Unregistered firm's Section 20 arbitration application was barred at filing stage; later registration did not cure the defect.

An application under Section 20 of the Arbitration Act, 1940 filed by an unregistered firm was treated as hit by Section 69(2) of the Indian Partnership Act, 1932 because such a proceeding, required to be numbered and registered as a suit, falls within the statutory bar on enforcement of contractual rights by an unregistered firm. Later registration of the firm before expiry of limitation did not cure the defect, since the bar operates at the stage of institution itself. The proceeding was therefore incompetent ab initio, and the appeal was allowed.

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Issues: Whether an application under Section 20 of the Arbitration Act, 1940 filed by an unregistered firm was barred by Section 69(2) of the Indian Partnership Act, 1932, and whether subsequent registration of the firm before limitation expired cured the initial defect.

Analysis: Section 69(2) bars institution of a suit by or on behalf of an unregistered firm to enforce a contractual right, and Section 69(3) extends that bar to other proceedings of the same character. An application under Section 20 of the Arbitration Act, 1940 is required to be numbered and registered as a suit, and therefore falls within the mischief of Section 69(2) when presented by an unregistered firm. The subsequent registration of the firm does not remove the defect because the bar operates at the stage of institution itself. The proceedings were thus defective from the outset.

Conclusion: The application under Section 20 of the Arbitration Act, 1940 was incompetent ab initio, and subsequent registration of the firm did not cure the defect; the appeal was therefore allowed.

Ratio Decidendi: Where a proceeding under Section 20 of the Arbitration Act, 1940 is instituted by an unregistered firm, the statutory bar under Section 69 of the Indian Partnership Act, 1932 applies at the threshold and is not cured by later registration of the firm.

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