1968 (4) TMI 31 - HC - Companies Law

Summary

Issues Involved:
1. Whether a limited company falls within the meaning of the expression "person" as used in rule 10 of Order 30 of the Code of Civil Procedure.
2. Whether the suit was badly framed due to the defendant being described under an assumed name.
3. Applicability of rule 10 of Order 30, Civil Procedure Code, to a limited company.
4. Interpretation of the term "person" in the context of the Civil Procedure Code and the Companies Act.
5. The impact of section 147 of the Companies Act on the interpretation of rule 10 of Order 30, Civil Procedure Code.

Detailed Analysis:

1. Whether a limited company falls within the meaning of the expression "person" as used in rule 10 of Order 30 of the Code of Civil Procedure:
The court examined whether a limited company could be considered a "person" under rule 10 of Order 30, Civil Procedure Code (CPC). Rule 10 states, "Any person carrying on business in a name or style other than his own name may be sued in such name or style as if it were a firm name." The court concluded that a limited company indeed falls within the meaning of "person" as used in this rule. The General Clauses Act defines "person" to include any company or association, whether incorporated or not, unless repugnant to the subject or context. The court found no such repugnancy in the CPC.

2. Whether the suit was badly framed due to the defendant being described under an assumed name:
The initial suit described the defendant as "Rajendra Prasad Oil Mills, Kanpur, through the director Bishan Dayal." This was later amended to include more directors. The appellants contended that the suit was improperly framed because Rajendra Prasad Oil Mills was not a legal entity but was owned by N.K. Industries Ltd., a limited company. The court held that the suit was not badly framed and could proceed against the assumed name under rule 10 of Order 30, CPC.

3. Applicability of rule 10 of Order 30, Civil Procedure Code, to a limited company:
The court found that rule 10 of Order 30, CPC, applies to limited companies as well. This rule allows for a person carrying on business in an assumed name to be sued under that name. The court emphasized that the rule is designed to facilitate the enforcement of claims against parties conducting business under assumed names, and there was no reason to exclude limited companies from its purview.

4. Interpretation of the term "person" in the context of the Civil Procedure Code and the Companies Act:
The court referred to the General Clauses Act, which includes companies in the definition of "person." The court also considered the Supreme Court decision in Dulichand Laxminarayan v. Commissioner of Income-tax, which held that the definition in the General Clauses Act would not apply if repugnant to the subject or context of the specific Act. However, the court found no such repugnancy in the CPC, thus allowing the inclusion of companies within the term "person" in rule 10 of Order 30.

5. The impact of section 147 of the Companies Act on the interpretation of rule 10 of Order 30, Civil Procedure Code:
Section 147 of the Companies Act requires companies to publish their name and registered office address. The appellants argued that this section prohibits companies from carrying on business under an assumed name. The court disagreed, stating that section 147 does not prohibit a company from using an assumed name; it merely imposes penalties for non-compliance with publication requirements. The court cited H. E. Randall Ltd. v. British American Shoe Co., where it was held that non-compliance with such statutory provisions does not invalidate the business name used.

Conclusion:
The court concluded that a limited company falls within the meaning of "person" under rule 10 of Order 30, CPC. This interpretation holds even if the company conducts business under an assumed name without concealing its corporate identity. The suit was deemed properly framed, and the provisions of the Companies Act did not preclude the application of rule 10 to limited companies. The court's decision ensures that parties can enforce claims against companies operating under assumed names, thereby supporting commercial transactions and preventing evasion of business obligations.