Quantum meruit claim survives where no proved contract exists and Section 69(2) does not bar compensation.

An unregistered firm was held not to be barred by Section 69(2) of the Partnership Act because the claim did not enforce a contractual right; the evidence showed no proved contract on price, quantity, margin or credit terms. Lawful supply of goods, non-gratuitous delivery and receipt of benefit satisfied Section 70 of the Contract Act, so compensation on a quantum meruit basis was maintainable. Objections based on summary suit procedure and absence of a statement of truth also failed because the matter was treated as an ordinary suit and a statement of truth had been filed. The plaintiff was awarded the principal sum and simple interest, while compound interest was refused.

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Issues: (i) Whether the suit was liable to be rejected for non-compliance with the summary suit procedure or for absence of a statement of truth; (ii) whether the suit was barred under Section 69(2) of the Indian Partnership Act, 1932 and whether it was maintainable as a claim for compensation under Section 70 of the Indian Contract Act, 1872; (iii) whether the plaintiff was entitled to the principal claim and interest.

Issue (i): Whether the suit was liable to be rejected for non-compliance with the summary suit procedure or for absence of a statement of truth?

Analysis: The suit was treated as an ordinary suit and the defendant suffered no prejudice from any deviation in the summary procedure. The record also showed that a statement of truth had been filed and received when the plaint was re-presented. The preliminary objections therefore did not survive.

Conclusion: The objection was rejected and the issue was decided in favour of the plaintiff.

Issue (ii): Whether the suit was barred under Section 69(2) of the Indian Partnership Act, 1932 and whether it was maintainable as a claim for compensation under Section 70 of the Indian Contract Act, 1872?

Analysis: The invoices, correspondence and oral evidence did not establish any written or oral contract governing price, quantity, margin or credit period. The claim was therefore not one to enforce a contractual right, so the embargo under Section 69(2) did not apply. The evidence did establish lawful supply of goods, non-gratuitous delivery and receipt of benefit by the defendant, satisfying the ingredients of Section 70. The claim was thus sustainable as one for reasonable compensation on a quantum meruit basis and the matter did not fall within the special summary suit category.

Conclusion: The suit was not barred by Section 69(2) and was maintainable under Section 70 in favour of the plaintiff.

Issue (iii): Whether the plaintiff was entitled to the principal claim and interest?

Analysis: The invoices, e-way bills, GST returns and related records supported the supply and receipt of goods, while the defendant adduced no evidence to disprove the reasonableness of the amount claimed. The claimed compound interest at 24% per annum with monthly rests was not available in a claim founded on Section 70, but the commercial nature of the transaction justified award of simple interest at a moderate rate.

Conclusion: The plaintiff was entitled to the principal sum and to simple interest at 9% per annum, not to compound interest at 24% per annum.

Final Conclusion: The suit succeeded on the substantive claim for compensation, with the principal amount decreed and interest awarded at a lower simple rate along with costs.

Ratio Decidendi: An unregistered firm is not barred by Section 69(2) when it does not enforce a contractual right, and where goods are lawfully supplied without an agreed contract and the recipient enjoys the benefit, compensation is recoverable on a quantum meruit basis under Section 70.

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