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SUPREME COURT OF INDIA
VIKRAM NATH, SANDEEP MEHTA, JJ.
Dogiparthi Venkata Satish And Anr. – Appellants
Versus
Pilla Durga Prasad & Ors. – Respondents
Civil Appeal No. 11104 of 2025 (Arising Out Of SLP(C) No. 25938 of 2023)
Decided On : 26-08-2025
Civil Procedure Code, 1908 – Order VII Rule 11 and Order XXX Rule 10 – Rejection of plaint – Eviction suit – Proprietorship Concern is nothing, but a trade name given by an individual for carrying on his business – Proprietorship Concern is not a juristic person – It cannot sue, however, in view of Order XXX Rule 10 CPC, it can be sued – Whether Proprietorship Concern is sued in its name or through its proprietor representing the Concern is one of same thing – High Court seems to have taken completely hyper-technical view not realizing that there was no prejudice caused and cause of action very much accrued against Proprietor as he alone had signed lease deed on behalf of Proprietorship Concern and there was no involvement of any second or third party, whose interest could be said to have been prejudicially affected – Once interest of Proprietorship Concern was taken care of by Proprietor having been impleaded nothing further remained – Impugned order set aside. (Paras 4.1, 4.3 and 5)
Facts of the case:
Instant appeal assails correctness of the judgment and order dated 19th October, 2023 passed by High Court of Andhra Pradesh at Amaravati, whereby Civil Revision Petition No.1679 of 2019 filed by respondent no.1 was allowed. The order passed by the Trial Court dated 2nd July, 2018 was set aside, and application I.A. No.429 of 2018 under Order VII Rule 11, Code of Civil Procedure, 1908 was allowed and the plaint of Original Suit No.118 of 2012 was rejected.
Findings of Court:
Trial Court to proceed in accordance with law to decide the suit on its own merits.
Result : Appeal allowed.
Based on the provided legal document, the key points are as follows:
A proprietorship concern is not a juristic person and, therefore, cannot sue in its own name. However, it can be sued, and whether the suit is filed against the proprietorship in its name or through its proprietor representing the concern is considered effectively the same (!) .
The provision allowing a proprietorship concern to be sued (Order XXX Rule 10 CPC) indicates that the concern may be made a party, but it does not preclude the proprietor from being the sole defendant. The proprietor's involvement suffices for defending the concern, and no prejudice is caused by suing the proprietor directly, especially when the proprietor has signed relevant documents on behalf of the concern (!) .
The use of the trade name or concern is merely a business designation, and the actual legal entity responsible is the proprietor. The suit against the proprietor, who signed the lease deed, adequately represents the concern, and there is no necessity to treat the concern as a separate juristic entity (!) .
The distinction between a proprietorship concern and a partnership firm is clear: a partnership is governed by specific legislation and can be sued or can sue in the firm's name, whereas a proprietorship concern is not a separate legal entity but a business name used by an individual. The provisions of the law enable the proprietor of a proprietorship to be sued directly in the name of the concern, but this does not transform the concern into a juristic person (!) .
The law permits the proprietor of a proprietorship concern to be sued in the concern’s name, and this does not imply that the concern itself is a separate legal entity. The proprietor remains the actual party involved in the legal proceedings (!) .
The legal provisions and principles affirm that a proprietorship concern cannot sue but can be sued, and suing the proprietor representing the concern is legally sufficient. The technicality of the concern not being a juristic person should not hinder the legal process when the proprietor's involvement is clear and no prejudice is caused (!) (!) .
The appellate court has rightly set aside the rejection of the plaint and directed the trial court to proceed with the case on its merits, emphasizing that the suit against the proprietor is appropriate and that the High Court's reliance on Order XXX Rule 10 CPC was misplaced (!) (!) .
In summary, the legal position clarified here is that a proprietorship concern is not a separate legal entity capable of suing but can be sued, and the proprietor’s involvement in signing documents makes them the proper party in legal proceedings without prejudice.
JUDGMENT :
VIKRAM NATH, J.
1. Leave granted.
2. This appeal assails the correctness of the judgment and order dated 19th October, 2023 passed by the High Court of Andhra Pradesh at Amaravati, whereby the Civil Revision Petition No.1679 of 2019 filed by the respondent no.1 was allowed. The order passed by the Trial Court dated 2nd July, 2018 was set aside, and further the application I.A. No.429 of 2018 under Order VII Rule 11, Code of Civil Procedure, 19081[CPC], was allowed and the plaint of Original Suit No.118 of 2012 was rejected.
3. Relevant facts necessary for adjudication of this appeal are as follows:
3.1 Admittedly, the suit schedule property is in the ownership of the appellants. One Aditya Motors (the lessee), a sole proprietorship concern of Pilla Durga Prasad (P.D. Prasad) requested the appellant to lease out the same. Accordingly, under a registered lease deed dated 13th April, 2005, the schedule premises was leased out to Aditya Motors. Thereafter, it appears without the consent of the owner-appellant, Aditya Motors inducted M/s. Associated Auto Services Pvt. Ltd.
3.2 After the expiry of the lease period, the lessee did not vacate the premises. The appellant after due notice under Section 106 of the Transfer of Property Act, 1882, filed a suit for eviction of not only the lessee but also M/s. Associated Auto Services Pvt. Ltd. and its two directors. The lessee was impleaded as defendant no.1, M/s. Associated Auto Services Pvt. Ltd. was impleaded as defendant no.2 and the two directors as defendant nos.3 and 4.
3.3 During the pendency of the proceedings, an application for seeking amendment in the plaint under Order VI Rule 17 of the CPC was filed by the appellant. One of the amendments sought was that the lessee-defendant no.1 be deleted and, in its place, Pilla Durga Prasad be substituted as representative of the lessee. The cause title of the suit, thus, changed from Dogiparthi Venkata Satish and another Vs. Aditya Motors and others now stood as Dogiparthi Venkata Satish and another Vs. Pilla Durga Prasad and others. The amendment was allowed by order dated 28th March, 2018, which order was not challenged, and it attained finality.
3.4 Later on, after the amendment, the defendant moved an application under Order VII Rule 11 CPC to reject the plaint on the ground that as the registered lease deed dated 13th April, 2005 was with Aditya Motors and now since the plaint had been amended and Aditya Motors has been deleted and in its place Pilla Durga Prasad has been substituted, the plaint does not disclose any cause of action against Pilla Durga Prasad, and as such was liable to be rejected.
3.5 The appellants objected to the said application stating that Aditya Motors was a proprietorship concern with Pilla Durga Prasad as its sole proprietor and since proprietorship concern is not a juristic person, therefore, it would not make any difference if the proprietor was made a party as representative of Aditya Motors, which description remained in the cause title. The cause of action was actually against Pilla Durga Prasad as he alone was the signatory to the registered lease deed. Pilla Durga Prasad being the proprietor of Aditya Motors and he having signed the registered lease deed as representative and proprietor of Aditya Motors, the application under Order VII Rule 11 CPC was liable to be rejected. The cause of action, if any, was always against the proprietor and not the firm. The use of Aditya Motors was only for the purposes of carrying on the business and not for any other purpose. It was only Pilla Durga Prasad, who was the relevant person.
3.6 The Trial Court after considering the rival submissions rejected the application under Order VII Rule 11 CPC by order dated 2nd July, 2018. Aggrieved by the same, revision was filed before the High Court by Pilla Durga Prasad. The High Court by the impugned order has allowed the revision merely relying upon the provisions contained in Order XXX Rule 10 CPC. According to the High
Proprietorship Concern is not a juristic person – It cannot sue but it can be sued – Whether Proprietorship Concern is sued in its name or through its proprietor representing the Concern is one of sa....
A proprietary concern cannot sue in its own name but can be represented by its proprietor; amendments to correct party descriptions are permissible.
A proprietor of a proprietary concern can file a complaint as the payee under Section 138 of the N.I Act.
The legal representative of a deceased sole proprietor is liable for the debts of the sole proprietor, and the scope of revisional powers under Section 115 of the CPC is limited.
A sole proprietorship cannot be prosecuted under Section 141 of the N.I. Act unless the proprietor is named in the complaint; the complaint was also quashed for being premature.
A suit against a proprietorship concern is maintainable, and technical defects in naming parties should not defeat substantive rights.
A plaint must be read meaningfully to determine if it discloses a cause of action; issues of jurisdiction and limitation are to be resolved at trial.
The court affirmed that disputes arising from agreements related to property used for trade fall under the jurisdiction of Commercial Courts, emphasizing the need for factual evaluation in limitation....
The Court emphasized the importance of upholding the procedure established by law and held that the revision petitioner's claim to possession was flawed as it interfered with a subsisting jural relat....
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