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218
V ASANT RAO AND ANOTHER
_v._
SHYAMRAO AND ORS.
_July_ 28, 1977
(A. C. GUPTA .AND P. N. SHINGHAL, JJ.]
_Conipanies_ _Act,_ 1956, _Part X,_ S. 590 _ris-a-vis Indian Partnership Act,_ 1932
_for winding lip_ _of_ _unregistered_ _co111panies._
In a civil suit for the dissolution of partnership between the appellants and
respondents, the defendants-respondents raised an objection that the court had
no jurisdiction to entettain the suit in view of Part X of the Companies Act,
1956. The application 'vas rejected by the Trial Court and thereafter by the
High Court in revision.
It was argued before this Court that as Part X of the Companies Act cor.i.tains special provisions for the \vinding up of unregistered companies including
partnerships containing more than seven membe:rs, such partnerships can be
wound up only in accordance with the procedure prescribed in the Companies
Act, and that the suit before the Senior Civil Judge was not maintainable.
Dismissing the appeal by special. leave, the Court.
HELD : The provisions for winding up of the affairs of a 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 compa·nY being wound up. [220H, 221 A]
_l'attada Authayya_ v. _Pattada So1navya_ _&_ _Ors._ AlR 1955 Mysore 149, partly
over-ruled.
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
GUPTA, J.-The two appellants and the six respondents were partners of a firm called "Shivraj Fine Art Litho Works." The appellants 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. The reliefs asked for included a declaration that the
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 plaintiffs were transferred to the category of defendants. The
transposed defendants raised an objection that the court had no
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 trial court rejected the applica- A
tion. The defendants then moved the Bombay High Court, Nagpur
Bench, in revision. The High Court having dismissed the revision
petition the present appeal has been filed with special leave granted
by this Court.
It is argued on behalf of the appellants that as Part X of the Companies Act, 1956 contains special provisions for the winding up of
unregistered companies, which expression as defined in that Act includes 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
not maintainable. Part X of the Companies Act includes sections
582 to 590. Section 582 defines the expression "unregistered company" 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 registered office wherWJ: was in Burma, Aden or Pakistan immediately before the separation of that
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
h11s been dissolved. It may 1also be stated that under sub-section
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220 SUPREME COURT REPORTS [1978] 1 S.C.R.
(3) no unregistered company can be wound up under this Aci voluntarily or subject· to the supervision of the court and can only be
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 provisions 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 contained 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 maintainable.
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
firm stood dissolved from January 9, 1974. This is not a relief that
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 jurisdiction to entertain some of the claims made in the suit, because section 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 company 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 prov1s1on. It leaves unaffected the operation of any enactment (a) which
provides for any partnership, association or company being wound
up, or (b) which provides for any partnership, association or company 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**viso** **which** **contains** **a** **rule** **of** **construction** **of** **references**
in any such enactment to any provision in the Indian
Companies Act, 1913 or any Act repealed by that
Act is not relevant for the present purpose. It is clear that the
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
' .
# •
VASANT RAO _v._ SHYAM RAO _(Gupta,_ _J.)_ 221
Companies Act, 1956. The cases cited in support of the respective A
contentions of the parties are not really on the point under consideration except the decision of the Mysore High Court in _Pattada Auth-_
_ayya_ v. _Pattada Somayya and others('),_ to which cotmsel for the
appellants referred. The Mysore case contains· an observation on
section 271 of the Indian Companies Act, 1913 which corresponds
to section 590 of the, Companies Act, 1956. The learned single
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 part1iership, association or company being wound up. C
The appeal is dismissed with costs.
M.R. _Appeal dismissed •_
(I) A.LR. 1955 Mysore 149.
