Unregistered Partnership Firm Can Maintain Writ Petition to Enforce Statutory Rights under the CGST Act: Delhi High Court
A significant legal issue — whether an unregistered partnership firm is barred under Section 69(2) of the Indian Partnership Act, 1932, from seeking relief under Articles 226 and 227 of the Constitution, or whether such a firm can nevertheless maintain a writ petition when enforcing statutory rights under the CGST Act — was examined by the Hon’ble Delhi High Court, in Amit Kumar Basau & Anr. v. Sales Tax Officer (W.P.(C) 15327/2025, decided on 8 October 2025),).
The Delhi High Court, clarified the legal position regarding the maintainability of writ petitions by unregistered partnership firms. The Court held that the bar under Section 69(2) of the Indian Partnership Act, 1932 is limited to suits arising from contractual rights and does not extend to proceedings seeking enforcement of statutory or common law rights.
M/s Basau Construction (India) (Petitioner No.2) is an unregistered partnership firm and Mr. Amit Kumar Basau (Petitioner No.1) is partner in the said unregistered partnership firm. The petitioners have challenged the following:
1. An order dated 20 February 2025 issued by the Sales Tax Officer Class II/Avato Ward113(Special Zone), Zone 12, Delhi raising a tax demand of ₹59,05,232/-, and with interest and penalty totaling ₹1,09,02,348/-.
2. A Show Cause Notice (SCN) dated 27 November 2024 for the FY 2020–21.
3. Two Notifications — Central Tax No. 40/2021 (dated 29 December 2021) and State Tax No. 40/2021 (dated 9 June 2022) — which are already under challenge before the Delhi High Court in Sarens Heavy Lift India Pvt. Ltd. v. Sales Tax Officer (W.P.(C) 9060/2025).
The respondent objected to the maintainability of the writ petition on the ground that an unregistered partnership firm is barred from instituting legal proceedings under Section 69 of the Indian Partnership Act, 1932. It was contended that since Petitioner No. 2 — M/s Basau Construction (India) — is an unregistered firm, the present petition is not maintainable in law.
Court observations
The Court observed that Section 69 of the Indian Partnership Act, 1932 has an embargo on an un-registered firm from filing a suit or any proceeding for enforcement of a right. The same 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
However, the exceptions to the said provision are carved out in the following decisions:
- Haldiram Bhujiawala & Anr. v. Anand Kumar Deepak Kumar & Anr. [(2000)3 SCC 250]:
“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 Raptakas Brett Co. Ltd. v. Ganesh Property. 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….”
“35. In our view, the questions arising in this matter could be directly answered with reference to the principles enunciated by this Court in the case of Raptakos Brett & Co. Ltd. v. Ganesh Property: (1998) 7 SCC 184, which have further been explained and applied by this Court in the cases of Haldiram Bhujiawala and Purushottam (supra).We may take note of the principles vividly exposited in the case of Haldiram Bhujiawala (supra) that to attract the bar of Section 69(2) of the Act of 1932, 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 Act of 1932 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.”
The Court observed that Section 69(2) of the Indian Partnership Act, 1932 cannot operate as a bar to proceedings instituted by an unregistered firm where the firm seeks to enforce a statutory or common law right. In the present case, the writ petition was filed to seek reliefs under the Central Goods and Services Tax Act, (CGST Act), under which Petitioner No. 2 holds a valid registration, despite being an unregistered partnership firm under the Partnership Act.
The Court held that a firm which is registered under the CGST Act, pays taxes, and has grievances against the Department cannot be denied the right to enforce its statutory entitlements merely due to the absence of registration under the Partnership Act. Moreover, since one of the partners, Mr. Amit Kumar Basau (Petitioner No. 1), was also impleaded as a petitioner, the writ petition was found to be maintainable.
Accordingly, the Court granted liberty to the petitioners to file an appeal against the impugned order by 30 November 2025 along with the requisite pre-deposit. It was further directed that if such an appeal is filed within the stipulated time, it shall not be treated as time-barred and must be decided on merits.
Conclusion
The Delhi High Court, in Amit Kumar Basau & Anr. v. Sales Tax Officer (W.P.(C) 15327/2025, decided on 8 October 2025), clarified the legal position regarding the maintainability of writ petitions by unregistered partnership firms. The Court held that the bar under Section 69(2) of the Indian Partnership Act, 1932 is limited to suits arising from contractual rights and does not extend to proceedings seeking enforcement of statutory or common law rights.
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