V ASANT RAO & Anr. v. SHYAMRAO & Ors.

firm which Chapter VI of the Indian Partnership Act contains besides provisions for the dissolution of partnership, are left untouched by Section 590 of the Companies Act, 1956. Section 590 makes it clear that Part X of the Act does not affect the operation of other enactments providing for any partnership, association or com pa·nY being wound up. [220H, 221 A] l'attada Authayya v. Pattada So1navya & Ors. AlR 1955 Mysore 149, partly over-ruled. - A B c E CIVIL APPELLATE 'JuRISDICTION: Civil Appeal No. 393 of 1977. Appeal by Special Leave from the Judgment and Order dated 8-10-1976 of the Bombay High Court in Civil Revision No. 137 /76. K. S. Ramamoorth)', S. Balakrishnan and N. N. Ghatate for the F Appellants. Naunit Lal, Miss Lalita Kohli and S. G. Ghate for Respondents Nos. 1 and 3 to 6. The Judgment of the. Court was delivered by G H The reliefs asked for included a declaration that GUPTA, J.-The two appellants and the six respondents were part- ners of a firm called "Shivraj Fine Art Litho Works." The appel lants as plaintiffs instituted civil suit No. 9 d!j 1974 in the Court oe the Senior Civil Judge, Nagpur, for dissolution of the partnership and accounts. firm stood dissolved on and from January 9, 1974. It appears that thereafter the original defendants who are the respondents Wfore us were transposed as plaintiffs and the appellants who were originally The the plaintiffs were transferred to the category of defendants. transposed defendants raised an objection that the court had jurisdiction to entertain the suit in view of the provisions of Part X VASANT RAO v. SHYAM RAO (Gupta, !.) 219 of the Companies Act, 1956. The defendants then moved the Bombay High Court, Nagpur tion. Bench, in revision. The High Court having dismissed the revision petition the present appeal has been filed with special leave granted by this Court. The trial court rejected the applica- A It is argued on behalf of the appellants that as Part X of the Com panies Act, 1956 contains special provisions for the winding up of unregistered companies, which expression as defined in that Act in cludes a partnership consisting of more than seven members, any action for the winding up such a partnership· must be in accordance with the procedure prescribed for that purpose in the Companies Act, and the suit instituted in the court of the Senior Civil Judg~ was Part X of the Companies Act includes sections not maintainable. Section 582 defines the expression "unregistered com 582 to 590. pany" a:s follows : Meaning of "unregistered Company". "For the purposes of this Part, the expression "unregistered com pany"- (a) shall not include- (i) a railway company incorporated by any Act of Parliament or other Indian law or any Act of Parliament of 'the United Kingdom; (ii) a company registered und.er this Act; or (iii) a company registered under any previous com panies law and not being a company the registe red office wherWJ: was in Burma, Aden or Pakis tan immediately before the separation of country from India; and (b) save as aforesaid, shall include any partnership. association or company consisting of.more than seven members at the time when the petition for winding up the partnership, association or company, as the case may be, is presented before the Court." It is not disputed that the partnership in question had more than seven members at the time when the suit 'was· instituted. This was therefore an "unregistered company" as defined in section 582 (b). Section 583 (I) states that subject to the provisions of this Part, any unregistered company may be wound up under this Act, and all the provisions of this Act With respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in sub-sections (2) to (5)". It is not necessary to refer in any great detail to these sub-sections except to point out that sub-section ( 4) mentions the circumstances in which an unregistered company may be wound up, and one 'of the circumstances is that the company It may 1also be stated that under sub-section h11s been dissolved. B c D E F G H A B c D E F G H 220 SUPREME COURT REPORTS [1978] 1 S.C.R. (3) no unregistered company can be wound up under this Aci volun tarily or subject· to the supervision of the court and can only wound up by the court. Admittedly this is not a case of voluntary winding up or winding up subject to the supervision of the court. Chapter VI of the Indian Partnership Act, 1932 also c011tains provi sions for the dissolution of a firm and its winding up on 'dissolution. The argument for the appellants is that the special provisions of Part X of the Companies Act exclude the operation of the general law con tained in the Partnership Act in the matter of winding up of a' firm having more. than seven p~rsons, and as the Civil Judge trying the suit shall have to apply the Partnership Act, the suit is not maintain able. It is difficult to appreciate why the suit should not be maintainable at any rate in so far as it is one for dissolution of the firm. As already stated, one of the reliefs prayed for is a declaration that the This is not a relief that firm stood dissolved from January 9, 1974. can be claimed in a proceeding under Part X of the Companies Act which provides for the winding up of unregistered companies. How ev~r it is not necessary to consider whether the Civil Judge had juris diction to entertain some of the claims made in the suit, because sec tion 590 o'f the Companies Act makes it clear that Part X of the Act does not affect the operation of the Indian Partnership Act. Section 590 states : Saving and construction of enactments conferring power to wind up partnership, association or company in certain cases. · "Nothing in this Part shall affect 'the operation of any enactment which provides for any partnership, association or company being wound up, or being wound up as a com pany or as an unregistered company, under the Indian Come panies Act, 1913 or any Act repealed by that Act : Provided that references in any such enactment to any provision contained in the Indian Companies Act, 1913 or in any Act repealed by that Act shall be read as references to the corresponding provision, if any contained in this Act." As the marginal note to this section indicates, this is a saving pro It leaves unaffected the operation of any enactment (a) which v1s1on. provides for any partnership, association or company being wound up, or (b) which provides for any partnership, association or com pany being wound up as a company or as an unregistered company under the Indian Companies Act, 191 3 or any Act repealed by that Act. An enactment means the whole Act or a part of it. The pro references Indian in any such enactment Companies Act, Act is not relevant for the present purpose. provisions for winding up of the affairs of a firm which Chapter VI of the Indian Partnership Act contains besides pro"isions for the dissolution of partnership are left untouched by section 590 of the construction repealed by to any provision It is clear that any Act 1913 or contains a ' . VASANT RAO v. SHYAM RAO (Gupta, J.) 221 The cases cited in support of the respective A Companies Act, 1956. contentions of the parties are not really on the point under considera- tion except the decision of the Mysore High Court in Pattada Auth ayya v. Pattada Somayya and others('), to which cotmsel for The Mysore case contains· an observation on appellants referred. section 271 of the Indian Companies Act, 1913 which corresponds single to section 590 of the, Companies Act, 1956. Judge who decided the case held that there was nothing in section B 271 or in the words "any unregistered company may be wound up" appearing in that section to indicate that the aggrieved party had an option to institute a suit for winding up of an unregistered company. This decision does not take note of sub-\Section (2) of section 271 which is similar to section 590 of the Companies Act, 1956 leaving unaffected the operation of other enactments providing for any part- 1iership, association or company being wound up. The learned C The appeal is dismissed with costs. M.R. Appeal dismissed • • (I) A.LR. 1955 Mysore 149.