VYANKATESH OIL MILLS CO Vs. NVVELMAHOMED

JUDGEMENT

(1.) [His Lordship, after stating the facts as above, continued:] In considering the question whether the proposed amendment is to be treated as a correction of a mere misdescription or as a substitution of different parties, it is necessary to bear in mind that by the law of India as well as by the law of. England a firm as such has no separate legal entity. This is very admirably pointed out by Mr. Justice Mulla in Rampratab Gavrishankar (1922) 25 Bom. L.R. 7, where that learned Judge said (p. 10):- To begin with it may be observed that the law of England as well as of British India knows nothing of a firm as a body or artificial person distinct from the members composing it. In this respect a firm differs from a company incorporated under the Companies Acts, such a company being a corporate entity separate from its shareholders, though the latter can control its action by passing resolutions in general meeting. The word firm is a short, collective name for the individuals who constitute the partners, and though under the Rules of the Supreme Court and under the Civil P. C. actions may now be brought by and against partners in the name of their firm, the general doctrine that there is no such thins as a firm known to the law (see per James L. J in Ex parte Corbett (1880) 14 Ch, D. 122, 126.), remains in force.

(2.) Before the introduction of Order XXX to the Civil Procedure Code, it appears from certain decisions that actions were allowed to be brought particularly in the mofussil against firms in the firm name without any objection being taken thereto. Thus, in Kasturchand Bahiravdas V/s. Sagarmal Shriram (1892) I.L.R. 17 Bom. 413, a suit was brought to recover a debt due to the firm of Kondanmal Sagarmal and the plaintiff was described as "the firm of K.S. by its manager S.S." The defendants objected that one Malamchand was a partner in the firm and should be a party to the suit. He was accordingly joined as a coplantiff on January 27, 1888. The defendants then contended that the suit was time-barred under Section 22 of the Indian Limitation Act (XV of 1877). It was held that the case was one of misdescription and not of nonjoinder, for the action was brought in the name of the firm by its manager. It is plain from the judgment in that case that it was assumed that the action could be brought in the name of the firm, although up to that time there was no provision in the Civil Procedure Code corresponding with Order XXX. Indeed it was argued that there was nothing in the Civil Procedure Code to prevent such a suit being filed, and it appears to have been assumed that a suit in that form could be filed. That being so I do not consider that that case is an authority on the question now before me, having regard to the fact that Order XXX of the Civil Procedure Code now indicates clearly that an action can only be brought by or against a firm in the firm name in cases in which the persons claiming or being liable as partners are carrying on business as partners in British India.

(3.) It is plain from the terms of the plaint itself in this case that the plaintiffs carry on business in Sangli and this application for an amendment is now made to me upon the basis that they are carrying on business there, and are not carrying on business in British India. I am, therefore, of opinion that the suit is brought by an entity which has no legal existence in the eyes of Indian law, and there being no mode of procedure whereby such an entity is permitted to sue in India, the suit as framed is, in my opinion not maintainable at all, because it is brought by an entity which has no legal existence. It follows from my opinion that the amendment asked for cannot be treated as an amendment following upon a mere description, but must be treated as an application for the substitution as plaintiffs of the individual persons who compose the entity which the law does not recognise.