"Unregistered Firms Can Enforce Statutory Rights": Delhi High Court Clarifies Section 69(2) Bar Inapplicable

The Delhi High Court has ruled that the bar under Section 69(2) of the Indian Partnership Act, 1932, does not apply to suits filed by unregistered firms seeking to enforce statutory or common-law rights.

A Division Bench of Justices Prathiba M. Singh and Shail Jain clarified that the provision only restricts actions to enforce contractual rights arising from agreements between partners or third parties. The Court emphasised that the key test lies in the right asserted; if it stems from statute or common law rather than contract, the bar is inapplicable.

Accordingly, an unregistered firm may maintain such suits before the court.