Bailabel Type : non-bailable

Description

Order 30 of the Civil Procedure Code (CPC) governs the procedure for filing suits by or against firms and persons carrying on business under names other than their personal names. This order recognizes that businesses may operate under trade names or firm names, and the legal framework allows them to be involved in litigation, just as individuals would be. It also ensures that when such entities are involved in a suit, the proceedings are carried out properly, respecting the legal distinction between individual proprietors, firms, and business names.

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Key Provisions of Order 30

Rule 1: Suit by or Against Firms

1. Who Can Sue or Be Sued:

   • Firms that carry on business under a firm name (a name other than the personal names of the partners) can file a suit in the court in their business name.
   • A suit can also be filed against the firm using its trade or firm name. When the firm is sued, it must be named according to the firm name under which it is conducting business.

2. Authorized Agent for Firm:

   • A partner of the firm, or in certain cases, an authorized agent acting on behalf of the firm, can represent the firm in legal proceedings. A firm cannot represent itself directly; it must do so through a person who is recognized as having the authority to act for it.
   • The partner or agent representing the firm can sign the plaint or written statement on behalf of the firm. If a firm is suing, one of its partners must verify the plaint and sign the necessary legal documents.

3. Verification of the Plaint:

   • The plaint filed on behalf of a firm must be verified by an authorized partner or someone recognized by the firm as having the authority to act. This ensures the authenticity and authorization of the legal action.
   • If a firm is filing the plaint, it is the responsibility of the partner or agent to verify the facts within the document.

Rule 2: Suit Against Firms

1. Service of Summons:

   • A suit against a firm must name the firm using the firm name, and the summons is served on the firm’s registered office or on a partner who is present and authorized to accept the summons.
   • The partner or authorized person receiving the summons must ensure the suit is properly addressed, and the firm’s legal obligations are met. If no partner is available, it may be served to a manager or other authorized person in charge of the firm’s operations.

2. Responsibility of Partners:

   • When a firm is sued, the partners may be held personally liable, depending on the type of firm (e.g., in a general partnership, partners are personally liable for the firm’s debts and obligations). The suit would then proceed against the partners as well, unless it is a limited liability partnership (LLP) or another type of entity where liability is limited.

3. Partnership as Defendant:

   • In a suit against a firm, the firm name is treated as the defendant, but in reality, the partners are the ones representing the firm’s interests. The court recognizes the partnership entity in the legal process, even though the partners may be personally liable for the firm’s obligations.

Rule 3: Verification of Plaint by Partners

1. Verification Process:
   • When a suit is filed by or against a firm, the plaint or written statement must be verified by one of the partners. This verification is a confirmation that the contents of the suit are true to the best of the knowledge and belief of the person filing it.
   • In the case of a partnership, one partner’s verification is sufficient, provided that the partner has the authority to act on behalf of the partnership.

Rule 4: Suit Against Person Carrying on Business Under a Name Other Than Their Own

1. Business Name:

   • A person who conducts business under a name other than their personal name (i.e., a trade name or business name) can be sued under that business name. This is often the case in sole proprietorships or small businesses that operate under a name other than the individual’s own.
   • If someone is carrying on business under a name other than their personal name, they are considered a person carrying on business in a name other than their own. Legal proceedings against such individuals should include the business name.

2. Service of Summons:

   • For such individuals, summons should be served to the person carrying on business under the trade name, at their business address. If the person is not available at their business location, the summons can be served to their personal address or to a representative acting on their behalf.

3. Proprietorship Business Representation:

   • If a sole proprietor is involved in litigation, the proprietor must verify and sign the plaint or written statement personally, and the case would proceed similarly to a personal suit, but under the business name.

Punishment

1. Dismissal of Suit:
   • If a firm or business does not comply with the proper verification procedures, such as having a partner or authorized person sign the plaint or written statement, the suit may be dismissed or rejected.
2. Adverse Legal Consequences:
   • If a firm is not represented by an authorized person (partner or agent), the court may dismiss the suit or take other adverse actions to ensure the integrity of the legal process.
3. Liability of Partners:
   • In a partnership firm, the partners may be held personally liable for the firm’s actions or the actions of the firm in a suit, unless otherwise structured (e.g., in a limited liability partnership). Failure to properly represent the firm or business in a suit could lead to legal consequences for the partners or individuals involved.