1977 Supreme(Pat) 211
PATNA HIGH COURT
S.K.Jha, J.
Sarat Chandra Ghosh (Private) Ltd.
Versus
Swastika Mica
Decided On : NOVEMBER 21, 1977
A misdescription of a company's name in a suit will not render the decree unenforceable against the company if the identity of the company is clarified by the findings of the court.
Headnote:
COMPANY LAW - SUIT AGAINST REGISTERED COMPANY - MISDESCRIPTION OF COMPANY NAME - EFFECT - ORDER 29 RULE 1, CIVIL PROCEDURE CODE - APPLICABILITY.
Fact of the Case:
Sarat Chandra Ghosh (Private) Limited (appellant) was sued as S.C. Ghosh (Private) Ltd. for recovery of money owed for mica transactions. The appellant appeared and filed a written statement, denying the existence of S.C. Ghosh (Private) Ltd. and claiming that the suit was barred by limitation and under Section 69 of the Indian Partnership Act. The trial court found that S.C. Ghosh (Private) Ltd. and Sarat Chandra Ghosh (Private) Limited were the same legal entity and dismissed the appellant's defenses.
Finding of the Court:
The court held that the suit against S.C. Ghosh (Private) Ltd. was substantially a suit against Sarat Chandra Ghosh (Private) Ltd., and that the error in the description of the defendant was a misdescription that had been clarified by the finding on the issue of identity. The court further held that Order 29 Rule 1 of the Code of Civil Procedure, which requires suits against registered companies to be instituted in the name of the company, was not applicable because the finding of identity meant that there was no case of one company being sued for the obligation of another company.
Issues: 1. Whether the suit was barred under Section 69 of the Indian Partnership Act? 2. Whether the suit was barred by limitation? 3. Whether the defendant described as S.C. Ghosh (Private) Ltd. in the plaint was the same firm as Sarat Chandra Ghosh (Private) Ltd.?
Ratio Decidendi: 1. The court found that the suit was not barred under Section 69 of the Indian Partnership Act or by limitation. 2. The court found that the defendant described as S.C. Ghosh (Private) Ltd. in the plaint was the same firm as Sarat Chandra Ghosh (Private) Ltd., based on the evidence and the appellant's participation in the suit.
Final Decision: The court dismissed the appeal, holding that the appellant was bound by the decree passed against S.C. Ghosh (Private) Ltd.
S.K.Jha, J.
1. This is an appeal by Sarat Chandra Ghosh (Private) Limited, which has for all practical purposes, been treated as the defendant in the suit S.C. Ghosh (Private) Limited. The only point urged in this appeal is that the defendant having been sued as S.C. Ghosh (Private Ltd., the courts below had committed an error of law in holding that S.C. Ghosh (Private) Ltd. was nothing else but the abbreviated name of Sarat Chandra Ghosh (Private) Ltd. and that the appellant would be bound by the decree passed in favour of the plaintiff respondent.
2. The plaintiff Messrs. Swastika Mica Company, a registered firm, instituted the suit against S.C. Ghosh (Private) Ltd. for recovery of Rs. 1084 30 as price mica and Rs. 483 41 as interest theron. This money claim was based upon certain transactions between the plaintiff and the defendant in course of the business in mica resulting in the final adjustment of accounts leaving a balance of Rs. 1084.30 to be paid by the defendant to the plaintiff. In spite of demands, the same not having been paid, the plaintiff instituted the suit with a claim for interest also.
3. When summons was issued in the suit against the defendant S.C. Ghosh (Private) Ltd. the appellant Sarat Chandra Ghosh (Private) Ltd. appeared and field a written statement through one of its Directors Sushant Kumar Ghosh. The case made out in the written statement was that there is no company in the name of S.C. Ghosh (Private) Ltd. in existence nor was in existence at any time, the plaintiffs suit was barred under the provisions of Section 69 of the Indian Partnership Act (hereinafter to be referred to as the Act) as also by limitation and the plaintiff had no cause of action against the appellant Sarat Chandra Ghosh (Private) Ltd.
4. It ought to be mentioned that the plaintiff thereafter filed an application for amendment of the plaint by adding Sarat Chandra Ghosh (Private) Limited as a defendant also, but that application for amendment was rejected on the ground that if they were the same entity, there was no need for addition of the name of the appellant.
5. The trial court framed, inter alia, three issues after hearing both the plaintiff respondent and the appellant. They were-
(1) Is the suit barred under Section 69 of the Act ?
(2) Is the suit barred by limitation ?
(3) Is the defendant described as S.C. Ghosh (Private, Ltd. in the plaint the same firm as Sarat Chandra Ghosh (Private) Ltd. ?
The findings recorded were that the suit was not barred either under Section 69 of the Act or by limitation. Issue No. 3, vital for this appeal, was decided by the trial court in these terras- Therefore it is apparent that the defendant in the suit described as S.C. Ghosh (Private) Ltd. had no separate or different existence and it must be the abbreviated name of the same company as Sarat Chandra Ghosh (Private) Ltd. It is also clear therefore that it could not be argued that any company other than Sarat Chandra Ghosh (Private) Ltd. carried on the transactions in suit, because admittedly no company in the name of S.C. Ghosh (Private) Ltd. ever existed. So, after a careful consideration of all the aforesaid facts, circumstances and evidence on record it is held that the defendant described as S.C. Ghosh (Private) Ltd. in the plaint is the same company as Sarat Chandra Ghosh (Private) Ltd.
Having so decided the issue, the trial court in paragraph 21 of its judgment further held that, though the decree, which will be passed in the suit, will stand against the name of S.C. Ghosh (Private) Ltd. because that is the name of the defendant given in the plaint, it would be enforceable against the real company known as Sarat Chandra Ghosh (Private) Ltd., which has contested the suit. Against the decree passed by the trial court, the appellant preferred an appeal before the District Judge who has agreed with, and affirmed, the judgment of the trial court.
6. Learned counsel for the appellant argued that in view of the provisions o