Quantum meruit recovery permitted for non-contractual supply; unregistered firm not barred under partnership law, with simple interest only.

Section 69(2) of the Partnership Act does not bar a suit by an unregistered firm unless the claim enforces a contractual right; where no written or oral contract fixing material terms is proved, compensation may still be claimed under Section 70 of the Contract Act on a quantum meruit basis for lawful supply and receipt of benefit without gratuitous intent. In assessing the claim, invoices, e-way bills, GST returns and related records may establish delivery and entitlement to the principal amount, while compound interest at a claimed commercial rate is not available where the award rests on Section 70 rather than contract; simple interest may instead be granted on a reasonable basis.

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Issues: (i) Whether the suit was liable to be rejected for alleged non-compliance with the summary suit procedure or for want of a statement of truth; (ii) whether the suit was barred by Section 69(2) of the Partnership Act and, if not, whether the plaintiff could maintain a claim for compensation under Section 70 of the Contract Act; (iii) whether the plaintiff proved entitlement to the principal suit claim; and (iv) whether the plaintiff was entitled to interest at the claimed rate.

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

Analysis: The special procedure for summary suits under Order VII of the Original Side Rules applies only to specified categories of claims. Even assuming the suit was initially treated as a summary suit, the Court proceeded to try it as an ordinary suit and required the plaintiff to prove the claim. That course caused no prejudice to the defendant. The record also showed that a statement of truth had been filed and received on re-presentation of the plaint.

Conclusion: The preliminary objections failed and the issue was decided in favour of the plaintiff.

Issue (ii): Whether the suit was barred by Section 69(2) of the Partnership Act and, if not, whether the plaintiff could maintain a claim for compensation under Section 70 of the Contract Act?

Analysis: Section 69(2) bars a suit by an unregistered firm only when the suit seeks enforcement of a right arising from a contract. The invoices, correspondence, and oral evidence did not establish any written or oral contract fixing the material terms of supply. The Court therefore found that the plaintiff was not enforcing contractual rights. The evidence instead showed lawful delivery of goods without gratuitous intent and receipt of the benefit by the defendant. Those facts satisfied the ingredients of Section 70, which supports compensation on a quantum meruit basis where the recipient has enjoyed the benefit of a non-gratuitous act.

Conclusion: The suit was not barred under Section 69(2), and the claim was maintainable as one for compensation under Section 70 of the Contract Act.

Issue (iii): Whether the plaintiff proved entitlement to the principal suit claim?

Analysis: The invoices, e-way bills, GST returns, and related records established supply and delivery of goods. The defendant produced no written statement or evidence to show that the amounts claimed were unreasonable or that the goods were returned, rejected, or unused. On the balance of probabilities, the claimed invoice values were found to represent reasonable compensation for the supplies made.

Conclusion: The plaintiff was entitled to the principal suit claim.

Issue (iv): Whether the plaintiff was entitled to interest at the claimed rate?

Analysis: The demand for 24% interest compounded with monthly rests was founded on the MSMED Act, but the claim was being awarded as compensation under Section 70 and not as recovery of a contractual debt. In that setting, compound interest at the claimed rate was not available. Having regard to the commercial nature of the transaction and the absence of any agreed interest term, the Court awarded simple interest at 9% per annum from the date of plaint until realisation.

Conclusion: The plaintiff was not entitled to interest at 24% per annum with monthly rests, but was entitled to simple interest at 9% per annum.

Final Conclusion: The suit succeeded on the merits as a claim for compensatory relief for non-gratuitous supply of goods, with the principal amount decreed together with moderate simple interest and costs.

Ratio Decidendi: An unregistered firm is not barred by Section 69(2) where the suit does not enforce a contractual right, and where goods are lawfully supplied and enjoyed without a contract, compensation is recoverable on a quantum meruit basis under Section 70 of the Contract Act.

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