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National Building Material Supply Vs. Jai Jai Ram Manohar Lal - Court Judgment

LegalCrystal Citation
SubjectCivil;Family
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 257 of 1953
Judge
Reported inAIR1965All586
ActsCode of Civil Procedure (CPC) , 1908 - Sections 100 and 101 - Order 1, Rule 10 - Order 6, Rule 17 - Order 30; Limitation Act, 1908 - Sections 22(1); Partnership Act, 1932 - Sections 4; Hindu Law
AppellantNational Building Material Supply
RespondentJai Jai Ram Manohar Lal
Appellant AdvocateK.C. Agarwal, Adv.
Respondent AdvocateS.C. Kharey, Adv.
DispositionAppeal allowed
Excerpt:
civil - institution of suit - order 30 of code of civil procedure, 1908 - institution of suit by joint family business in the name of assumed business title - suit shall be treated as by person who did not exist - suit is null and void - substitution of the name of family member as a new plaintiff, can not take effect retrospectively. - - it is note-worthy that the amendment application does not state that it was due to some bona fide mistake or omission that the suit had been brought in the name of 'jai jai ram manohar lal'.on the other hand, the amendment application clearly stated that the amendment was being sought only 'to avoid any future difficulty on this mere technicality' raised by the defendants. the opening words of the application suggest that jai jai ram as well as..........partners constituting the firm. to put it in another form, it is by a fiction of law that the firm name embraces and indicates the names of its various partners. such is not the position in the case of a joint family business. a trade name might have been given to it, but the trade name has not been recognised to be a legal entity so as to entitle it to institute a suit in a court of law under its business name and style.where a suit has to be brought by a joint hindu family business it must necessarily be brought either in the name of the karta of the family or in the names of the various members constituting the joint family--but certainly not in the assumed business name. when the suit was originally instituted on 11-3-1950 business in the name of 'jai jai ram manohar lal' it was.....
Judgment:

Gyanendra Kumar, J.

1. This is an appeal by the defendants arising out of a suit in the following circumstances. The suit was originally brought on 11-3-50 by 'Jai Jai Ram Manohar Lal, Ram Nagar, District Naini Tal' plaintiffs to recover a sum of Rs. 10,139/12/-from the defendants purporting to be the balance of sale price of timber purchased by the defendants from the plaintiffs on 10-3-47 and delivered to the defendants on 10-6-47.

2. One of the objections taken by the defendants in their written statement was that the plaintiff firm was not registered under the Indian Partnership Act, and as such, the suit was not maintainable; and that, at any rate, the suit was barred under the provisions of Order XXX, Civil P. C.

3. After the lodging of the written statement, an amendment application was moved on behalf of the plaintiffs on 18-7-52 saying that the plaintiffs were joint family business, in which 'Jai Jai Ram is the father and Manohar Lal is the son. The business name of the plaintiffs is Jai Jai Ram Manohar Lal.' It was further stated that

'Manohar Lal has signed and verified the plaint as owner and proprietor and it was with Manohar Lal as owner and proprietor that the defendant too had been having dealings. There should thus be no difficulty as envisaged and objected to by the defendants. ............ with a view to avoid any future eifficulty on this mere technicality, it is prayed that ............... in the heading of the suit ............ beforethe words 'Jai Jai Ram Manohar Lal, Ramnagar, (the words) 'Manohar Lal Malik' may kindly be added, and that in para 1 of the plaint between the words 'Yeh ki muddai' and 'Karobar Arhat lakri' the words 'Aznam Jai Jai Ram Manohar Lal' may kindly be added.'

4. The aforesaid amendment application was allowed by the trial court by its order D/- 18-7-52, and the amendment was made in the plaint on that very date. It is note-worthy that the amendment application does not state that it was due to some bona fide mistake or omission that the suit had been brought in the name of 'Jai Jai Ram Manohar Lal'. On the other hand, the amendment application clearly stated that the amendment was being sought only 'to avoid any future difficulty on this mere technicality' raised by the defendants. The tone and contents of the amendment application show that it had been moved just to satisfy the whims of the defendants. The opening words of the application suggest that Jai Jai Ram as well as Manohar Lal, who were father and son, were both alive. On the other hand, the deposition of Manohar Lal recorded on 22-9-52 shows that his father Jai Jai Ram had died in the year 1936 or 1939 and that on the date of the institution of the suit, Manohar Lal and his four sons, one of whom was major, were the owners of the joint family business, styled 'Jai Jai Ram Manohar Lal.'

5. At the trial the defendants had argued that inasmuch as the name of Manohar Lal had been brought on the record by amendment of the plaint on 18-7-52, the suit should be deemed to have been instituted by him on that date, and hence the claim for recovery of the balance price of the timber sold on 10-3-47 was long barred by three years' rule o limitation.

6. The trial Court, however, repelled the contention of the defendants and held that the amendment would take effect retrospectively from the date of the institution of the suit which had been filed on 11.3.'50, within three years of the delivery of the goods made on 18-6-'47. In the result it decreed the suit for Rs. 6568/6/3. Hence this appeal by the defendants.

7. It has strenuously been urged by Mr. K. C. Agarwal learned counsel for the defendant-appellants that the finding of the Court below on the question of limitation was wholly erroneous and that the suit was clearly barred by limitation. Broadly speaking, his contention is that it was not a case of a mere mis-description of the original plaintiffs and that the effect of the amendment dated 18-7-1952 was to substitute an altogether new person in place of the original plaintiffs, with the result that the suit as regards the present plaintiff Manohar Lal would be deemed to have been instituted on 18-7-1952 when he was so made a party to the suit. This would be clearly far beyond the prescribed period of three years computed from 16-6-1947, which was the date of delivery of the goods by the plaintiffs to the defendants. I think there is considerable force in this contention.

8. At the very outset it may be mentioned that Order 30 of Civil P. C. has no application to the instant case, inasmuch as Jai Jai Ram Manohar Lal is not a firm within the meaning of Section 4 of the Indian Partnership Act. It has no partners at all. The business is admittedly a joint family concern, of which the various members of the family are owners without specification of their respective shares. There could hardly be any doubt that a joint family business like the present has no legal entity in the sense that it could sue or be sued in the business name, as is the case with a registered partnership, envisaged by Section 69 of the Indian Partnership Act. Under the aforesaid Act the style of a firm is only a conjoint name of the various partners. In other words, it is an alias for the names of its different partners constituting the firm. To put it in another form, it is by a fiction of law that the firm name embraces and indicates the names of its various partners. Such is not the position in the case of a joint family business. A trade name might have been given to it, but the trade name has not been recognised to be a legal entity so as to entitle it to institute a suit in a court of law under its business name and style.

Where a suit has to be brought by a joint Hindu family business it must necessarily be brought either in the name of the Karta of the family or in the names of the various members constituting the joint family--but certainly not in the assumed business name. When the suit was originally instituted on 11-3-1950 business in the name of 'Jai Jai Ram Manohar Lal' it was a nullity, inasmuch as there was no legal entity of the name of 'Jai Jai Ram Manohar Lal' entitled to institute a Suit on behalf of the joint family or its business. That being the situation, there was no question of amending or adding to the name of the then existing plaintiff on 18-7-1952 when the amendment was made. The effect of the amendment, plain and simple, was that Manohar Lal was substituted as the plaintiff for the first time on 18-7-1952, by virtue of the amendment order of that date. As such, the suit in the name of Manohar Lal shall be deemed to have been instituted on 18-7-1952 vide Section 22 of the Indian Limitation Act, which would obviously be beyond the period of limitation prescribed by law.

9. For authority Mr. Agarwala rightly relies on two cases: Daud Sayad Mahomed v. Mahomed Sayad : AIR1926Bom366 and Northern Bank of India Ltd. v. Ramesh Chandra, A. I. R. 1932 Lah 314 for the proposition that where the person originally impleaded as plaintiff had no right to sue, the addition of a person claiming to be entitled to sue would amount to substitution or at least addition of a new plaintiff.

10. In Debi Sahai v. Gillu Mal, A. I. R. 1933 Lah. 563, Zujya Puscol Damel v. Manmohandas Lallubhai Pratap A. I. R. 1940 Bom. 164 and Jamunadhar Poddar, Firm v. Jammunaram Bhakat : AIR1944Cal138 , it has been laid down that Order 30, Civil P. C. does not apply to a joint Hindu family firm or business as the rights and liabilities of such a firm are not exclusively regulated by the Contract Act but by Hindu Law. Such joint family business must sue either in the name of its Karta or in the name of all its members, inasmuch as the members of a joint family are not partners in the sense in which that term is used in the Partnership Act, nor can it be said that they have any definite share therein. In a joint family business there is a community of interest in and unity of possession of all the assets of the firm between all the members of the family like other coparcenary property.

11. Reference may now be made to the case of Purshottam Umadbhai and Co. v. Messrs. Manilal and Sons : [1961]1SCR982 , which has been relied upon by the learned counsel for both the parties. In that case the suit was filed by Manilal and Sons, a firm carrying on business in Singapore. The firm had five partners. But it had not been registered as a firm under the Indian Partnership Act. The defendant was a firm, which was registered under the Indian Partnership Act and was carrying on business at Calcutta. In 1949 there was a contract between the plaintiff and the defendant, under which the defendant was to sell to the former certain bales of gunny bags to be shipped from Calcutta to Singapore, The plaintiff alleged that the defendant had failed to perform the contract and as a result of the default of the defendant, the plaintiff had suffered loss. The plaintiff accordingly claimed compensation and instituted the suit for the recovery of Rs. 281,714/- on the original side of the Calcutta High Court. Later on the plaintiff itself applied for amendment of the plaint, which was amended by striking off the name of the firm 'Manilal and Sons' as plaintiff and by substituting in its stead the names of the five partners as plaintiffs.

The amendment application clearly stated that the mis-description of the plaintiff was a bona fide-one and that the same should be rectified by bringing the names of the partners of the firm on the record as plaintiffs. This was seriously objected to by the defendant to that suit. The trial Judge rejected the application, but on an appeal before a Division Bench of the Calcutta High Court the amendment of the plaint was allowed with the result that the defendant went up to the Supreme Court in appeal by special leave.

12. Their Lordships of the Supreme Court approved the following observations of the Madras High Court in Mura Mohideen v. V.O.A. Mohomed, : AIR1955Mad294 ; the underlined (here in, ' ') and brackets are mine:--

'If, however, imperfectly and incorrectly a party is designated in a plaint 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 case is one of intention of the party and if the Court is able to discover the person or persons intended to sue or to be sued a mere mis-description of such a party can always be connected 'provided the mistake was bona fide' vide Order 1, Rule 10, Civil P. C. Such an amendment does not involve the addition of a party so as to attract Section 22(1), Limitation Act. ...............merelybecause the law does not recognise the firm as being a legal entity, the firm name could not indicate or designate the individuals composing the firm (is not correct).

To sum up, the situation is analogous to a case where an individual who has an alias or an abbreviated name by which he is sometimes called initially describes himself in that name but subsequently applies to have it rectified so as to describe in the manner in which he is most generally known. There cannot be any doubt that by the correction in the name, a new plaintiff is not added so as to attract Section 22(1), Limitation Act. A trade name either of a person or a group of individuals 'carrying on business in partnership' is in truth an alias for the person or the group.'

13. It was further pointed out by the Supreme Court that after the introduction of Order XXX into the Code it is now permitted that :

'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 Order 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 in fact by the partners of that firm individually, (in view of the provisions of Section 4 of the Indian Partnership Act.)

...............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 still a suit by all the partners of the firm.................. A firm may not be alegal entity in the sense of a corporation or a company incorporated under the Indian Companies Act but it is still an exciting 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 Order XXX had not been introduced into the Code and a suit hadbeen filed in the name of the 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 of the firm and replacing it with the name of the persons forming the partnership. It would be a case of mis-description.............Inthe present case the plaintiff described in the plaint as the firm of Manilal & Sons was a mere mis-description capable of amendment and 'not a case where a plaint had been filed by a non-existent person and therefore a nullity.'

...............If, however, under some misapprehension, persons doing business as partners outside India do file a plaint in the name of their firm they are mis-describing themselves, as the suit instituted is by them, they being known collectively as a firm. It seems, therefore, that 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 purposes of the Code of Civil Procedure.'

14. It is note-worthy that the above quoted observations only relate to a firm name which, in the eye of law, is only a collective or consolidated name for the various partners of that firm. Therefore, in the case of a partnership firm, the firm name is, by fiction of law, representative of the names of its numerous partners. Such is not the case in a joint Hindu family business. It is open to such a business to assume a trade name, but there is no law like the one contemplated by Section 4 of the Indian Partnership Act, which provides that the trade name of a Joint Hindu family business would indicate or stand for the various coparceners, who at the time of the institution of the suit might constitute the joint Hindu family. Therefore, what is true of a partnership firm is not really true of a joint Hindu family business. In the latter case, it is only the Karta, who in his representative capacity can institute the suit or else all the members of the joint family must join as plaintiffs.

15. Secondly it has to be noted that Order 1, Rule 10, Civil P.C., itself contemplates that substitution or addition of a person as plaintiff can be made only if the Court is satisfied that the suit has been instituted through a bona fide mistake or mis-apprehension. But the question of a bona fide mistake or misapprehension is essentially a question of fact and evidence. In the instant case, as already stated earlier, there is nothing to indicate in the amendment application that the plaintiff or any other member of the joint family business, known as 'Jai Jai Ram Manohar Lal,' was under any bona fide mistake, error, or misapprehension. The suit instituted by the joint Hindu family business in the name of an assumed business title was a suit by a person, who did not exist and was, therefore, a nullity. Hence there could be no amendment of the description of such a plaintiff who did not exist in the eye of law. The Court below was in obvious error in thinking otherwise and allowing the name of Manohar Lal to be added as proprietor of the original plaintiff 'Jai Jai Ram Manohar Lal'. which was neither a legal entity nor an existing person who could have validly instituted the suit. At any rate, the substitution of the name of Manohar Lal as a new plaintiff, during the pendency of the suit, would take effect from the date of such substitution or addition, that is, from 18-7.1952 and the suit shall be deemed to have been instituted by him on the date when he was so made a party.' Such an amendment could not take effect retrospectively. This principle is clearly embodied in Section 22(1) of the Limitation Act, which reads as under :

'22 (1) Where, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party.'

The suit instituted on 18-7-1952 would un-controversially be very much beyond limitation and must be dismissed as being barred by time.

16. The appeal has, therefore, to be and is hereby allowed, with the result that the suit stands dismissed. But in view of the fact that the appeal is being allowed on a technical ground, the parties shall bear their own costs throughout.


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