The lower court rejected two applications filed, one to bring on record the new Managing Partner of the firm in place of the deceased managing partner representing the plaintiff firm and the other to condone the delay in bringing the new ‘Managing Partner on record. This was in a suit filed by a firm against the present respondent who is the defendant, to recover a sum of money.
2. One difficulty is expressed on the basis of Rules 1 and 2 of order 30 of the C.P.C Rule 1 requires that 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. Since only the Managing Partner was purported to be brought on record, this requirement of Rule 1 is not satisfied. Rule 2 requires that whenever there is a demand in writing by the defendant the names of all the partners of the firm shall be disclosed. It is true that only the managing partner filed the suit. When he died, the new managing partner is sought to be substituted in his place. In that sense, there is no strict compliance with sub-rule 1 of Rule 1 of Order 30 C.P.C At the same time, I must make a reference to Rule 4, which says that two or more persons may sue or be sued in the name of a firm and if any of such persons die, whether before the institution or during the pendency of any suif, it shall not be necessary to join the legal representative of the deceased as a party to the suit. Sub-rule 2 of rule 4 says that nothing in sub-rule 1 shall affect any right of any legal representative of the deceased to apply to be made a party to the suit. However, section 19 of the Partnership Act declares that subject to the provisions of section 22 of the Act, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm and that the authority to bind the firm is an implied authority. It is also very significant to note that in sub-section 2 of that section, institution of the suit on behalf of the firm is not one of the matters excluded from this implied authority. Hence there is no doubt that the suit had been filed by the previous Managing Partner in the name of the firm. Now in his place the new Managing Partner was sought to be substituted. The new Managing Partner is not merely a partner but also the managing partner of the firm who manages the business and affairs of the firm. Therefore, by virtue of section 19 of the Partnership Act, be has the implied authority to institute a suit. The provisions of Rule 1 of Order 30 C.P.C will have to be read in the light of section 10 of the Partnership Act. Therefore, I have no doubt that a managing partner without being accompanied by another partner can file a suit.
3. In Gambhir Mal v. J.K Jute Mills . A.I.R 1963 S.C 243 the suit was against a firm. Hidayatullah J., (as be then was) observed that persons may appear and establish that they are not partners of the firm when the cause of action arose. This observation may usefully be utilised in a case where the firm is a plaintiff. In Bhadreswar Coal Supply Co. v. Satish Chandra . A.I.R 1936 Cal. 353. a Division Bench of the Culcutta High Court expressed the view that once a partner can institute a suit in the name of the firm, although the other partners did not join, the only requirement is that the name of the firm should be mentioned in the cause title. That requirement has been complied with in this case. After all, the principle here is that it must be made clear that it is a firm that is the plaintiff or the defendant. Certainly, a partner by virtue of section 19 of the Partnership Act and much more so, a managing partner can represent such a firm in the suit. Therefore, there is no doubt that the Managing partner can file a suit and when he dies, the new managing partner can be brought on record as the managing partner representing the plaintiff firm.
4. It is well settled that the suit does not abate on the death of the managing partner Vide Sohanla v. Aminchand & Sons.
5. If we examine the case in the light of the above conclusions, it is manifest that the lower court is wrong in dismissing the delay condonation petition and also the application to bring the new Managing Partner on record. Consequently, the orders are set aside and the two revision petitions are allowed. Since the defendant, thongh served, is not present, there will be no order as to costs.
6. I am beholden to Sri Ravi Shankar, who has helped me as Amicus Curiae.
C.R Ps allowed