Unregistered Firm Can Sue To Enforce Statutory Or Common Law Rights; S.69(2) Partnership Act No Bar: Delhi High Court

The Delhi High Court has held that Section 69(2) of the Partnership Act, 1932 is not an embargo to suits filed by unregistered firms, if any statutory or common law right is being sought to be enforced.

A division bench of Justices Prathiba M. Singh and Shail Jain observed,

“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. However, the exceptions to the said provision are carved out in Haldiram Bhujiawala & Anr. v. Anand Kumar Deepak Kumar & Anr. (2000).”

In the said judgment the Supreme Court had held 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.

In the case at hand, an unregistered Partnership firm had challenged over ₹50 lakh tax demand raised against it through its partner.

The Department objected to maintainability of the petition, stating that the firm is unregistered.

Rejecting Department's claim, the High Court observed,

“In the present case, the writ petition seeks reliefs under the CGST Act, under which the Petitioner no.2 has a registration - despite being an unregistered Partnership firm. Such a firm, which is paying taxes and has any grievances against the Department cannot be non-suited from enforcing statutory rights.”

It added that since the Partner has also been impleaded, it cannot be held that the writ petition is not maintainable.

Appearance: Mr. Abhishek Garg & Mr. Naman Mehta, Advs for Petitioners; Mr. Sumit K. Batra, Adv. (9911211000) Mr. Arun Khatri, SSC with Ms. Anoushka Bhalla, Adv for Respondents

Case title: Amit Kumar Basau & Anr. v. Sales Tax Officer Class Ii Avato Ward 13 (Special Zone) Zone 12 Delhi & Ors.

Case no.: W.P.(C) 15327/2025

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