Source: RTP,June20195 Marks
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Question Scenario

P, X, Y and Z are partners in a registered firm A & Co. X died and P retired. Y and Z filed a suit against W in the name and on behalf of firm without notifying to the Registrar of firms about the changes in the constitution of the firm. Is the suit maintainable?

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Suggested Answer

As regards the question whether in the case of a registered firm (whose business was carried on after its dissolution by death of one of the partners), a suit can be filed by the remaining partners in respect of any subsequent dealings or transactions without notifying to the Registrar of Firms, the changes in the constitution of the firm, it was decided that the remaining partners should sue in respect of such subsequent dealings or transactions even though the firm was not registered again after such dissolution and no notice of the partner was given to the Registrar. \nThe test applied in these cases was whether the plaintiff satisfied the only two requirements of Section 69 (2) of the Act namely, \n(i) the suit must be instituted by or on behalf of the firm which had been registered.\n(ii) the person suing had been shown as partner in the register of firms\nIn the given case, the firm A & Co. was a registered firm. The fact that X died and P retired, and such changes in the constitution of the firm were not notified to the Registrar of Firms, does not affect the registration status of the firm. Registration once made continues to be effective until the firm is dissolved. Hence, the suit filed by Y and Z in the name and on behalf of the firm is maintainable under Section 69(2) of the Indian Partnership Act, 1932.

Exam Strategy Tip

When answering law questions in the CA Foundation exam, follow the "Provision -> Facts -> Conclusion" structure for maximum marks. Ensure to state the relevant sections where applicable to earn bonus marks from the evaluator.

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