1937 (9) TMI 10 - HC - Indian Laws

Summary

Issues Involved:
1. Non-joinder of parties.
2. Maintainability of the suit in the form it was brought.
3. Legal capacity of a firm to enter into a partnership.
4. Authority of the person signing and verifying the plaint.

Issue-wise Detailed Analysis:

1. Non-joinder of Parties:
The trial court set down the issue of non-joinder for trial and found that there was no non-joinder. However, the lower appellate court did not express a clear opinion on this issue. The defense argued that the suit was not properly framed due to non-joinder, but no particulars were provided. The High Court did not find any fatal flaw in the suit due to non-joinder, stating that the suit should be considered one in respect of such partnership as may be found to have been created by the act of the parties.

2. Maintainability of the Suit:
The suit was brought in the name of the firm Brij Kishore Ram Sarup. The lower courts held that a firm could not enter into a contract of partnership with another person and therefore the suit was not maintainable. However, the High Court referred to the case of Jai Dayal Madan Gopal of Benares AIR1933All77, which held that a firm as such cannot enter into a partnership with other individuals. The High Court concluded that if all the partners of the firm are consenting parties or represented by a duly authorized person, a partnership can come into existence, though not as a partnership of which a firm as such is a partner. The suit is maintainable if it is not bad for any other reason.

3. Legal Capacity of a Firm to Enter into a Partnership:
The High Court agreed with the view that a firm, not being a legal entity, cannot enter into a partnership. However, it clarified that a partnership can be formed between the individual partners of a firm and another individual. The court emphasized that the partnership would include all the partners of the firm as individuals and the other party. The suit should proceed in the name of the firm as allowed by Order 30, Civil Procedure Code, provided the names of the partners are disclosed upon the defendant's demand.

4. Authority of the Person Signing and Verifying the Plaint:
The defense contended that Lachmi Narain, son of Hem Raj, who signed and verified the plaint, was not a partner of the plaintiff firm. The High Court noted that this issue had not been definitively resolved by the lower courts. It stated that if Lachmi Narain, son of Hem Raj, is found to be a partner, the suit should be considered to have been brought by all three partners (Ram Sarup, Lachmi Narain alias Munni, and Lachmi Narain, son of Hem Raj). Otherwise, it should be considered to have been brought by Ram Sarup and Lachmi Narain alias Munni, and the authority of the person signing the plaint on their behalf would need to be examined.

Conclusion:
The High Court allowed the appeal, set aside the decree of the lower appellate court, and remanded the case for disposal according to law. The court emphasized that the suit is maintainable if it is found that a contract of partnership was entered into between the defendant and the authorized partners of the plaintiff firm. The suit should proceed in the name of the firm, with appropriate reliefs granted to the individual partners if they are found entitled to it.