Suits by or against firms (Order XXX):
The procedure relating to the suits by or against firms is given in Order XXX of the Code. It states that any two or more persons claiming or being liable as partners and carrying on business in India may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the court for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action partners in such firm, to be furnished and verified in such manner as the court may direct. In a suit by or against a firm, the pleadings may be signed and verified by anyone of the parties. (Order XXX, Rule 1).
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ADVERTISEMENTS:
Suit by a Firm:
Where a suit is instituted by partners in the name of the firm, the plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant, forthwith declare in writing the names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted. [Order XXX, Rule 2 (1)]. Failure to comply with such demand may necessitate the staying of proceedings [Order XXX, Rule 2 (2)].
Where the names of the parties are declared in the manner referred to in sub-rule (1), the suit shall proceed in the same manner, and the same consequences in all respects shall follow, as if they had been named as plaintiffs in the plaint, provided that all proceedings shall nevertheless continue in the name of the firm, but the names of the partners disclosed in the manner specified in sub-rule (1) shall be entered in the decree. [Order XXX, Rule 2 (3)].
Order XXX, Rule 1 (2) provides that where persons sue or are sued as partners in the name of their firm under sub-rule (1), it shall in the case of any pleading or other document required by or under the Code to be signed, verified or certified by the plaintiff or the defendant, suffice if such pleading or other document is signed, verified or certified by any of such persons. An executing application is certainly a document, which is required to be signed under the Code by the decree-holder and the decree-holder being the firm it could be signed on its behalf by one partner of the dissolved firm.
ADVERTISEMENTS:
Suit against a Firm:
Where persons are sued as partners in the name of their firm the summons shall be served either
(a) Upon anyone or more of the partners, or
(b) At the principal place at which the partnership business is carried on within India upon any person having at the time of service, the control or management of the partnership business there, as the court may direct.
ADVERTISEMENTS:
Where the partnership has been dissolved to the knowledge of the plaintiff before the institution of the suit, the summons is to be served upon every person within India whom it is sought, to make liable. (Order XXX, Rule 3).
Where persons are sued as partners in the name of their firm they must appear individually in their own names, as a firm cannot appear in the firm name; but all subsequent proceedings shall nevertheless continue in the name of the firm. [Order XXX, Rule 4].
On the death of a partner, whether before the institution or during the pendency of any suit, it is not necessary to join legal representative of the deceased as a party to the suit. (Order XXX, Rule 4).
The court remains very circumspect in dealing with the application of a third party seeking impleadment when it is opposed by the plaintiff. Application of impleadment is generally disallowed when it involves a de novo trial. Revision for impleadment becomes infructuous when suit is already decreed and revisional court should not allow the impleadment.
In a suit by or against firm sub-rule (2) of Rule 4 of Order XXX does not create any right of impleadment of legal representatives of deceased partner. It cannot operate where Order I, Rule 10 is not applicable and it operates as an exception to sub-rule (l).
In a suit for eviction against proprietary concern and two other persons. The proprietors had died on date of institution of suit thereby it was not in existence on that date. A decree passed in such suit is nullity and cannot be executed. The provisions of Rule 4, Order XXX are not applicable as suit has been filed against dead persons.
In what capacity served:
Where a summons is issued to a firm, every person upon whom it is served shall be informed by notice in writing giving at the time of such service in what character he is served, whether as a partner or as a person having the control or management of the partnership business or in both characters; and in default of such notice, the person served will be deemed to be served as a partner. (Order XXX, Rule 5).
Appearance under protest:
Any person served with summons as a partner under Rule 3 may enter an appearance under protest denying that he was a partner at any material time. On such appearance being made either the plaintiff or the person entering the appearance may, at any time before the date fixed for hearing and final disposal of the suit, apply to the court for determining whether that person was a partner of the firm and liable as such.
If, on such application, the court holds that he was a partner at the material time that shall not preclude the person from filing a defence denying the liability of the firm in respect of the claim against the defendant.
If the court, however, holds that such person was not a partner of the firm and was not liable as such, that shall not preclude the plaintiff from otherwise serving a summons on the firm and proceeding with the suit; but in that event, the plaintiff shall be precluded from alleging the liability of that person as a partner of the firm in execution of any decree that may be passed against the firm. (Order XXX, Rule 8).
Order XXX shall apply to suits between a firm and one or more of the partners therein and to suits between firms having one or more partners in common; but no execution shall be issued in such suits except by leave of the court, and, on an application for leave to issue such execution, all such accounts and inquiries may be directed to be taken and made and directions given as may be just. (Order XXX, Rule 9).
Any person carrying on business in a name or style than his own name or a Hindu undivided family carrying on business under any name, may be sued in such name or style as if it were a firm name, and, in so far as the nature of such case permits, all rules under Order XXX shall apply accordingly. (Order XXX, Rule 10).
Suit for eviction against proprietary concern and two other persons filed. On the date of institution of suit the proprietors had died. The suit is to be treated to have been filed against dead person. Decree passed in such suit is nullity against the dead proprietor and cannot be executed by impleading the legal representatives.
The provisions of Rule 10 of Order XXX enable the proprietary concern to be sued in the business names of his proprietary concern. But really it is the proprietor of the said business who is being sued. Only those provisions of Order XXX are applicable to proprietary business which can be so much applicable seeing the nature of the case.
Note:
For execution of a decree against firm and Attachment of Partnership Property, see the relevant provisions contained in Part II ante.