In Brief
An unregistered partnership firm (Shiv Developers) filed suit against another firm and individuals seeking to declare a sale deed null and void, alleging fraud and misrepresentation, and claiming the sale consideration was never paid. The High Court rejected the plaint as barred by Section 69(2) of the Indian Partnership Act, 1932, which restricts suits by unregistered firms. The Supreme Court held that Section 69(2) only applies to contracts entered into by the firm with defendants in the course of business. Here, the sale was an independent transaction unconnected to the firm's construction business, and the suit sought statutory remedies (declaration, injunction) and common law relief based on fraud—not enforcement of contractual rights. The appeal was allowed and the suit was restored.
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