l Appeals Nos 178 and 179 of 1960
Appeals by Special Leave from the Judgment and Decree dated the 18th December 1958 of the Calcutta High Court in Appeals from Original Orders Nos 108 and 138 of 1957 respectively
B R L Iyengar for the Appellants In both the appeals N C Chatterjee and D N Mukherjee for the Respondents In both the appeals
October 7
The Judgment of the Court was delivered by IMAM J
These are appeals by special leave against the order of a Division Bench of the Calcutta High Court dated December 18 1958 setting aside the order of P B Mukherjea J dated February 8 1957 whereby he rejected the petition of the respondent for amendment of the plaint filed in Suit No 1452 of 1951 in the High Court in exercise of its Ordinary Original Civil jurisdiction
The plaint in Suit No 1452 of 1951 was filed in the name of Manilal  Sons a firm carrying on business at No 11A Malacca Street Singapore
The partners of this firm were five in number
They were 1 Manubhai Maganbhai Amin 2 Pravinbhai Dahyabhai Patel 3 Gangabhai Iswarbhai Patel 4 Bachubhai Manibhai Amin and 5 Dahyabhai Trikambhai
The defendant was the firm of Purushottam Umedbhai  Co now the appellant a firm registered under the Indian Partnership Act 1932 carrying on business at No 55 Canning Street Calcutta
In July 1949 there was a contract between the plaintiff and the defendant under which the defendant was to sell to the former subject to certain conditions 950 bales of Heavy Cees gunny bags c i f Singapore to be shipped from Calcutta in August 1949
It was also agreed between the plaintiff and the defendant in July August 1949 that the latter would sell subject to certain conditions 600 bales of Heavy Cees gunny bags c i f Hong Kong to be shipped from Calcutta 985 in August 1949
According  to the plaintiff the defendant did not perform the contract entered into by the parties and as a result of the default on the part of the defendant the plaintiff had suffered loss
The plaintiff accordingly claimed compensation to the extent of Rs 273864 and Rs 7850 towards expenses incurred in all Rs 281714
The breach of the contract is alleged to have taken place in October and November 1949
The suit was instituted on April 2 1951
The defendant s written statement was filed on or about May 21 1951
The petition for amendment of the plaint was filed on January 31 1957
The amendment sought was to the effect that the name of the firm Manilal  Sons as plaintiff be struck off and in its place and stead the names of the five persons who were the partners of the firm may be entered in the plaint as plaintiffs
The petitioner also sought the necessary consequential amendments in the body of the plaint
According to the petition praying for amendment on January 29 1957 the solicitors of the plaintiff received a letter from the attorney of the defendant to the effect that inasmuch as the firm Manilal  Sons was carrying on business at Singapore an objection would be taken on behalf of the defendant that the suit as framed was null and void and not maintainable
The suit had been pending in the court of P B Mukherjea J and appeared on the peremptory list for the first time on January 3 1957
According to the petition the petitioner was advised that as the misdescription of the plaintiff was a bona fide one the names of the partners of the firm Manilal  Sons should be brought on to the record in order to bring the controversy between the proper parties into clear relief
Accordingly the petitioner filed the petition for amendment
On a Chamber Summons being taken out Mukherjea J heard the matter and rejected the petition for amendment
He was of the opinion that the original plaint was no plaint in law and therefore was a mere nullity of a process
The proper course when there is such a mistake is not to amend disregarding the conditions of O I r 10 of the Civil Procedure Code 986 but to seek the Court s permission to withdraw the suit with liberty to file a fresh suit under 0 xxIII r 1 of the Civil Procedure Code on the ground of formal defect and which should be done before limitation
In his opinion it was not a case of misnomer or a misdescription
It was not a case of a nonexistent firm or a non existent person or of a wrong description but of a legal bar and when a plaint is filed showing that the plaintiff was not a legally recog nised person at all such a plaint must be regarded as a nullity
He was also dissatisfied with the explanation given for filing the petition for amendment some six years after the institution of the suit
In appeal the Division Bench of the High Court came to the conclusion on a consideration of various decisions of the High Courts in India and the courts in England that  the description of a plaintiff by a firm name in a case where the Code of Civil Procedure does not permit a suit to be brought in the firm name should properly be considered a case of description of the individual partners of the business and as such a misdescription which in law can be corrected and should not be considered to amount to a description of a non existent person 
It also rejected the contention on behalf of the defendant that the Power of Attorney in favour of Dunderdale was insufficient
The contention had been that this Power of Attorney did not authorize Dunderdale to act on behalf of the the firm far less the individual members of the firm
The Division Bench accordingly allowed the amendment prayed for and permitted the names of the individual partners of the firm Manilal  Sons to be substituted as plaintiffs in the place of Manilal  Sons
The individual partners were permitted either to sign the plaint themselves or through their constituted attorneys
The Division Bench allowed this amendment on the condition that all the costs of the appellant before us incurred upto the date of the judgment must be paid to it
The Division Bench also allowed the appeal against the decree of P B Mukherjea J dismissing the suit which it set aside
Appeal No 179 of 1960 is by 987 special leave against the aforesaid order of the Division Bench
It was urged on behalf of the appellants that 1 the plaint as filed was a nullity
The suit therefore was incompetent
To bring on the record the partners of the firm amounted to addition of new parties and if on the date these partners are added as parties and the period of limitation had elapsed then the entire suit would be time barred 2 even if it be held that the plaint is not a nullity neither the provisions of 0 1 r 10 nor those of 0
VI r 17 have any application to the case 3 having regard to the provisions of section 45 of the Indian Contract Act a suit by only one partner or one promisee is bad to start with
There being within the period of limitation no suit by all the partners any amendment if allowed would convert the old suit into a new suit and the new suit would be barred by limitation if the amendment was allowed on a date which was beyond the period of limitation prescribed for such a suit 4 if the amendment was allowed it would be a case of adding or substituting new plaintiffs and as regards them it would be deemed to have been instituted when they were made parties
Reference to section 221 Indian Limitation Act was made in this connection
In the present case so far as the new plaintiffs were concerned the suit was barred by time at the date when they were sought to be made parties 5 the circmstances of the case indicated that there was no suit in the eyes of the law nor was the plaint verified or signed as required by law
Consequently there was no proceeding before the court in which any amendment could be sought and 6 even if it was held that the plaint was not a nullity the plaint had been signed and verified on behalf of the firm Manilal  Sons by Dunderdale on a Power of Attorney executed by one of the partners only
It was therefore not manifest that all the partners intended to sue
Furthermore the Power of Attorney executed in favour of Dunderdale by one of the partners could not be regarded as authorizing him to to act on behalf of the firm of Manilal  Sons
Very great reliance was placed on the decision of 988 Blackwell J in the case of Vyankatesh Oil Mill Co vs N V Velamahomed 1 where the learned Judge held that the suit was brought by an entity which had no legal existence in the eyes of Indian law and there being no mode of procedure whereby such an entity was permitted to sue in India the suit as framed was not maintainable at all
It followed therefore that the amendment asked for could not be treated as an amendment following upon a mere misdeseription but must be treated as an application for the substitution of the individual persons who composed the entity which the law did not recognize
This view of Mr Justice Blackwell was not accepted by Beaumont C J inthe case of Amulakchand Mewaram vs Babulal Kanalal Taliwala 2 where he expressed himself as follows I must confess that I have some difficulty in following both the reasons and the conclusions of the learned Judge in that case
It was a case of a suit brought in the name of a firm carrying on business outside British India and therefore not justified by the terms of 0 30 Civil P C and the learned Judge expressed the view that the plaintiff firm was a nonexistent entity
But the order which he subsequently made giving leave to amend seems inconsistent with that finding He further held  But I do not see how 0 30 can affect the question of fact whether a suit brought in the name of a firm in a case not within 0
30 is in fact a case of misdescription of existing persons or a case of a suit brought by a non existent entity
 In the case of Hajee Sattar Hajee Peer Mahomad vs Khusiram Benarsilal 3 the Calcutta High Court did not accept the view expressed by Blackwell J it referred to the following observation of Farwell L J in Sadler vs Whiteman4 In English law a firm as such has no legal existence partners carry on business both as principals and as agents for each other within the scope of the 1 AIR 1928 Bom
3 ILR 2 AIR 1933 Bom
304 305
4  889 989 partnership business the firm name is a mere expression not a legal entity although for convenience under Order XLVIII A it may be used for the sake of suing and being sued
 In the case of Mura Mohideen vs VOA Mohomed1 the Madras High Court dissented from the opinion expressed by Blackwell J and the learned Judges stated  We are unable to agree with Blackwell J in his view that a foreign firm not being a legal entity which could as such file a suit under the Civil P C by itself determines the question whether the impleading of the members of that firm is the addition of a new party
The view of Blackwell J appears to have been concurred in by two decisions reported in  Neogi Ghose and Co vs Nehal Singh  AIR 1931 Cal 770 F and  L N Chettiar Firm vs MPRM Firm  AIR 1935 Rang 240 G but we are unable to agree with the soundness of the reasoning in these decisions either of which do not furnish any further reasons in support of the view of Blackwell J The Madras High Court then concluded as follows If however imperfectly and incorrectly a party is designated in a plaint the correction of the error is not the addition or substitution of a party but merely clarifies and makes apparent what was previously shrouded in obscurity by reason of the error or mistake
The question in such a case is one of intention of the party and if the Court is able to discover the person or persons intended to sue or to be sued a mere misdescription of such a party can always be corrected provided the mistake was bona fide vide 01 R 10 CPC Such an amendment does not involve the addition of a party so as to attract section 221 Limitation Act
Suits by or on behalf of dead persons stand in a different category
The principle that a misdescription could be corrected by amendment could not obviously be applied to such a case but this is far from saying that merely because the law does not recognise the firm as being a legal entity the firm 1 AIR 1955 Mad 294 297 299
126 990 name could not indicate or designate the individuals Composing the firm
 To sum up the situation is analogous to a case where an individual who has an alias or an abbreviated name by which he is sometimes called initially describes himself in that name but subsequently applies to have it rectified so as to describe in the manner in which he is most generally known
There cannot be any doubt that by the correction in the name a new plaintiff is not added so as to attract section 221 Limitation Act
A trade name either of a person or a group of individuals carrying on business in partnership is in true an alias for the person or the group
 Before the introduction of O XXX in the Code of Civil Procedure apparently suits were instituted particularly in the Mofussil courts in the name of a firm or were instituted against a firm in the firm name and no objection was generally taken
Presumably this practice was largely based on the assumption that the suit concerned was either by all the partners of the firm or against all the partners of the firm
If however an objection were to be taken that a suit in the name of a firm was not maintainable because it had no legal entity the courts would have to decide whether the suit had been instituted by non existent persons
If so the suit was not maintainable
In the case of Kasturchand Bahiravdas vs Sagarmal Shriram 1 which was before the introduction of 0
XXX in the Code the suit had been brought in the name of the firm Kondanmal Sagarmal by its manager Sagarmal Shriram
The defendants objected that one Malamchand was also a partner in the firm and should be made a party
He was accordingly added as a plaintiff on the 27th of January 1888
The defendant then contended that the suit was barred under section 22 Limitation Act
It was held by the Bombay High Court that it was a case of misdescription and not of non joinder for the action was brought in the name of the firm by its manager
The introduction of 0
XXX into the Code 1 1892 ILR i7 Bom
991 prevents such an objection being taken because it permits two or more persons carrying on business of the firm to sue or be sued in the name of the firm but the firm must be carrying on business in India
The introduction of this provision in the Code was an enabling one which permitted partners constituting a firm to sue or be sued in the name of the firm
This enabling provision however accorded no such facility or privilege to partners constituting a firm doing business outside India
The existence of the provisions of 0
XXX in the Code does not mean that a plaint filed in the name of a firm doing business outside India is not a suit in fact by the partners of that firm individually
Section 4 of the  hereinafter referred to as the Act states that    Partnership  is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all
Persons who have entered into partnership with one another are called individually  partners  and collectively  a firm  and the name under which their business is carried on is called the  firm name 
 It is clear from this provision of the Act that the word  firm  or the  firm name  is merely a compendious description of all the partners collectively
It follows therefore that where a suit is filed in the name of a firm it is still a suit by all the partners of the firm unless it is proved that all the partners had not authorized the suit
A firm may not be a legal entity in the sense of a corporation or a company incorporated under the Indian Companies Act but it is still an existing concern where business is done by a number of persons in partnership
When a suit is filed in the name of a firm it is in reality a suit by all the partners of the firm
XXX had not been introduced into the Code and a suit had been filed in the name of a firm it would not be a case of a suit filed by a nonexistent person
It would still be a suit by the part ners of a firm the defect being that they were described as a firm
In order to clarify matters a court would permit an amendment by striking out the name 992 of the firm and replacing it with the name of the persons forming the partnership
It would be a case of misdescription
Even if the provisions of 0 1 r 10 and 0
VI r 17 did not strictly apply the amendment could be permitted under section 153 of the Civil Procedure Code because it was not a case of either adding parties or substituting parties
The High Court referred to a number of decisions to which no particular reference need be made but they do support the view taken by the High Court that in the present case the plaintiff described in the plaint as the firm of Manilal  Sons was a mere misdescription capable of amendment and not a case where a plaint had been filed by a non existent person and therefore a nullity
We now refer to certain provisions of 0
XXX CPC Order XXX r 1 CPC states  1 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
2 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 this 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 one of such persons 
This rule enables any party to a suit filed in the name of a firm doing business in India to 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 the firm to be furnished and verified in such manner as the court may direct
Order XXX r 2 states  1 Where a suit is instituted by partners in the name of their firm the plaintiffs or their pleader shall 993 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
2 Where the plaintiffs or their pleader fail to comply with any demand made under sub rule 1 all proceedings in the suit may upon an application for that purpose be stayed upon such terms as the Court may direct
3 Where the names of the partners 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 the proceedings shall nevertheless continue in the name of the firm 
This makes it obligatory in the case of a suit instituted by the partners in the name of the firm on demand in writing by or on behalf of any defendant to declare in writing the names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted
If the plaintiffs fail to comply with the demand made under sub r
1 of this rule all the pro ceedings in the suit may be stayed on such terms as the court may direct
Under sub r
3 if the names of the partners are declared in the manner referred to in sub r
1 the suit shall proceed in the same manner and the same consequences in all respects shall follow as if they had been named in the plaint provided that all the proceedings shall nevertheless be continued in the name of the firm
Rule 1 of 0
XXX is a general provision
Rule 2 however is confined to a suit instituted by partners in the name of the firm
It is clear from this rule that although the suit is filed in the name of the firm a disclosure has to be made on demand in writing by or on behalf of any defendant of names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted
The provisions of r 2 would indicate that although the suit is filed in the name of a firm it is nonetheless a suit by all the partners of the firm because if a disclosure of the names of the partners is 994 asked for by any defendant on such disclosure the suit shall proceed as if the partners had been named as plaintiffs in the suit even though the proceedings shall nevertheless be continued in the name of the firm
It is clear therefore that the provisions of 0
XXX r 1 and r 2 are enabling provisions to permit several persons who are doing business as partners to sue or be sued in the name of the firm
Rule 2 would not have been in the form it is if the suit instituted in the name of the firm was not regarded as in fact a suit by the partners of the firm
The provisions of these rules of 0
XXX being enabling provisions do not prevent the partners of a firm from suing or being sued in their individual names
These rules also do not prohibit the partners of a firm suing in India in their names individually although they may be doing business outside India
Indeed this was not disputed on behalf of the appellant
Since however a firm is not a legal entity the privilege of suing in the name of a firm is permissible only to those persons who as partners are doing business in India
Such privilege is not extended to persons who are doing business as partners outside India
In their case they still have to sue in their individual names
If however under some misapprehension persons doing business as partners outside India do file a plaint in the name of their firm they are misdescribing themselves as the suit instituted is by them they being known collectively as a firm
It seems therefore that a plaint filed in a court in India in the name of a firm doing business outside India is not by itself a nullity
It is a plaint by all the partners of the firm with a defective description of themselves for the purposes of the Code of Civil Procedure
In these circumstances a civil court could permit tinder the provisions of section 153 of the Code or possibly under 0
VI r 17 about which we say nothing an amendment of the plaint to enable a proper description of the plaintiffs to appear in it in order to assist the court in determining the real question or issue between the parties
Strictly speaking 0 1 r 101 has no application to a case of this kind because the suit has not been instituted in the name 995 of a wrong person nor is it a case of there being a doubt whether it has been instituted in the name of the right plaintiff
The provisions of 0
I r 102 also do not apply because it is not a case of any party having been improperly joined whose name has to be struck out or a case of adding a person or a party who ought to have been joined or whose presence before the court is necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit
The suit has been from its very inception a suit by the partners of the firm and no question of adding or substituting any person arises the partners collectively being described as a firm with a particular name
One of the partners Manubhai Maganbhai Amin was the Manager of the firm Manilal  Sons
He had executed a Power of Attorney in favour of four persons including one Dunderdale
By this Power he authorized any one of these persons to sue for recovery of moneys due to the firm from the firm Puru shottam Umedbhai  Co the appellant
It also empowered these persons to appear and to represent the firm in any court in any jurisdiction civil criminal insolvency original appellate or otherwise and before any official in any suit or proceeding or matter and to make sign verify present and file any plaint
Dunderdale had signed and verified the plaint in the present case
We have no doubt on a perusal of the Power of Attorney that it authorized Dunderdale to file the plaint on behalf of the firm Manilal  Sons and also to verify it
It was suggested that this was a Power of Attorney by Manubhai Maganbhai Amin for himself and not for the firm of Manilal  Sons
As we understand the Power of Attorney that is not so
No doubt the Power of Attorney is not signed by all the partners of Manilal  Sons but only by Manubhai Maganbhai Amin
In our opinion it was not necessary that the Power should have been signed by all the partners of the firm because Manubhai Maganbhai Amin was the manager of the firm
Under B 18 of the Act a partner is an agent of the firm for the purposes of the business of the firm
Manubhai 996 Maganbhai Amin was therefore the agent of the firm as well as its manager
It is to be noticed that under section 192 of the Act instances are stated where in the absence of any usage or custom of trade to the contrary the implied authority of a partner does not empower him to do matters mentioned in cls
a to h
It is significant that in these clauses there is no prohibition to a partner executing a Power of Attorney in favour of an individual authorizing him to institute a suit on behalf of the firm
In these circumstances it cannot be said that at the time the plaint was filed it was defective because the Power of Attorney in favour of Dunderdale was not a Power of Attorney on behalf of the firm and its partners
As the High Court has pointed out there is on the record now Powers of Attorney on behalf of all the partners of the firm
It seems to us that the Division Bench of the High Court took a correct view in holding that the plaint was not a nullity
It was a case of a suit instituted by all the partners of a firm who were misdescribed as Manilal  Sons a firm carrying on business at No 11A Malacca Street Singapore and accordingly the learned Judges rightly allowed the plaint to be amended on terms and conditions stated in their order
It follows therefore that the High Court was also right in setting aside the decree of P B Mukherjea J dismissing the suit
These appeals accordingly fail and must be dismissed but in the circumstances without costs
Appeals dismissed


Summary:
The appellants house was searched on June 22 1951 by the Customs authorities and ten articles were recovered therefrom
In the inquiry before the Collector the appellant stated that the first five articles had been brought by him in 1947 from Pakistan after partition and that with respect to the other five articles he was a bona fide purchaser thereof
The Collector held that the appellant had failed to establish his case and held that the goods were imported into India in contravention Of section 3 Import Export Control Act read with sections 19 and 1678 Sea Customs Act and sections 4 and 5 Land Customs Act read with section 7 thereof
This decision was upheld on appeal by the Central Board of Revenue and by the Central Government on revision
The appellant contended that i the onus of proving that the first five articles were smuggled goods was on the department which it had failed to discharge and 2 even if the other five articles which he purchased were smuggled goods he was not concerned with their importation
Held that the onus was on the authorities to establish that the first five articles were imported into India after March 1948 when the customs barrier was put up for the first time between India and Pakistan and that the authorities having failed to adduce any evidence to prove this fact the appellant could not be held guilty of any of the offences charged
The onus did not shift by virtue Of section 178A Sea Customs Act or section 5 Land Customs Act as the former section was not in operation at the relevant time and the latter section was not applicable to the facts of this case  nor did the onus shift by virtue of section 106 Evidence Act as that section could not be used to undermine the well established rule that the burden was on the prosecution and never shifted
Shambu Nath Mehra vs The State of Ajmer   followed
With respect to the other five articles even if the appellant was right in his contention that he was not concerned in their importation he was liable to the penalty under section 71c  for keeping the articles knowing them to be smuggled goods