Bar U/S 69 of Partnership Act not applicable to Arbitration Dispute of Unregistered Partnership Firm

Md. Wasim Vs Bengal Refrigeration and Company (Calcutta High Court)

The partnership deed containing the Arbitration Clause has not been disputed by the respondents. It is also not in dispute that it is an unregistered partnership deed.

The objection of the respondents is in respect of the bar contained under Section 69 of the Act of 1932. Sub-sections (1) and (2) of Section 69 of the Act of 1932 restrict filing of suit by any person as a partner of unregistered firm. Sub-section (3) of Section 69 of the Act of 1932 makes the provisions of Sub-sections (1) and (2) applicable also to a claim of suit of or “other proceedings” to enforce a right arising from a contract. Hon’ble Supreme Court in the matter of Umesh Goel vs. Himachal Pradesh Cooperative Group Housing Society Limited reported in (2016) 11 SCC 313 has settled that the arbitral proceedings will not come under the expression “other proceedings” of Section 69(3) of the Act of 1932 and that the ban imposed under Section 69 can have no application to arbitration proceedings as well as the arbitral award.

In view of the above legal position, the objection of the respondent based upon Section 69 of the Act of 1932 cannot be sustained and is hereby rejected.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

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