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2009 Supreme(Bom) 364

HIGH COURT OF JUDICATURE AT BOMBAY
THE HONOURABLE MRS. JUSTICE ROSHAN DALVI
M/s. Hari Shree Enterprises - Appellant
Versus
M/s. Vikas Housing Ltd. & Others - Respondent
Chamber Summons No.1705 of 2008 in Suit No.3382 of 2007
Date of Judgment : 19-03-2009

Advocates appeared:
For the Plaintiff:Rohit Kapadia, Sr, Nitin Shukla, Advocates. For the Defendants:D.D. Madon, Sr, Mr. Birendra Saraf, Shashikala Sharma i/by Yogesh Adhia, N.J Devashrayee, Advocates.

Headnote:Companies Act, 1956-Section 191-Suit on behalf of Company-Company which is a juristic person must itself decide to sue-Once that is done, it would authorize one of its Directors who is agent of Company or its Principal Officers Secretary of Company or Managing Director to file suit-Suing in each case is a separate act-Unless a power to institute suit is specifically conferred on a particular Director, he has no authority to institute suit on behalf of Company-Authority given to a individual as a Managing Director 6 years before filing of suit cannot be taken to be authority given by company to file a particular action in law. (Paras 11 and 12)

       

JUDGMENT :

Oral Order:

1. The Plaintiff in the Suit is the Partnership Firm which has sued third parties for recovery of possession of the suit lands, payment of amount s by way of compensation for delay as well as by way of mesne profits. The Suit has been filed by one Jitendra Chandarana shown as the Constituted Attorney of the Plaintiff-Firm. The Power of Attorney annexed to the Plaint has been executed by one K.V.Mohan shown as one of the partners of the Firm and as the authorized signatory of two other partner s of the Firm V. Rajagopal and Mr.Rajiv Sinha, one of whom, V. Rajagopal, has been adjudged insolvent. The Plaintiff-Firm stood dissolved prior to the filing of the Suit upon the said partner having been adjudged insolvent. The Plaintiff-Firm, therefore, could not sue as shown in the Plaint.

2. The Plaintiff itself has taken out the above Chamber Summons for amendment to the Plaint, including the title of the Suit. The Plaintiff now desires to sue through one of its partner s as the partner of the Plaintiff-Firm, since dissolved. The said K.V.Mohan has not sought the sue as a partner of the firm on behalf of the dissolved firm. The partner of the firm seeking to sue is a Limited Company. The Limited Company is sought to be represented by its Managing Director, the same K.V. Mohan. The Plaintiff has sought to join the other two partners Rajiv Sinha and the Official Assignee on behalf of the insolvent partner V. Rajagopal as Defendant s. Mr.Kapadia on behalf of the Plaintiff argued that the Official Assignee should not be joined as party Plaintiff and hence is sought to be joined as Defendant. The consent of the Official Assignee to sue on behalf of the dissolved Firm for recovery of possession and monies from third party is not obtained. However it may be taken that the Official Assignee is brought on record only as a necessary and proper party, representing the insolvent partner of the dissolved Firm. Rajiv Sinha is stated to be residing in Bihar and is hence to be brought on record as a Defendant.

3. The Plaintiff has essentially relied upon a judgment in the case of Purushot tam Umedbhai & Co. vs. M/s.Manilal & Sons, (AIR 1961 SC 325) to show that the introduction of Order XXX of the Code of Civil Procedure (C.P.C.) is only an enabling provision and when the Firm, which cannot sue, has sued, it is in effect misdescribing the Firm which is compendious form for its partners and shows the defective description of the parties who could have otherwise sued. Consequently, it is held that by way of an amendment either under Section 153 of the Code of Civil Procedure or under Order VI Rule 17 of the C.P.C. an amendment to the Plaint to enable a proper description of the Plaintiff could be allowed. Upholding the decision of Chief Justice Beaumont in the case of Amulakchand Mewaram vs. Babulal Kanalal, (AIR 1933 Bombay 304), it was held that incorrectly suing in the name of the Firm rather than by the partner s suing as such on behalf of the Firm would be only a case of misdescription of the existing persons. In paragraph 8 of that judgment, it is held that the Firm or a Firm name is merely a compendious description of all partners collectively. Consequently, it is held that when a Suit is filed in the name of a Firm, it is still a Suit by all the partners of the Firm unless it is proved that all the partners had not authorized the Suit. It is observed that when the Suit is filed in the name of a Firm it is in reality of a Suit by all the partners of the Firm, the defect being they were described as a Firm. Hence it is held that to clarify matters the Court would permit an amendment by striking out the name of the Firm and replacing it with the name of the persons forming the partner ship. It is further observed that that would not be a case of adding parties or substituting parties. Consequently, it is observed in paragraph 11 of that judgment that a Suit filed by a Firm, which could not sue, is not a nullity. It was only a

















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