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Case Study On M/s Radha Raman Industries v/s M/s Manoj Trading Company

In the case of M/s Radha Raman Industries versus M/s Manoj Trading Company, Hon’ble Justice Rajbir Sherawat held in the High Court of Madhya Pradesh that On perusal of the file, it is clear that there is no discrepancy, illegality or perversity in the findings recorded by the lower Appellate Court in view of this Court, the Order 30 Rule 10 of Code of Civil Procedure which talks about the suing of partners in name of firm and suits against person carrying on business in name other than his own.

It does not create any bar against a person for bringing a suit in the name of a firm/proprietary concern or in the assumed business name of the sole proprietor . Also , So far as Order 30 Rule 10 is concerned, this provision only relates to the proprietary concern being 'sued against' by a person having claim against such firm or concern. Thus , the appeal was dismissed and the suit was maintainable .

Coram: Hon'ble Mr. Justice Rajbir Sehrawat - Decided on: 29.08.2017 - Present: Mr. Adarsh Jain, Advocate, for the appellant.

The plaintiff is a firm dealing in food grains, cereals, oil seeds etc and the defendant is a firm being in the business of oil etc. The defendant-firm purchased mustard seed from the plaintiff for some amount .The defendant paid only a part of the total amount vide a pay order, and the remaining amount was not paid by the defendant. Therefore, the plaintiff firm filed a suit for recovery along with interest. The defendant filed a written statement. It did not dispute the supply of the material through the bills.

However, it took the defence that it had paid the money against the valid receipts and therefore, nothing is due towards it which the plaintiff might be entitled to recover. Hence, the prayer for dismissal of the suit. The parties led their respective evidence, to prove their case. The plaintiff proved the bills on record and understanding its onus to prove the payments Both the parties examined the Hand Writing Expert also to prove/disprove the disputed signatures on the alleged receipts of payment. Both the Hand Writing Expert gave their contradictory reports regarding the signatures on the said receipts of payment.

It is an appeal filed by the defendant against the concurrent findings of both the Courts below and their judgments and decrees whereby the suit for recovery filed by the plaintiff raising the issue of whether a person, carrying business in a name or other than his own name; then whether the person is liable for being sued either in his own name or in his assumed business name .

Judgement by Trial Court:
The court decreed the suit by believing the evidence of the plaintiff. Aggrieved against the judgment and decree passed by the trial Court, the present appellant preferred an appeal before the lower Appellate Court. The court relied upon the judgment of Hon'ble Bombay High Court Municipal Council, Tiroda Versus K. Ravindra and Company; to contend that the proprietary firm could not have filed a suit for recovery and the suit has to be brought in the name of the proprietor only.

He has further referred to Order 30 Rule 1 and Rule 10 of Code of Civil Procedure to buttress his claim. the judgment of Hon'ble Bombay High Court does not come to the rescue of the present appellant because that judgment related to a proprietary concern; the status and identity of which itself was not clear in the title of that suit . However, the lower Appellate Court also dismissed the appeal filed by the present appellant.

Judgement by Appellate Court:
The lower Appellate Court recorded a finding that the alleged payment receipts were not proved as per the law. It was further observed by the lower Appellate Court that the evidence of the present appellant was contradictory even to the pleadings taken by the present appellant in the written statement.

It was recorded by the lower Appellate Court . as per the learned lower Appellate Court, the statement being in contradiction to even the pleadings of the defendant, cannot be relied upon. Learned lower Appellate Court also recorded a finding that even on perusal, the signatures on the receipts do not tally with the signatures of the person alleged to have signed these receipts. Hence, the appeal was dismissed.

Judgement by High Court:
The court held that a bare perusal of this judgment also shows that the Hon'ble Supreme Court held the suit in that case to be legal although the same was in the name of the proprietary concern of the sole proprietor, but the concern had sued through its sole proprietor.

A person, carrying business in a name or other than his own name; then that person can be sued either in his own name or in his assumed business name, Suit maintainable A proprietary concern or assumed name of the sole proprietor, when arrayed as a defendant under Order 30 Rule 10, would also get a right to file a counter claim under Order 8 Rule 6 A of Code of Civil Procedure , which talks about the counter claim by defendant.

On the contrary it is well settled law that the suit by the proprietary concern is a suit by its sole proprietor and the suit by the sole proprietor is a suit by his proprietary concern. Both are the same thing for the purpose of the proceedings before the Court of Law.

As per General Clauses Act, Section 3 (42) even incorporation is not necessary for an entity to claim the status of a 'person' so even un-incorporated entity can file suit unless specifically prohibited by statutory law. In case of proprietary firm, if the relationship between the firm and the proprietor is clear and not in dispute then it does not matter whether the suit is brought in the name of the firm or the proprietor, which is one and the same thing.

In the present case also the suit by the proprietary firm is through sole proprietor giving complete details. So the suit by the proprietary concern in the present case is maintainable and thus the present appeal fails and was dismissed.

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