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Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • S.K.Agarwal
Judges
  • Wali Ullah
  • P.L Bhargava, JJ.
Acts
  • provisions of sub-s. (2) of B. 69 of the Partnership Act
  • SECTION 25 PROVINCIAL SMALL CAUSE COURTS ACT
  • provisions of Section 692 of the Partnership Act.3.
  • firm.4. Section 69(2) of the Partnership Act
  • S. 69(2) of the Partnership Act
  • Indian Partnership Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • S.K.Agarwal
Judges
  • Wali Ullah
  • P.L Bhargava, JJ.
Acts
  • provisions of sub-s. (2) of B. 69 of the Partnership Act
  • SECTION 25 PROVINCIAL SMALL CAUSE COURTS ACT
  • provisions of Section 692 of the Partnership Act.3.
  • firm.4. Section 69(2) of the Partnership Act
  • S. 69(2) of the Partnership Act
  • Indian Partnership Act
See more information ...
Smart Summary

Judgment Summary — P.L. Bhargava, J. (Revision under Section 25, Provincial Small Cause Courts Act)

Factual and Procedural Background

The applicant instituted a suit in the Court of the Judge, Small Cause Court, Kanpur, against the Dominion of India to recover damages for shortage and non-delivery of two bags of ginger delivered to the Administration of the G.I.P. Railway for transmission from Wadi Bunder to Kanpur.

In the plaint the plaintiff was titled and described as a partnership firm: "Messrs Ram Kumar Ram Chandra through Ram Kumar Adult son of Sarjoo Prasad caste Vaish residing at Naya Ganj Kanpur, partner of the firm." Paragraph 1 of the plaint stated that the plaintiffs were a partnership firm registered under the Indian Partnership Act and that Lala Ram Kumar, who signed and verified the plaint, was a registered partner.

The defendant denied paragraph 1 and disputed liability. One of the issues framed was: "Are plaintiffs entitled to sue?" At trial the plaintiff attempted to prove by oral evidence that Ram Kumar was a partner. The trial Court held that oral evidence was inadmissible to prove that a person's name is entered in the Register of Firms and that a certified copy of the Register of Firms was necessary. The trial Court found the fact of partnership not proved and dismissed the suit, referring to the provisions of "Section 692 of the Partnership Act" (as recorded in the judgment).

The applicant brought a revision under Section 25 of the Provincial Small Cause Courts Act. A learned single Judge of this Court agreed with the trial Court's view that the Register of Firms must be produced to prove a name shown in it. The single Judge also observed that "no right of suit had been given to a firm" and treated the person suing as a partner who must be shown in the Register. The single Judge referred the matter to a bench for decision because of a difficulty noted with the Register not containing partners' names and because the applicant contended that the suit was by the firm, not by the partner.

Legal Issues Presented

  1. Whether the present suit, though instituted in the name of the firm with the added phrase "through Ram Kumar ... partner of the firm," was a suit by or on behalf of the firm within the meaning of the Civil Procedure Code (Order 30) and the Partnership Act.
  2. Whether Section 69(2) of the Indian Partnership Act (as quoted in the opinion) barred the suit when a party who signed and verified the plaint was not shown by name in the Register of Firms, and consequently whether oral evidence was admissible to prove partnership in such circumstances.
  3. Whether an addition in the plaint describing a firm "through" a named partner (i.e., naming the partner who signs/ verifies) converts the suit from a suit by the firm into a suit by that partner alone for the purposes of the registration requirement in Section 69(2).

Arguments of the Parties

Applicant's Arguments

  • The suit was brought by the firm (Messrs Ram Kumar Ram Chandra) and not by Lala Ram Kumar in his individual capacity; therefore the second condition of Section 69(2) was not applicable.
  • Reliance was placed on the decision of the late Chief Court of Oudh in Sardar Singar Singh v. Sikri Brothers, A.I.R. 1944 Oudh 37, for the proposition that where a suit is brought in the name of a firm the firm is the real plaintiff and not the partner named as the person through whom the firm sues.
  • It was pointed out that the Register of Firms did not contain a column for the names of partners, so even if produced a certified copy would not prove whether a given individual was a partner.

Defendant's / Trial Court's Position (as represented at trial)

  • The allegation in paragraph 1 of the plaint (that the plaintiffs are a registered firm and that Lala Ram Kumar is a registered partner) was denied and the defendant disputed liability for damages.
  • The trial Court held oral evidence insufficient to prove that the name of Lala Ram Kumar was entered in the Register of Firms and required production of a certified copy of that Register; on failure to produce it, the trial Court found the partnership not proved and dismissed the suit under the Partnership Act provision cited (recorded as Section 692 in the opinion).

Standing Counsel / Government Submissions at the Bench

  • Learned Standing Counsel did not support the views of the trial Court or the single Judge; he pointed out that this suit was, in fact, a suit by the firm Ram Kumar Ram Chandra and not a suit by Ram Kumar as an individual partner.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sardar Singar Singh v. Sikri Brothers, A.I.R. 1944 Oudh 37 Holds that where a suit is described and instituted in the name of a firm the firm is the real plaintiff; the mere mention of the individual "through whom" the firm sues does not make that individual the plaintiff; defects may be formal rather than substantial. The Court followed and applied this decision to hold that the present suit was by the firm and that the mere description "through Ram Kumar" was redundant. The precedent supported the conclusion that the suit was not barred by Section 69(2) as the firm was the plaintiff and the procedural requirements were complied with.

Court's Reasoning and Analysis

The Court began by posing the central question whether the suit was instituted "by or on behalf of the firm." It examined the procedure in Order 30, Rule 1 (and sub‑rule (2)) of the Civil Procedure Code, which permits "any two or more persons claiming or being liable as partners and carrying on business" to sue or be sued in the name of the firm and permits that pleadings may be signed and verified by any one of the partners.

The Court reasoned as follows (recounting the steps set out in the opinion):

  1. Order 30 prescribes a convenient procedural device to permit suits by partners collectively in the firm name, avoiding the necessity of listing all partners as parties. Although a firm has no separate legal personality, a suit instituted in the firm name under Order 30 is effectively a suit by the partners collectively and therefore may be described as a suit "by the firm."
  2. The Code's Appendix A shows model titles where a firm is described as "A.B., a firm carrying on business in partnership at ...", which the Court took as supporting the idea that a firm may be described and treated as the plaintiff for procedural purposes.
  3. In the present plaint the firm was described in that manner and the additional phrase "through Ram Kumar ... partner of the firm" was unnecessary. The Court treated this addition as redundant and without legal effect to convert the firm‑suit into a suit by an individual partner.
  4. Because the plaint used the firm description and because sub‑rule (2) of Order 30 allows a pleading to be signed and verified by one partner on behalf of the firm, the fact that Ram Kumar signed and verified the plaint did not make him the plaintiff in his individual capacity.
  5. The Court therefore concluded that the suit was by the firm. On that basis the requirements of Section 69(2) of the Partnership Act (as quoted in the judgment) — which conditions suits by or on behalf of a firm on registration and on persons suing being shown in the Register of Firms — were treated as satisfied in the present facts (the firm was registered and the pleading was signed by a partner in the manner contemplated by Order 30).
  6. For these reasons the Court held that it was unnecessary to probe whether Ram Kumar's name separately appeared in the Register of Firms; the trial Court's reliance on non‑production of oral evidence of partnership was misplaced in the face of the suit having been properly instituted in the firm name.
  7. The Court expressly followed and relied upon Sardar Singar Singh v. Sikri Brothers (A.I.R. 1944 Oudh 37) as consistent authority for treating a suit in the firm's name as a suit by the firm rather than by a single partner named "through" whom the firm sues.

The opinion records the trial court's dismissal as having been made "in view of the provisions of Section 692 of the Partnership Act" (as recorded in the trial Court's decision), while the discussion and statutory quotation in the High Court opinion refer to Section 69(2) of the Partnership Act as the operative provision. The Court's decision rests on the interpretation of Order 30 of the CPC and Section 69(2) as discussed above.

Holding and Implications

Core Ruling: Revision allowed; the decision of the Court below is set aside and the suit is remanded to the trial Court for disposal according to law.

Direct consequences:

  • The trial Court's dismissal of the suit on the ground that the plaintiff had failed to prove that the signing individual was shown in the Register of Firms was held to be incorrect in the circumstances recorded in this plaint.
  • The suit is to go back to the trial Court for further proceedings consistent with this judgment.
  • Costs "here and hitherto" were ordered to abide the ultimate result of the suit (i.e., costs to be decided on final disposal).

Broader implications:

The Court's reasoning clarifies that, for procedural purposes under Order 30 of the CPC, a suit properly instituted in the name of a firm is to be treated as a suit by the firm (i.e., by the partners collectively), and that the mere addition of wording naming the partner who signs and verifies does not in itself convert the suit into one by that partner alone for the purpose of the registration requirement in Section 69(2). The opinion applies the existing authority cited (Sardar Singar Singh v. Sikri Brothers) and does not purport to announce a novel principle beyond that application.

D.R.R

Order: Revision allowed.

Show full summary ...

    Ram Kumar Ram Chandra v. Dominion Of India

    P.L Bhargava, J.:— This is an application in revision, under Section 25 of the Provincial Small Cause Courts Act. The applicant had instituted a suit, in the Court of the Judge, Small Cause Court, Kanpur, against the Dominion of India for recovery of damages resulting from the shortage and non delivery of two bags of ginger, which were made over to the Administration of the G.I.P Railway for transmission from Wadi Bunder to Kanpur. In the title of the suit in the plaint the applicant had desoribed himself thus:

    “Messrs Ram Kumar Ram Chandra through Ram Kumar Adult son of Sarjoo Prasad caste Vaish residing at Naya Ganj Kanpur, partner of the firm”. In para, 1 of the plaint the applicant had stated

    ‘that the plaintiffs are a partnership firm registered under the Indian Partnership Act and Lala Ram Kumar who has signed and veiifled the plaint, is registered partner of the firm.”

    2. On behalf of the defendant the allegation in para. 1 of the plaint was denied and the liability for payment of any damages was also disputed. One of the issues framed in the suit was:

    “Are plaintiffs entitled to sue?” The applicant attempted to prove by oral evidence that Ram Kumar was a partner in the firm Messrs Ram Kumar Ram Chandra. The trial Court held that oral evidence to prove that Lala Ram Kumar, was a partner of the firm was inadmissible and that fact could be proved only by production of a copy of the Register of Firms, which the plaintiff had failed to produce. The issue mentioned above was, therefore, decided against the plaintiff and it was held that it was not proved that Lala Ram Kumar was a partner in the firm. The suit was, accordingly, dismissed in view of the provisions of Section 692 of the Partnership Act.

    3. The revision came up for hearing before a learned single Judge of this Court. He agreed with the opinion of the trial Court that the fact that the name of Lala Ram Kumar had been shown in the Register of Firms as a partner of Messrs Ram Kumar Ram Chandra could not be proved otherwise than by the production of a certified copy of the Register of Firms. On behalf of the applicant it was contended before the learned single Judge that in the present case the person suing was not Lala Ram Kumar but the firm and as such the second condition laid down in s. 69(2) was not applicable and reliance was placed upon a decision of the late Chief Court of Oudh in Sardar Singar Singh v. Sihri Brtthers, A.I.R(31) 1944 Oudh 37, where it was held that in a case where the suit was brought in the name of a firm it was the firm that was the person suing and not any partner of the firm. The view taken in the Oudh case cited above did not find favour with the learned single Judge, and relying upon the provisions of O. 30, R. 1 of the CPC, it was observed by the learned Judge that no right of suit had been given to a firm; that the present suit was brought by a partner in the name of the firm; and that the person suing was, therefore, the partner of the firm and not the firm itself. Another point raised before the learned single Judge was that the Register of Firms had no column for the names of the partners of the firm which is registered and, in the V absence of the names of the partners in the Register of Firms, a copy of the said Register, even if produced, could not have proved the fact whether Ram Kumar was a partner of the firm or not. Consequently, the learned Judge observed that there was this obvious difficulty that the law requires that the person suing on behalf of the firm must show that his name is entered in the Register of Firms while the names of partners are not entered at all in the Register of Firms. Accordingly, he referred the whole case to a bench for decision. The case has been argued at length on be-half of the applicant as well as on behalf of the opposite party. Learned Standing Counsel has not supported the view of the Court below or that expressed by the learned single Judge and he has pointed out that this suit was, in fact, a suit by the firm Ram Kumar Earn Chandra and not a suit by Earn Kumar, one of the partners of the firm.

    4. Section 69(2) of the Partnership Act is as follows:

    “No suit to enforce a right arising from contract stall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.”

    5. The first question which arises for consideration in this case is whether the present suit was instituted by or on behalf of the firm. The suit has, no doubt, been instituted in the name of the firm, evidently in accordance with the provisions of R. 1 of o. 30 of the CPC, which lays down:

    “(1) Any two or more persons claiming or being liable as partners and oarrying on business' in (British India) the Provinces may sue or be sued in the name of the firm (if any) of which saoh 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 names of their firm under sub-r. (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.”

    6. Order 30 prescribes the procedure in suits by or against Firms and persons carrying on business in names other than their own, and B. 1 of the said Order, which has been quoted above, permits any two or more persons claiming or being liable as partners and carrying on business to sue and be sued ill the name of the firm. The procedure laid down in ??? is obviously intended to avoid a long array of the plaintiffs of defendants and it prescribes a convenient mode of institution of suits by or against the partners collectively in the names of the partners who carry on business under a particular name. Such a suit is, no doubt, a suit by the partners collectively in the name of the firm; but when we consider the partners collectively as a firm it will, in effect, be a suit by a firm. As o. 30 prescribes the procedure for a suit by or against a firm a suit instituted in the manner laid down in B. 1 of O. 30 will be a suit by the firm. Appendix A to the Code of Civil Procedure which refers to pleadings gives some model title of suits of different kinds and the title of a suit by a firm is given as “A.B, a firm carrying on business in partnership at……” It is, therefore, clear that, even though a firm has got no legal entity and as a firm it is not entitled to institute a suit, a suit can be filed by the firm in accordance with the provisions contained in O. 30, and when such a suit is instituted the firm is to be described as “A.B, a firm carrying on business in partnership at……”

    7. In the present case the firm was so described in the plaint, but the words “through Ram Kumar Adult son of Sarjoo Prasad caste Vaish residing at Naya Ganj, Kanpur, partner of the firm” were added. In law this addition was unnecessary and as such it can be treated as redundant and ignored. The above addition does not and cannot alter the fact that the firm is, in fact, the plaintiff. As the firm had no legal status as such, the suit has been instituted by the firm as representing all the partners. Here we may notice the definition of the term “firm” in the Partnership Act. It has been defined in the said Act in this way:

    “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.”

    8. It would thus appear that where a suit is instituted in the name of a firm under B. 1 of O. 30 of the CPC, it is really a suit by the partners of the firm collectively. The present suit was, therefore, a suit by the firm and the addition of the words through so and so was redundant and of no consequence.

    9. The description of the plaintiff and the title of the suit have been quoted in extenso in the opening part of this judgment, and it is difficult to hold that it was a suit by Earn Kumar on behalf of the firm. As, the language of para. 1 of the plaint shows, the name of Ham Kumar was evidently mentioned as the person who was to sign and verify the plaint on behalf of the firm in terms of sub-r. (2) of B. 1 of O. 30, Civil P.C

    10. The present suit being by the firm and the firm having been registered the provisions of sub-s. (2) of B. 69 of the Partnership Act were fully complied with. In the circumstances, it was wholly unnecessary for the trial Court to consider whether Earn Kumar was or was not a partner in the firm.

    11. The view expressed above is in accord with the view taken in Sardar Singar Singh v. Sikri Brothers (A.I.R 1944 Oudh 37). In that case the plaintiff was described in the plaint as “Sikri Brothers, Coal Merchants, Latouche Eoad, Lucknow, through N.E Nagpal partner and Manager.” N.E Nagpal described himself as plaintiff under his signature in the plaint and in the verification he described himself as “N.E Nagpal Manager and partner general attorney.” The suit was for price of coal supplied to the defendant. The defence was that it was not shown in the plaint that the plaintiff's firm was registered as a firm, nor had N.R Nagpal any right to sue. It was further contended that the suit was not maintainable and liable to dismissal under the provisions of the Partnership Act. It was held in that suit that the firm was registered, but the name of N.E Nagpal was not shown in the Register of Firms as a partner in the firm and though he was not entitled to bring the suit as a partner of Sikri Brothers he could maintain the suit in the name of the firm as its manager. It was held by a Division Bench of the Oudh Chief Court that Sikri Brothers were the real plaintiff in the case and that the mere mention of the name of Nagpal through whom the suit was brought did not make him the plaintiff and that the defect, if any, was one of form and not of substance. For the reasons stated above, it must be held that the suit was properly instituted and was not hit by S. 69(2) of the Partnership Act and it was wrongly rejected on that ground by the trial Court. In our opinion, therefore, this revision ought/to be allowed, the decision of the Court below set aside and the suit should be remanded to the Court below for disposal according to law. We order accordingly. Costs here and hitherto shall abide the ultimate result of the suit.

    D.R.R

    12. Revision allowed.

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    Ram Kumar Ram Chandra v. Dominion Of India
    (Dec 21, 1951)