JUDGMENT
V.S. Aggarwal, J.
1. Mahinder Kumar Chaudhary and Mrs. Dharam Devi
Chaudhary, plaintiffs have filed a suit for
declaration and for recovery of Rs. 13,39,088/-. A
declaration is prayed to the effect that the bank
cheques No. 147524 to 147523 drawn on Syndicate Bank
and procured by the defendants and null and void.
2. The facts alleged are that plaintiffs were
appointed as stockists on 18th June, 1980 by the
defendants vide agreement dated 18th June, 1980.
Defendants were a partnership firm. The plaintiff
paid Rs. 25,000/- as security deposit. Thereafter the
partnership firm of the defendant was converted into a
company incorporated under the Companies Act, 1956.
up to September, 1984 defendants were supplying the
goods to the plaintiff on documents through bank
system. The plaintiffs used to pay the value of the
supplies into the bank and obtain the lorry receipts
for release of the goods. The defendants from October
1984 stopped the system and adopted the cheque system
under which the defendants collected blank cheques in
advance from the plaintiffs and the defendants filled
in those cheques for the amount of supplies made by
them and they presented the cheques to their bankers
for collection. Under this system the plaintiffs from
time to time handed over sufficient number of blank
cheques to the defendants. The defendants reimbursed
to the stockists for the value of the damaged stocks,
additional discounts given to the retailers and
discrepancies in the invoices etc.
3. It has further been pleaded that defendants had
similar disputes over the sales tax rates on its
product ODOMOS with Delhi Sales Tax authorities. The
revenue claimed that product was taxable at 7% while
the defendants disputed that it was taxable at 5%. In
order to cover the possible tax liability of 2% the
defendants collected the additional 2% from the
stockists as security tax. In this process defendants
had collected from the plaintiffs Rs. 6,15,000/- from
April 1986 to February 1991. The plaintiffs came to
know that this issue was decided in favor of the
defendants. The plaintiffs requested the defendants
for refund of the amount. But it was put off on one
pretext or the other. Defendants further collected a
sum of Rs. 2,52,000/- by way of octroi, transport and
freight charges which they were not entitled to
charge. Furthermore, defendants are claimed to be
destroying the damaged, soiled stocks lying with the
stockists. The stocks collected from the market were
to be destroyed by the officials of the defendant.
The plaintiffs had accumulated the soiled/damaged
stock of Rs. 1,50,000/- and is entitled for
reimbursement of the same. In addition to that it has
been pleaded that in 1992-93 the defendant appointed
sub-stockist in the territory allotted to the
plaintiff. The understanding between the parties for
the appointment of sub-stockist was that plaintiffs
were to get 2% additional discount. The plaintiffs
thus were entitled to Rs. 34,838/-. It has been
asserted that it was a usual practice of the
defendants to operate various market scheme through
their stockists. These scheme include consumer offer,
rebate, free issue gifts. The plaintiffs had incurred
an expenditure to the tune of Rs. 1 lakh on this count
and are entitled to the refund of the same. Lastly it
is claimed that defendants introduced scheme called
Ex-godown on BABOOL tooth paste. As per this scheme
stockists were given additional discount on the sale of
BABOOL Toothpaste and plaintiffs are entitled to a
discount of Rs. 10,000/-.
4. Plea has been raised that believing the
defendants the plaintiffs handed over 10 signed blank
cheques and defendants supplied goods worth
Rs. 9,83,180 to the plaintiff. The above supplies to
the plaintiff were very much in excess of their normal
purchase. The plaintiffs received the invoice on
1.11.1994 but to their dismay found that only a small
sum of Rs. 59,107.81 had been adjusted against the
invoice. Plaintiff wrote to the defendants in this
regard. It is claimed that in this process
Rs. 13,39,088/- was due to the plaintiff and
declaration with respect to cheques referred to above
that they were null and void was also claimed.
5. An application under Order 7 Rule 11 has been
filed on behalf of the defendant for rejection of the
plaint. It has been pleaded that the suite has been
filed for recovery of the amount referred to above.
The claim has been made by the plaintiff on behalf of
the partnership firm M/s Emkay Agencies. It was this
firm which was the stockist/distributors. The claim
includes refund of security tax, octroi, transport and
freight charges and value of damaged goods. The
plaintiff had no independent privity of contract with
the defendants except as a partner of the firm. The
firm is not registered and therefore the suit is
barred. It is also claimed that it is barred
by time and therefore the plaint should be
rejected.
6. The application as such has been opposed. It is
denied that the suit is barred by time or that Section
69 of the Indian Partnership Act bars further filing
of the suit.
7. Sub-section (2) to Section 69 of the Partnership
Act reads as under:-
(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 and or have been shown in the
Registered firms as partners in the firm.
x x x x x x x x x x
8. Perusal of the relevant provision referred to
above clearly show that if a person is to enforce a
right arising from a contract then if the firm is
unregistered as a partnership firm then under
Sub-section (2) to Section 69 the firm is debarred and
even partners are debarred from suing with respect to
the said right.
9. On behalf of the defendant it is pointed that
plaintiffs are the partners of the firm and the firm
is unregistered and therefore plaint as such must be
rejected.
10. As already pointed above, the claim of the
plaintiff is basically is alleging that it was a
stockist/distributor of the defendant. It relates to
the goods supplied by the defendant. The plaintiff
claims refund of the security tax, octroi, transport
and freight charges and value of the damaged goods.
Plaintiff claims that defendants were liable to pay
back the said amount. It is abundantly clear from the
facts which have already been enumerated above that
claim arises from a contract between the parties.
Once the claim arises from a contract between the
parties Sub-section (2) to Section 69 will apply with
all its rigours.
11. On behalf of the plaintiff reliance was
strongly been placed on the decision of the Supreme
Court in the case of Raptakos Brett & Co. Ltd.
v. Ganesh Property . Therein too
the Supreme Court held that suit based on cause of
action, based on breach of covenant would be barred
under Sub-section 2 to Section 69. Learned counsel
for the plaintiff urged that the Supreme Court has
further held that if there is a cause of action based
on breach of statutory obligation then Sub-section (2)
to Section 69 will not bar the filing of the suit.
12. Indeed the legal position as argued is not
disputed but herein it is not the plaintiff’s case
that his cause of action is on breach of statutory
obligation. As referred to above the plaintiff claims
refund and the payments based on a contract that was
between the parties. The plaintiff was the stockist
of the defendant and indeed this was the contract and
for whatever reasons the plaintiff seek the refund or
the payment, it must be stated that it was arising
from the contract between the parties. Thus
Sub-section (2) to Section 69 would clearly bar the
filing of the suit.
13. In that event it was contended that suit for
declaration in any case would be maintainable whereby
the plaintiff seeks that the cheques purported to be
procured by the defendants are null and void. But in
this connection Section 30 of the Specific Relief Act
clearly provides the answer and negatives the
arguments of the plaintiffs learned counsel. No suit
for declaration is maintainable where an alternative
relief is available. The cheques so given had been
encashed and therefore alternative relief for recovery
of the amount would be maintainable, if any. The
simple suit for declaration as such consequently
keeping in view the facts referred to above, will not
be maintainable.
14. In fact of the aforesaid it is patent that in
the present form the suit would be barred by law and
therefore it is the plaintiff’s plaint is rejected
under Order 7 Rule 11 CPC. However, by way of
abundant caution it is added that nothing said herein
should be taken as an expression of opinion on the
merits of the matter.