1993 (2) TMI 346 - HC - Indian Laws

Summary

Issues Involved:
1. Whether a firm can maintain a writ petition under Article 226 of the Constitution of India.
2. The legal status and capacity of a firm to act as a juristic person.
3. The effect of non-registration of a firm under the Indian Partnership Act, 1932.

Issue-wise Detailed Analysis:

1. Whether a firm can maintain a writ petition under Article 226 of the Constitution of India:
The primary issue addressed in the judgment is whether a firm can maintain a writ petition under Article 226 of the Constitution of India. The court emphasized that only a natural person, juristic person, or corporate entity can approach the court under Article 226. The petitioners failed to disclose whether the firms were registered or unregistered, which is crucial for determining their legal standing. The court held that the submission that firms are persons and thus entitled to maintain the petition was without substance.

2. The legal status and capacity of a firm to act as a juristic person:
The court delved into the nature of a firm under the Indian Partnership Act, 1932, explaining that a partnership is a relationship between persons who have agreed to share the profits of a business. A firm is not a corporation and does not have a separate legal personality distinct from its partners. The Supreme Court in the case of Board of Trustees, Ayurvedic and Unani Tibia College, Delhi v. State of Delhi clarified that a corporation is recognized by law as having a distinct personality, which a firm does not satisfy. The court reiterated that a firm is merely a collective name for its partners and does not possess the capacity to act as an individual.

3. The effect of non-registration of a firm under the Indian Partnership Act, 1932:
The court highlighted the implications of non-registration of a firm, referencing Section 69 of the Indian Partnership Act, which restricts an unregistered firm from instituting a suit to enforce a right arising from a contract. The court noted that even if a firm is registered, an individual partner cannot maintain a writ petition in the firm's name; all affected partners must join in the petition. The court cited various judgments, including Dulichand Laxminarayan v. Commissioner of Income Tax, Nagpur, which emphasized that a firm is not a legal entity but a collective name for its partners.

Conclusion:
The court concluded that the writ petitions, as filed in the name of the firms, were incompetent since a firm is neither a natural nor a juristic person. However, in the interest of justice, the court allowed the petitioners an opportunity to amend their petitions within three days to rectify the defects regarding maintainability.

Order:
The petitions were held to be incompetent as they stood but were allowed to be amended within three days to address the maintainability issues.