ORDER XXX OF THE CODE OF CIVIL PROCEDURE, 1908 (CPC) delineates the procedural framework for instituting suits by or against firms and individuals conducting business under names other than their own. This provision ensures clarity and efficiency in legal proceedings involving partnerships and businesses operating under trade names.

1. SUING OF PARTNERS IN THE NAME OF THE FIRM

Order XXX, Rule 1 permits two or more individuals, who are partners and conduct business in India, to sue or be sued in the firm’s name as it existed at the time the cause of action arose. This rule simplifies litigation by allowing the firm to be treated as a single entity for legal purposes. Any party involved in such a suit can request the court to provide a verified statement of the names and addresses of the persons who were partners at the time the cause of action accrued.

2. DISCLOSURE OF PARTNERS’ NAMES

Under Rule 2, when a suit is filed by partners in the firm’s name, the plaintiffs or their legal representative must, upon a written request from any defendant, promptly disclose in writing the names and residential addresses of all individuals constituting the firm on whose behalf the suit is initiated. Failure to comply with such a request may result in the court staying the proceedings. Once the names are disclosed, the suit proceeds as if these individuals were named as plaintiffs in the plaint, and their names are entered into the decree.3. SERVICE OF SUMMONS

Rule 3 outlines the procedure for serving summons when individuals are sued as partners in the firm’s name. The summons can be served:

• Upon any one or more of the partners, or
• At the principal place of business within India, upon any person currently in control or management of the partnership business, as directed by the court.

Such service is considered valid for the entire firm, regardless of whether all or any partners are within or outside India. However, if the partnership was dissolved to the plaintiff’s knowledge before the suit’s initiation, the summons must be served upon every individual within India whom the plaintiff seeks to hold liable.

4. RIGHTS OF SUIT ON DEATH OF A PARTNER

According to Rule 4, notwithstanding Section 45 of the Indian Contract Act, 1872, if a partner dies before or during the pendency of a suit filed in the firm’s name, it is not mandatory to include the deceased partner’s legal representative as a party to the suit. However, this does not affect the legal representative’s right to:

• Apply to be made a party to the suit, or
• Enforce any claim against the surviving partners.

5. NOTICE IN WHAT CAPACITY SERVED

Rule 5 mandates that when a summons is issued to a firm and served as per Rule 3, each individual served must be informed in writing at the time of service whether they are being served as a partner or as a person in control or management of the partnership business, or in both capacities. If such notice is not provided, the person served is presumed to be served as a partner.

6. APPEARANCE OF PARTNERS

Per Rule 6, when individuals are sued as partners in the firm’s name, they must appear in court individually under their own names. Despite this, all subsequent legal proceedings continue in the firm’s name.

7. NO APPEARANCE EXCEPT BY PARTNERS

Rule 7 states that if a summons is served, as outlined in Rule 3, to a person managing the partnership business, that individual is not required to appear in court unless they are a partner in the firm being sued.

8. SUITS AGAINST PERSONS CARRYING ON BUSINESS IN NAMES OTHER THAN THEIR OWN

Rule 10 extends the provisions of Order XXX to individuals or Hindu Undivided Families (HUFs) conducting business under a name or style other than their own. Such persons or HUFs can be sued in that business name as if it were a firm name, and all rules under this Order apply accordingly.

9. CASE LAW ILLUSTRATIONS

• Purushottam Umedbhai & Co. v. M/s. Manilal & Sons, AIR 1961 SC 325: In this case, the Supreme Court held that a suit filed in the firm’s name is essentially a suit against all its partners. The court emphasized that the firm’s name is merely a collective name for the individuals who constitute the partnership.

• Ashok Transport Agency v. Awadhesh Kumar, AIR 1998 SC 1433: The Supreme Court clarified that an individual carrying on business in a name other than their own can be sued in that business name, treating it as a firm name under Order XXX, Rule 10. This ensures that individuals cannot evade legal liability by operating under a different business name.

10. LEGAL PRINCIPLES AND DOCTRINES

• Doctrine of Mutual Agency: In a partnership, each partner acts as an agent for the other partners and the firm concerning the business of the partnership. This mutual agency principle underpins the liability of partners for acts done in the firm’s name.

• Principle of Collective Liability: Partners are collectively liable for obligations incurred in the firm’s name. This principle ensures that creditors can hold all partners accountable for the firm’s debts and liabilities.

11. PROCEDURAL ASPECTS

• Pleadings: In suits by or against a firm, pleadings may be signed and verified by any one of the partners. This facilitates the legal process by not requiring all partners to sign the documents.

• Execution of Decrees: A decree against a firm can be executed against:

• The firm property,
• Any partner who was served with the summons and had appeared in the suit,
• Any partner who, though not served personally, was a partner in the firm at the time the cause of action arose and was aware of the proceedings, provided the decree was not obtained by fraud or collusion.

This ensures that creditors can enforce their claims effectively while also protecting the rights of partners who were unaware of the suit.

CONCLUSION

Order XXX of the Code of Civil Procedure, 1908, plays a vital role in streamlining legal proceedings involving firms and individuals conducting business under trade names. By treating partnerships as collective entities for litigation purposes, this provision ensures clarity, efficiency, and equitable resolution of disputes. Its rules on disclosure, service of summons, and execution of decrees reflect a balance between protecting the rights of plaintiffs and ensuring procedural fairness for defendants.