Section 69(3) partnership bar does not extend to arbitration or award enforcement under the 1996 Act.

Section 69(3) of the Indian Partnership Act was construed as a bar operating in the setting of a suit instituted in court, with "other proceedings" understood in connection with such suit-based claims. It was held not to create an independent prohibition against arbitral proceedings under the Arbitration and Conciliation Act, 1996. The limited meaning of "court" under the 1996 Act, and the confined scope of Sections 35 and 36, were treated as insufficient to treat arbitration as civil court litigation. The fiction that an award is enforced as a decree was held to apply only at the execution stage, so it does not attract the Section 69(3) bar.

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Issues: Whether Section 69(3) of the Indian Partnership Act bars arbitral proceedings and post-award enforcement where the claimant is an unregistered partnership firm.

Analysis: Section 69(3) was held to operate only where the foundation is a suit instituted in a court, with any claim of set-off or other proceedings being intrinsically connected to that suit. The expression "other proceedings" was construed in the context of sub-sections (1) and (2), and not as an independent category covering arbitral proceedings under the Arbitration and Conciliation Act, 1996. The limited definition of "court" in the 1996 Act and the restricted scope of Sections 35 and 36 were treated as insufficient to convert arbitral proceedings into civil court proceedings. The statutory fiction that an award is enforced as a decree was confined to execution and could not be extended to attract the bar under Section 69(3).

Conclusion: Section 69(3) does not apply to arbitral proceedings or the award in question, and the objection based on non-registration of the firm fails.

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