    principles vividly exposited in Haldiram Bhujiawala
    [Haldiram Bhujiawala v. Anand Kumar Deepak Kumar
    ,
    (2000) 3 SCC 250] that to attract the bar of Section
    69(2)
    of the 1932 Act, the contract in question must be
    the one entered into by firm with the third-party
    defendant and must also be the one entered into by the
    plaintiff firm in the course of its business dealings; and
    that Section 69(2) of the 1932 Act is not a bar to a suit
    filed by an unregistered firm, if the same is for
    enforcement of a statutory right or a common law right.

    16. …………………………..

    “8. The points that arise for consideration are:

    (i) Whether Section 69(2) bars a suit by a firm not
    registered on the date of suit where permanent
    injunction and damages are claimed in respect of a trade
    mark as a statutory right or by invoking common law
    principles applicable to a passing-off action?

    (ii) Whether the words “arising from a contract” in
    Section 69(2) 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 or whether the bar
    under Section 69(2) can be extended to any contract
    referred to in the plaint unconnected with the defendant,
    as the source of title to the suit property?”

    16.1. Answering the first question in the negative, this
    Court referred to the previous decision in Raptakos
    Brett [Raptakos Brett & Co. Ltd. v. Ganesh Property
    ,
    (1998) 7 SCC 184] and held as follows :

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    “9. The question whether Section 69(2) is a bar to a suit
    filed by an unregistered firm even if a statutory right is
    being enforced or even if only a common law right is
    being enforced came up directly for consideration in
    this Court in Raptakos Brett & Co. Ltd. v. Ganesh
    Property [Raptakos Brett & Co. Ltd.
    v. Ganesh
    Property, (1998) 7 SCC 184] . In that case, Majmudar,
    J. speaking for the Bench clearly expressed the view
    that Section 69(2) cannot bar the enforcement by way of
    a suit by an unregistered firm in respect of a statutory
    right or a common law right. On the facts of that case, it
    was held that the right to evict a tenant upon expiry of
    the lease was not a right “arising from a contract” but
    was a common law right or a statutory right under the
    Transfer of Property Act. The fact that the plaint in that
    case
    referred to a lease and to its expiry, made no
    difference. Hence, the said suit was held not barred. It
    appears to us that in that case the reference to the lease
    in the plaint was obviously treated as a historical fact.

    That case is therefore directly in point. Following the
    said judgment
    , it must be held in the present case too
    that a suit is not barred by Section 69(2) if a statutory
    right or a common law right is being enforced.

    xxx x xxxx xxxx xxxx

    11. Likewise, if the reliefs of permanent injunction or
    damages are being claimed on the basis of a registered
    trade mark and its infringement, the suit is to be treated
    as one based on a statutory right under the Trade Marks
    Act
    and is, in our view, not barred by Section 69(2).

    12. For the aforesaid reasons, in both these situations,
    the unregistered partnership in the case before us cannot
    be said to be enforcing any right “arising from a
    contract”. Point 1 is therefore decided in favour of the
    respondent-plaintiffs.”

    16.2 This Court further exposited on the scope of the
    words “enforcing a right arising under the contract”, as
    used in Section 69(2) of the 1932 Act; and after a
    detailed survey of the reports and precedents which led
    to the frame of the said provision as also after reference
    to various authorities on the point, this Court explained
    the rationale and object of the provision that the same
    was intended to protect those in commerce who deal

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    15 FA-1458-2025
    with a partnership firm in business, inasmuch as they
    ought to be enabled to know the names of the partners
    of the firm before they deal with them in business; and
    the bar of Section 69(2) is not attracted to any and every
    contract referred to in the plaint as a source of title to an
    asset owned by the firm. This Court held and explained
    as under:-

    “23. The further and additional but equally important
    aspect which has to be made clear is that the contract by
    the unregistered firm referred to in Section 69(2) must
    not only be one entered into by the firm with the third-
    party defendant but must also be one entered into by the
    plaintiff firm in the course of the business dealings of
    the plaintiff firm with such third-party defendant.

    24. … The real crux of the question is that the
    legislature, when it used the words “arising out of a
    contract” in Section 69(2), it is referring to a contract
    entered into in course of business transactions by the
    unregistered plaintiff firm with its defendant customers
    and the idea is to protect those in commerce who deal
    with such a partnership firm in business. Such third
    parties who deal with the partners ought to be enabled
    to know what the names of the partners of the firm are
    before they deal with them in business.

    25. Further, Section 69(2) is not attracted to any and
    every contract referred to in the plaint as the source of
    title to an asset owned by the firm. If the plaint referred
    to such a contract it could only be as a historical fact.
    For example, if the plaint filed by the unregistered firm
    refers to the source of the firm’s title to a motor car and
    states that the plaintiff has purchased and received a
    motor car from a foreign buyer under a contract and that
    the defendant has unauthorisedly removed it from the
    plaintiff firm’s possession, it is clear that the relief for
    possession against the defendant in the suit does not
    arise from any contract which the defendant entered
    into in the course of the plaintiff firm’s business with
    the defendant but is based on the alleged unauthorised
    removal of the vehicle from the plaintiff firm’s custody
    by the defendant. In such a situation, the fact that the
    unregistered firm has purchased the vehicle from
    somebody else under a contract has absolutely no

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    bearing on the right of the firm to sue the defendant for
    possession of the vehicle. Such a suit would be
    maintainable and Section 69(2) would not be a bar,
    even if the firm is unregistered on the date of suit. The
    position in the present case is not different.”

    17. The aforesaid decision in Haldiram Bhujiawala
    (supra) was further considered and applied by this Court
    i n Purushottam [Purushottam (supra) while holding as
    under:- “24.
    With respect, we find ourselves in
    complete agreement with the principles enunciated in
    Haldiram Bhujiawala [Haldiram Bhujiawala v. Anand
    Kumar Deepak Kumar
    , (2000) 3 SCC 250] . Having
    regard to the purpose Section 69(2) seeks to achieve
    and the interest sought to be protected, the bar must
    apply to a suit for enforcement of right arising from a
    contract entered into by the unregistered firm with a
    third party in the course of business dealings with such
    third party. If the right sought to be enforced does not
    arise from a contract to which the unregistered firm is a
    party, or is not entered into in connection with the
    business of the unregistered firm with a third party, the
    bar of Section 69(2) will not apply.”

    22. From plaint averments as well as documents referred and
    quoted in preceding paras, it is evident that present suit has been
    filed on behalf of the Ashoka Group for specific performance of
    contract that was executed by one of its partner, on behalf of
    Ashoka Group, after having been authorized by Ashoka Group.
    Thus, present suit has been filed for enforcement of a right arising
    from a contract of firm with third party. Thus, if facts of the
    present case, as quoted and referred in preceding paras, along with
    partnership deed/resolution, are examined in the light of legal
    provision contained in Section 69(2) of the Indian Partnership Act
    1932 as well as principles laid down by Hon’ble Apex Court in
    Haldiram Bhujiawala (supra) Purshottam (supra) and Shiv
    Developers (supra), then, it is evident that present suit filed by the
    appellant/plaintiff is clearly barred by Section 69(2) of Indian
    Partnership Act, 1932.”

    20. Applying the aforesaid principles of law laid down by Hon’ble
    Apex Court and in view of the factual analysis of the present case, bearing in

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    17 FA-1458-2025
    mind the averments made in the plaint, it is found by this Court that the
    present suit is not barred by section 69(2) of the Indian Partnership Act. It
    has been clarified by the Hon’ble Apex court in the case of Haldiram
    Bhujiawala
    (supra) that the contractual rights which are sought to be
    enforced by the plaintiff firm and which are barred under section 69(2) are
    “rights arising out of the contract” and it must be a contract entered into by
    the firm with the third party defendants.
    Same principle has been reiterated
    by the Hon’ble Apex Court in Purushottam and another Vs. Shivraj fine Arts
    Litho Works and others, (2007) 15 SCC 58, Shiv Developers through its
    Partner Sunilbhai Somabhai Ajmeri Vs. Aksharay Developers, AIR 2022 SC
    772, Shakti Bhog Food Industries Ltd. Vs. Central Bank of India
    , AIR 2020
    SC 2721 and by this Court in Ashoka Group (supra).

    21. When pleadings of the plaint have been examined, it is found that
    the plaintiff is not claiming any rights arising out of a contract with a third
    party being the partner of the firm nor it is a case that a partnership firm has
    entered into a contract with a third party in which the appellant being a
    partner having rights. In fact, it is a case of the appellant that the appellant
    has invested money with defendants, who are said to be partners in the
    partnership firm to purchase land. However, the defendant became the office
    bearer of the society from which it is to be purchased, therefore, it is not a
    case of the firm against the third party. It is the case of the appellant/plaintiff
    for declaration of his rights in the land. However, the relief which has been
    sought by the appellant is ex-facie not tenable in the eyes of law in absence
    of any transfer in favour of the appellant and other persons who have

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    18 FA-1458-2025
    invested with the appellant to purchase the land as there is no transfer deed
    available on record.

    22. The object behind section 69(2) of the Act is that a third party
    should not be defrauded by a firm which is not registered, against whom no
    contractual obligation can be enforced. But, as a matter of fact, the learned
    court below has not decided the application on the ground of not having
    cause of action or rights of the appellant, which can be declared under
    section 34 of the Specific Relief Act. Thus, in the considered opinion of this
    court, rejection of the plaint under Order 7 Rule 11 CPC is not in accordance
    with law. Accordingly, the impugned order dated 9.5.2025 passed by 18th
    District Judge, Jabalpur, in R.C.S.A.No.15063/2024 is hereby quashed. The
    matter is remanded back to the trial court to re-examine the application on
    the available grounds by giving opportunity to all the parties to plead and
    submit their arguments.

    23. With the aforesaid, the appeal stands disposed of.

    (DEEPAK KHOT)
    JUDGE

    HS

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