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  • provisions of Sch. 1, O. 30, Section 10 of the CPC,
  • 119-B, High Court Rules,
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of Sch. 1, O. 30, Section 10 of the CPC,
  • 119-B, High Court Rules,
Smart Summary

Factual and Procedural Background

This opinion addresses the maintainability of a counter-claim filed by the defendants in a suit where the plaintiffs sued a firm carrying on business as a sole proprietor. The defendants' counter-claim was objected to on the ground of its title, which described the counter-claim as if it were a separate suit between firms rather than a counter-claim within the original suit. The court examined the procedural and substantive propriety of the counter-claim's title and its maintainability under the Code of Civil Procedure and the High Court Rules.

Legal Issues Presented

  1. Whether the counter-claim as framed by the defendants, particularly with its separate title, is maintainable.
  2. Whether a sole proprietor carrying on business in a firm name can maintain a counter-claim under the provisions of Order 30, Rule 1 of the CPC and Rule 119-B of the High Court Rules.
  3. Whether the separate title to the counter-claim is necessary or permissible under the procedural rules applicable.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court analyzed the provisions of Order 30, Rule 1 of the Code of Civil Procedure (CPC), which permits suits by or against firms composed of two or more partners, and found that a sole proprietor cannot sue in the name of a firm but must sue in his own name. However, the plaintiffs were entitled to sue the defendant firm as a sole proprietorship under Order 30, Rule 10 CPC.

The court noted that the CPC does not provide for counter-claims, but the High Court Rules, specifically Rule 119-B, allow defendants to make counter-claims which have the same effect as cross-suits and enable final adjudication in the same suit. The court held that the High Court Rules supersede the CPC in this respect.

Regarding the title of the counter-claim, Rule 119-B does not require a counter-claim to have a separate title akin to a separate suit. Rule 121 of the High Court Rules mandates a further title only if the counter-claim raises questions between the defendant and the plaintiff along with other persons, which was not the case here as the counter-claim was restricted to the original plaintiffs.

The court reasoned that creating a separate title for the counter-claim in this case was unnecessary and could cause procedural complications, such as requiring multiple signatures in different capacities. Therefore, the title of the counter-claim was superfluous and was ordered to be struck out.

Since the heading of the written statement clearly identified the counter-claim as that of the sole proprietor defendant firm, and the plaintiffs had not objected to the counter-claim previously, the court found no reason to strike out the counter-claim itself. The suit and counter-claim were allowed to proceed after amendment of the title.

Holding and Implications

The court answered issue 8 in the affirmative, holding that the counter-claim as framed is maintainable provided the separate title to the counter-claim is struck out and amended accordingly.

The direct effect of this decision is that the counter-claim filed by the defendant firm, despite being a sole proprietorship, is permissible under the High Court Rules and the CPC provisions applicable to firms. The ruling clarifies that a separate title for the counter-claim is unnecessary unless multiple parties are involved in the counter-claim, thus preventing procedural complications. No new precedent beyond the interpretation of the procedural rules in this context was established.

    Samrathrai Khetsidas v. Kasturbhai Jagabhai

    Mirza, J.:— Mr. Bhagvati on behalf of the plaintiffs has raised an (issue 8) whether the counter-claim as framed is maintainable. The objection to the counter-claim is with regard to its title. The title of the counter-claim is:

    “Messrs Kasturbhai Jagabhai, firm carrying on business at Shaikh Memon Street without the Fort of Bombay—Plaintiffs

    Messrs Samarthrai Kheteseydas, a firm carrying on business at Sheikh Memon Street without the Fort of Bombay—Defendants.”

    2. The written statement is headed:

    “The written statement and counter-claim of Jagabhai Lallubhai the sole proprietor of the defendants' firm abovenamed.”

    3. Order 30 of the CPC, enables suits to be brought by or against firms and persons carrying on business in names other than their own. The firm name is treated as a compendious description of the several partners it comprises. For a suit in the name of a firm to be maintained it must satisfy the provisions of O. 30, R. 1 of the CPC, viz., that there must be two or more persona claiming as partners and carrying on business in British India. In that case they may sue in the name of firm (if any) of which they were partners at the time of the accruing of the cause of action. It is clear from this rule that a firm consisting of a sole proprietor cannot bring a suit in the name of the firm, but must sue in his own name. If this counter-claim is to be treated as a separate suit, the suit would not be maintainable.

    4. There is no provision in the Code of Civil Procedure for making a counter-claim, although a set off is permitted to a defendant. Our High Court Rules, however, allow the making of counter-claim by defendants. R. 119-B, High Court Rules, provides that the defendant in a suit may set up by way of counterclaim against the claims of the plaintiff, any right or claim, whether such counter-claim sounds in damages or not, and such counter-claim shall have the same effect as a cross-suit, so as to enable the Court to pronounce a final judgment in the same suit, both on the original and on the counter-claim. There is no provision in this rule for a counterclaim to have a title as that of a separate suit. The separate title given in the written statement appears to be superfluous. Does the description in R. 119-B that such counter-claim shall have the same effect as a cross-suit convert the counter-claim into a cross-suit to which the ordinary provisions of the Code of Civil Procedure would apply? O. 30, R. 10 enables a plaintiff to sue any person carrying on business in a name or style other than his own name in such name or style as if it were a firm. The plaintiffs were entitled, therefore, to sue the defendant as a firm although the firm consisted of a sole proprietor and no partners. Is the defendant firm under these circumstances entitled under provisions of R. 119-B to maintain the counter-claim? In such a case would it be necessary or permissible to add a further title to the written statement and counter-claim whereby the sole proprietor of the firm would be set out as plaintiff in the counterclaim and the original plaintiffs as defendants to the counter-claim? In such a case the written statement and the counter claim would have to be signed not once only as contemplated by the general rules but twice over. In one capacity the person making the counterclaim would have to sign the name of the firm as the defendant to the suit and he would sign his own name as the plaintiff in the counter-claim. Such a procedure, in my opinion, would create complications which are not contemplated by the High Court Rules. In my judgment, the provisions of the High Court Rules supersede and override those of the Code of Civil Procedure, Sch. ??? R. 119-B entitles the defendant; in a suit in general terms to safe up a counter-claim. I find nothing in the rule to exclude a defendant firm properly sued under the provisions of Sch. 1, O. 30, Section 10 of the CPC, from making a counter-claim. If the counter-claim had not borne a separate title, there would be no objection in my opinion to a defendant firm consisting of a sole proprietor maintaining a counter-claim under the provisions of R. 119-B. The provision for having a title to a counterclaim is set out in R. 121, High Court Rules, as follows:

    “Where a defendant by his written statement sets up any counter-claim which raises questions between himself and the plaintiff along with any other persons, had shall add to the title of his written statement a further title similar to the title in a plaint.”

    5. That is not the case in the present suit. The counter-claim here is restricted to the plaintiffs in the original suit.

    6. Had there been several defendants to the action and the defendant firm was making counter-claim against the plaintiff along with some or all his co-defendants or any other persons it would have been incumbent on him to set out a title to the counter-claim. That is not the case here. The title to the counter-claim is unnecessary and may, therefore, be struck off. If this is done there can be no objection to the maintainability of the counter-claim. The heading of the written statement and counter-claim makes it clear that it is the counter-claim of Jagabhai the sole proprietor of the defendant firm. The plaintiffs ire not taken by surprise. They have not filed a reply to the counter-claim and have nowhere before set out this abjection. They did not rely upon this objection when they applied to the Chamber Judge for an order to have the counter-claim struck out. I order, therefore, that the title of the written Statement and counter-claim be amended at the defendants' costs by the striking out therefrom the title of the counter claim. The suit and the counter-claim will proceed.

    7. I answer issue 8 in the affirmative.

    J.M/R.K

    8. Issue decided.

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    Comments

    Samrathrai Khetsidas v. Kasturbhai Jagabhai
    (Apr 11, 1929)