1. Suit for eviction filed against a proprietary concern and its proprietor after the proprietor's death — validity of decree passed against a dead person. (Para 3 )
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1998 Supreme(SC) 414
SUPREME COURT OF INDIA
S.C.Agrawal : S.Saghir Ahmad
Ashok Transport Agency
Versus
Awadhesh Kumar
Case No. : 1873 of 1998
Date of Decision : 3/31/98
A suit filed against a proprietary concern after the death of its sole proprietor is a nullity, as the proprietor is the real party. Order XXX Rule 10 CPC does not convert a proprietary concern into a partnership; legal representatives must be impleaded.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXX Rule 1, Rule 4 and Rule 10 - Indian Partnership Act, 1932 - Suit against proprietary concern - Death of proprietor prior to institution of suit - Decree passed against a dead person - Nullity - A proprietary concern is only the business name in which the proprietor carries on business; a suit by or against a proprietary concern is by or against the proprietor - In the event of the death of the proprietor, only the legal representatives can sue or be sued - Provisions of Rule 10 of Order XXX enable the proprietor to be sued in the business name but do not convert the proprietary business into a partnership firm - Rule 4 of Order XXX applies only insofar as the nature of the case permits; it cannot be extended to a case where the proprietor died before the suit was filed and the concern ceased to exist. (Paras 6, 7)
(B) Tenancy - Status of Manager - Where tenancy is taken in the name of a proprietary concern and rent is paid in that name, the manager cannot be treated as the tenant. (Para 8)
Facts of the case:
A suit for eviction was filed against a proprietary concern, its proprietor, and its manager. The proprietor had died prior to the institution of the suit. An ex parte decree was passed. The executing court dismissed the execution petition on the ground that the decree was a nullity as it was passed against a dead person. The High Court reversed this, holding that under Order XXX Rule 10 of the Code of Civil Procedure, the decree was not a nullity and could be executed.
Findings of Court:
The executing court correctly held that the suit having been filed against a dead person, the decree was a nullity and could not be executed.
Issues: Whether a decree passed against a proprietary concern whose proprietor died before the institution of the suit is a nullity and whether the provisions of Order XXX Rule 4 of the Code of Civil Procedure apply to such a proprietary concern.
Ratio Decidendi: A partnership firm differs from a proprietary concern. While a partnership can be sued in the firm's name under Order XXX Rule 1, a proprietary concern is merely a business name for the individual proprietor. The real party is the proprietor. Upon the proprietor's death, only legal representatives can be sued. Order XXX Rule 10 does not transform a proprietary concern into a partnership, and Rule 4 is inapplicable when the proprietor's death precedes the suit's filing.
Result: Appeal allowed.
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Table of Contents
2. Whether a decree against a deceased proprietor is a nullity or maintainable under Order XXX Rule 10 and Rule 4 of the Code of Civil Procedure. (Para 4 , 5 )
3. A proprietary concern is not a juristic person; the proprietor is the real party, and Order XXX Rule 10 does not convert it into a partnership. (Para 6 , 7 )
4. A suit filed against a deceased proprietor of a proprietary concern is a suit against a dead person, rendering any resulting decree a nullity. (Para 6 , 7 )
5. Appeal allowed — High Court judgment set aside — executing court's order declaring the decree a nullity restored. (Para 9 )
6. What is the legal distinction between a partnership firm and a proprietary concern regarding litigation?
A partnership is governed by the Indian Partnership Act, 1932, and can sue or be sued in the firm's name under Order XXX Rule 1 CPC. A proprietary concern is merely a business name; the proprietor is the actual party to the proceedings. (Para 6 )
7. Does Order XXX Rule 10 of the Code of Civil Procedure convert a proprietary concern into a partnership?
No. Order XXX Rule 10 only enables the proprietor of a proprietary business to be sued in the business name; it does not have the effect of converting the proprietary business into a partnership firm. (Para 6 )
8. Can Order XXX Rule 4 CPC be used to maintain a suit against a deceased proprietor of a proprietary concern?
No. Order XXX Rule 10 applies other Order XXX provisions only insofar as the nature of the case permits. Since the real party is the proprietor, a suit cannot be maintained against a dead person under Rule 4. (Para 6 , 7 )
9. What is the status of a decree passed against a proprietor who died before the institution of the suit?
Such a decree is considered a nullity and cannot be executed because the suit was instituted against a dead person, and only the legal representatives of the deceased proprietor could have been sued. (Para 6 , 7 , 9 )
(1) SPECIAL leave granted.
(2) WE have heard the learned counsel for the parties.
(3) THIS appeal arises out of a suit for eviction filed by the respondents against three persons namely (7 Ashok Transport Agency (2 A.C. Basu, Proprietor of Ashok Transport Agency and (3 Birnath Singh, Manager of Ashok Transport Agency. The said suit was filed on 28/9/1992. Prior to the filing of the suit, A.C. Basu, Proprietor of Ashok Transport Agency had died on 6/8/1992. In the said suit, nobody appeared on behalf of the defendants and an ex parte decree was passed on 28/9/1993. The respondents thereafter moved for execution of the said decree. Before the executing court, it was submitted on behalf of the appellant that the decree was a nullity and it could not be executed for the reason that the Proprietor of Ashok Transport Agency had already died on the date of the institution of the suit and that the decree was passed against a dead person. The Munsif Sadar, Sitamarhi, by order dated 13/7/1994 upheld the said objection raised by the appellants and dismissed the execution petition on the view that the decree having been passed against a dead person was a nullity and it could not be executed. The revision filed by the respondents against the said order of the executing court has been allowed by the Patna High court by the impugned judgment dated 23/7/1996. The High court has proceeded on the basis that in view of Order XXX Rule 10 Code of Civil Procedure, even though the Proprietor of the firm Ashok Transport Agency had died before the institution of the suit, the decree passed against him cannot be held to be a nullity and, therefore, it a could be executed. Feeling aggrieved by the said judgment, the appellant, which is now a partnership firm has filed this appeal.
(4) SHRI Amarendra Sharan, the learned counsel appearing for the appellant, has urged that the High court was in error in holding that the decree which was passed against a dead person, namely, A.C. Basu as the Proprietor of Ashok Transport Agency, was not a nullity and it could be executed. The learned counsel has submitted that there is a distinction between a partnership firm and a proprietary business and that insofar as proprietary business is concerned, the proprietor of the business is the party to the proceedings and if the proprietor is dead on the date of the filing of the suit, the suit has to be treated as having been instituted against a dead person and no decree can be validly passed in such a suit.
(5) SHRI Vikas Singh, the learned counsel appearing for the respondents has, however, submitted that in spite of the fact that Ashok Transport Agency was a proprietary concern owned by A.C. Basu and that A.C. Basu had died before the institution of the suit, the suit filed by the respondents cannot be held to be non-maintainable and that the decree passed in that suit cannot be regarded as a nullity. The learned counsel has submitted that by virtue of Order XXX Rule 10 Civil Procedure Code, the other provisions of Order XXX would be applicable to a proprietary concern and that in view of Rule 4 of Order XXX the suit filed by the respondents without impleading the legal representatives of A.C. Basu, the Proprietor of Ashok Transport Agency was maintainable.
(6) A partnership firm differs from a proprietary concern owned by an individual. A partnership is governed by the provisions of the Indian Partnership Act, 1932. Though a partnership is not a juristic person but Order XXX Rule I Civil Procedure Code enables the partners of a partnership firm to sue or to be sued in the name of the firm. A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. In the event of the death of the proprietor of a proprietary concern, it is the legal representatives of the proprietor who alone can sue or be sued
