# Sl1PREME COURT REPORTS Pt;RUSHOTTA!\I UMEDBHAI & CO v. M/S . .MANILAL AND SONS

- **Citation:** [1961] 1 S.C.R. 982
- **Court:** Supreme Court of India
- **Decided:** 1958-12-18
- **Case number:** Oivil Appeals Nos. 178 and 179 of 1960
- **Bench:** J. htAM, A. K. SARKAR am! B.AOOHBAR DAYAL
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sl1preme-court-reports-pt-rushotta-i-umedbhai-co-v-m-s-manilal-and-sons-2195
- **Pages:** 15

## Headnote

Pleadings- -Suit by foreign firm in firm namc--l'laint, if a
'"'llity- -Application for amendment of plaint for substitution of
names of partners instead of the 11ame of the firm-Maintainability
---Code of Civil Pro"dure, 1908 (Act V of 1908), s. lSJ-0. XX X
,
rr.1. 2-0.1, rr. 10(1), l0(2).
Partmrsl11p --- Power of Attorney-Partner if ca11 e.reculc power
on bd1alf of all parltlers-l11dia11 Partnership Act, 19p (l X of
1932) SS. 4, 18 illld 19(2).
The respondent a firm carrying on business in Singapore
filed a plaint in the firm name against the appellants for th&
breach of contract. The plaint had been signed and verified
on behalf of the firm by one' D ·on a power of attorney cxer.utod hy one of the ;>artncrs only.
After about 6 years the respondents made an application fur the amendment of the plaint.
The amendment sought was to the effect that the name of the
firm as plaintiff il<' struck off, as it was a misdescription and in
its place and stead the names of five partners of the firm should
he brought on record in order to bring the controversy between
the proper parties into clear relief.
The amendment petition was rejected, inter ,.Jia, 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, b·.1t 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. r r. IO
of the Code of Civil Procedure but to seek the Court's permission 10 withdraw tl1c suit with liberty to file a fresh suit under
o. 23 r. I of the Civil Procedure Code on th• ground of formal
defect and which should be done before limitation.
Jn appe.al the High Court came to the conclusion that the
description of a plaintiff by a firm name in a case where the
Code of Civil Procedure docs not permit a suit to be brought in
the firm name s!wuld properly be considered a case of description of the individual partners of the husiness and as su~h a
n1isdescription, which in la\v can be corrected and should not
b,~ considcrt~d to arnount to a description of non-existent per-
:i.Oll.
It also rejected the contention that the power of attorney
in favour of 'I)' was insufficient.
,(
'
I S.C.R. SUPREME COURT REPORTS
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 unle.ss 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 Procedure 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 he 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 tu
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

## Text

October 7.
982
Sl1PREME COURT REPORTS
Pt;RUSHOTTA!\I UMEDBHAI & CO.
v.
M/S . .MANILAL AND SONS
(IX co:-.NECTED APPEALS)
[ 1961]
(8. ,J. htAM, A. K. SARKAR am! B.AOOHBAR
DAYAL, JJ.)
Pleadings- -Suit by foreign firm in firm namc--l'laint, if a
'"'llity- -Application for amendment of plaint for substitution of
names of partners instead of the 11ame of the firm-Maintainability
---Code of Civil Pro"dure, 1908 (Act V of 1908), s. lSJ-0. XX X
,
rr.1. 2-0.1, rr. 10(1), l0(2).
Partmrsl11p --- Power of Attorney-Partner if ca11 e.reculc power
on bd1alf of all parltlers-l11dia11 Partnership Act, 19p (l X of
1932) SS. 4, 18 illld 19(2).
The respondent a firm carrying on business in Singapore
filed a plaint in the firm name against the appellants for th&
breach of contract. The plaint had been signed and verified
on behalf of the firm by one' D ·on a power of attorney cxer.utod hy one of the ;>artncrs only.
After about 6 years the respondents made an application fur the amendment of the plaint.
The amendment sought was to the effect that the name of the
firm as plaintiff il<' struck off, as it was a misdescription and in
its place and stead the names of five partners of the firm should
he brought on record in order to bring the controversy between
the proper parties into clear relief.
The amendment petition was rejected, inter ,.Jia, 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, b·.1t 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. r r. IO
of the Code of Civil Procedure but to seek the Court's permission 10 withdraw tl1c suit with liberty to file a fresh suit under
o. 23 r. I of the Civil Procedure Code on th• ground of formal
defect and which should be done before limitation.
Jn appe.al the High Court came to the conclusion that the
description of a plaintiff by a firm name in a case where the
Code of Civil Procedure docs not permit a suit to be brought in
the firm name s!wuld properly be considered a case of description of the individual partners of the husiness and as su~h a
n1isdescription, which in la\v can be corrected and should not
b,~ considcrt~d to arnount to a description of non-existent per-
:i.Oll.
It also rejected the contention that the power of attorney
in favour of 'I)' was insufficient.
,(
'
I S.C.R. SUPREME COURT REPORTS
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 unle.ss 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 Procedure 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 he 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 tu
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(1) nor r. ro(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 ofthe 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.LR. 1928 Born.
191, disapproved.
Amulakchand Mewaram v. Bab1<lal Kanalal. A.LR. 1933 Born.
304, Sadler v. Whiteman, [19ro] I K.B. 868, M1<ra Mohideen v.
V. 0. A. Mohomed,
A.LR. 1955 Mad. 294 and Kasturchand
Bahiravdas v. Sagarmal Shriram, (1892) I.L.R. 17 Born. 413,
discussed.
Hajee Sattar Hajee Peer Mohamad v . . Khusiram Benarsilal,
l.L.R. [1952] l Cal. 153, referred to.
Purushottam
Umedbhai 6· Co.
v.
J1 / s. .ill (tnilal
&· Sons
PMYwsJioltam
U medbh ai C>- Co.
v.
J\1 /s. Ma,iilal
cS- Sons
984
SUPRE~IE COURT REPORTS
[1961]
CIVIL APPELLATE JURISDICTION:
Oivil Appeals
Nos. 178 and 179 of 1960.
Appea.ls by Specia.1 Lea.ve from the Judgment and
Decree da.ted the 18th December, 1958, of the Ca.I.
cutta High Court in Appeals from Origina.1 Orders
Nos. 108 a.nd 138of1957 respectively.
B. R. L. Iyengar for the Appellants (In both the
a.ppea.ls.)
N. 0. Chatterjee a.nd D. N. Mukher.jee for the Res.
pondents (In both the a.ppea.ls).
1960. October 7.
The Judgment of the Court was
delivered by
•
1 ... ,. J.
IMAM J.-These a.re a.ppea.ls by specia.l lea.ve a.ga.inst
the order of a. Division Bench of the Calcutta. High
Court dated December 18, 1958, setting a.side the
order of P. B. Mukherjea., J., da.ted February 8, 1957,
whereby he rejected the petition of the respondent
for amendment of the pla.int, filed in Suit No. 1452 of
1951 in the High Court, in exercise of its Ordinary
Original Civil jurisdiction.
The pla.int in Suit I\ o. 1452 of 1951 wa.s filed in the
na.me of Ma.nila.l & Sons, a. firm carrying on business
at No. llA, Mala.cca. Street, Singapore. The partners
of this firm were five in number. They were (I)
Ma.nubha.i '.\fa.ga.nbha.i Amin (2) Pravinbha.i Da.hya..
bha.i Pa.tel (3) Ga.ngabhai Iswarbhai Pa.tel (4) Bachubhai Manibhai Amin and (5) Dahyabha.i Trikambha.i.
The defendant wa.s the firm of Purushottam Umedbhai & Co. (now the a.ppellant)-a. firm registered
under the Indian Partnership Act, 1932-carrying on
business at No. 55 Canning Street, Calcutta.. In July,
1949, there was a contra.ct between the plaintiff a.nd
the defendant under which the defendant was to sell
to the former, subject to certain conditions, 950 bales
of Hea.vy Coos gunny bags c. i. f. Singapore to be
shipped from Calcutta in August, 1949. It wa.s a.lso
/
a.greed between the plaintiff and the defendant in
July-August, 1949, tha.t the latter would sell, subject
to certain conditions, 600 bales of Heavy Cees gunny
bags c. i. f. Hong Kong to be. shipped from Calcutt&
'
.....
J
'·
1 S.C.R. SUPREME COURT REPORTS
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 Manila.I & 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 reeeived a letter from the
attorney of the defendant to the effect .that inasmuch
as the firm Manila! & Sons wll.s 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 a bona fide one, the names of the partners of the firm Manila! & 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 mattefand 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,
Purusholtam
Umedbhai c£.. Co.
v.
Mfs. Manilal
6- Sons
Iniam J.
Putu(hottam
V"lfdbhai 6- Co.
v.
M /s. !tfanilal
6- So"s
Jn1am ].
986
SUPREME COURT REPORTS
[ 1961]
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 Pioccdure Code on the ground of
formal defect a.nd which should be done bofore limitation. In his opinion, it wa.s not a. ca.se of misnomer
or a. misdescription. It wa.s not a. ca.se of a. nonexistent firm or .a. non.existent person or of a. wrong
description but of a. legal ba.r; a.nd when a. pie.int is
filed showing tha.t the pla.ntiff wa.s not a. lega.lly recognised person a.t a.II such a. pie.int must be regarded a.s
a. nullity.
He was a.lso dissatisfied with the t1xplana.-
tion given for filing the petition for amendment some
six yea.rs after the institution of the suit.
In appeal, the Division Bench of the High Court
ca.me t-0 the conclusion on a. consideration of various
decisions of the High Courts in India. a.nd the courts
in England tha.t "the description of a. plaintiff by a.
firm na.mo in a. ca.se where the Codo of Civil Procedure
does not permit a suit to be brought in the firm na.me
should properly be considered a. ·Ca.so of description of
the irdividua.l na.rtners of tho business and as such
a. misd~script.ion which in la.w can be correct~d a.nd
should not be co .. oidered to a.mount to a. description
of a non.existent person". It a.lso rejected the contention on behalf of tho defendant that the Power
of Att0rney in favour of Dunderdale was insufficient.
Tho contention had been that this Power of Attorney.
did not authorize Dunderdalo to act on behalf of the
the firm fa.r less the individual members of the firm.
Tho Division Bench accordingly allowed the amen-1ment prayed for and permitted the names of the
individual partners of the firm Manila! &; Sons to be
substituted as plantiffs in the place of Ma.nllal &, Sons.
The individual partners were permitted either to sign
the plaint themselves or thr<!ugh their con11tituted
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 judgm,ent
must be paid to it.
The Division Bench also allowed the appeal against
the decree of P. B. Mukherjee., J., dismissing the suit,
which it, set aside.
Appeal No. 179 of 1960 is by
>
1 s.c.R. SUPREME COURT REPORTS
987
specia.l lea.ve a.gs.inst the aforesaid order of the Divi-
'960
sion Bench.
Putushottam
It was nrged on behalf of the appellants that (1) Umedbhai &- co.
the plaint a.a filed wa.s a. nullity. The suit, therefore,
v.
was incompetent. To bring on the record the partners M/s. Mani/al
of the firm amounted to addition of new parties a.nd if
&- Sons
on the date these partners a.re added a.s parties and
Imam J.
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. I, r. 10 nor those of 0. VI, r. 17 have any application to the case; (3) having regard to the provisions
of a. 45 of the Indian Contract Act a suit by only one
partner or one promisee is bad to start with. There
being within the period of limitation no suit by all the
partners, 1;1.ny amendment, if allowed, would convert
the old suit into a new suit a.nd the new suit would be
barred by limitation if the 1;1.medment 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, wa.s made
in this connection. In the present case, so fa.r a.s the
new plaintiffs were concerned, the suit wa.s barred by
time at the date when they were sought to be made
parties; (5) the circmstances of the case indicated
that there wa.s 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 ef the
·firm. Manila! & Sons by DunderdaJe· on a Power of
Attorney executed by one of the partners only. It
was therefore not manifest that a.II 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 Manila.I & Sons.
·
Very great reliance was ~laced on the decision of
1960
Pt1,.uslu>ll1nrt
Um.dblksi & Co.
v.
M fs. M anilaJ
<S- Son.(
/'""'" ].
988
SUPREME COURT REPORTS
[1961]
Blackwell, J., in the case of Vyankateah Oil Mill Co. v.
N. V. Velamahomed (')where the learned Judge held
that the suit was brought by a.n entity which ha.d no
legal existence in the eyes of Indian la.w a.nd there
being no mode of procedure whereby such a.n entity
wa.s permitted to sue in India., the suit, a.s framed,
wa.s not mainta.i.Da.ble a.t a.II. It followed therefore
that the amendment asked for could not be treated as
an amendment following upon a mere misdesoription
but must be treated as an a.pplica.tion for the substitu.
tion of the individual persons who composed the
entity whioh the la.w did not recognize. This view of
Mr. J ustioe Blackwell was not accepted by Beaumont,
C. J., in the ca.se of ..4.m11lakchand M ewaram v. Babulal
Kana/al Taliwala (') where he expressed himself as
follows:
-
"I must oonfess tha.t I have some difficulty in
following both the reasons and the conclusions of the
learned Judge in that ca.se. It was !> ca.BB of a. suit
brought in the name of a firm. carrying on business
outside British India, a.nd therefore not justified by
the terms ofO. 30, Civil P. C. a.nd the lea.road Judge
expreSBed the view tha.t the plaintiff firm wa.s a non-
~xistent entity. But the order which he subBBquently
made giving leave to &~end seems inconsistent with
that finding."
He further held :
" But I do not see how 0. 30 ca.n affect the question of fa.ct, whether a suit brought in the na.me of &
firm in a case not within 0. 30 is in fa.ct a .ca.BB of misdeseription of existing persons, or a ca.se of a suit
brought by a non-existent entity."
In the case of Hajee Sattar Hajee Peer Mahomad v.
Khuriram Benarsilal ('), the Calcutta. High Court did
not accept the view expreSBed by Blackwell, J. It
referred to the following observation of Farwell, L. J .,
in Sadler v. Whiteman('):-
" In English law· & firm as suoh has no legal existence ; partners oa.rry on business both a.s principals
and as agents for eaoh other within the soope of the
(1) A.LB. 1928 Bom. 191.
(•) A.I.B. 1933 Bom. 304, 30'·
()) U..R. (1952] 1 cal. •'5·
(4) [1910] 1 K.B. 868, 889.
.A-
.•
1 S.C.R. SUPREME COURT REPORTS
989
partnership business; the firm name is a. mere expres-
'96•
sion, not a. legal entity, although for convenience
Purushott•m
under Order XL VIII-A it may be used for the sake of umedbh•i o;. c~.
suing and being sued."
v.
In the case of Mura Mohid-een v. V. 0. A. Mohomed(')
M/s. Manilal
& Sons
the Ma.drii.s High Court dissented from the opinion
expressed by Blackwell, J. and the learned Judges
Imam J.
stated :
" We a.re 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 implea.ding 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 Go. v. Nehal Singh', AIR 1931
Ca.I. 770 (F) and-' L. N. Ghettiar Firm v. M.P.R.M.
Firm', AIR 1935 Rang. 240 (G), but we a.re 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 fo~lows :-
" If however imperfectly and incorrectly a. party
is designated in a. pie.int 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 oa.se is one of intention
of the party and if the Court is al/le to discover the
· person ·or persons intended to sue or to be sued a. mere
misdescription of such a. party cltn always be corrected provided the mistake was bona. fide vide O.I, 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
PurHshol/am
Un1edbhai c-,. Co.
v.
il1 /s. Afanilal
&- Sons
Imam J.
990
SUPREME COURT REPORTS
[1961]
name could not indicate or designate the individuals
composing the firm."
"To surn up, the situation is analogous to a case
where an individual who has a.n alias or a.n abbreviated name by which he'is Hometimes called initially
describes himself in that name but subsequently
applies to have it rectified so a.s to describe in the
manner in which he is most generally known. Thero
cannot be any dou ht 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 0. XXX in the Code of
Civil Procedure apparently suits were instituted,
particularly iu the Mofussil courts, in the name of a
firm or were instituted against a firm in the firm name
a.nd no objection wa.s genera.By ta.ken.
Presumably
this practica was larg.,ly based on the assumption
that the suit concerned wa.s either by all the partners
of the firm or a.gs.inst all the partners of the firm.
If, however, a.n objection were to be ta.ken that
a suit in the name of a. firm was not maintainable
because it ha.d no legal entity, the courts would
have to decide whether the suit had been instituted by non-existent persons. If so, the suit was
not ma.inta.iuable.
In the ca.He
of Kasturchand
Bahiravdas v. Sagarmal Shriram (1), which wa.s before
the introduction of 0. XXX in the Code, the suit had
been brought in the name of the firm Konoanma.l
Sa.garma.1 by its manager Sa.garmal Shrira.m.
The
defendants objected that one '.\la.la.mchand wa.s also a
partner in the firm and should be ma.de a pa.rty.
Ho
was accordingly added as a plaintiff 011 tho 27th of
January, 1888. The defendant then contended that
the suit wa.s barred under s. 22, Limitation Act. It
was held by the Bombay High Court that it was a
0&11e of misdescription and not of non-joinder for tho
action wa.s brought in the na.me of the firm by its
manager. The introduction of 0. XXX into the Code
(1) p8<)2) I.L.R. 17 Bom. 413.
,A, I
..
=
r
\
.
~·
I S.C.R. lSUPREME COURT REPORTS
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 ir: 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 st.ill 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 compa.ny 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 non-
.existent person. It would still be a suit by the partners 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
196n
Purushottam
Umedbhai & Co.
v.
M/s. Manilal
0. Sons
-.-
Iniam ].
I960
Purushottam
U medbhai & Co.
v.
M/s. Manilal
6" Sons
ltnam ].
992
SUPREME COURT REPORTS
[1961] ..
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. I, 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 Gourt
referred to a number of decisions to which no particular reference need be made but they do support the
view taken by the High Court that in the present case
the plaintiff described in the plaint as the firm of
Manila! & Sons was a mere misdescription capable of
amendment and not a case where a plaint had been
filed by a non-existent pers~n and therefore a nullity.
We now refer to certain provisions of 0. XXX,
C.P.C. Order XXX, r. l, 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:
" (l) Where a suit is instituted by partners in the
name of their firm, the plaintiffs or their pleader shall,
/ ..
.
I S.C.R.
SUPRE~IE COl'J:T J:El'OUTS
!l03
on demand in wnting by or on behalf of any defendant, forthwith declare in writing the names and
plaees of residence of all the persons constituting th\'
fhm on whose behalf the suit is instituted.
(2) Wher,e the plaintiffs or their pleader fail to
comply with any demand made under sub-rule (1), all
proceedings in the suit may, upon :rn application for
that purpose, be stayed upon such terms as the Court
may direct ..
(3) Wher,e t'.1e names of the partners are declared in the manner reforrcd to in sub-rule (1), the suit
shall proceed in the same manner, anrl the same. consequences in· all respects shall follow, as if they had
been named as plaintiffs ip the. pla.int:
·
Provided that all the proceedings shall ne\•erthl'!ess
continue in the name of the firm".
This makes it obljgatory, in the case of a suit instit.11ted by the partners in the na.me 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 institutecl. If the plaintiffs fail to comply with the
demand made under ,snb-r. {l) of this rule, all the proceedings' -in 'the suit may be stayed bn such ter,ms as
the court may direct.
Under s.ub-r. (3) if the names
of the partners >ire declared in the manner referred to·
iri 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 na111ed in the plaint, provided that
all the proceedings shall nevertheless be 'continued iu
the name of the firm.. Rule 1 of 0. XXX is a g~neral
provision.
Huie 2, however, is confitwd to a suit
instituted by partners in the name of the firm. It is
clear from this rule that althmigh the suit is filed in
the name oft.he firm a disclosure has to be macle, on
demand)n writing by or on behalf of any (,lefrndant,
of names and places of residence of all i,he persons
constituting the firm on whose :gehalf the snit is
instituted. ~e provisions of r. 2 would indicatp that
although the suit is filed.·in the name of a ,firm, it is
nonetheless a suit by all the partnern of the ii rm
because if
.;Jselosure of the names of the partners is
1960
'
rur11s/1n//l/lii
V 111cd/1hni
(~ co
v.
:1! /;; . . \I a111f,i/
C~ S1n1s
l1111u11 j
[I!lflll
rofin
asked for by an.v d1,fcndant, on such di•elos11r<>, t hf'
,,,,,,,.,""""'
suit- shall proceed as if the partners had bePn named
r.,,";11.,,, ~'· ro. as plaintiffs in the suit, C'\'tn though the pruceedinf!.'l
shall noverth!'less be continued in the name of tho
v .
• 11· .
• 11 • .,,:.1
firm. It is clear, therefore, that the provisions of 0.
/iJ1a111 J.
XXX, r. land r. 2 are enabling provisions to permit
sevr.ral persons who are doing IH1Hiness as partners to
8UC or be sued in the name of the firm.
Hnle 2 would
not hav!' been in the form it is if tlw suit instituted in
thr name of the firm was not r!'garded as, in fact, a
suit hy the partners of the firm.
The provi,;io11s of
these rules of 0. XXX, being enabling pro,·isions, do
not prc\'e11t the partners of n. firm from ~u i11g or being
sued in thPir indi\'idual namPs.
These rules also do
not prohibit the partners of a firm suing in India in
their names indi\'idually although they ma~· Le doing
business outside India. Indeed, this was not rliHput!'d
on behalf of the appellant.
~inct>, howe\ ,,r, a firm is
1ir1t. a legal entity the privil1•gc of suing in the name
of a firm is permissible only to those persons who, as
pa.rtnerH, are doing buHim•ss in lndia.
Such privilege
is not extrnded to pt>.rsons who are doing business as
partners outside India.
1.n their c:a~e they ,till have
to sue in their individual names.
If, however, under
some
misappreheusion,
persons doiug tJusiness as
partners .outside India do file a plaint in th<' uame of
their tirm they are misdcscribi11g thcmselrl'S, as the
Huit instituted is b~' tht>lll, they being knO\rn collecti·
vely as a ti rm.
It sePm~, therdor<', that a plaint filed
in a court in India in the name of a firm doing busi.
ness outAide India is not hv its•'1f a nullitv. It is a
via.int by all the partners" of the firm with-a defoctivc
. description of themselvl'B for tht' purpost'B of the Code
of Civil Procedure.
In the8e circumstances, a civil
court could permi1, under the provisions of s. 153 of
the Code (or pos~ibly undPr 0. VJ, r. 17, about which
we say not bing), an ameudment oft.he plaint to enable
,~ proper description of the plaintiffs to appear in it in
order t.o assist the court in determining the real question or issue between the parties. Strictly speaking
0. I, r. 10( I) has no applicatiou to a ci~se of this kind
because the suit has not been iui;titnted in the name
••
'
-
1 S.C.R. SUPREME COURT REPORTS
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 !Jartners
of the firm and no question of adding or -subFtitutiug
any person a.rises, the partners collectively being described as a firm with a particular name.
One of the partners Manubhai Maganbha.i Amin
was the Manager of the firm Manila! & 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 Purushottam Umedbhai & Co., the appellant. It also
.empowered these persons to appear and to represent
the firm iu any court, in any jurisdiction-civil, criminal, insolve.ncy, 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 sigried and verified the plaint in the
present case.
We have no doubt, on a perusal of the
Power of AttfJrney, that it authorized Dunderda.le to
file the plaint on behalf of the firm Manila.I & Sons
and also to verify it. It was suggested 'that this was
a Power of Attorney by Ma.nubhai Maganbhai Amin
for himself and not for the firm of Manila.I & 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 Manila.I & 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 Manubha.i Maganbhai Amin· was the manager of the firm.
Under s. 18
of the Act a partner is an agent of the firm for the
purposes of the business of the firm.
Ma.nubha.i
Purusho!tam
Umedbhai &- Co.
v.
.iVl/s. -111anilal
&- Soris
Imam].
1900
l'to1oholt.lm
(:111t1El1ai 0 Co.
v.
J/ ;.~ . .lta11il11f
, ~ So11s
Imai;; j.
!J9Li
SCPRE:.\IE COUHT REPOHTS
[19611
:llaganbhai Amin was theretore the agent of the firm
as well as its managor.
It is to be noticed that under
s. l!l(2) of the Act instances an' stated where, in the
absence uf any usage or custom of trade to the contrary, the implied authority of a par!Jwr does not empower him tu du matterH mentioned in els. (a) to (h).
lt is significant th'1;t 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 beh:df of the firm.
In these circumstances, it
cannot be said that at the tinrn the plaint was filed it
was defective because the Power of Attorney in favour
of Dunderdi>le 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 w us that th!' Division Bench of the High
Court took a correct view in holdiug that the plaint
WJiS not a nullity.
It was a casP of a suit instituted
b}· al! the partn°ers of a firm who were misdescribed as
.\lanilal & 8ons, a firm carryiug on business at No.
llA Malacca Street, Singapore and accordingly the
learned ,Judges rightly allowed the plain't to be
amended 011 tc>rms and conditions stated in their
order.
[t. follows thcroforc that the High Court was also
right in Heiting i>Hide the decree of I'. B. Mukherjea, J.,
dismi,;sing the suit.
Thrse appeal~ accordingly fail and must be dismissed but, in t.hc circumst;rnces, without costs.
Appeals diBmissed.
•
T .