SOUTH EAST CENTRAL RAILWAY AND ANOTHER vs RAHEE-GPT (JV) AND ORS

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IN THE HIGH COURT AT CALCUTTA
COMMERCIAL APPELLATE DIVISION
ORIGINAL SIDE
Present:
The Hon’ble Justice Debangsu Basak
And
The Hon’ble Justice Aryak Dutt


AD-COM/7/2026

C.S. (COM) No. 56 of 2024

SOUTH EAST CENTRAL RAILWAY AND ANOTHER
VS
RAHEE-GPT (JV) AND ORS.


For the Appellants : Mr. Pramod Kumar Drolia, Adv.
Mr. Santosh Kumar Pandey, Adv.

For the Respondents Nos.:Mr. Samrat Sen, Sr. Adv.
1, 2 and 3 Mr. Nirmalya Dasgupta, Adv.
Mr. R. L. Mitra, Adv.
Ms. Priyanka Dhar, Adv.


Hearing Concluded on : October 12, 2026
Judgement on : November 13, 2026

DEBANGSU BASAK, J.:-
1. Appellant has assailed the judgment and decree dated
March 10, 2026 passed in CS (COM) No. 56 of 2024.
2. By the impugned judgment and decree dated March
10, 2026, learned Single Judge has directed the appellant to
refund the security and earnest money deposit along with
bank guarantee amount and the bill amount together with
SACHIN
KAHAR
Digitally signed by
SACHIN KAHAR
Date: 2026.11.13
15:33:17 +05'30'

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interest to the respondent. Learned Single Judge has also
directed that a sum of Rs. 1,00,000/- be paid by the appellant
to the respondent as costs. Learned Single Judge has
dismissed the counter claims filed by the appellants.
3. At the hearing of the appeal, finding the nature of the
plaintiffs who are the respondents herein, particularly the
respondent no. 1 as the plaintiff no. 1 in the suit, we have
raised the query as to whether or not the suit is barred under
Section 69 of the Indian Partnership Act, 1932.
4. Learned Counsel for the parties have addressed us on
such an issue.
5. Learned Advocate appearing for the appellant has
contended that, the Railways had floated a tender. Railways
had allowed a Joint Venture entity to participate in such a
tender. Respondent No. 1 herein had participated in the
tender as a Joint Venture of the respondent No. 2 and 3.
6. Learned Advocate appearing for the appellant has
contended that, the respondent No. 1 is essentially a
partnership firm of the respondent nos. 2 and 3. The
respondent No. 1 being unregistered, the suit filed by the
respondents has attracted the mischief of Section 69 of the

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Act of 1932. Consequently, the suit not being maintainable,
learned Single Judge has erred in passing the impugned
judgment and decree.
7. In support of such contention that the respondent no.
1 is a partnership firm, learned advocate appearing for the
appellant has relied upon AIR 2006 AP 169 (GVPREL-MEE
(J.V) Vs. Government of Andhra Pradesh & Anr)
8. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, the railways
had floated a tender which permitted participation of a Joint
Venture. Respondent Nos. 2 and 3 had constituted a Joint
Venture for such purpose which is the respondent no. 1.
Respondent No. 1 had participated in such tender process and
became successful. Railways had granted the tender in favour
of the respondent no. 1.
9. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, the Railways
had prevented his clients from executing the contract and
discharging their obligations under the contract subsequent to
the contract being awarded. Respondents had assailed several
notices issued by the Railways including the notice of

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termination dated March 5, 2014, invocation of the bank
guarantee and forfeiture of the security deposit in the suit.
10. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, the tender
notice dated February 23, 2010 permitted a Joint Venture
firm to participate in the bidding process. He has referred to
the Special Conditions of Contract in connection with the
tender and contended that, the same specified the model
format of the Joint Venture for bidders desiring to participate
in the tender as a Joint Venture. He has contended that, the
respondent nos. 2 and 3 did not have the luxury of
formulating the terms of the Joint Venture at their discretion.
11. Learned Senior Advocate appearing for the
respondents has contended that, the respondent no. 2 and 3
being desirous of participating in the tender entered into the
Memorandum of Understating dated February 20, 2010 in
terms of the prescribed format. They had created the
respondent no. 1 as a Joint Venture. Railways had issued the
letter of acceptance on April 10, 2010 in name of the
respondent no. 1. He has pointed out that in terms of Clause
12 of the Guidelines in the Special Condition of Contract read

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with Clause 4 of the Memorandum of Understanding,
respondents no. 2 and 3 as Members of the joint venture
entered into the agreement on similar terms and got the same
registered under the Registration Act, 1908.
12. On the quality of the formulation of the respondent no.
1, as a legal entity, learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, respondent
no. 1 is an unincorporated association of persons. According
to him, an unincorporated association of persons not being a
legal personality is nothing but the aggregation of its
members, and therefore, legal proceedings can therefore be
instituted only if all members of the associations have joined
in the proceedings. In support of such contention, he has
relied on AIR 1969 Cal 149 (Director General Ordnance
Factories Employees Association Vs. Union of India and
Director General Ordnance Factories).
13. Relying upon 2008 SCC OnLine Cal 680
(Gandhabanik Mahasabha Vs. Gandhabanik Mahasabha,
Bardhaman Sakha Samity, learned Senior Advocate
appearing for the respondents no. 1, 2 and 3 has contended
that, an unincorporated association cannot sue in its own

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name alone. In the present case, the two members of the Joint
Venture have joined as the plaintiffs. Therefore, the suit
cannot be faulted on the basis of Order I Rule VIII of the Code
of Civil Procedure, 1908.
14. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, a Joint
Venture per se is not a juristic entity. In support of such
contention, he has relied upon the decision of the Bombay
High Court dated September 1, 2026 passed in Commercial
Suit No. 585 of 2017 (BPL-BBC Joint Venture Vs. Mumbai
Metropolitan Region Development Authority).
15. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, a Joint
Venture and a partnership firm are distinct and separate. He
has referred to the provisions of the Commercial Courts Act,
2015 namely, Section 2(1)(c)(xi) and 2(1)(c)(xv) to emphasise
that the two entities are different.

16. Learned Senior Advocate appearing for the respondent
nos. 1, 2 and 3 has contended that, a Joint Venture can be
converted into a Partnership under the Act of 1932 or a
limited liability partnership (LLP) under the Limited Liability

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Partnership Act, 2008 or Joint Venture Company under the
Companies Act, 2013. He has contended that no such
transition took place as, clauses 8 to 10 of the guidelines of
the Special Condition of Contract and clause 4 of the Joint
Venture agreement prohibited any such
modification/alteration.
17. Referring to Section 6 of the Act of 1932, learned
Senior Advocate appearing for the respondents no. 1, 2 and 3
has contended that, sharing of profits is not determinative of
the real relationship between the parties. He has contended
that, the terminology and nomenclature used in the
agreement is irrelevant and that, the Court has to consider
substance rather than the form. According to him the test to
determine as to whether the entity is a Joint Venture or not is
not on the basis of the legal entity or on the basis whether
such legal entity is a partnership. He has contended that,
incorporation of the clause that, the members of the Joint
Venture are jointly and severally liable establishes that the
Joint Venture is not a partnership. In support of such
contention, he has relied upon 2026 SCC OnLine Bombay

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217 (Hindustan Petroleum Corpn. Ltd. Vs. Om
Construction)

18. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, clause 5 of
the Joint Venture agreement read with Clause 12(a) of the
Guidelines in the Special Condition of the Contract would
establish that, respondent no. 1 is not a legal entity.
19. Relying upon the decision rendered in CRP (MD) No.
200 of 2024 and CMP (MD) No. 855 of 2024 (Jagatheesh Vs.
Chandrasekharapillai) dated October 4, 2024 passed by the
Madras High Court, learned Senior Advocate appearing for the
respondents has contended that, Joint Venture is a
Consortium of Members agreeing to sharing profits without
entering into a partnership. He has contended that, the test
laid down therein applied to the facts and circumstances of
the present case, and would establish that the respondent no.
1 is not a partnership but a Joint Venture.
20. Relying upon AIR 2005 Bom 57 (Sanjay Kanubhai
Patel Vs. Chief Controlling Revenue Authority) and
Jagatheesh (supra), learned Senior Advocate appearing for
the respondents no. 1, 2 and 3 has contended that, the

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respondent no. 2 is the lead partner who was empowered to
represent the Joint Venture and therefore, no partnership was
entered into.
21. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, Section 9 of
the Act of 1932 requires the partners to render true accounts
and full information of all things affecting the firm to any
partner or his legal representative which is not the case in
respect of the Joint Venture. Dissolution proceeding of the
partnership firm is also under the Act of 1932 while,
dissolution of a Joint Venture is governed by the agreement
entered into between the parties. In support of such
contention, he has relied upon Jagatheesh (supra).
22. Relying upon 1985 SCC Online Guj 316 (Asia
Foundation & Constructions Ltd. Vs. State) learned Senior
Advocate appearing for the respondents no. 1, 2 and 3 has
contended that, the difference between the partnership in the
nature of Joint Venture and a partnership is that, in a Joint
Venture partners incurs no responsibilities beyond the limits
of the particular adventure or business and therefore, their
rights and liabilities are less extensive.

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23. Learned Senior Advocate appearing for the
respondents no. 1, 2 and 3 has contended that, respondent
no. 1 is not a partnership within the meaning of the Act of
1932. At best, it may be an informal partnership as held in
2005 SCC Online AP 531 ( GVPREL-MEE (J.V.), Hyderabad
Vs. Government of A.P.), and a quasi partnership as held in
2023 SCC Online Del 1391 (ITD Cementation India Ltd.
Vs. SSJV-ZVS Joint Venture).

24. Learned Senior Advocate appearing for the
respondents has contended that, Karnataka High Court in
2018:KHC:8653-DB (C. Prakash Vs. State of Karnataka &
Ors.) applied the ratio of AIR 1967 Cal 429 (Ganga Metal
Refining Co. Pr. Ltd. Vs. Commissioner of Income Tax,
West Bengal)
25. Relying upon 2020 SCC Online Ker 5017 (Nortrans
Marine Services (P) Ltd. Vs. Cargo Care International)
learned Senior Advocate appearing for the respondents has
contended that, the issue that the respondent no. 1 was not
registered was not raised in the written statement. No specific
issue had been framed by the Trial Court on such score. The

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Memorandum of Appeal does not contain any such ground.
Such ground cannot be canvassed in the appeal.
26. Appellants had issued a tender notice dated February
23, 2010 in connection with the work of designing and
construction of the foundation, sub structure, approaches
including allied and miscellaneous works of Bridge No. 182
between IB and Brajraj Nagar Railway Station in the Champa
- Jharsuguda section. Special Condition of Contract of such
tender notice had permitted a Joint Venture to participate in
such tender process. Such Special Conditions of Contract
have also specified the guidelines to be followed by the
participating Joint Venture. Special Condition of Contract had
been admitted in the evidence in appeal by consent of the
parties in course of hearing of the appeal.
27. Respondent Nos. 2 and 3 had formed a Joint Venture
namely, the respondent No. 1 on the basis of a memorandum
of understanding being Exhibit Y dated February 20, 2010.
Respondent Nos. 2 and 3 had executed a Joint Venture
agreement dated November 29, 2010 being Exhibit Z series.
28. Appellants had issued a letter of acceptance dated July
28, 2010 in favour of the respondent No. 1.

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29. The issues that have fallen for consideration in the
present appeal are:-
i. Is the respondent No. 1 a partnership firm?
ii. If the answer to the first issue is in the
affirmative then is the respondent No. 1 duly
registered under the Indian Partnership Act,
1932?
iii. If the answer to issue No. 2 is in the
negative, then, is the suit filed by the
respondents maintainable?
iv. If the answer to the issue No. 3 is in the
negative, then, is the impugned judgment
and decree sustainable?
30. In Director General Ordnance Factories Employees
Association (supra) a Division Bench of the Calcutta High
Court in a litigation between two labour unions, held that, in
case of a body incorporated by law, the corporate body
acquires a legal personality of itself and is as such entitled to
maintain legal proceedings. However, an unincorporated
association has no legal personality as it is nothing but an

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aggregation of its members who can only bring legal
proceedings in their individual capacity.
31. A Single Judge of the Bombay High Court in BPL-BBC
Joint Venture (supra) has held that, the Joint Venture per se
is not a juristic entity and an unincorporated association
cannot sue in its own name alone. It has observed that, if the
plaint contained only the name of the Joint Venture, such
defect could be cured by impleading the constituent members
of the Joint Venture.
32. In Hindustan Petroleum Corpn. Ltd. (supra) a Single
Judge of the Bombay High Court has held in the facts of that
case that, the Joint Venture formed for securing contract and
for execution of the works was never a legal entity by itself. It
has observed that, only those Joint Ventures who are
incorporated become legal entities.
33. A Single Judge of the Madras High Court in
Jagatheesh (supra) has noted the distinction between a Joint
Venture and a partnership firm. It has noted that, in a
partnership firm every partner is both an agent and principal.
Each partner in the partnership firm can therefore act as an
agent and is also bound by the actions of the other partners

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as a principal. It has noted that such is not the case of a Joint
Venture. It has also noted that the exercise of determining
whether the entity is a partnership firm or a Joint Venture has
to be based on the terms and conditions of the contract and
the appreciation of evidence.
34. The decision of the learned Single Judge of the Andhra
Pradesh High Court in GVPREL-MEE (J.V.) (supra) cited on
behalf of the respondents has been reversed on appeal by the
Division Bench in GVPREL-MEE (J.V) (supra).
35. A Single Judge of the Delhi High Court in ITD
Cementation India Ltd (supra) has termed a Joint Venture
to be a quasi partnership.
36. A Division Bench of the Karnataka High Court in C.
Prakash (supra) in the facts of that case has held that, two
limited liability companies coming together for the purpose of
permitting the business and avoiding competition was not a
partnership firm within the meaning of the Act of 1932. It has
considered Ganga Metal Refining Co. Pr. Ltd.(supra).
37. A Coordinate Bench of this Hon’ble Court in Ganga
Metal Refining Co. Pvt. Ltd.(supra) has answered two issues
raised in an income tax reference. In the facts of that case, the

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limited liability company had entered into a Joint Venture
with two other companies for the purchase and sale of certain
quantity of white metal slab. Before the Revenue authorities,
the assessee company had claimed that, the accounts of the
Joint Venture were maintained in the books of one of the
constituent companies. On the basis of such accounts, the
final result of the Joint Venture was a loss and that, the
assessee was entitled to set off one third of such loss. In such
factual matrix, it has held that, the Joint Venture between the
assessee and the two other limited companies was not an
income tax entity of an unregistered firm or a partnership
under the Income Tax Act, 1961 and therefore the three
limited companies would only be regarded as an association of
persons under Section 3 of the Income Tax Act, 1961 and in
which event, Section 24 (1) of the Income Tax Act, 1961 would
not be applicable. It has held that, the assesse was not
entitled to set off against its other income the loss suffered by
the Joint Venture with the two other limited companies.
38. A Division Bench of the Kerala High Court in Nortrans
Marine Services (P) Ltd. has held that, objection under
Section 69(2) of the Act of 1932 is required to be taken in

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written statement. It has held that, in the absence of specific
and categorical plea of Section 69(2) of the Act of 1932 being
taken, neither the Court is expected to consider the
maintainability of the suit in the background of the non-
compliance with the requirement of Section 69(2) of the Act of
1932 nor is the plaintiff expected to place on record the proof
in support of its assertion that it is an registered partnership
firm. Moreover, in the facts of that case it has held that, the
plaintiff therein was enforcing a statutory right for which,
requirement under Section 69 of the Act of 1932 could not be
insisted upon.
39. The Division Bench of the Calcutta High Court in
Gandhabanik Mahasabha and Anr. (supra) has held that,
an unregistered society could not by itself bring a suit nor
could it be represented by the Secretary to sue in the common
interest of all the members unless and until either all the
members of the Committee individually joined as the plaintiffs
or leave of the Court under Order I Rule 8 of the Code of Civil
Procedure, 1908 was taken.
40. The Division Bench of the Gujarat High Court in Asia
Foundation & Constructions Ltd. & Ors. (supra) has held

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that, a person can become a partner with another person in a
particular adventure or undertaking in terms of Section 8 of
the Act of 1932. However, three elements of partnership,
namely, agreement, business and mutual urgency must exist
as a matter of course. It has noted that, the only difference
between such a partnership in the nature of Joint Venture
and an ordinary partnership is that, a Joint Venture partners
incur no responsibility beyond the limits of the particular
adventure or business or undertaking and their rights and
obligations are, therefore, less extensive than those of
partners in ordinary partnership.
41. In order to arrive at a decision as to whether an
association of persons is a partnership or not, the Court has
to find, whether there was an agreement between such
persons for such purpose and that, the agreement was to
share profits of the business and that such agreement created
agencies between the concerned persons binding each other of
acts done by the other. These three ingredients must exist
simultaneously for the association to be considered as a
partnership. Nomenclature is of no consequence. Substance
garnered from the facts established govern the relationship.

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42. In order to determine whether, a particular group of
persons constitute a partnership or not, the Court has to
consider the intention of such persons, as garnered from the
facts established at the trial. Agreement to share profits may
in circumstances be a strong indication of partnership,
however, not conclusive evidence thereof.
43. Under the Income Tax Act, 1961, on the basis of the
authorities cited before us, it can be deduced that a
partnership firm is an independent and distinct juristic
person for the purpose of assessment as well as for the
recovery of tax as it is a person within the meaning of Section
2(31) of the Act of 1961 having its own entity and personality.
44. A Joint Venture has been defined by Black’s Law
Dictionary as under :-
“Joint venture. A business undertaking by
two or more persons engaged in a single
defined project. The necessary elements
are: (1) an express or implied agree-ment;
(2) a common purpose that the group
intends to carry out; (3) shared profits and
losses; and (4) each member's equal voice in
controlling the project.”

45. As the name suggests, a Joint Venture is necessarily
between two or more persons with the object of achieving a

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particular goal. A Joint Venture may be project specific or
object specific.
46. A Joint Venture entity may be a partnership firm. All
partnerships may not be a Joint Venture. A partnership firm
can be created for the purpose of executing an object or a
project. Section 8 of the Act of 1932 permits a partnership for
a particular adventure or undertaking. A partnership firm
therefore can be created for a joint venture of the partners to
achieve an object or to execute a project.
47. Section 2(1)(c) of the Commercial Courts Act, 2015
has defined commercial dispute to mean amongst other,
anything to do with the partnership agreement or a Joint
Venture. Recognition of a partnership agreement and a Joint
Venture as separate items under Section 2(1)(c) of the Act of
2015 does not mean that, a Joint Venture cannot be a
partnership firm under the Act of 2015. As the definition
stands, any dispute relating to a Joint Venture will be
construed to be a commercial dispute as also a dispute
relating to any partnership agreement. Segregating a
partnership agreement and a Joint Venture under the Act of
2015 does not mean that, a Joint Venture cannot be a

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partnership firm or that, a joint venture cannot be a
partnership firm to execute a particular project or achieve an
object.
48. On the anvil of law as discussed above, we have to
assess whether or not, respondent no. 1 is a partnership firm.
The respondent nos. 1, 2 and 3 have claimed that, the
respondent no. 1 is a Joint Venture between the respondent
nos. 2 and 3. They have claimed that, the respondent no. 1
was brought into existence in order to permit the respondent
nos. 2 and 3 to participate in the subject Tender process.
According to them, respondent no. 2 has certain qualifications
while the respondent no. 3 has certain other qualifications
and conjointly, they have requisite qualifications to participate
in the tender process. Moreover, the tender process itself has
permitted a Joint Venture entity to participate. Consequently,
the respondent nos. 2 and 3 had constituted the respondent
no. 1 as a Joint Venture entity to participate in the tender
process.
49. Respondent nos. 2 and 3 had entered into the
Memorandum of Understanding dated February 20, 2010 for

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the purpose of creating the respondent no. 1. Relevant clauses
of such Memorandum of Understanding are as follows:-
01. That under this MOU, the work will be done jointly
and severally by the parties under the name and
style of RAHEE-OPT (JV), a joint venture between
RAHEE INDUSTRIES LIMITED & OPT.
INFRAPROJECTS LIMITED.

02. That all the parties to this JV, shall be jointly and
severally be liable to the Railway for the execution
of the tender project/works in accordance with the
General and Special Conditions of Contract and
also for the loss, damages caused to the Railways
during the course of execution of the contract or due
to the non-execution of the contract or part thereof.
03. That the role of cash constituent of this JV shall
be as under;-

a. The first party shall be responsible for the
Technical, Financial and all other obligations
related to this tender project and shall hold 70% of
capital contribution and ratio of profit
b. The other party shall be responsible for the
Technical and Managerial jobs related to this
tender project and shall hold 30% of capital
contribution and ratio of profit.
04. That if Letter of Acceptance is issued in the
name of this JV, an agreement among the parties to
the J.V. shall be executed and got registered before
the Registrar of Companies under the Companies
Act or before the Registrar/Sub-Registrar under the
Registration Act 1908 and this agreement shall be
submitted to the Railways.

05. That all parties to this Joint Venture shall not
have the right to assign or transfer the Interest
right or liability in the contract without written
consent of the other parties to this JV and also of
the Railways in respect of the said tender/contract.

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06. That the RAHEE INDUSTRIES LIMITED
mentioned here as the first party whose share of
interest in this JV indicates as 70%, being one of
the members of this JV, shall be the lead member
of this JV, who is having a major share of interest
in this JV and who shall be prime contractor and
responsible for timely completion of work and to co-
ordinate with the Railways to receive payments
and also to make all sorts of correspondences on
behalf of this Joint Venture with the Railways,
whose name and address will be M/s. Rahee
Industries Limited, "Century Towers", 5th Floor, 45,
Shakespeare Sarani, Kolkata-700017. That all
notices/correspondences with respect to the Tender
would be sent only to this authorised member of
JV.

07. That the above said party as lead partner is
authorised by the other party of this JV to deal
with the tender, sign the agreement or enter into
the contract in respect of the said tender, to receive
payments, to witness joint measurement of work
done, to sign measurement books and similar such
works in respect of this said tender.

09. That the Joint Venture shall be valid during the
currency of the contract including the period of
extension if any and the maintenance period after
the work is completed.

50. The respondent nos. 2 and 3 have also entered into the
Joint Venture agreement on November 29, 2010. Relevant
clauses of such Joint Venture agreement are as follows:-
2.1 The Parties have studied the documents, JV
guidelines and have agreed to participate in
submitting the Tender jointly; signed the JV MOU
and submitted the bid accordingly.
2.2 M/S RAHEE INFRATECH LIMITED, the Lead
Partner, shall be the lead member of the JV for all

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intents and purposes and shall represent the Joint
Venture in its dealing with the Employer. The lead
member shall be authorized to sign and submit all
documents and subsequent clarifications, if any, to
the Employer. However, he will not submit any
such proposals, clarifications or commitments
before securing the written clearance of the other
partner(s) which shall be expeditiously given by
M/s GPT INFRAPROJECTS LIMITED to M/ RAHEE
INFRATECH LIMITED.
2.3 The lead member shall sign the agreement or
enter into contract in respect of the work awarded,
to receive payment, to witness joint measurement
of work done, to sign measurement books and
similar such action in respect of the said contract.
All notices/correspondences with respect to the
contract would be sent only to the lead member of
the JV-firm.

3. The Parties have resolved that the distribution of
share, responsibilities, profits, losses and
remuneration shall be as under
a) Lead Partner's share: 70%; Name RAHEE
INFRATECH LIMITED
Responsibilities:
(Technical, Financial & other obligations)
i) Technical
ii) Financial
iii) Managerial
iv)Other obligation
b) Second Joint Venture Partner's share: 30%;
Name GPT Infraprojects Limited.
Responsibilities:
(Technical, Financial & other obligations)
i) Technical
ii) Managerial

4. The constitution of JV firm shall not be altered
during the currency of the contract except when
modification become inevitable due to succession
laws etc. provided that the minimum eligibility
criteria are-not got vitiated. Failure to observe this
stipulation shall be deemed to be breach of

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contract, which will entitle the employer. The South
Eastern Railway Administration to take all
consequential action as per contract conditions.

5. JOINT AND SEVERAL RESPONSIBILITY
The parties undertake that they shall be jointly and
severally liable to the South East Central Railway
acting through Chief Engineer/ Con. South East
Central Railway, Bilaspur or his assignees, for
satisfactory execution and completion of the Project
work In accordance with General and Special
conditions of contract. The JV members shall also
be liable jointly and severally for the loss, damages
that may be caused to the South East Central
Railway Administration, acting through Chief
Engineer/Con, South East Central Railway,
Bilaspur and during the course of execution of the
contract or due to non-execution of the contract or
part thereof. The parties solemnly affirm and
declare that every possible care will be taken by
them for ensuring satisfactory execution and
completion of the work awarded under the contract.

6. ASSIGNMENT AND THIRD PARTIES
No member of the Joint Venture firm shall, have the
right to assign or transfer the Interest, right or
liability in the contract without the written consent
of the other members and that of the Employer
(South East Central Railway) in respect of-the said
tender/contract.

7. GUARANTEES AND BONDS
The lead partner shall furnish all
bonds/guarantees to the South East Central
Railway Administration in the name of J.V. and on
behalf of the J.V, which shall be legally binding on
all the partners of the J.V.

8. USE OF MACHINERY, INSTRUMENT, LABOUR
FORCE etc. For the execution of the respective
portions of works, the parties shall make full
arrangements, to bring the required finance, plants
and equipment, materials, manpower and other

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resources. However, the parties here to undertake
that whatever anpow the machinery, Instruments,
labour force, (Including unskilled, skilled,
inspectors, Engineer etc.) they possess at the time
of entering into Joint Venture Agreement or which
subsequently shall come in their possession and if
such machinery, Instruments, labour force is
required for the speedy and efficient execution of
any portion of the work, the party/parties having
the control over the said machinery, instruments,
labour force etc., without having any regard to their
share of profit and loss agreed to between the
parties in-Joint Venture Agreement shall hand over
the same which shall be placed at the disposal of
the other party actually executing that portion of
the work at mutually agreed terms for the purpose
of execution of the contract without any hindrance
and obstacle.

9. DURATION OF JOINT VENTURE AGREEMENT
It shall be valid during the entire currency of the
contract including the period of extension if any
and the maintenance period after the work is
completed and Security Deposit is released.

51. Special Terms and Conditions of the contract, which
have been marked as Exhibit in appeal, has prescribed the
format for the Joint Venture agreement. The Joint Venture
agreement dated November 29, 2010 which the respondent
nos. 2 and 3 have executed are in terms of such prescribed
format.
52. The Memorandum of Understanding dated February
20, 2010 specifies that, the respondent nos. 2 and 3 who are
the parties to such Memorandum of Understanding shall be

26

jointly and severally liable to the Railways for the execution of
the project. The Memorandum of Understanding has
delineated the role of the respondent nos. 2 and 3 in the Joint
Venture. Clause 7 of the Memorandum of Understanding has
identified the respondent no. 2 as the lead partner. The
Memorandum of Understanding however, does not specify
that, the two parties to the Joint Venture would not be able to
bind the other by its actions.

53. The Joint Venture agreement dated November 29,
2010 has specified that, the respondent no. 2 would be the
lead partner. It has authorized the respondent no. 2 to sign all
agreements and enter into contract with the Railways on
behalf of the Joint Venture entity. Clause 3 has specified
share of profits, responsibilities and remuneration. Clause 5
has specified the joint and several liabilities for both the
respondent nos. 2 and 3 with regard to the Joint Venture.
54. Clause 2 of the Memorandum of Understanding and
Clause 5 of the Joint Venture agreement have created joint
and several liabilities in respect of the Joint Venture for the
respondent nos. 2 and 3. Clause 6 of the Memorandum of
Understanding and Clause 3 of the Joint Venture agreement

27

have specified the ratio of sharing of profits and liabilities.
Clause 1 of the Memorandum of Understanding has specified
that, it would be the joint and several responsibility of the
respondent nos. 2 and 3 to execute the project.
55. Clause 7 of the Memorandum of Understanding and
Clause 2.2 of the Joint Venture agreement have identified
respondent no. 2 as the lead partner of the Joint Venture.
56. In the facts and circumstances of the present case,
therefore, there is a Memorandum of Understanding dated
February 20, 2010 and a Joint Venture agreement dated
November 29, 2010 expressing the intention of the respondent
nos. 2 and 3 to enter into an agreement to execute a project,
share the profits of such project and to create agencies
between the respondent nos. 2 and 3. In our view, therefore
all ingredients required for formation of partnership have been
satisfied. In the facts and circumstances of the present case,
respondent nos. 2 and 3 have agreed to create a partnership
firm for a particular project, share profits of such project and
create agencies between the respondent nos. 2 and 3.
Respondent nos. 2 and 3 have agreed to be jointly and
severally liable for the execution of the project.

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57. There is one more aspect which has to be considered
by us. The Special Conditions of Contract of the Railways
provide that, the Joint Venture must either be a company
incorporated under the Companies Act, 2013 or an existing
company or Joint Venture agreement registered. The
authorities cited before us have laid down that, an
unincorporated body can neither sue nor be sued. Therefore,
the clause of the Special Conditions of Contract have to be
read and understood to mean that the Railways wanted a
Joint Venture entity which is a legal entity capable of suing
and being sued.
58. A Joint Venture must be a legal entity which is
competent to enter into a contract. In the facts and
circumstances of the present case, an authority within the
meaning of Article 12 of the Constitution of India is involved
as one of the parties to the contract. The appellants floated a
tender permitting participation in such tender process by a
Joint Venture. Special Conditions of Contract specified that,
the Joint Venture may be a limited liability company. It did
not rule out participation by a partnership firm also. In any

29

event, the implied condition is that, the Joint Venture must be
an entity legally competent to enter into a contract.
59. The Special Conditions of Contract governing the
tender process cannot and should not be construed to mean
that, the same permits an Article 12 authority to enter into a
contract with an entity which can neither be sued nor sue.
Disputes in the working of the contract may arise between the
parties. Resolution of such disputes through a process known
to law must be made available to either of the contracting
parties. Therefore, interpretation of the Special Conditions of
Contract and for that matter the terms of the contract must be
such that it conforms to the law of India. In the present case,
the tender conditions specifically provide for the applicability
of the laws of India to the parties to the contract. In any event,
the right to approach a Court or an adjudicating forum for the
purpose of resolution of such disputes must exist for either of
the contracting parties.

60. Viewed in such conspectus where, the anvil is a Joint
Venture entity which is capable of being sued as also of suing,
in a Court of Law or before an adjudicating authority, the
Joint Venture permitted to participate in the tender process

30

must therefore be a legal entity which possess such
characteristics.
61. Consequently, the Joint Venture, under the Special
Conditions of Contract must either be a company within the
meaning of the Companies Act, 2013 or a company
incorporated thereunder or a partnership firm.
62. An unregistered partnership firm suffers the mischief
of Section 69(2) of the Act of 1932 while it seeks to sue.
However, it can be sued. From the perspective of the
appellants therefore, the Joint Venture contemplated under
the terms of the tender process particularly the Special
Conditions of Contract, is either a company incorporated
under the Companies Act, 2013 or an existing company within
the meaning of such Act or a partnership firm. No other entity
or atleast an entity which is incapable of being sued or suing
can validly enter into a contract with the appellants in terms
of the Special Conditions of Contract.

63. Materials placed before the learned Trial Judge as also
before us does not establish that, respondent no. 1 had
caused respondent no. 4 to issue a bank guarantee in favour
of the Railways in respect of the project concerned. Therefore,

31

respondent no. 1 has by the conduct of the parties been
recognized to be an entity separate and distinct from the
respondent nos. 2 and 3. Contemporaneously, respondent
nos. 1, 2 and 3 have recognized that the respondent no. 1 to
be separate and distinct from the respondent nos. 2 and 3
while Railways have done so as also the bankers of the
respondent nos. 1, 2 and 3.
64. Respondent no. 1 being an entity therefore, the
question that has fallen for consideration is whether it is a
legal entity in the sense that, is it an existing company within
the meaning of the Companies Act, 2013 or a partnership or
any other legal entity.
65. No materials have been placed on record to establish
that, respondent no. 1 is a company established under the
Companies Act, 2013 or is an existing company. To be fair
respondent nos. 1, 2 and 3, they have not suggested that the
respondent no. 1 is a company. The other option that
therefore remains is that, the respondent no. 1 is a
partnership firm of the respondent nos. 2 and 3. We have
already returned the finding that the respondent no. 1

32

satisfies all criteria of a partnership firm being the partnership
of the respondent nos. 2 and 3.
66. It is trite law that compliance with Section 69 of the
Act of 1932 is mandatory. It is also trite law that, registration
of the partnership firm must exist on the date when the suit
has been presented before the Court.
67. In the facts of the present case, it has been admitted
by the respondent nos. 1, 2 and 3 that, the respondent no. 1
was not registered under the Act of 1932. Consequently, the
mischief of Section 69(2) of the Act of 1932 stands attracted so
far as the plaint that has been filed by the respondent nos. 1,
2 and 3 is concerned. The suit therefore filed by the
respondent nos. 1, 2 and 3 is barred under Section 69(2) of
the Act of 1932.
68. In the facts obtaining in Nortrans Marine Services (P)
Ltd. (supra) it has been observed that, the bar under Section
69(2) of the Act of 1932 is required to be taken in the written
statement. With due respect, we are of the view that, Section
69(2) of the Act of 1932 is a bar on the plaintiff to institute a
suit for recovery when, the plaintiff is an unregistered
partnership firm. It is for the plaintiff to establish while suing

33

as a partnership that, the bar under Section 69(2) of the Act of
1932 is not attracted. The burden and onus of such proof lies
solely with the plaintiff when it sues as a partnership firm.
69. In the present case, the appellants did not raise
objection under Section 69 of the Act of 1932 in its written
statement. It reflects on the quality of assistance that the
learned Trial Court had received from an Article 12 authority.
Before us also the issue was not raised at the first instance by
the appellant or in the Memorandum of Appeal. A lot remains
to be desired on the quality of assistance that we had received
from the appellant which is an Article 12 authority.
70. The respondent Nos. 1, 2 and 3 as plaintiffs, have not
claimed that the respondent No. 1 is a partnership firm in so
many words. However, the averments made in the plaint as
also the reverification of the plaint filed by the respondent
Nos. 1, 2 and 3 have established that, the plaintiff No. 1 is a
partnership firm. In the reverification, the person re-verifying
the plaint has described himself to be a partner.
71. Bar under Section 69(2) of the Act of 1932 cannot be
waived even by the consent of the parties to the proceedings.
Issue under Section 69(2) of the Act of 1932 resonates on the

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jurisdiction of the Court to entertain a suit. Jurisdictional fact
of Section 69 of the Act of 1932 must be answered in favour of
the plaintiff for the Court to assume jurisdiction over the
subject matter of the lis where, the sole plaintiff or one of the
plaintiffs is a partnership firm.
72. The issue of bar under Section 69(2) of the Act of 1932
has been raised at the hearing of the appeal. Appeal is a
continuation of the original proceedings. It is for the plaintiffs
to come with clean hands before the Court. It is trite law that
plaintiffs must place all relevant facts on the issue of
jurisdiction of the Court to entertain the suit apart from its
cause of action.
73. The bar under Section 69 of the Act of 1932 having
been raised in the appeal, we had allowed both the parties to
address us on such issue including producing any documents
in respect of such issue. Respondent Nos. 1, 2 and 3 have
produced the Special Conditions of Contract at the hearing of
the appeal which we admitted and marked the same as
Exhibit. None of the parties in our view, have been prejudiced
by the issue being raised and decided in the appeal.

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74. The facts and circumstances of the present case as
discussed above, have established that, the respondent no. 1
is a partnership of the respondent nos. 2 and 3. It has also
been established that the respondent no. 1 is not registered
under the Act of 1932. The respondent nos. 1, 2 and 3 as the
plaintiff have therefore failed in discharging their burden of
proof in establishing that the bar under Section 69(2) of the
Act of 1932 is not attracted to the suit filed by them.

75. The respondents as plaintiffs have sued the appellants
claiming rights and reliefs emanating out of a contract.
Essentially, the contract between the Railways and the
respondent no. 1 has formed the subject matter of the suit.
The respondents as plaintiff have not sought enforcement of
any statutory or common law rights. Bar under Section 69(2)
of the Act of 1932 cannot be overcome by impleading all
parties to the unregistered partnership firm when such
partnership firm has sought remedies relating to a contract.

76. In view of the discussions above, issue No. (i) is
answered by holding that the respondent No. 1 is a
partnership firm. Issue No. (ii) is answered by holding that,
the respondent No. 1 is not registered under the Act of 1932

36

and admitted to be so by the respondent Nos. 1, 2 and 3.
Issue No. (iii) is answered by holding that, the suit filed by the
respondent Nos. 1, 2 and 3 is not maintainable in view of the
non-registration of the respondent No. 1 under the Act of
1932. Issue No. (iv) is therefore answered by holding that, the
impugned judgment and decree is not sustainable.
77. AD-COM 7 of 2026 is allowed by dismissing CS (COM )
No. 56 of 2024.

78. Impugned judgment and decree dated March 10, 2026
passed in CS (COM) No. 56 of 2024 is set aside. No orders as
to costs.

[DEBANGSU BASAK, J.]
79. I agree.
[ARYAK DUTT, J.]