Proprietorship firm
Dinesh
(Querist) 11 January 2013
This query is : Resolved
A Proprietorship Firm cannot be sue or sued on its own name because its have no legal entity..
Please sir provide me law point in regard above said law and where i can find this law point and also suggest some authorities in regard of above said point.
Thanks..
R Trivedi
(Expert) 12 January 2013
Prop firm can be sued under Order XXX rule 10 of cpc.
Prop firm in general must sue in the name of prop in the cause title along with the name of firm.
Nadeem Qureshi
(Expert) 12 January 2013
RDER XXX. SUITS BY OR AGAINST FIRMS AND PERSONS CARRYING ON BUSINESS IN NAMES OTHER THAN THEIR OWN
1. Suing of partners in name of firm
(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 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 such pleading or other document is signed, verified or certified by any one of such persons.
HIGH COURT AMENDMENTS
Delhi.-Same as in Punjab.
Haryana.-Same as in Punjab.
Himachal Pradesh.-Same as in Punjab.
Punjab.-In Order XXX, in rule 1, at the end, insert the following "Explanation ", namely:-
"Explanation.-This rule applied to a joint Hindu family trading partnership."
[Vide Notification No. 2212-G, dated 12th May, 1909.]
2. Disclosure of partners' names
(1) Where a suit is instituted by partners in the name of their firm, the plaintiffs or their pleader shall, on demanding 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:
1[Provided that all proceedings shall nevertheless continue in the name of the firm, but the name of the partners disclosed in the manner specified in sub-rule (1) shall be entered in the decree.]
1. Subs, by Act No. 104 of 1976 for the proviso (w.e.f. 1-2-1977).
3. Service
Where persons are sued as partners in the name of their firm, the summons shall be served either-
(a) upon any one or more of the partners, or
(b) at the principal place at which the partnership business is carried on within India upon any person having, at the time of service, the control or management or the partnership business, there,
as the Court may direct; and such service shall be deemed good service upon the firm so sued, whether all or any of the partners are within or without India:
Provided that, in the case of a partnership which has been dissolved to the knowledge of the plaintiff before the institution of the suit, the summons shall be served upon every person within India whom it is sought to make liable.
4. Rights of suit on death of partner
(1) Notwithstanding anything contained in section 45 of the Indian Contract Act, 1872 (9 of 1872) where two or more persons may sue or be sued in the name of a firm under the foregoing provisions and any of such persons dies, whether before the institution or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit.
(2) Nothing in sub-rule (1) shall limit or otherwise effect any right which the legal representative of the deceased may have-
(a) to apply to be made a party to the suit, or
(b) to enforce any claim against the survivor or survivors.
5. Notice in what capacity served
Where a summons is issued to a firm and is served in the manner provided by rule 3, every person upon whom it is served shall be informed by notice in writing given at the time of such service, whether he is served as a partner or as a person having the control or management of the partnership business, or in both characters, and, in default of such notice, the person served shall be deemed to be served as a partner.
6. Appearance of partners.
Where persons are sued as partners in the name of their firm, they shall appear individually in their own names, but all subsequent proceedings shall, nevertheless, continue in the name of the firm.
HIGH COURT AMENDMENT
Orissa.- In Order XXX, in rule 6, at the end, insert the following words, namely:-
"But the decree shall, however, cointain the names of all such partners." (w.e.f. 7-5-1954)
7. No appearance except by partners.
Where a summons is served in the manner provided by rule 3 upon a person having the control or management of the partnership business, no appearance by him shall be necessary unless he is a partner of the firm sued.
1[8. Appearance under protest
(1) Any person served with summons as a partner under rule 3 may enter an appearance under protest, denying that he was a partner at any material time.
(2) On such appearance being made, either the plaintiff or the person entering the appearance may, at any time before the date fixed for hearing and final disposal of the suit, apply to the Court for determinig whether that person was a partner of the firm and liable as such.
(3) If, on such application, the Court holds that he was a partner at the material time, that shall not preclude the person from filing a defence denying the liability of the firm in respect of the claim against the defendant.
(4) If the Court, however, holds that such person was not a partner of the firm and was not liable as such that shall not preclude the plaintiff from otherwise serving a summons on the firm and proceeding with the suit; but in that event, the plaintiff shall be precluded from alleging the laibility of that person as a partner of the firm in execution of any decree that may be passed against the firm.]
1. Subs, by Act No. 104 of 1976 for rule 8 (w.e.f. 1-2-1977).
9. Suits between co-partners
This Order shall apply to suits between a firm and one or more of the partners therein and to suits between firms having one or more partners, in common; but not execution shall be issued in such suits except by leave of the Court, and, on an application for leave to issue such execution, all such accounts and inquiries may be directed to be taken and made and directions given as may be just.
1[10. Suit against person carrying on business in name other than his own
Any person carrying on business in a name or style other than his own name, or a Hindu undivided family carrying on business under any name, may be sued in such name or style as if it were a firm name, and, in so far as the nature of such case permits, all rules under this Order shall apply accordingly.]
Section 69 is not applicable on prop. Firms
Feel free to call
anil kumar
(Expert) 13 January 2013
I fully agree with Nadeem who has exhaustively touched on the subject.
V R SHROFF
(Expert) 13 January 2013
Nadeem explained in details, nothing to add
Advocate Bhartesh goyal
(Expert) 14 January 2013
Supreme Courthas has ruled that suit filed in the name of the firm through proprietor-suit at the best can be sain not in proper order as name must proceed the business name-However this is not an illegality which goes to the root of matter.2010[1] civil court cases 695[S.C] Rasiklal Manakchand vs M/s M.S.S Food Products
Raj Kumar Makkad
(Expert) 14 January 2013
*Nadeem, Shroff & Anil Kumar! The question of author is about proprietorship firm and not about partnership.
Raj Kumar Makkad
(Expert) 14 January 2013
The proprietorship firm can also be sued and may sue as per law.
R Trivedi
(Expert) 14 January 2013
Proprietorship firm can be sued, but identity of the proprietor has to be brought on record once the case starts.
Proprietorship firm as such cannot sue, because it is not the legal entity as per general clause act, so in the cause title mention of proprietor (the legal person behind the case) must be disclosed and infact it should be like this... Mr XYX proprietor of ABC as plaintiff.. Non disclosure of proprietor name in the cause title can be fatal.
Raj Kumar Makkad
(Expert) 14 January 2013
It is true that the name of the proprietor is required to be mentioned but the question was whether such firm can sue or can be sued so answer is yes.
prabhakar singh
(Expert) 14 January 2013
I agree with Mr.Trivedi .the relevant law touching the problem is laid in order 30 rule 10 of the CPC.
True is also the fact that unlike a company,a
proprietorship firm is not a legal entity but this order provides a facility to put its'name in title of suit through individual who owns the firm.
Dinesh
(Querist) 15 January 2013
Thnx to all...
Mr. Tiwari, you got right wut i want to know.
plz tell me the law which says that if the propriter did not disclose his identity its leads to fatal..
R Trivedi
(Expert) 19 January 2013
The honorable Madras High Court in B Adarsh Rao Vs.
Tamilnadu Electricals held in Para # 18 as
“Taking into consideration the above facts and circumstances of the case I
hold that the complaint as framed in the name of Tamil Nadu Electricals
without disclosing the name of the proprietor of the said concern in the
cause title of the complaint is not maintainable in law”,
Well it was a criminal case, but still one should not take a chance as non legal entity cannot sue.
Raj Kumar Makkad
(Expert) 19 January 2013
Mr. trivedi has perfectly advised the situation connected with the case.
