The Bombay High Court clarified that an unregistered partnership firm in occupation of premises as a licensee on the notified date of 01.02.1973 is entitled to the protection of Section 15-A of the Bombay Rent Control Act, 1947, notwithstanding non-registration under the Indian Partnership Act, 1932. The Court set aside lower court rulings that had denied tenancy on the ground of non-registration, holding that Section 69(2) of the Partnership Act only bars suits to enforce contractual rights, not statutory rights conferred by the Rent Control Act.
Background & Facts
The Dispute
The dispute arose from a leave and license agreement executed on 30.05.1966 between S. T. Upadhayay (original tenant) and All India Travel Services (Applicant partnership firm) for occupation of a shop on the Ground Floor of Mayfair Building, Veer Nariman Road, Fort, Mumbai. The Applicant continued in possession from the notified date 01.02.1973 and thereafter. The firm was subsequently registered on 03.10.1973. S. T. Upadhayay died on 30.09.1986; his legal heirs (Defendant Nos. 1-3) and the original landlord (Defendant No. 4) and subsequent purchaser (Defendant No. 5) contested the Applicant’s claim to tenancy.
Key Facts
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Leave and license agreement dated 30.05.1966 between S. T. Upadhayay and Applicant.
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Applicant in exclusive occupation and possession of the suit premises as licensee from 01.02.1973 onwards.
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Applicant firm registered on 03.10.1973.
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Monthly license fee was Rs. 2,500/- at the time of filing the suit.
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Applicant paid license fees to original tenant till September 1987; after his death, payments made to legal heirs (Defendant Nos. 1-3).
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Applicant initially traded as "All India Travel Services" and later as general sales agents of Iraq Airways.
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Unknown persons attempted forcible possession; Applicant filed R.A.D. Suit No. 4088 of 1987 seeking declaration of tenancy and injunction.
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Defendant Nos. 1-3 contended that only part of the premises was given to Applicant through purported partner Charandas Jain.
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Defendant No. 5 denied the leave and license agreement, alleging illegal subletting by S. T. Upadhayay.
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Defendant Nos. 4 and 5 had earlier filed R.A.E. Suit No. 367/1471 of 1978 for eviction from the same premises.
Procedural History
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1987: R.A.D. Suit No. 4088 of 1987 filed by Applicant before Small Causes Court.
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1978: R.A.E. Suit No. 367/1471 of 1978 filed by Defendant Nos. 4 and 5.
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Trial Court framed issues: (1) possession since 1966 as licensee? Affirmative. (2) entitlement to declaration of tenancy? Negative. (3) entitlement to injunction? Negative. (4) suit maintainable? Negative. (5) firm unregistered? Affirmative. Suit dismissed.
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Applicant filed R. Appeal No. 290 of 2015; Appellate Court replicated findings: possession proved, but no tenancy, no injunction, suit not maintainable, firm unregistered, appeal dismissed.
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Both courts held that Applicant was in possession from 1966 under leave and license agreement but denied tenancy because the firm was unregistered on the notified date 01.02.1973 and later registered on 03.10.1973.
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Revision petition filed; reserved on 18.08.2026; pronounced on 22.09.2026.
The Parties' Positions
Applicant: Contended that the right claimed under Section 15-A is statutory, not contractual; Section 69(2) of Partnership Act only bars enforcement of contractual rights by unregistered firms; reliance on Madras HC and SC precedents.
Respondents: Argued that non-registration on 01.02.1973 attracted the bar of Section 69(2), preventing the firm from claiming any benefit under Section 15-A; reliance on Trial and Appellate Court findings.
Relief Sought
Applicant sought allowance of R.A.D. Suit No. 4088 of 1987 in terms of Prayer Clauses (A), (B) and (E), i.e., declaration of tenancy, possession, and injunction, with appropriate decree.
The Legal Issue
The central question was whether the benefit of Section 15-A of the Bombay Rent Control Act, 1947 can be granted to an unregistered partnership firm in occupation of the premises as a licensee on the notified date of 01.02.1973, in view of the prohibitory bar contained in Section 69(2) of the Indian Partnership Act, 1932.
Arguments Presented
For the Applicant/Petitioner
The Applicant relied on the distinction between contractual and statutory rights, arguing that Section 15-A creates a statutory tenancy independent of the Partnership Act. It submitted that Section 69(2) only prohibits suits to enforce contractual rights by unregistered firms and has no application where the right sought is statutory under the Rent Control Act. The Applicant cited the Madras High Court Division Bench decision in Dungarsi Ranchhodas Jayesh Niwas, Kozhikode vs. Moolji Visanji (AIR 2004 Ker 314) and the Supreme Court ruling in Raptakos Brett & Co. Ltd. Vs. Ganesh Property (MANU/SC/0595/1998) to support the proposition that the non-obstante clause in Section 11(1) of the Rent Control Act overrides the permission of Section 69(2).
For the Respondent/State
The Respondents maintained that the Applicant firm was unregistered on the notified date 01.02.1973 and therefore fell within the embargo of Section 69(2), which bars any suit to enforce a right arising from a contract on behalf of an unregistered firm. They contended that the right claimed under Section 15-A, though labelled statutory, was essentially contractual in nature and thus susceptible to the Partnership Act bar, relying on the concurrent findings of the Trial and Appellate Courts.
The Court's Analysis
The Court commenced by noting that Section 15-A of the Bombay Rent Control Act, 1947 deems any person in occupation as a licensee on 01.02.1973 to be a tenant for the purposes of the Act, irrespective of any other law. It then examined Section 69(2) of the Indian Partnership Act, 1932, which reads: "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."
The Court observed that the language of Section 69(2) is expressly confined to rights "arising from a contract". It emphasized that the right conferred by Section 15-A is statutory in origin, not contractual, and therefore lies outside the sweep of the Partnership Act prohibition. In this regard, the Court quoted with approval the reasoning of the Supreme Court in Raptakos Brett & Co. Ltd. Vs. Ganesh Property:
"The bar contain under Section 69 of the Indian Partnership Act, 1932, is to institute a suit on behalf of an unregistered firm against a third person to enforce a contractual right and not a statutory right. If the suit simpliciter is based on a covenant in the agreement for enforcement of a clause in the agreement against the third party, the same would be barred under Section 69(2) of the Indian Partnership Act, 1932, unless the firm is registered on the date of filing of the suit. However, the bar does not apply for enforcement of statutory right against a third person."
The Court further relied on the Madras High Court decision in Dungarsi Ranchhodas Jayesh Niwas, Kozhikode vs. Moolji Visanji, which held that the non-obstante clause in Section 11(1) of the Rent Control Act overrides the permission of Section 69(2), rendering the suit maintainable. Applying these principles, the Court found that the Trial and Appellate Courts had erred in treating the statutory tenancy under Section 15-A as a contractual right and consequently applying the bar of Section 69(2). Since the Applicant/Partnership Firm was in possession as a licensee on the notified date 01.02.1973 and was registered at the time of filing the suit, it was entitled to the protection of Section 15-A. Accordingly, the judgments and orders of the lower courts were set aside.
The Verdict
The Applicant succeeded. The Court set aside the judgments and orders of the Trial Court and the Appellate Court, allowed R.A.D. Suit No. 4088 of 1987 in terms of Prayer Clauses (A), (B) and (E), and directed that a decree be drawn accordingly. The prayer for stay filed by the Respondent was refused as the Applicant/tenant remained in possession of the premises. No monetary compensation, interest, or costs were awarded in the judgment.
What This Means For Similar Cases
Statutory Rights Are Not Subject to Partnership Registration Bars
Practitioners must note that any right conferred by a special statute containing a non-obstante clause (such as Section 15-A of the Bombay Rent Control Act) prevails over the general prohibition in Section 69(2) of the Partnership Act. When claiming statutory benefits, the registration status of the firm under the Partnership Act is irrelevant.
Occupancy as Licensee on the Notified Date Is the Key Trigger
The entitlement under Section 15-A hinges solely on being in occupation as a licensee on 01.02.1973. Subsequent registration of the firm does not defeat the right, nor does prior non-registration negate it. Evidence of continuous possession from the notified date is therefore critical.
Burden Shifts to the Objector to Show Contractual Nature
If a defendant seeks to resist a claim under a statutory tenancy provision by invoking Section 69(2), they must demonstrate that the right being enforced is contractual in origin. Mere allegation of non-registration is insufficient; the nature of the right must be scrutinized.
