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IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
BALCORP LIMITED – Plaintiff
Versus
M/S GANGA RAM BRIJ MOHAN – Defendant
C.S. (COMM) No. 1318 of 2018
Decided On : 14-11-2024
(A) Code of Civil Procedure, 1908 - Order VII Rule 11 and Order VIII Rule 10 - Suit against proprietorship concern - The Court held that a suit filed against a proprietorship concern is maintainable, as the proprietor can be sued in the business name. The judgments in P.C. Advertising and SVAPN Construction were found to be not good law. (Paras 34, 40, 44)
(B) Maintainability of Suit - The Court clarified that technical defects in the naming of parties can be cured and should not defeat substantive rights. (Paras 52, 53)
Facts of the case:
The plaintiff, a Canadian company, filed a suit for recovery of losses due to breach of contract by the defendant, a sole proprietorship. The defendant contested the maintainability of the suit on technical grounds.
Findings of Court:
The Court dismissed the objections regarding maintainability and allowed the defendant to endorse the written statement.
Issues: The main issue was whether the suit filed against a proprietorship concern was maintainable.
Ratio Decidendi: The Court ruled that a suit against a proprietorship concern is valid, and technicalities should not prevent justice.
Result: Applications dismissed; defendant allowed to file endorsed written statement.
Key Points: - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!)
JUDGMENT :
NAVIN CHAWLA, J.
I.A. Nos. 1953/2020, 9616/2023, 37751/2024
1. By the present Judgment, this Court shall dispose of the above applications.
2. I.A. 1953/2020 has been filed by the plaintiff praying for a direction to take off the record the written statement filed by Mr. Ankit Goel, and pass a Judgment against the defendant as arrayed.
3. On the other hand, I.A. 9616/2023 has been filed by Mr. Ankit Goel claiming therein that as the defendant has been arrayed in the name of a proprietorship concern, which is not a legal entity, the Suit be rejected under Order VII Rule 11 of the Code of the Civil Procedure, 1908 (in short ‘CPC’) as being barred by law.
4. I.A. 37751/2024 has also been filed by Mr. Ankit Goel seeking permission of this Court for Mr. Brij Mohan Goel to endorse the written statement filed on behalf of M/s Ganga Ram Brij Mohan, by affixing the signatures of Mr. Brij Mohan Goel thereon and to permit Mr. Brij Mohan Goel to file a separate affidavit/statement of truth adopting the stand of M/s Ganga Ram Brij Mohan as taken in the written statement.
CASE OF THE PLAINTIFF IN THE SUIT:
5. This Suit has been filed by the plaintiff seeking recovery of the alleged loss suffered by the plaintiff due to the alleged breach of the contractual obligations on the part of the defendant firm. By way of this Suit, the plaintiff seeks the following reliefs against the defendant:
(b) Award pendente lite and future interest @ 12 % per annum to the Plaintiff till date of realization of the aforementioned amount by the Plaintiff.
(c) Award costs in favour of the Plaintiff.”
6. It is the case of the plaintiff that it is a company incorporated in Canada and is inter alia engaged in the business of exporting California almonds from USA to various countries including India. The plaintiff asserts that the defendant, M/s Ganga Ram Brij Mohan, is a sole proprietary firm of Shri Brij Mohan Goel, its proprietor.
7. It is the case of the plaintiff that the plaintiff, through its agent in India, namely, SJSS Trade Links Pvt. Ltd. entered into four contracts with the defendant firm, dated 24.04.2015, 25.04.2015, 02.05.2015, and 07.05.2015, for the supply of California almonds. The details of these contracts are mentioned herein-below:
(b) CAL/042/2015/NPIS dated 25.04.2015 for supply of forty five thousand pounds (45000 Lbs.) @ US$ 3.54 per Lbs FAS based on 70% yield. The shipment under the said contract was to be done in October 2015.
(c) CAL/044/2015/NPIS dated 02.05.2015 for supply of forty five thousand pounds (45000 Lbs.) @ US$ 3.58 per Lbs FAS based on 70% yield. The shipment under the said contract was to be done in October 2015.
(d) CAL/052/2015/NPIS dated 07.05.2015 for supply of forty five thousand pounds (45000 Lbs.) @ US$ 3.61 per Lbs FAS based on 70% yield. The shipment under the said contract was to be done in October 2015.”
8. The plaintiff asserts that the plaintiff shipped the abovementioned quantities of California almonds in accordance with the aforesaid contracts and the shipping schedule agreed upon with the defendant. Thereafter, the plaintiff raised the following four invoices in respect of the almonds supplied under the aforesaid four contracts:
(b) Invoice No. 151034 dated 02.11.2015 for a sum of US$ 1,59,075 under contract CAL/042/2015/NPIS dated 24.04.2015.
(c) Invoice No. 151011 dated 26.10.2015 for a sum of US$ 1,68,210 under contract CAL/044/2015/NPIS dated 02.05.2015.
(d) Invoice No. 150973 dated 20.10.2015 fo
A suit against a proprietorship concern is maintainable, and technical defects in naming parties should not defeat substantive rights.
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.
Substitution of a plaintiff after limitation has expired is valid only from the date of substitution, not retrospectively.
The amendments sought to the plaint were imperative for proper adjudication of the case and did not fundamentally change the nature of the case. The Court emphasized the applicability of Order XXX Ru....
The amended provision allowing 120 days to file a written statement under the CPC is applicable, and dismissal on procedural grounds without considering such amendment is unreasonable.
The court established the discretion of the Commercial Court in accepting written statements in transferred suits and highlighted the applicability of the Commercial Courts Act, 2015 to suits filed b....
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