JUDGMENT Prakash Krishna, J.
1. This is tenant's revision under Section 25 of the Provincial Small Causes Court Act. It arises out of an application filed under Order XXIII, Rule 1 (3)(b) of C.P.C. by the plaintiff opposite party who is arrayed as opposite party No. 1 in the revision. The said application, by the order under revision, has been allowed by the court below on the condition on payment of Rs. 2500 as costs with liberty to file fresh suit.
2. M/s. Jagat Estate, a partnership, instituted suit No. 80 of 2001 claiming itself to be landlord of the disputed property for ejectment of M/s. Bhartiya Antar Rashtriya Byopari Limited and M/s. Kishore Bandhu Private Limited (Applicants No. 1 and 2) on the ground that the plaintiff opposite party is a registered partnership firm. The defendant applicants have failed to pay the rent and are defaulters within meaning of Section 20 of U.P. Act No. 13 of 1972, thus, they are liable for eviction. Plea of subletting of major portion of the house in dispute to defendants No. 2, 3 and 4 was also raised in the plaint. in written statement it has been asserted that the defendants have already deposited the rent in proceedings under Section 30 (1) of U.P. Act No. 13 of 1972, the allegations of sub-tenancy was also denied. It has been stated that in any case the tenants having deposited a sum of Rs. 45,000 in the present suit under Section 20 (4) of the aforesaid Act, the suit for eviction is liable to be dismissed.
3. In the suit two applications-- one for amendment of the plaint and another for permission to withdraw the suit with permission to file fresh suit were filed by the plaintiff opposite party. in the application for withdrawal of the suit it has been stated that as the defendants have taken a plea that the plaintiff Firm was not registered on the date of institution of the suit, although it has been registered during the pendency of the suit, the plaintiff Firm has been advised to withdraw the suit with permission to file a fresh suit to avoid long drawn litigation on the aforesaid issue. The said application, as stated above, has been allowed by the order under revision.
4. Heard Shri Ravi Kant, senior advocate along with Sri V.N. Kapoor, advocate, for the applicants and Sri Pankaj Bhatia, the learned Counsel for the plaintiff opposite party No. 1. It has been contended in support of the revision by the senior counsel that it is settled law that such a suit is not maintainable on behalf of an unregistered Firm and is barred in view of Section 69 of the Partnership Act; no permission could be granted by the trial court under Order XXIII, Rule 1 (3), C.P.C. as the plaint itself is a nullity and the said defect in the plaint cannot be termed as "formal defect" within the meaning of the aforesaid Order XXIII, Rule 1 (3), C.P.C. Elaborating the argument, it was contended that a valuable right has been accrued in favour of the defendant applicants. in contra, the learned Counsel for the plaintiff opposite party submitted that no right has been accrued to the defendants in the suit and the court below has properly exercised its discretion while granting the permission and that there is no jurisdictional error in the order under revision. It was submitted that the deposit made under Section 20 (4) of the Act does not confer any right on the defendant-applicants and the defendant-applicants would not suffer any loss or in jury if the present suit is permitted to be withdrawn. It was further stated that a fresh suit being S.C.C. Suit No. 39 of 2004 as per permission granted by the court below has already been instituted by the plaintiff-opposite party. in any view of the matter, it was submitted, that the plaintiff Firm which was initially an unregistered Firm has got registration during the pendency of the suit under the Partnership Act, the defects, if any, has now been removed.
5. Sri Ashok Gupta in para 12 of his affidavit filed in support of the stay application has stated that after deposit of the amount by the defendant-applicant, the plaintiff opposite party became dishonest as he wanted to misappropriate amount deposited by the defendant applicants. in reply, it has been deposed in para 13 of the counter-affidavit that the plaintiff opposite party has not withdrawn the amount deposited by the present applicant. Thus, the present applicant, it was submitted by the landlord opposite party, have obtained the interim order from this Court by misrepresenting the fact regarding the withdrawal of the amount deposited by the defendant-applicants, the revision is liable to be dismissed on this ground alone.
6. During the course of the argument it was admitted by the counsel for the parties that neither the plaintiff-opposite party has withdrawn any amount deposited under Section 20 (4) of the Act nor the defendant applicants have withdrawn the cost awarded by the order under revision.
7. The point, thus, mooted in the revision for consideration of this Court is whether in the facts and circumstances of the case the order granting permission to withdraw the present suit with liberty to file fresh suit on the same cause of action is legally justified in view of Section 69 of the Partnership Act read with Order XXIII, Rule 1 (3), C.P.C. It is apt to consider the decisions relied upon by the learned Counsel for the applicants. It may be placed on record that the learned Counsel for the opposite party felt satisfied by referring the order under revision and the withdrawal application and the objections thereof, and could not cite any precedent in support of the case.
8. The decisions relied upon by the learned Counsel for the applicants are to the effect that a suit by an unregistered Firm for eviction of defendant-applicants is not maintainable as the words "other proceedings" referred to in Section 69(3) of the Partnership Act relates to the enforcement of a right arisen from a contract. For this proposition reliance has been placed upon SaifuddinHusaini u. Burma Cycle Trading Co. Ltd. : Mahendra Singh Chaudhory v. Tej Ram Singh and Gappumal Gordhan Das v. Chunni Lal Shyam Lal . The other cases are Dwijendra Nath Singh v. Govind Chandra and Annapurna Fertilizers and General Stores v. Arunodaya Fertilizers and General Stores . wherein it has been Laid down that if a Firm is not registered on date of institution of suit, the suit on its behalf is not maintainable. These decisions have gone to the extent that subsequent registration during the pendency of the suit does not cure the defect. Such a broad proposition Laid down in these decisions are doubtful in view of the subsequent Judgment of the Apex Court, on which I could lay hand: Raptakos Brett and Co. v. Ganesh Property . in this case the judgment of the Calcutta High Court in the case of Dwijendra Nath Singh (supra) has been referred in para 27 of the report. However, the Apex Court in para 30 has made the following observations which are reproduced below:
We, prima facie, find substance in what is contended by Dr. Singhvi for the respondent. It is obvious that even if the suit is filed by an unregistered partnership firm, against a third party and is treated to be in competent as per Section 69, sub-section (2) of the Partnership Act, if pending the suit before a decree is obtained the plaintiff puts its house in order and gets itself registered the defect in the earlier filing which even though may result in treating the original suit as still born, would no longer survive if the suit is treated to be deemed to be instituted on the date on which registration is obtained. If such an approach is adopted, no real harm would be caused to either side. As rightly submitted by Dr. Singhvi that, Order VII, Rule 13 of the C.P.C. would permit the filing of a fresh suit on the same cause of action and if the earlier suit is permitted to be continued it would continue in the old number and the parties to the litigation would be able to get their claim adjudicated on merits earlier while on the other-hand if such subsequent registration is not held to be of any avail, all that would happen is that a fresh suit can be filed immediately after such registration and then it will bear a new number of a subsequent year. That would further delay the adjudicatory process of the Court as such a new suit would take years before it gets ready for trial and the parties will be further deprived of an opportunity to get their disputes adjudicated on merits at the earliest and the arrears of cases pending in the Court would go on mounting. It is axiomatic to say that as a result of protracted litigation spread over tiers and tiers of Court proceedings in hierarchy, the ultimate result before the highest Court would leave both the parties completely frustrated and financially drained off. To borrow the analogy in an English poem with caption "Death the Leveler", with appropriate modifications, the situation emerging in such cases can be visualized as under: "upon final Courts' purple alter see how victor victim bleed." All these considerations in an appropriate case may require a re-look at the decision of the two-member Bench of this Court in 1989 (3) SCC 476: AIR 1989 SC 1769 (supra). However, as we have noted earlier, on the facts of the present case, it is not necessary for us to express any final opinion on this question or to direct reference to a larger Bench for reconsidering the aforesaid decision. With these observations we bring down the curtains on this controversy. Point No. 2, therefore, is answered by observing that it is not necessary on the facts of the present case in the light of our decision on the first point to decide this point one way or the other. Point No. 2 is, therefore, left undecided as not surviving for consideration.
9. It is not necessary to dilate on this issue any further as the same is not directly involved in the present revision. The observations of the Apex Court, as quoted above was necessitated to meet the submission of the learned Counsel for the defendant applicant that the suit itself is void at its inception and Court is powerless, notwithstanding the Order XXIII, Rule 1 (3), C.P.C. and also the fact that the suit is still at its in fancy.
10. Further reliance placed upon Firm Sita Ram Agrawal v. Har Nath , is misplaced one. in this case in spite of defect pointed out by the defendant in the trial court that the suit on behalf of unregistered Firm is not maintainable, no such application for withdrawal was filed before the trial court. After the dismissal of the suit, in the revision during the course of the argument an oral request was made that the plaintiff may be allowed to withdraw the suit under Order XXIII, Rule 1, C.P.C. with liberty to institute a fresh suit on the same subject-matter. in this fact situation the High Court had held there is nothing to show that the request for withdrawal with liberty to institute a fresh suit should be granted in absence of any written application together without there being no reason for not filing the application before the trial court.
11. The next decision relied upon is Khatuna v. Ramsewak Kashinath , needs consideration in detail. in this case the High Court held that "formal defect' under Order XXIII, Rule 1, C.P.C. would not encompass a suit filed on behalf of unregistered Firm. The Orissa High Court held that a Firm not registered under Section 69 suffers from legal disability of enforcing a right arising from a contract. Non-registration of the Firm is not 'formal defect', but a defect affecting the merits of a suit, in other words, the very root of the plaintiffs suit. With great respect to the Hon'ble Judge it is difficult to subscribe the aforesaid view as the said view appears to be not in consonance of earlier part of the Judgment. in para 5 of the Judgment, it has been held, after considering other decisions that law is well settled that the expression 'formal defect' occurring in Rule 1 of Order XXIII, C.P.C. must be given a wide and liberal meaning and must be deemed to connote every kind of defect which does not affect the merit of the case or does not strike at the root of the plaintiffs case. Paragraph 5 in extenso, is reproduced below:
At the outset it would be useful to delineate the principles with regard to withdrawal of a suit according to the provisions of Order XXIII, Rule I, C.P.C. A Full Bench of Bombay High Court in a decision in Ramrao Bhagwantrao in amdar v. Babu Appanna Samage AIR 1940 Bom 121, Laid down that the expression 'formal defect" occurring in Rule I of Order XXIII, C.P.C. must be given a wide and liberal meaning and must be deemed to connote every kind of defect which does not affect the merit of the case, whether that defect is fatal to the suit or not. in Dwaraka Agarwalla v. Mst. Sashi Prabha Gountianl (1966) 32 Cut LT 864, Misra, J. (as he then was) relying upon a decision of the Privy Council in Watson v. Collector of Rqjashahye 13 MIA 160, held that the expression formal defect' does not cover any defect pertaining to the merits of the case. The defect affecting the root of the plaintiffs case is not a formal defect. in a case in Harikrishna Agarwalla v. State of Orissa (1976) 42 Cut LT 339, S.K. Ray, A.C.J. (as he then was) held that the expression 'formal defect', even given a wide and liberal meaning, can connote only every kind of defect which does not affect the merits of the case. in view of the principle Laid down in the aforesaid decisions law is well settled that the expression 'formal defect' occurring in Order XXIII, Rule 1 (3) la), C.P.C. even if given a wide and liberal meaning must be deemed to connote every kind of defect which does not affect the merits of the case or does not strike at the root of the plaintiffs case.
The ratio of the above para, evidently, is that a defect pertaining to the merits of the case or affecting the root of the plaintiffs case is not a formal object. To find out as to whether non-registration of the firm, is a kind of defect as stated in the immediately preceding sentence, examination of language of Section 69(2) of Partnership Act is essential, the relevant provision of Section 69(2), reads as follows:
(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 are or have been shown in the Register of Firms as partners in the firm.
On a plain reading of the aforesaid provision it is clear, that it bars the institution of a suit on behalf of an unregistered firm, for the enforcement of a right arising from a contract. It is penal in nature. The said provision creates legal disability in a unregistered firm to maintain a suit. Except non-suiting the unregistered firm it does not create any corresponding vested right in favour of the defendant. Registration of a Firm, it is well known, under the Partnership Act is optional but it has been made mandatory in view of Section 69 of the Partnership Act and it cannot be doubted that it worked out as an in direct compulsion for registration.
JaLal Mohd. Ibrahim v. Kaka Mohd. Ghos Sahib AIR 1972 Mad 1986, is an authority for the proposition that a decree passed in a suit filed by an unregistered Firm is not a nullity and where the plea of non-registration was not raised in the suit itself it cannot be raised in a subsequent suit. It has observed that disability created by Section 69 of the Partnership Act is with regard to the right to institute a suit and not with regard to the power of the Court to pass a decree. The object of this section appears to be to protect public against a Firm carrying on a business under a name, which does not disclose to the public the names of the actual partner. The plea of non-maintainability of suit being on behalf of unregistered Firm is available to the defendants in the suit and the said objection could be waived by the defendants.
Viewed, thus, the bar is lifted as soon as the unregistered firm gets registration. Applying the ratio of the Khatuna (supra), as mentioned in the aforesaid quoted paragraph, it is clear that the defect of non-registration of firm does not pertain to the merits of the case. The merits of the case, as understood eans the allegation of claim and claim as set up in the plaint and its denial.
12. Order XXIII, Rule 1, .P.C. makes provisions for withdrawal of the suit. The said provision is reproduced below:
1. Withdrawal of suit or abandonment of part of claim.--(1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim:
Provided that where the plaintiff is a minor or other person to whom the provisions contained in Rules 1 to 14 of Order XXXII extend, neither the suit nor any part of the claim shall be abandoned without the leave of the Court.
(2) An application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the next friend and also, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other person.
(3) Where the Court is satisfied:
(a) that a suit must fail by reason of some formal defect, or
(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.
(4) Where the plaintiff:
(a) abandons any suit or part of claim under sub-rule (1), or
(b) withdraws from a suit or part of a claim without the permission referred to in sub-rule (3), he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim.
(5) Nothing in this rule shall be deemed to authorize the Court to permit one of several plaintiffs to abandon a suit or part of a claim under sub-rule (1), or to withdraw, under sub-rule (3), any suit or part of a claim, without the consent of the other plaintiffs.
13. A bare reading of the aforesaid provision would show that the suits can be withdrawn under the aforesaid rule either by abandoning claim without permission of the Court; in that case he will be precluded from suing again on the same cause of action. in another case, a plaintiff may, in the circumstances mentioned in sub-rule (3) be permitted by the Court to withdraw a suit with liberty to sue afresh on the same cause of action. The legislative policy, as pointed out by the Apex Court in the case of K.S. Bhoopathy v. Kokila AIR 2000 SC 2132, in the matter of exercise of discretion is clear. The discretion can be exercised by a Court on either of the conditions. The relevant passage is reproduced below:
The legislative policy in the matter of exercise of discretion is clear from the provisions of sub-rule (3) in which two alternatives are provided: (1) Where the Court is satisfied that a suit must fall by reason of some formal defect, and the other where the Court is satisfied that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim. Clause (b) of sub-rule (3) contains the mandate to the Court that it must be satisfied about the sufficiency of the grounds for allowing the plaintiff to institute a fresh suit for the same claim or part of the claim on the same cause of action. The Court is to discharge the duty mandated under the provision of the Code on taking in to consideration all relevant aspects of the matter including the desirability of permitting the party to start a fresh round of litigation on the same cause of action. This becomes all the more important in a case where the application under Order XXIII, Rule 1 is filed by the plaintiff at the stage of appeal. Grant of leave in such a case would result in the unsuccessful plaintiff to avoid the decree or decrees against him and seek a fresh adjudication of the controversy on a clean slate. It may also result in the contesting defendant losing the advantage of adjudication of the dispute by the Court or courts below. Grant of permission for withdrawal of a suit with leave to file a fresh suit may also result in annulment of a right vested in the defendant or even a third party. The appellate/second appellate court should apply its mind to the case with a view to ensure strict compliance with the conditions prescribed in Order XXIII, Rule 1 (3), C.P.C. for exercise of the discretionary power in permitting the suit with leave to file a fresh suit on the same cause of action. Yet another reason in support of this view is that withdrawal of a suit at the appellate/second appellate stage results in wastage of public time of Courts which is of considerable importance in the present time in view of large accumulation of cases in lower courts and inordinate delay in disposal of the cases.
14. The Apex Court in the case of Hulas Rai v. Firm K.B. Bass and Co. , held that in a suit for rendition of accounts by principal against his agent, the principal is entitled to withdraw the suit even at the stage when issues have been framed and some evidence has been recorded but no formal preliminary decree for rendition of account has yet been passed. This was the case where the suit was withdrawn unconditionally and no permission to institute a fresh suit on the same cause of action was sought for and was, thus, covered by the first category of Order XXIII, Rule 1, C.P.C.
15. The guiding factor for exercise of discretion in favour of the plaintiff from the aforesaid decision appears to be that it may not annul any right vested in the defendant or even a third party. To put it differently, the Court while applying its mind to a case with a view to strict compliance of Order XXIII, Rule 1 (3), C.P.C. will ensure that the vested right of the defendant or third party, if any, is not taken away. One thing which should not lose the sight of the fact is that the Apex Court was dealing with a case where permission was granted to withdraw the suit under the aforesaid provision not by the trial court but at the stage of second appeal. in the backdrop of the law enunciated above, it is desirable to consider the facts of the case in hands.
16. A suit for recovery of arrears of rent and damages etc. was filed by the landlord, an unregistered Firm, against the tenant on the ground of default of payment of rent and subletting the premises to sub-tenants. The application to withdraw the suit was filed in the light of the objection raised by the defendants that the Firm was not registered on the date of the institution of the suit. An application for permission to withdraw the suit was filed in the light of the defence set up in the written statement that the Firm was unregistered at the date of institution of the suit. in reply to the aforesaid application, the defendant applicants in their objections has raised, after narrating the facts of the case, plea of the deposit of rent under Section 20 (4) and Section 30 (1) of the U.P. Act No. 13 of 1972 and factum of filing of amendment application to amend the plaint. They have stated as follows, which is cnix of the objections:
8. That from the above facts, it is apparent that the plaintiff had intentionally filed a defective suit on the false allegations of it being a registered partnership and thereby making the defendant to part with huge money being deposited in the suit and to in cur heavy expenses in putting up the written statement and contesting the suit and the said frivolous amendment application. All these conducts of the plaintiff is definitely mala fide and mischievous. Defects having occurred due to plaintiffs own fault, it cannot be permitted to vex and harass the bona fide tenant a number of times on the same cause of action.
9. That no ground for granting permission to file a fresh suit against the defendants, has been even alleged or shown and the prayer in this behalf is totally mala fide.
17. During the course of hearing Shri Ravi Kant, senior advocate, on a query put by the Court, could not deny that a subsequent suit can be filed by the plaintiffs for eviction of the tenants on the aforesaid grounds. So far as question of deposit of rent etc. under Section 20 (4) of the U.P. Act No. 13 of 1972 is concerned, it is in the nature of granting another opportunity to a tenant to make good the deficiency in arrears of the rent with certain conditions to get himself relieved from a decree of eviction. The deposit made under Section 20 (4) of U.P. Act No. 13 of 1972 will not in any way inure for the benefit of such tenant when his eviction is being sought on any ground other than ground of default in payment of rent. A suit instituted on the plea of subletting by the tenant for his eviction will not in any way be affected even if amount is deposited under Section 20 (4) of the said Act. in the present suit, besides the plea of default, plea of sub-tenancy is also there. Neither it could be pointed out nor any material has been placed before this Court to show that any vested right has been accrued in favour of the defendant applicants or any vested right would be nullified if the suit is permitted to be withdrawn with permission to file a fresh suit. The total length and breadth of the argument of the defendant applicants is that they have deposited a sum of Rs. 45,000 under Section 20 (4) of the Act. Earlier an impression by clever drafting of the affidavit was given by the applicant tenant that the said amount has been withdrawn by the landlord but during the course of the argument it could not be disputed that the deposit, thus made by them is in tact and lying with the Court.
18. In Amba Lal Sarabhai Enterprizes Ltd. v. Amrit Lal and Co. , the Apex Court in great detail examined, the reierence to various State Rent Control Acts, whether a protection given to a tenant under the Rent Act is said to be not a vested right and if that protection is withdrawn, can a landlord claim any ground of eviction under the Rent Act to be his vested right. After consideration of various cases on the point, the following observation has been made in para 17 of the report:
The aforesaid decision holds that tenants have no vested right under the Rent Act. in effect, the law is well settled. Prior to the enactment of the Rent Act the relationship between the landlord and the tenant is governed by the general law, may be Transfer of Property Act or any other law in relation to the property. The Rent Act merely provides a protection to a tenant as against unbridled power of the landlord under the general law of the land. The Rent Act gives protection to the tenant from being ejected except on the grounds referred under the Rent Act. in other words, it protects a tenant from the drastic enhancement of the rent by the landlord which may otherwise landlord could do under the general law. Thus the right of a tenant under the Rent Act at the best could be said to be a protective right which cannot be construed to be a vested right. in effect, in view of this special enactment of the Rent Act, the right and remedies available to a landlord under the general law remains suspended. in other words the landlord's vested right undej the general law continue so long it is not abridged by such protective legislation, but the moment when this protection is withdrawn the landlord's normal vested right reappears which could be enforced by him.
19. It is, thus, clear that right of a tenant under Rent Act is not more than a right to take advantage of enactment. A tenant enjoys statutory protection as long as the statute remained in force and was applicable to him.
20. Judging thus the case, it is difficult to hold that any vested right by making the aforesaid deposit has been accrued to the defendant applicants which could be nullified if the permission as granted by the Court stands. On the contrary, it would rather give another opportunity and in a way beneficial to the defendant applicants to make good deficiency, if any, in the deposit already made under Section 20 (4) in the present suit, by depositing the amount in the newly instituted suit. The deposit etc. has to be made on the date of first hearing of the suit, which would obviously be a subsequent date and fresh date in the newly instituted suit.
21. It would not be out of place to mention the certain observations of the Apex Court though made in a different context but is quite appropriate in the present facts situation, that:
It must be grasped that Judiciary is respected not on account that it has power to legalize in justice on technical grounds but because it is capable of removing in justice and is expected to do so vide Collector Land Acquisition Anant Nag v. Katiji .
22. The last case relied upon by the defendant-applicants is Executive Officer v. S. Sathya Murti and Ors. (1993) 3 SCC 115, wherein the permission to withdraw the suit was granted by the revisional court was set aside by the Apex Court on the ground that the defendant had obtained an advantage on remand by Supreme Court therefore withdrawal was impermissible. On the strength of this judgment it was strenuously contended that since advantage has been obtained by the defendant applicants, the impugned order cannot be sustained. The said argument has been proceeded on the assumption that the defendant applicants had obtained some advantage by making deposit under Section 20 (4) of the Act but in the opinion of the Court by making the aforesaid deposit, the defendant applicants have not obtained any such advantage which may disentitle the plaintiffs-opposite party to obtain the permission sought for.
23. Before saying omega, a few facts need to be noted. in Padam Singh Jain v. Chandra Brothers , (Hon'ble S.B. Sinha, J. as he then was) has held that eviction suit can be filed by unregistered firm, as such suit is not for enforcement of agreement of tenancy. Right to sue for eviction is statutory right. This case has been taken note of by this Court in Vijay Krishna Jain v. Pratap Chand Jain 1996 (2) ARC 207.
24. There is another reason for not agreeing with the submissions of the learned Counsel for the defendant applicants. This Court is of the view that the order under revision is discretionary order and the trial court has properly exercised its discretion while allowing the withdrawal application under Order XXIII, Rule 1 (3), C.P.C. It has neither acted illegally or with material irregularity in the exercise of its discretion. It could not be pointed out that the impugned order could not have been passed by the Court. It is an acknowledged position of law that higher court should be slow in interfering with a discretionary order of lower court. Looked from any angle, there is no merit in the revision. The revision is dismissed accordingly. No order as to costs.