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2025 Supreme(SC) 1270

VIKRAM NATH, SANDEEP MEHTA
Dogiparthi Venkata Satish – Appellant
Versus
Pilla Durga Prasad – Respondent


Advocates appeared:
For the Petitioner(s): Mr. K. Parameshwar, Sr. Adv. Ms. Rao Vishwaja, Adv. Mr. P. Vamshi Rao, Adv. Mr. Shreenivas Patil, Adv. Ms. Tatini Basu, AOR
For the Respondent(s): Ms. C. K. Sucharita, AOR Mr. Vinod Kumar Gupta, Adv. Ms. Praseena Elizabeth Joseph, AOR Mr. Shivang Goel, Adv. Ms. Juhi Bhargava, Adv. Ms. Jaikriti S. Jadeja, AOR

Judgement Key Points

Based on the provided legal document, the key points are as follows:

  1. 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 (!) .

  2. 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 (!) .

  3. 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 (!) .

  4. 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 (!) .

  5. 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 (!) .

  6. 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 (!) (!) .

  7. 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 noti

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