TMI Blog1993 (2) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri Wajahat Husain Khan in the writ petition M/s. Agarwal Stone Mills. 4. Learned counsel for the petitioners though fairly stated that the petitioners are the firm but they have failed to disclose as to whether the firms are registered or unregistered. 5. It is a settled position of law that only a natural, person juristic legal or corporate can approach this Court under Art. 226 of the Constitution of India. However learned counsel for the petitioners tried to impress upon the Court that the petitioners are also persons and as such are entitled to maintain the petition in the name of the firm. The submission is sans any substance. 6. The Indian Partnership Act 1932 which essentially is a branch of law of contract whereunder the partnership is defined as a relationship between the persons inter se, who have agreed to share the profits of the business carried on by all or any of them acting for all. The person who have entered into the partnership with one another are called individually as partner and collectively as a firm. In the name under which their business is carried on is called 'the firm name'. The relationship of partnership arises from the contract and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a special denomination having perpetual succession under an artificial form, and vested by the policy of the law the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation or at any subsequent period of its existence. 10. The firm does not satisfy the requirement of a corporation, in the case (supra), the Supreme Court held as:-- a corporation aggregate has therefore, only one capacity, namely its corporate capacity. A corporation or a non-trading corporation. The usual examples of a trading corporation are (1) charter companies, (2) companies incorporated by special acts of Parliament, (3) companies registered under the Companies Act, etc. Non-trading corporations illustrated by (1) municipal corporations, (2) district boards, (3) benevolent institution (4) universities etc. An essential element in the legal conception of a corporation is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that sense. The firm name is only a collective name, for the individual partners. But each partnership is a distinct relationship. The partners may be different and yet the nature of the business may be the same, the business may be different and yet the partners may be the same. An agreement between the partners to carry on a business and share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein. The intention may be to constitute two separate partnership and therefore two distinct firms. Or to extend merely a partnership, originally constituted to carry on one business, to the carrying on of another business. It will all depend on the intention of the partners. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circumstances including evidence as to the interlacing or interlocking of management, finance and other incidents of the respective businesses. 13. In Dulichand Laxminarayan v. Commissioner of Income Tax, Nagpur, the Supreme Court has said that for the purposes of registration under Indian Partnership Act there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 239 of the Indian Contract Act, contemplates only natural or artificial, i.e., legal persons and for the reasons stated above, a firm is not a person and as such is not entitled to enter into a partnership with another firm or Hindu undivided family or individual. 16. A 'firm' is not a legal entity but is only a collective or compendious name for all the partners. So, if a suit to enforce a right arising from a contract is to be instituted by a firm against a third party, the firm would be the plaintiff. If the suit is to be instituted on behalf of a firm, the partners or partners, who want or want to institute the suit on behalf of the (i.e. for the benefit of) the firm would be the plaintiff. But, in both the cases the suit would in effect be or on behalf of all the partners of the firm. 17. Under Section 2(23) of the Indian Income Tax Act the expression 'firm' 'partner' and 'partnership' are defined. A close and careful reading of the provision of the Partnership Act indicates that 'Partnership' or 'firm' as such is not a separate independent entity or person in law but is merely an association or combination of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm are supposed to join for maintaining the petition under Art. 226 of the Constitution. 21-22. The following cases may not go unnoticed in the context of the controversy. In C.I.T. V. R.M. Chidambaram Pillai, the view taken was that a firm is not a legal person even though it has some attributes of personality. Partnership is a curtain relation between persons, the product of agreement of share the profits of a business. 'Firm' is a collective noun a compendious expression to designate an entity, not a person. Likewise, in Munshi Ram v. Municipal Committee, the Court took the view that a firm of the partnership is not a legal entity separate and distinct from partners and is only compendious description of individuals who compose the firm. 23. In view of the above, the petitions as drawn, are incompetent having been filed in the name of firm which is neither natural nor juristic person. 24. Though, the petitions, for the reasons stated heretofore, are held to be incompetent, as they stand, but the interest of justice demands that an opportunity be provided to learned counsel for the petitioners to rectify the defects regarding maintainability in the name ..... X X X X Extracts X X X X X X X X Extracts X X X X
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