07 October 1960
Supreme Court
Download

PURUSHOTTAM UMEDBHAI & CO. Vs M/S. MANILAL AND SONS (IN CONNECTED APPEALS)

Case number: Appeal (civil) 178 of 1960


1

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: PURUSHOTTAM UMEDBHAI & CO.

       Vs.

RESPONDENT: M/S.  MANILAL AND SONS (IN CONNECTED APPEALS)

DATE OF JUDGMENT: 07/10/1960

BENCH: IMAM, SYED JAFFER BENCH: IMAM, SYED JAFFER SARKAR, A.K. DAYAL, RAGHUBAR

CITATION:  1961 AIR  325            1961 SCR  (1) 982  CITATOR INFO :  R          1965 SC1718  (4)  RF         1967 SC 278  (6)  R          1969 SC1267  (4,6)  R          1978 SC 484  (12)

ACT:  Pleadings--Suit  by foreign firm in firm name--Plaint, if  a  nullity--Application    for   amendment   of   plaint    for  substitution of names of Partners instead of the name of the  firm--Maintainability--Code Civil Procedure, 1908 (Act V  of  1908), s. 153--O.  XXX rr.  1, 2--O. 1, rr. 10(1), 10(2).  Partnership--Power of Attorney--Partner if can execute power  on behalf of all partners--Indian Partnership Act, 1932  (IX  of 1932) ss. 4, 18 and 19(2).

HEADNOTE:  The  respondent  a firm carrying on  business  in  Singapore  filed  a plaint in the firm name against the appellants  for  the  breach  of contract.  The plaint had  been  signed  and  verified  on  behalf of the firm by one ’D’ on  a  power  of  attorney executed by one of the partners only.  After about,  6  years  the  respondents  made  an  application  for   the  amendment  of the plaint.  The amendment sought was  to  the  effect that the name of the firm as plaintiff be struck off,  as  it was a misdescription and in its place and  stead  the  names  of  five partners of the firm should  be  brought  on  record in order to bring the controversy between the  proper  parties into clear relief.  The  amendment  petition was rejected, inter  alia,  on  the  grounds that the original plaint was no plaint in law and it  was not a case of misnomer or misdescription, nor a case  of  a  nonexistent  firm or a non-existent person, but  a  legal  bar,  as the plaint was a nullity.  The proper  course  when  there  is  such a mistake is not to amend  disregarding  the  condition  of 0. i r. 10 of the Code of Civil Procedure  but  to  seek  the Court’s permission to withdraw the  suit  with  liberty  to file a fresh suit under 0. 23 r. i of the  Civil  Procedure  Code  on the ground of formal  defect  and  which  should be done before limitation.  In  appeal  the High Court came to the conclusion  that  the  description  of a plaintiff by a firm name in a  case  where

2

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

the  Code  of Civil Procedure does not permit a suit  to  be  brought  in  the firm name should properly be  considered  a  case  of  description  of the  individual  partners  of  the  business  and as such a misdescription, which in law can  be  corrected  and  should  not be considered  to  amount  to  a  description of non-existent person.  It  also rejected the contention that the power of  attorney  in favour of D was insufficient.  983  Held,  that the word,’ firm" or the "firm name " in s. 4  Of  the   Indian  Partnership  Act  is  merely   a   compendious  description of all the partners collectively.  Where a  suit  is filed in the name of a firm it is still a suit by all the  partners  of  the  firm unless it is  proved  that  all  the  partners had not authorised the suit.  The  provision of 0. XXX r. 1 & 2 of the Code of Civil  Pro-  cedure  are enabling provisions to permit several firms  who  are doing business as partners to sue or be sued in the name  of  the firm and do not prevent the partners of a firm  from  suing  or being sued in their individual names, nor do  they  prohibit  the  partners of a firm suing in  India  in  their  names  individually  although  they may  be  doing  business  outside  India;  since  a firm is not  a  legal  entity  the  privilege of suing in the name of a firm is permissible only  to  those  persons, who as partners are  doing  business  in  India.   Such privilege is not extended to persons  who  are  doing  business  as partners outside India.  In  their  case  they  still  have  to sue in  their  individual  names.   If  however, under some misapprehension, persons doing  business  as  partners outside India do file a plaint in the  name  of  their  firm they are misdescribing themselves, as  the  suit  instituted  is by them, they being known collectively  as  a  firm.  A  plaint  filed in a court in India in the name of  a  firm  doing business outside India is not by itself a nullity.  It  is a plaint by all the partners of the firm with a defective  description  of  themselves for the purpose of the  Code  of  Civil   Procedure.   A  civil  court  could   permit   under  provisions of S. 153 of the Code an amendment of the  plaint  to  enable a proper description of the plaintiffs to  appear  in  it in order to assist the court in determining the  real  question or issue between the parties.  Neither r. 10(i) nor  r.  10(2) of Order I have any application to a case of  this  kind, as the suit had been from its very inception a suit by  the  partners  of  the firm and no  question  of  adding  or  substituting  any person arises, the  partners  collectively  being described as a firm with a particular name.  Held,  further, that it is not necessary that the  power  of  attorney  should be signed by all the partners of the  firm.  A  partner  is  an  agent  of  the  firm  and  there  is  no  prohibition  to a partner executing a power of  attorney  in  favour of an individual authorising him to institute a  suit  on behalf of the firm.  Vyankatesh  Oil  Mill Co. v. Velamahomed, A.I.R.  1928  Bom.  191, disapproved.  Amulakchand  Mewaram  v. Babulal Kanalal, A.I.R.  1933  Bom.  304, Sadler v. Whiteman, [1910] 1 K.B. 868, Mura Mohideen v.  V.O.A.  Mohomed,  A.I.R.  1955  Mad.  294  and   Kasturchand  Bahiravdas  v. Sagarmal Shriyam, (1892) I.L.R. 17 Bom.  413,  discussed.  Hajee  Sattar  Hajee Peer Mohomad  v.  Khusiram  Benarsilal,  I.L.R. [1952] 1 Cal. 153, referred to.  984

3

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

JUDGMENT:  CIVIL  APPELLATE, JURISDICTION: Civil Appeals Nos.  178  and  179 of 1960.  Appeals by Special Leave from the Judgment and Decree  dated  the  18th  December,  1958, of the Calcutta  High  Court  in  Appeals  from  Original  Orders Nos. 108  and  138  of  1957  respectively.  B.  R. L. Iyengar for the Appellants (In both the  appeals.)  N.   C.  Chatterjee and D. N. Mukherjee for the  Respondents  (In both the appeals).  1960.  October 7. The Judgment of the Court was delivered by  IMAM J.-These are appeals by special leave against the order  of  a  Division  Bench  of the  Calcutta  High  Court  dated  December  18,  1958,  setting  aside  the  order  of  P.  B.  Mukherjea,  J., dated February 8, 1957, whereby he  rejected  the petition of the respondent for amendment of the  plaint,  filed  in  Suit  No.  1452 of 1951 in  the  High  Court,  in  exercise of its Ordinary Original Civil jurisdiction.  The plaint in Suit No. 1452 of 1951 was filed in the name of  Manilal  &  Sons, a firm carrying on business  at  No.  11A,  Malacca  Street, Singapore.  The partners of this firm  were  five  in number.  They were (1) Manubhai Maganbhai Amin  (2)  Pravinbhai Dahyabhai Patel (3) Gangabhai Iswarbhai Patel (4)  Bachubhai  Manibhai Amin and (5) Dahyabhai Trikambhai.   The  defendant  was the firm of Purushottam Umedbhai &  Co.  (now  the   appellant)-a   firm  registered   under   the   Indian  Partnership Act, 1932-carrying on business at No. 55 Canning  Street,  Calcutta.   In  July, 1949, there  was  a  contract  between  the  plaintiff and the defendant  under  which  the  defendant  was  to sell to the former,  subject  to  certain  conditions,  950  bales of Heavy Cees gunny bags  c.  i.  f.  Singapore  to be shipped from Calcutta in August, 1949.   It  was  also agreed between the plaintiff and the defendant  in  July-August,  1949, that the latter would sell,  subject  to  certain conditions, 600 bales of Heavy Cees gunny bags c. i.  f. Hong Kong to be shipped from Calcutta  985  in August, 1949.  According’ to the plaintiff, the defendant  did not perform the contract entered into by the parties and  as a result of the default on the part of the defendant  the  plaintiff  had  suffered loss.   The  plaintiff  accordingly  claimed  compensation to the extent of Rs. 2,73,864 and  Rs.  7,850  towards expenses incurred, in all Rs. 2,81,714.   The  breach  of  the contract is alleged to have taken  place  in  October  and  November, 1949.  The suit  was  instituted  on  April 2, 1951.  The defendant’s written statement was  filed  on or about May 21, 1951.  The petition for amendment of the  plaint was filed on January 31, 1957.  The amendment  sought  was  to the effect that the name of the firm Manilal &  Sons  as  plaintiff be struck off and in its place and  stead  the  names of the five persons who were the partners of the  firm  may be entered in the plaint as plaintiffs.  The  petitioner  also  sought ’the necessary consequential amendments in  the  body  of the plaint.  According to the petition praying  for  amendment,  on  January  29, 1957,  the  solicitors  of  the  plaintiff  received  a  letter  from  the  attorney  of  the  defendant to the effect that inasmuch as the firm Manilal  &  Sons  was  carrying on business at Singapore,  an  objection  would be taken on behalf of the defendant that the suit,  as  framed,  was null and void and not maintainable.   The  suit  had  been pending in the court of P. B. Mukherjea,  J.,  and  appeared  on  the peremptory list, for the  first  time,  on  January 3, 1957.  According to the petition, the  petitioner  was advised that as the misdescription of the plaintiff  was

4

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

a  bona  fide  one, the names of the partners  of  the  firm  Manilal  & Sons should be brought on to the record in  order  to  bring  the controversy between the proper  parties  into  clear   relief.   Accordingly,  the  petitioner  filed   the  petition for amendment.  On  a Chamber Summons being taken out, Mukherjea, J.,  heard  the matter and rejected the petition for amendment.  He  was  of the opinion that the original plaint was no plaint in law  and  therefore was a mere nullity of a process.  The  proper  course,  when  there  is such a mistake, is  not  to  amend,  disregarding  the  conditions of O. I, r. 10  of  the  Civil  Procedure Code,  986  but to seek the Court’s permission to withdraw the suit with  liberty  to  file a fresh suit under 0. xxIII, r. 1  of  the  Civil  Procedure  Code on the ground of  formal  defect  and  which should be done before limitation.  In his opinion,  it  was not a case of misnomer or a misdescription.  It was  not  a case of a nonexistent firm or a non-existent person or  of  a wrong description but of a legal bar; and when a plaint is  filed  showing that the plaintiff was not a  legally  recog-  nised  person  at all such a plaint must be  regarded  as  a  nullity.   He  was also dissatisfied  with  the  explanation  given  for filing the petition for amendment some six  years  after the institution of the suit.  In appeal, the Division Bench of the High Court came to  the  conclusion  on a consideration of various decisions  of  the  High  Courts in India and the courts in England that  "  the  description  of a plaintiff by a firm name in a  case  where  the  Code  of Civil Procedure does not permit a suit  to  be  brought  in  the firm name should properly be  considered  a  case  of  description  of the  individual  partners  of  the  business  and as such a misdescription, which in law can  be  corrected  and  should  not be considered  to  amount  to  a  description of a non-existent person ". It also rejected the  contention  on  behalf of the defendant that  the  Power  of  Attorney  in  favour of Dunderdale  was  insufficient.   The  contention  had  been that this Power of  Attorney  did  not  authorize  Dunderdale to act on behalf of the the  firm  far  less the individual members of the firm.  The Division Bench  accordingly  allowed the amendment prayed for and  permitted  the  names of the individual partners of the firm Manilal  &  Sons to be substituted as plaintiffs in the place of Manilal  &  Sons.  The individual partners were permitted  either  to  sign  the  plaint themselves or  through  their  constituted  attorneys. The Division Bench allowed this amendment on  the  condition  that  all the costs of the  appellant  before  us  incurred upto the date of the judgment must be paid to it.  The  Division  Bench  also allowed the  appeal  against  the  decree of P. B. Mukherjea, J., dismissing the suit, which it  set aside.  Appeal No. 179 of 1960 is by  987  special  leave against the aforesaid order of  the  Division  Bench.  It was urged on behalf of the appellants that (1) the plaint  as   filed  was  a  nullity.   The  suit,   therefore,   was  incompetent.   To  bring on the record the partners  of  the  firm amounted to addition of new parties and if on the  date  these  partners  are  added as parties  and  the  period  of  limitation  had elapsed then the entire suit would  be  time  barred;  (2)  even if it be held that the plaint  is  not  a  nullity, neither the provisions of 0. 1, r. 10 nor those  of  0.  VI, r. 17 have any application to the case;  (3)  having  regard to the provisions of s. 45 of the Indian Contract Act  a  suit by only one partner or one promisee is bad to  start

5

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

with.   There being within the period of limitation no  suit  by  all  the  partners, any  amendment,  if  allowed,  would  convert the old suit into a new suit and the new suit  would  be  barred by limitation if the amendment was allowed  on  a  date  which was beyond the period of  limitation  prescribed  for  such a suit; (4) if the amendment was allowed it  would  be  a case of adding or substituting new plaintiffs  and  as  regards them it would be deemed to have been instituted when  they  were  made  parties.  Reference to  s.  22(1),  Indian  Limitation Act, was made in this connection.  In the present  case, so far as the new plaintiffs were concerned, the  suit  was  barred by time at the date when they were sought to  be  made  parties;  (5) the circmstances of the  case  indicated  that  there was no suit in the eyes of the law, nor was  the  plaint verified or signed as required by law.  Consequently,  there  was  no  proceeding before the  court  in  which  any  amendment  could be sought and (6) even if it was held  that  the plaint was not a nullity the plaint had been signed  and  verified on behalf of the firm Manilal & Sons by  Dunderdale  on a Power of Attorney executed by one of the partners only.  It was therefore not manifest that all the partners intended  to  sue.   Furthermore, the Power of  Attorney  executed  in  favour  of  Dunderdale by one of the partners could  not  be  regarded as authorizing him to to act on behalf of the  firm  of Manilal & Sons.  Very great reliance was placed on the decision of  988  Blackwell, J., in the case of Vyankatesh Oil Mill Co. v.  N.  V.  Velamahomed  (1) where the learned Judge held  that  the  suit  was brought by an entity which had no legal  existence  in  the  eyes  of  Indian law and there  being  no  mode  of  procedure  whereby  such an entity was permitted to  sue  in  India, the suit, as framed, was not maintainable at all.  It  followed therefore that the amendment asked for could not be  treated as an amendment following upon a mere misdeseription  but  must be treated as an application for the  substitution  of the individual persons who composed the entity which  the  law  did not recognize.  This view of Mr. Justice  Blackwell  was  not  accepted  by  Beaumont,  C.  J.,  in.the  case  of  Amulakchand Mewaram v. Babulal Kanalal Taliwala (2) where he  expressed himself as follows:       "I  must  confess  that  I  have  some  difficulty   in  following  both  the  reasons and  the  conclusions  of  the  learned Judge in that case.  It was a case of a suit brought  in  the name of a firm carrying on business outside  British  India,  and therefore not justified by the terms of  0.  30,  Civil  P. C. and the learned Judge expressed the  view  that  the plaintiff firm was a nonexistent entity.  But the  order  which  he  subsequently  made giving leave  to  amend  seems  inconsistent with that finding."  He further held:       " But I do not see how 0. 30 can affect the question of  fact, whether a suit brought in the name of a firm in a case  not  within  0. 30 is in fact a case  of  misdescription  of  existing  persons,  or a case of a suit brought  by  a  non-  existent entity."  In  the case of Hajee Sattar Hajee Peer Mahomad v.  Khusiram  Benarsilal  (3), the Calcutta High Court did not accept  the  view expressed by Blackwell, J. it referred to the following  observation of Farwell, L. J., in Sadler v. Whiteman(4):-  "In  English  law  a firm as such has  no  legal  existence;  partners carry on business both as principals and as  agents  for each other within the scope of the  (1)  A.I.R. 1928 Bom. 191.  (3)  I.L.R. [1952] 1 Cal. 153.

6

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

(2)  A.I.R. 1933 Bom. 304, 305.  (4)  [1910] 1 K.B. 868, 889.  989  partnership  business; the firm name is a  mere  expression,  not  a  legal entity, although for convenience  under  Order  XLVIII-A  it  may be used for the sake of  suing  and  being  sued."  In the case of Mura Mohideen v. V.O.A. Mohomed(1) the Madras  High   Court  dissented  from  the  opinion   expressed   by  Blackwell, J. and the, learned Judges stated :        "We are unable to agree with Blackwell, J. in his view  that a foreign firm not being a legal entity which could  as  such file a suit under the Civil P. C., by itself determines  the  question whether the impleading of the members of  that  firm is the addition of a new party.  The view of Blackwell,  J.  appears  to  have been concurred  in  by  two  decisions  reported in-’ Neogi Ghose and Co. v. Nehal Singh’, AIR  1931  Cal.  770 (F) and-, L. N. Chettiar Firm v.  M.P.R.M.  Firm’,  AIR 1935 Rang. 240 (G), but we are unable to agree with  the  soundness  of  the reasoning in these  decisions  either  of  which  do not furnish any further reasons in support of  the  view of Blackwell, J."  The Madras High Court then concluded as follows:       "If  however   imperfectly and incorrectly a  party  is  designated  in a plaint the correction of the error  is  not  the addition or substitution of a party but merely clarifies  and makes apparent what was previously shrouded in obscurity  by  reason of the error or mistake.  The question in such  a  case  is one of intention of the party and if the  Court  is  able to discover the person or persons intended to sue or to  be sued a mere misdescription of such a party can always  be  corrected  provided the mistake was bona fide vide  0.1,  R.  10,  C.P.C. Such an amendment does not involve the  addition  of a party so as to attract S. 22(1), Limitation Act.  Suits  by  or  on  behalf  of dead persons  stand  in  a  different  category.   The  principle that a  misdescription  could  be  corrected  by  amendment could not obviously be  applied  to  such a case but this is far from saying that merely  because  the law does not recognise the firm as being a legal entity,  the firm  (1) A.I.R. 1955 Mad. 294, 297, 299.       126  990  name  could  not  indicate  or  designate  the   individuals  Composing the firm."       "To sum up, the situation is analogous to a case  where  an  individual  who has an alias or an abbreviated  name  by  which he is sometimes called initially describes himself  in  that  name but subsequently applies to have it rectified  so  as  to describe in the manner in which he is most  generally  known.  There cannot be any doubt that by the correction  in  the  name, a new plaintiff is not added so as to attract  s.  22(1), Limitation Act.  A trade name either of a person or a  group of individuals carrying on business in partnership  is  in true an alias for the person or the group."  Before  the  introduction  of O. XXX in the  Code  of  Civil  Procedure apparently suits were instituted, particularly  in  the  Mofussil  courts,  in  the  name  of  a  firm  or  were  instituted against a firm in the firm name and no  objection  was  generally taken.  Presumably this practice was  largely  based  on the assumption that the suit concerned was  either  by all the partners of the firm or against all the  partners  of  the  firm.  If, however, an objection were to  be  taken  that  a  suit  in the name of a firm  was  not  maintainable  because  it  had no legal entity, the courts would  have  to

7

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

decide whether the suit had been instituted by  non-existent  persons.  If so, the suit was not maintainable.  In the case  of Kasturchand Bahiravdas v. Sagarmal Shriram (1), which was  before the introduction of 0. XXX in the Code, the suit  had  been  brought in the name of the firm Kondanmal Sagarmal  by  its manager Sagarmal Shriram.  The defendants objected  that  one Malamchand was also a partner in the firm and should  be  made  a party.  He was accordingly added as a  plaintiff  on  the  27th  of January, 1888.  The defendant  then  contended  that  the suit was barred under s. 22, Limitation  Act.   It  was  held  by the Bombay High Court that it was  a  case  of  misdescription  and  not of non-joinder for the  action  was  brought  in  the  name  of the firm  by  its  manager.   The  introduction of 0. XXX into the Code  (1)  (1892) I.L.R. i7 Bom. 413.  991  prevents  such an objection being taken because  it  permits  two or more persons carrying on business of the firm to  sue  or  be  sued in the name of the firm but the  firm  must  be  carrying  on  business in India.  The introduction  of  this  provision  in the Code was an enabling one  which  permitted  partners  constituting a firm to sue or be sued in the  name  of the firm.  This enabling provision, however, accorded  no  such  facility or privilege to partners constituting a  firm  doing   business  outside  India.   The  existence  of   the  provisions of 0. XXX in the Code does not mean that a plaint  filed in the ’name of a firm doing business outside India is  not   a  suit  in  fact  by  the  partners  of   that   firm  individually.  Section  4 of the Indian Partnership Act, 1932,  hereinafter  referred to as the Act, states that :  "  " Partnership " is the relation between persons who  have  agreed to share the profits of a business carried on by  all  or any of them acting for all.  Persons  who have entered into partnership with one  another  are  called individually " partners " and collectively  "  a  firm " and the name under which their business is carried on  is called the " firm name "."  It  is clear from this provision of the Act that the word  "  firm  "  or  the  " firm name  "  is  merely  a  compendious  description  of all the partners collectively.  It  follows,  therefore, that where a suit is filed in the name of a  firm  it is still a suit by all the partners of the firm unless it  is proved that all the partners had not authorized the suit.  A  firm  may  not  be  a legal entity  in  the  sense  of  a  corporation  or  a  company incorporated  under  the  Indian  Companies  Act  but it is still an  existing  concern  where  business  is  done by a number of  persons  in  partnership.  When a suit is filed in the name of a firm it is in  reality  a  suit by all the partners of the firm.  If 0. XXX had  not  been  introduced into the Code and a suit had been filed  in  the name of a firm it would not be a case of a suit filed by  a nonexistent person.  It would still be a suit by the part-  ners of a firm, the defect being that they were described as  a firm.  In order to clarify matters a court would permit an  amendment by striking out the name  992  of  the firm and replacing it with the name of  the  persons  forming   the   partnership.   It  would  be   a   case   of  misdescription.   Even if the provisions of 0. 1, r. 10  and  0.  VI, r. 17 did not strictly apply the amendment could  be  permitted  under s. 153 of the Civil Procedure Code  because  it  was not a case of either adding parties or  substituting  parties.   The High Court referred to a number of  decisions  to  which no particular reference need be made but  they  do

8

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

support the view taken by the High Court that in the present  case  the plaintiff described in the plaint as the  firm  of  Manilal  &  Sons  was  a  mere  misdescription  capable   of  amendment and not a case where a plaint had been filed by  a  non-existent person and therefore a nullity.  We  now refer to certain provisions of 0. XXX, C.P.C.  Order  XXX, r. 1, C.P.C. states:  "  (1) Any two or more persons claiming or being  liable  as  partners  and  carrying on business in India may sue  or  be  sued in the name of the firm (if any) of which such  persons  were  partners at the time of the accruing Of the  cause  of  action,  and any party to a suit may in such case  apply  to  the Court for a statement of the names and addresses of  the  persons  who were, at the time of the accruing of the  cause  of  action,  partners  in such firm,  to  be  furnished  and  verified in such manner as the Court may direct.  (2) Where persons sue or are sued as partners in the name of  their firm under sub-rule (1), it shall, in the case of  any  pleading or other document required by or under this Code to  be  signed,  verified or certified by the plaintiff  or  the  defendant,  suffice  if such pleading or other  document  is  signed, verified or certified by any one of such persons ".  This rule enables any party to a suit filed in the name of a  firm  doing  business in India to apply to the court  for  a  statement of the names and addresses of the persons who were  at the time of the accruing of the cause of action  partners  in  the firm to be furnished and verified in such manner  as  the court may direct.  Order XXX, r. 2 states:  " (1) Where a suit is instituted by partners in the name  of  their firm, the plaintiffs or their pleader shall,  993  on  demand  in  writing by or on behalf  of  any  defendant,  forthwith  declare  in  writing  the  names  and  places  of  residence of all the Persons constituting the firm on  whose  behalf the suit is instituted.  (2)  Where  the plaintiffs or their pleader fail  to  comply  with any demand made under sub-rule (1), all proceedings  in  the  suit  may,  upon an application for  that  purpose,  be  stayed, upon such terms as the Court may direct.  (3)  Where  the names of the partners are  declared  in  the  manner  referred to in sub-rule (1), the suit shall  proceed  in  the  same  manner,  and the  same  consequences  in  all  respects  shall  follow,  as  if  they  had  been  named  as  plaintiffs in the plaint:   Provided  that  all  the  proceedings  shall   nevertheless  continue in the name of the firm ".  This  makes it obligatory, in the case of a suit  instituted  by  the  partners  in the name of the  firm,  on  demand  in  writing  by  or on behalf of any defendant,  to  declare  in  writing the names and places of residence of all the persons  constituting   the  firm  on  whose  behalf  the   suit   is  instituted.   If  the  plaintiffs fail to  comply  with  the  demand  made  under sub-r. (1) of this rule,  all  the  pro-  ceedings  in  the suit may be stayed on such  terms  as  the  court  may  direct.  Under sub-r. (3) if the  names  of  the  partners  are declared in the manner referred to  in  sub-r.  (1)  the suit shall proceed in the same manner and the  same  consequences  in  all respects shall follow as if  they  had  been named in the plaint, provided that all the  proceedings  shall  nevertheless  be continued in the name of  the  firm.  Rule  1 of 0. XXX is a general provision.  Rule 2,  however,  is confined to a suit instituted by partners in the name  of  the firm.  It is clear from this rule that although the suit  is  filed  in the name of the firm a disclosure  has  to  be  made, on demand in writing by or on behalf of any defendant,

9

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

of  names  and  places  of  residence  of  all  the  persons  constituting   the  firm  on  whose  behalf  the   suit   is  instituted.   The  provisions of r. 2  would  indicate  that  although  the  suit is filed in the name of a  firm,  it  is  nonetheless  a suit by all the partners of the firm  because  if a disclosure of the names of the partners is  994  asked  for  by any defendant, on such disclosure,  the  suit  shall  proceed  as  if  the  partners  had  been  named   as  plaintiffs  in the suit, even though the  proceedings  shall  nevertheless  be continued in the name of the firm.   It  is  clear, therefore, that the provisions of 0. XXX, r. 1 and r.  2 are enabling provisions to permit several persons who  are  doing business as partners to sue or be sued in the name  of  the  firm.  Rule 2 would not have been in the form it is  if  the suit instituted in the name of the firm was not regarded  as,  in  fact,  a suit by the partners  of  the  firm.   The  provisions  of  these  rules  of  0.  XXX,  being   enabling  provisions, do not prevent the partners of a firm from suing  or  being sued in their individual names.  These rules  also  do  not  prohibit the partners of a firm suing in  India  in  their names individually although they may be doing business  outside  India.  Indeed, this was not disputed on behalf  of  the appellant.  Since, however, a firm is not a legal entity  the privilege of suing in the name of a firm is  permissible  only  to those persons who, as partners, are doing  business  in India.  Such privilege is not extended to persons who are  doing  business  as partners outside India.  In  their  case  they  still  have  to sue in their  individual  names.   If,  however, under some misapprehension, persons doing  business  as  partners outside India do file a plaint in the  name  of  their  firm they are misdescribing themselves, as  the  suit  instituted  is by them, they being known collectively  as  a  firm.   It seems, therefore, that a plaint filed in a  court  in India in the name of a firm doing business outside  India  is  not  by  itself a nullity.  It is a plaint  by  all  the  partners  of  the  firm  with  a  defective  description  of  themselves for the purposes of the Code of Civil  Procedure.  In  these circumstances, a civil court could permit,  tinder  the  provisions of s. 153 of the Code (or possibly under  0.  VI, r. 17, about which we say nothing), an amendment of  the  plaint  to enable a proper description of the plaintiffs  to  appear in it in order to assist the court in determining the  real  question  or  issue  between  the  parties.   Strictly  speaking 0. 1, r. 10(1) has no application to a case of this  kind because the suit has not been instituted in the name  995  of  a wrong person, nor is it a case of there being a  doubt  whether  it  has been instituted in the name  of  the  right  plaintiff.   The  provisions of 0. I, r. 10(2) also  do  not  apply  because  it is not a case of any  party  having  been  improperly joined whose name has to be struck out or a  case  of adding a person or a party who ought to have been  joined  or whose presence before the court is necessary in order  to  enable  the court effectually and completely  to  adjudicate  upon and settle all the questions involved in the suit.  The  suit has been from its very inception a suit by the partners  of  the firm and no question of adding or  substituting  any  person arises, the partners collectively being described  as  a firm with a particular name.  One of the partners Manubhai Maganbhai Amin was the  Manager  of  the  firm Manilal & Sons.  He had executed  a  Power  of  Attorney in favour of four persons including one Dunderdale.  By this Power he authorized any one of these persons to  sue  for  recovery of moneys due to the firm from the firm  Puru-

10

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

shottam  Umedbhai & Co., the appellant.  It  also  empowered  these  persons  to appear and to represent the firm  in  any  court,  in  any  jurisdiction-civil,  criminal,  insolvency,  original, appellate or otherwise-and before any official  in  any suit or proceeding or matter and to make, sign,  verify,  present  and  file any plaint.  Dunderdale  had  signed  and  verified the plaint in the present case.  We have no  doubt,  on  a perusal of the Power of Attorney, that  it  authorized  Dunderdale to file the plaint on behalf of the firm  Manilal  &  Sons and also to verify it.  It was suggested  that  this  was  a  Power  of Attorney by Manubhai  Maganbhai  Amin  for  himself  and  not  for the firm of Manilal &  Sons.   As  we  understand  the Power of Attorney that is not so.  No  doubt  the  Power of Attorney is not signed by all the partners  of  Manilal & Sons but only by Manubhai Maganbhai Amin.  In  our  opinion,  it  was not necessary that the Power  should  have  been signed by all the partners of the firm because Manubhai  Maganbhai Amin was the manager of the firm.  Under B. 18  of  the  Act a partner is an agent of the firm for the  purposes  of the business of the firm.  Manubhai  996  Maganbhai  Amin was therefore the agent of the firm as  well  as its manager.  It is to be noticed that under s. 19(2)  of  the  Act instances are stated where, in the absence  of  any  usage  or  custom  of trade to  the  contrary,  the  implied  authority  of a partner does not empower him to  do  matters  mentioned  in  cls. (a) to (h).  It is significant  that  in  these clauses there is no prohibition to a partner executing  a  Power of Attorney in favour of an individual  authorizing  him  to  institute a suit on behalf of the firm.   In  these  circumstances, it cannot be said that at the time the plaint  was filed it was defective because the Power of Attorney  in  favour  of Dunderdale was not a Power of Attorney on  behalf  of the firm and its partners.  As the High Court has pointed  out, there is on the record now Powers of Attorney on behalf  of all the partners of the firm.  It  seems  to us that the Division Bench of the  High  Court  took  a  correct view in holding that the plaint was  not  a  nullity.   It  was a case of a suit instituted  by  all  the  partners of a firm who were misdescribed as Manilal &  Sons,  a  firm  carrying  on business at No.  11A  Malacca  Street,  Singapore  and.,  accordingly  the  learned  Judges  rightly  allowed  the  plaint to be amended on terms  and  conditions  stated in their order.  It  follows therefore that the High Court was also right  in  setting aside the decree of P. B. Mukherjea, J.,  dismissing  the suit.  These appeals accordingly fail and must be dismissed but, in  the circumstances, without costs.                       Appeals dismissed. 1